Why commission does not help get your business sold!
Our clients often ask us, “what is our incentive to sell their business if we don’t charge commission?” And generally it is a fair question as that is how the business broker market has worked to date.
Why have we given up the commission cheque?
We have over 20 years’ experience in the market and have analysed the market data. In fact you could do this yourself if you have a few weeks to spare.
As an example looking at a player who claims to lead the market, they have sold 33 businesses valued up to $1m in the six month period reviewed from an average listing volume of 623 over the period. That is a 5.3% success rate. Annualised 10.6%. Not great, but unfortunately industry average.
Interestingly they have sold 16 businesses in the range from $1m to $2.5m from a total of 139 listings, which is 11.5% or 23% annualised. A great result, more than double their performance in the sub $1m category.
However, if you are a business below $1m valuation, where is the focus and service of this broker? On the bigger businesses that offer a bigger payday.
So does a commission driven broker really work for you as a small business owner?
After all it is basic human instinct to do more for the bigger pay check and as a smaller business you would expect less service, as shown by the stats above.
This is what motivated us to start a commission free service, where everyone receives excellent service! Everyone is broadly advertised, every enquiry gets the same fast response, every seller gets a great business profile produced within 2 working days and every enquiry gets this sent to them within 24 hours of completing a confidentiality agreement. We follow-up on a pre-planned schedule and give ongoing feedback to sellers. We sort out the wheat from the chaff and we get results.
Due to this our sale completion rate per annum is 35.2%, over 350% of the market average. We haven’t charged anyone a commission, but we have outperformed the market.
Ask yourself, why are you paying commission again?
Check out our packages today to see what we do for you by clicking here.