Business Brokerage and Services Provided ?

Answer 1

The business brokerage acts as a type of middle man. This firm or organization is the mediator between buyers and sellers of small businesses. The business brokerage is also known as business transfer agents. This firm assists the buyers and sellers of small businesses. These firms are skilled at estimating the value of a business. They can then advertise the business. Oftentimes, the identity of the business is not yet revealed. The business brokerage handles the initial process of interviewing prospective buyers. A business brokerage normally handles all of the negotiations and discussions concerning a potential deal.

Traditionally, the brokerage provides a full-service commission based service. There is a signed agreement that states that the business brokerage represents the client and act on behalf of the client. The majority of states have laws that state that this agency relationship creates certain fiduciary obligations. Many states have certain requirements and licensing requirements for this relationship.

Furthermore, there are different types of brokerage relationships. In some U.S. states, business brokers act as transaction brokers. A transaction broker represents neither party as an agent; however, the transaction broker works to facilitate the transaction. There is equal levels of trust with each party in this relationship.

The dual or limited agency is when the same broker represents both parties. Individual laws in states regulate the duties and obligations of the dual agency under this signed contract. In some states, this dual relationship is not allowed. The state considers it to be a conflict of interest in these cases.

A business brokerage can provide a number of services for the client. For example, this firm can assist the client in establishing a Most Probable Selling Price. Another service that can be provided by the business brokerage is preparing a Information Memorandum. This document can be 15-30 pages long, and the document gives a detailed description of the company to potential buyers. The brokerage can also assist in the marketing process. This is often one of the most important activities for the company. The brokerage can eliminate bad buyers by doing a thorough screening of the buyer. This is also an important service provided by the firm.