As the owner of a business, selling it can be one of the most important decisions you make. This is where a business broker or intermediary comes in. A business broker helps owners sell their businesses, acting as a middleman between the seller and buyer. If you`re considering working with a business broker, it`s important to understand the most common contract terms you can expect to see.

1. Listing term and fee structure

Your business broker contract should clearly state the term of the listing, or how long the broker will have the right to sell your business. It`s common for this term to be six to twelve months, but it can be longer depending on the complexity of the business. Additionally, you should understand the broker`s fee structure, which can include a flat fee or a percentage of the sale price.

2. Confidentiality provisions

When you work with a business broker, you`ll need to share sensitive information about your business, such as financial statements and customer lists. To ensure that this information stays confidential, your contract should include confidentiality provisions. This can include non-disclosure agreements and clauses restricting the broker from sharing information with competing brokers or potential buyers.

3. Exclusivity

Some business brokers may require exclusivity, which means you can`t work with another broker during the listing term. While this can limit your options, it can also ensure that the broker is fully invested in selling your business. If you do agree to exclusivity, make sure the contract outlines what you`ll receive in return, such as more marketing efforts or a lower commission rate.

4. Marketing plan

Your business broker contract should include a marketing plan outlining how the broker plans to advertise and sell your business. This can include online listings, networking events, and print advertising. Make sure you understand how the broker plans to market your business and that it aligns with your goals.

5. Success fee

In addition to the broker`s fee, your contract may include a success fee. This is an additional fee paid to the broker if they successfully sell your business. Make sure you understand the conditions for the success fee, such as the minimum sale price or the timeframe for the sale.

Working with a business broker can be a smart decision if you`re looking to sell your business. However, it`s important to understand the contract terms before signing on. Make sure you ask questions and negotiate any terms that don`t align with your goals. With the right broker and contract terms, you can successfully sell your business and move on to your next venture.