Business Seller - Frequently Asked Questions

1 - WHEN IS THE BEST TIME TO SELL?

The best time to sell is when a business is doing well. It's best not to wait until after a business has peaked; the selling price can suffer. However, almost any business can be sold, even if it is not doing too well, if the sale is handled correctly.

2 - HOW MUCH IS MY BUSINESS WORTH?

A company's value depends on many factors-such as cash flow, asset values, financial history, condition of equipment and premises, lease attractiveness, competition, potential for improvement, location, industry type and the economy, to name a few. We have unparalleled knowledge of real market values from selling many businesses each year. By analyzing your business and comparable sales in your industry, we can advise you on proper pricing strategy for your business.

3 - CAN A REAL ESTATE AGENT SELL MY BUSINESS?

While many business brokers are licensed to sell real estate, most real estate do not know how to sell businesses. The techniques of pricing, selling and putting together the business transaction are altogether different from selling houses or commercial property.

It is virtually impossible for a real estate agent to get the confidential exposure to qualified buyers that a major business brokerage can.  How many for sale signs do you see out front of a viable business?  You have already taken away one of their most important tools.

4 - WHAT ABOUT THE MARKETING FEE?

There are no upfront fees or costs unless we are contracted for specific purposes such a business evaluations. The marketing fee is paid only if your business sells. We pay for all the advertising. Most sellers have found that the cost of using our services is more than offset by the value they have gained from our expertise and access to buyers. We only get paid if we are suc

5 - WHY NOT SELL THE BUSINESS MYSELF?

Most owners find that the frustration, expense and time involved do not yield cost savings. In fact, because they don't have access to a large number of qualified buyers, many owners end up selling their business for much less than they could have through a well-established business broker. 

And, owners find it difficult to work direct with buyers and maintain confidentiality. If a key employee or competitor learns the business is for sale, the value of the business could be damaged.  Selling a business is a specialized function. Just as you wouldn't attempt to do your own legal or taxes work; you should seek professional assistance when it comes to selling an asset as important as your business.

6 - WHAT ARE BUYERS LOOKING FOR WHEN BUYING A BUSINESS?

As a seller it's natural for you to be most concerned with your own needs, but don't loose sight of the buyer's needs. Unless the buyer's needs are met, he will never buy a business. Sales that actually take place are win, win situations, not loaded heavily to the buyer or seller.

• A - BOOKS AND RECORDS:
  Even though the buyer may trust you completely, he/she will want proof of the sales and profits that the business has made in the past. This means you should have tax returns, profit & loss statements, sales tax returns etc. ready for the buyer’s examination after the offer has been made.
• B - REASONABLE PRICE AND TERMS:
  Quite frequently real buyers won't even look at a business that is over priced because they feel the seller doesn't really want to sell.
• C - TERMS:
  Generally speaking, banks are not very quick to finance the purchase of a small business. Over 95% of small businesses sell with seller financing thereby showing confidence in the buyer' ability & the business' future.
• D - INCOME:
  Buyers must feel they can make a decent living wage from the business after they have made their payment to the seller for debt service.
• E - FURNITURE, FIXTURES & EQUIPMENT:
  Buyers will want a complete list of your equipment and will inspect it to insure that everything is in good working order.
• F - LEASE:
  All buyers want a good lease and look to the seller to help in the transfer of his lease or in getting a new lease.
• G - TRAINING:
  One of the reasons to buy a business is that a buyer can buy a business he /she has no experience in & feel confident that the seller will train him/her. This opens up the number of potential buyers for your business.
• H - APPEARANCE:
  Everyone wants to be proud of his or her business; therefore nice looking businesses sell first! Buyers deduct large amounts from their offering price for businesses that are in less than top shape. Please keep your business neat, clean and in good repair if you want top dollar.
• I - NON-COMPETE AGREEMENT:
  Most buyers fear you may decide to open another business just like the one they are buying and take all their customers. A promise not to compete with an appropriate distance and time is normal for many businesses. This may also provide tax advantages for both buyer and seller.
• J - WHY IS THE BUSINESS FOR SALE?
  This is one of the first questions a buyer asks. Buyers are always concerned because they are afraid you may be selling because of some undisclosed fact, which may hurt the business in the future. Buyers must see a logical reason for sale - without it they will assume the worst!
• K - TIME IS OF THE ESSENCE:
  It's always wise to respond quickly to an offer because buyers are often looking at more than one business when they make an offer. An offer can be withdrawn any time until it is accepted and delivered back to the buyer. If you don't respond in a reasonable time, the buyer may lose interest in your business and move on to another.
• L - NO SURPRISES:
  Almost any problem can be solved if we know about it in advance. Please be sure to tell us about any problems such as: Are you behind in tax payments? Are there any problems with the landlord or lease? Are there any loans against the business? Are you in compliance with zoning, health and other regulations?  If the buyer is surprised by something similar to this late in the process, they often just walk away.
• M - NEGOTIATION:
  We guide you through even the most complicated contract negotiations and work with other professionals to help put tax, legal and business issues in perspective. We never give up! We find solutions to even the most difficult problems when they emerge!
• N - BUYER'S ASSISTANCE:
  We have found that the best way to assure a successful sale is to closely assist the buyer through every step of the buying process. We unravel the "mystery" of buying a business and make the buyer comfortable with the whole process.
  
  We prepare them to act quickly when we uncover the right opportunity. We explain the seller's needs to the buyer prior to the negotiation stage. After agreement, we help the purchaser review the books and records of the business and help secure the lease, licenses and necessary approvals.