Seller FAQ 2018-02-22T06:05:55+00:00

Seller FAQ

Business Brokers can help people sell and buy businesses, including their estimate of the best business price, ideas on marketing, advice with negotiations, documentation for closing, and other consulting. Business Brokers can also improve confidentiality, reach more potential buyers and save the seller time while also helping the seller and buyer achieve a mutually beneficial deal.

CONFIDENTIALITY

Business brokers represent the seller and can maintain your anonymity and confidentiality. Lack of confidentiality can be devastating on employees, customers, suppliers, others and ultimately the sales price.

LARGE POTENTIAL BUYER POOL

Business brokers and intermediaries can market your business to a large pool of potential buyers.

OBJECTIVE VIEW AND ABILITY TO HELP NEGOTIATE

Business Brokers have an objective view of your business and can understand both the seller and buyer needs and expectations. Additionally, good brokers are not emotionally attached to the business and have had experience with negotiations between parties, to achieve mutually beneficial outcomes.

SAVING THE SELLER TIME

It takes time to inform, screen and qualify buyers, which can seriously detract a seller from operating their business. Most sellers don’t know what information to have ready for a potential buyer. A buyer who must wait for this information will likely walk away. A business broker can help the seller gather and present important business information, and assess potential buyers for their financial and other capabilities.

This is one of the many reasons to use a business broker or intermediary. We require every person inquiring about the business to sign a confidentiality agreement. This is called a Non-Disclosure Agreement or a NDA. Additionally, we require buyers to submit a profile which includes some basic information about the buyer’s background and financial information. This is to help determine if the buyer has the ability to buy the business. Even with these steps employees can become suspicious if there are a lot of unusual people or non-typical behavior. We can help you take steps to prevent this

 

unintentional disclosure. Most sellers realize that if employees, customers, or vendors become aware of a pending sale, they may go elsewhere to do business.

Smaller businesses that are priced correctly can sometimes be sold in as little as three months. Most of the time even with correct pricing it takes a year or longer to sell the business. Although this may sound like a lot of time, the complexities involved in the transaction, including listing the business, finding potential buyers, interviewing potential buyers, writing contracts, obtaining financing, due diligence and the closing process are all time consuming.

This is a very complex question. Please go the section in this website on Business Valuation. In general, the value of a business is what a buyer is willing to pay. It is not the value told to you by an attorney, an accountant, a consultant, or someone else. Pricing your business too high will scare away potential buyers and significantly lengthen the time to sell the business. Selling it at too low a price is almost as bad. It is important to have a fair price with reasonable terms.

Although it is not required, it is strongly recommended. Setting the value of a business is one of the first steps in the process. Business values are based on the ability of the business to generate cash flow, its assets, its reputation, and the relative risk of the business. A valuation can help assure you that you are selling at a fair price.

Most buyers require that the business be debt free when it is purchased. Consequently, at closing most debts are required to be paid off by the seller using the buyer’s purchase payment. Additionally, some type of guarantee of undisclosed liabilities will be required of the seller by the buyer. Sometimes there are provisions for offsets against the seller-financed notes for changes in working capital or other undisclosed liabilities.

A lot of information will be required. Historical financial statements, copies of leases, notes payable, equipment leases, asset lists, accounts receivable aging and many more documents will be required. Additionally, some narrative description of the business, the reason for selling, profiles on employees and other documents will be required. We can give you a list when the time comes. Good records will make the due diligence process go smoothly.

If you plan on selling your business in the future – today is the day to start planning and preparing. The longer the time frame the better the result will be.

Buying or selling a business is one of the most complex transactions that business people encounter. It is possible to do it without professional advisors; however, we strongly recommend that both buyers and sellers have their own experienced professional advisors for the transaction. We have seen many buyers that did not use professional advisors feel that they agreed to terms that have caused them many difficulties after the purchase.

Unless your business requires some specific skill or credentials, a buyer can be found. The business will need to have cash flow that will allow a buyer to get a return on their investment and obtain reasonable compensation for their work.

We constantly have a pool of buyers looking for suitable acquisitions. A thorough understanding of your business will allow for us to develop a successful marketing plan for the sale of your business.

Once a potential buyer has been qualified and has signed the non-disclosure agreement, we will provide them with a prepared package of information. After they have had time to review the package and ask questions, the buyer will then want to see the business. At that time, we will personally introduce the buyer to you. This is normally done at your place of business. While the buyer is at your business a tour of the business normally occurs. After that point, the buyer may choose to contact you directly. We do recommend that most questions are given to us for an understanding of where the buyer is in the process.

Yes, but it will be listed in a discrete manner that will not make it possible for someone to specifically identify your business from the listing.