Sell
a Business
Here are some of the most commonly asked questions that we get
from our sellers. The answers have come through experience and knowledge.
If there are more questions that you have please do not hesitate
to call.
What can a business broker do and what can’t
they do?
Business brokers are professionals who will facilitate the successful
sale of your business. As your business broker we can help you decide
how to price your business and how to structure the sale so it makes
sense for everyone (you and the buyer). We can also help you find
the right buyer for the business, work with you and the buyer in
negotiating the deal every step of the way until the transaction
is completed. We will also help the buyer by educating him/her in
the business buying process.
How long does it take to sell my business?
In general, it usually takes about 3 to 4 months to sell most businesses.
But this is just an average, there are a lot of occasions when it
only takes a few weeks and others when it can take a lot longer.
But in general, the sooner our company has all the information needed
to start the marketing process, the shorter the time period should
be. It is also important that the business is priced properly right
from the start. Some sellers believe that selling their business
is a lot like selling a car and they over price the business thinking
that they can just come down in cost later. This ideology usually
works great when selling a car but almost always backfires when
selling a business.
Why is seller financing so important to the
sale of my business?
Surveys conducted by the International Business Brokerage Association
(IBBA) have shown that sellers asking for all cash,
receive 70% of their asking price, while sellers who accept terms
usually get 86% of their asking price. The 16% difference is usually
too large of a loss for most business owners to accept. In addition,
businesses that are listed for all cash just don’t sell at
all. However if reasonable terms are established the chances of
selling greatly increase, and the time it takes to sell from the
listing date to the closing date decreases dramatically. In addition
to getting 16% more for your business, most sellers also do not
take in to account how much more money they will be making on the
interest of the loan. Perhaps the most important reason is that
it's the best way to prove to the buyer that the seller is confident
that the business can indeed pay for itself. |
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What happens when there is a buyer for my business?
When a buyer is interested in your business, we will help in the
preparation of an offer or proposal. This offer can have one or
more contingencies. It usually concerns a detailed review of your
financial records and may also include a review of your lease arrangements,
franchise agreement (if there is one) or other pertinent details
of the business. The buyer’s proposal will be presented for
your consideration. You may accept the terms of the proposal or
you can make a counter-proposal. It is important to understand that
if you do not accept the buyer’s proposal, the buyer can withdraw
it at any time. We will submit all offers for your consideration.
At first glance, you may not be pleased with a particular offer;
however, it is important to look at it carefully. It may be lacking
in some areas, but it might also have some very strong advantages.
When you and the buyer are in agreement, we will work with both
of you to satisfy and remove the contingencies in the offer. It
is important that you cooperate fully in this process. You do not
want the buyer to think you are hiding anything. The buyer may,
at this point, bring in outside advisors to help them review the
information. When all the conditions have been met, final papers
will be drawn and signed. Once the closing has been completed, money
will be distributed and the new owner will take possession of the
business.
What can I do to help sell my business?
You can cooperate fully with us and any other professional you are
using. A buyer will want up-to-date financial information. If you
use accountants, you can work with them on making current information
available. If you are working with an attorney, make sure they are
familiar with the business closing process and the laws of your
particular state. You might also ask if their schedule will allow
them to participate in the closing on short notice. This is important
if you and the buyer want to close the sale quickly. Some times
there is an alcohol or other license involved that might delay things,
but in general you do not want to wait until the attorney can make
the time to prepare the documents or attend the closing. Time is
of the essence in any business sale transaction. The failure to
close on schedule permits the buyer to reconsider or make changes
in the original proposal. Finally, your team of advisors must all
be working towards the common goal of selling your business for
the best price and terms available in the marketplace as well as
closing out the sale as quickly as possible! Remember that as your
professional business broker we are on your side. By cooperating
with us, can we best handle your business interests.
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