Sellers Q&A

Over the past 20 years, Business Brokers & Consultants has successfully closed hundreds of main street to mid-market acquisitions.

Business owners have questions. We have answers.

What is my business worth?

Businesses are sold based upon a multiple of earnings. Discretionary earnings are the key value indicator for most small businesses. You can use this link to get a general idea of what your business is worth based solely upon discretionary earnings.

Other factors that affect the value of your business may include: franchise rights, patents, age and condition of any equipment, location, its financial history, competition, and the economy. We will work with you to uncover any hidden value in your business and enhance its saleability. Our brokers will help identify the type of buyer who stands to benefit most by acquiring it and is therefore willing to offer you the fairest price.

Is it time to sell?

The best time to sell your business is when you don’t have to, when profits are up, and you are under no compulsion to make a quick exit. You should have a good reason to sell, without being desperate. This is the point when you are selling from a position of strength.

Unfortunately, some business owners don’t think about selling until they absolutely have to. At that point, it may be too late to get the highest possible sale price. Almost any business can be sold, but the final sale price often comes down to timing and whether or not the owner already had an exit strategy in place. We can help you plan an exit strategy today, so you’re ready no matter what the future holds.

If you are already in a “have-to-sell” position, don’t panic.  We will work with you to maximize the value of your business. We know how to market your business’ strengths, maintain confidentiality, and quickly put your business in front of qualified buyers.

How long will it take to sell my business?

It takes an average of 60 to 180 days to find a buyer. That is from the day you list your business until a purchase agreement is signed. Thereafter, a period of due diligence ensues. This can take anywhere from two weeks to two months depending upon the complexity of the transaction.

How can I expedite the sale of my business?

The price and terms you offer are some of the most important influences in expediting a business sale. The more reasonably priced and favorable your terms, the faster the sale will close.

Some factors that influence how long it will take to sell are outside of your control and ours. For example, industry trends and the ‘climate’ within the lending community. We will help you understand and focus on the factors that can be controlled. For example, getting all your books and records in order, and preparing in-advance any licensing, loan, or real estate related documents that may be needed during due diligence.

Can I sell my business without a broker?

You probably know everything there is to know about running your business. Likewise, Brokers know everything there is to know about selling it, so, while it is possible, there are disadvantages you should strongly consider. Let’s look at a few.

First, you probably don’t have access to a large number of qualified buyers. Advertising your business through internet listing services will generate inquiries, but it’s only one of the many marketing tactics we employ. A well-qualified buyer, or several competing to acquire your business, will generate a much higher sale price.

Next, It will be extremely time consuming and difficult to keep the sale confidential. You will have to field inquires from “tire-kickers” and serious buyers yourself, often with employees and clients around. This increases the likelihood that news of the sale will get out, and, inevitably, cuts into the time it takes to run your business. Even if all the “lookers” keep quiet about the sale, most business owners find the process of dealing with them extremely frustrating.

Finally, if you have never sold a business before, you will be at a serious disadvantage when it comes to negotiating with experienced buyers. And, if the buyers are inexperienced, it can be a case of “the blind leading the blind.” You and your perspective buyer may have the best of intentions about completing the sale, but not enough knowledge to actually do so.  Knowing how to obtain financing, structure the transaction, and draft the necessary legal agreements may prove more challenging and expensive than either of you anticipate.

What are the advantages of working with a broker?

Businesses sold through a broker command a higher sale price. Plus, your broker lends expertise. They know how to market your business, and more importantly, who to market it to. They understand the process, as well as pre-screen, educate, and help prospective buyers obtain financing. This ensures that you can stay focused on your business, and keep profits up. The Broker also provides a buffer between you and the buyer in the negotiating process. That buffer can make the difference between two parties that walk away from the deal in frustration and a successful closing.

How will my business be marketed?

First, we gather information about your business, the industry and prospective buyers. That information is used to prepare a comprehensive profile of your business. We then identify individuals in the same or an interdependent industry and market your business directly to them. They will understand your business, its value, and are most likely to have interest in acquiring it. Meanwhile, your business is also advertised on our web-site, industry specific publications, and the major on-line listing services. These are all “blind ads” that share just enough information about the business to generate interest, but do not disclose its name or specific location. That information, and the comprehensive profile are only shared with pre-screened buyers under nondisclosure agreement (NDA). This gives your business offering exposure to a wide range of buyers, but ensures that only a small qualified number of those know it’s actual identity.

At the same time, we introduce the opportunity to a network of lenders, who specialize in cash-flow acquisitions. Our lenders will pre-approve the business and tell us how much they will be willing to loan against it once a suitable buyer is found. We keep all the moving pieces in place, so that once we secure a purchase agreement, the deal can move forward as quickly as possible.