Selling a Business - bizbrokersusa.com

Selling your Business?

As a business owner considering selling, you need to know some of your options:

i). That the confidentiality of your business will be protected.

ii). That you will get maximum exposure to pre-qualified buyers.

iii). That you will receive sound advice and direction when responding to offers.

iv). That you will receive the best price for your business.

v). That you are selecting the right firm to represent you.

A). Free Confidential Business Evaluation: A valuation of your business is one of the first steps in determining if your business is positioned to sell. There is also the matter of determining if the sale will meet your financial needs. In our initial consultation, we will discuss with you the methods we use to determine value. We will ask you to provide certain financial reports and returns to determine this. At such time as we determine a market price, we will advise you on what we deem to be the best possible price for your business. We go to great effort to follow certain guidelines provided by lenders to insure we are not out of the ball park but we have arrived at a “sweet spot”. The valuation is FREE and it also provides us the opportunity to determine if you have a marketable business. What is your business worth?

B). The Listing Agreement: A listing agreement is entered into between us. This listing agreement gives us the right to market your business. It makes provision for the term, price, and specific conditions we agree to. Once the listing agreement is entered into, we gather a variety of information in preparation to market your offering. These include such items as current financial statements, statements of profit and loss, employment records, tax returns, leases, contractual obligations etc.

C). Business Disclosure Statement: Of paramount importance is a disclosure form we utilize called the Business Disclosure Statement or BDS. This comprehensive document is utilized to provide the potential buyer with a physical accounting of just about every aspect of your business. It is vital to the transaction to disclose as much information as possible. By doing so, we eliminate many last-minute concerns and insure you a smooth transition.

D). Marketing: From the information you shared, we prepare a marketing package designed to present to a potential buyer. Initially, we do not expose the business name or address. The information we provide is general in nature until we can meet with a potential buyer in person. We may provide interior pictures, price, area, number of employees, current volume, cash flow etc. In addition to our database of buyers, we advertise your business on our web site and several others. Now and again we do utilize the newspapers, mailers, e mail and telephone.

E). Screening the Buyer: We shield your business to determine if there is a genuine interest. Many times, we initially hear from a buyer that they are “open to just about any business”. These are what we call “tire kickers”. They do not receive any confidential information about your business. On the other hand, we have buyers that are willing to be pre-qualified. By this we mean that they have signed Confidentiality Agreement and provided us with their financial information. We have their assurance that they are financially capable to purchase a business. These people are serious buyers. They know what they want. If there is an interest in your industry, for your price and close to your terms, we prepare a Confidentiality Agreement. At such time as it is signed, we provide them with your Business Disclosure Statement -BDS.

F). Keeping the Business Going: While we are in the process of marketing your business, it is vital that you continue to maintain your business. In other words, it’s “business as usual”. During this time, we may ask you for updated financial information. It is also your responsibility to inform us of anything which may affect the sale of your business…either good or bad. Changes are important. We need to be informed.

G). Meeting the Buyer: We will arrange all showings of your business. It is important that we register the potential buyer with you. We will arrange these showings at a time that is off business hours. We do this to avoid employees and customers. Remember, the buyer that we are presenting to you is pre-qualified to make a financial decision. It is an opportunity for the buyer to inspect your business. Basically, the buyer has the opportunity to “kick the tires”. We discourage any discussion regarding the price and terms. This is simply the time for the buyer to do an initial inspection and discuss any concerns he or she may have relative to the Business Disclosure Statement.

H). The Purchase Offer: After the buyer has had an opportunity to review the Business Disclosure Statement, your financials, and inspected the offering, he or she is in a position to make an offer to purchase your business. We prepare the offer and obtain a good faith deposit. With these items in hand, we present the offer to you. We make every effort to make a great deal for everyone involved. At times, different concerns will come up that need clarification or revision. We make every effort to negotiate the deal to everyone’s satisfaction.

I). Due Diligence: After the purchase offer has been signed, the buyer will want to do his or her due diligence. This is an opportunity for the buyer to examine the documents you provided and verify the information. Depending on the size of the business, it usually takes from a few days to a couple of weeks to complete this process.

J). Closing the Deal: Our purchase offer indicates the closing date. This date is a time agreed to by the buyer and seller. The attorneys for both sides of the transaction will prepare the various documents necessary to close. Some of them include the bill of sale, bulk transfer lease assignments etc. Depending on the business being sold, we may need to have outside firms perform such items as taking inventory. At such time as these items are complete, the buyer will present your attorney with a certified check for the amount due at closing. The business is now transferred to the buyer.

K). After the Closing: At times, the purchase offer may contain a provision to have the seller of the business train the new owner for a period of time. This is an opportunity for you to ensure a smooth transition of the business. It is a time to allow the buyer to feel comfortable with the business and show him or her how the you operated the business on a day to day basis.