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Is it time to sell? Selling your business is a major decision!
We have included some of the most common topics and questions frequently brought up by sellers. If you have any questions that we have not covered, please don’t hesitate to contact us.
You have devoted your time, money, and energy into building, running, and operating your business. It may well represent your life’s work.
If you have already decided that now is the right time to sell, you want the very best professional guidance you can get.
This is when working in tandem with a professional business broker can make the difference between just getting rid of the business and selling it for the very best price and terms!
Following are some of the most common topics and questions frequently brought up by sellers. If you have any questions that we have not covered, please don’t hesitate to contact us.
Selling a Business? We offer a Professional Business Valuation.
We have designed this section to address commonly asked questions about the process. Feel free to reach out to us with any additional questions you might have.
What is my business worth?
The first question almost every seller asks is: “What is my business worth?” Quite frankly, if we were selling our business, that is the first thing we would want to know. However, before you ask that question, you have to be ready to sell for what the market is willing to pay. There are a wide variety of factors that go into a valuation. Our brokers will work closely with you to determine the optimal market price.
Do you really want to sell this business?
It’s important to get clear about your motivations. When you feel that you have a solid reason (or reasons) why you want to sell, you will be in the right frame of mind to get started.
Preparation is key!
The First Steps:
- Three years’ profit and loss statements
- Federal Income Tax returns for the business
- List of fixtures and equipment
- The lease and lease-related documents
- A list of the loans against the business (amounts and payment schedule)
- Copies of any equipment leases
- A copy of the franchise agreement, if applicable
- An approximate amount of the inventory on hand, if applicable
- List of FF&E ( Furniture, Fixtures and Equipment )
Make sure the financial statements of the business are current and as accurate as you can get them.
If you’re halfway through the current year, make sure you have last year’s figures and tax returns, and also year-to-date figures. Make sure all of your financial statements presentable. It will pay in the long run to get outside professional help, if necessary, to ensure these documents are thorough and accurate.
You want to present the business well “on paper” and give prospective buyers insight into your cash flow. This includes the profit of the business, as well as the owner’s salary and benefits, the depreciation, and other non-cash items. Not everything is dependent on your bottom line.
Prospective buyers eventually will want to review your financial figures.
Notes If you’re like many small business owners, you’ll have to search for some of these items. After you gather all of the above items, you should spend some time updating the information and filling in the blanks. Have all of the above put in a neat, orderly format as if you were going to present it to a prospective purchaser. Everything starts with this information.
Insider Tips The big question is not really how much your business will sell for, but how much of it can you keep? The Federal Tax Laws determine how much money you will actually be able to put in the bank. How your business is legally formed can be important in determining your tax status when selling your business.
For example: Is your business a corporation, partnership or proprietorship? If you are incorporated, is the business a C corporation or a sub-chapter S corporation? There are also tax rules that impact certain businesses on seller financing. The point of all of this is that before you consider price or even selling your business, it is important that you discuss the tax implications of a sale of your business with a tax advisor. You don’t want to be in the middle of a transaction with a solid buyer and discover that the tax implications of the sale are going to net you much less than you had figured.
We conduct a professional business valuation that we have designed, and it maximizes the value of your business for sale.
Protection of your Interest throughout the entire business sale process.
We maximize value, we maintain confidentiality, and we maintain deal flow to help you sell your business quickly.
Dedicated Business Broker.
Ultimately selling a business is about people-sure, we have all the technology and modern day resources to help you sell your business, but no technology in the world will sell your business on its own. With Angle, you will have the help of our professionally trained, experienced brokers who will be dedicated as your “listing expert” to help you reach the goals you set for selling your business.
Productive Negotiations To Help You Sell Your Business.
We help overcome common objections and hurdles that occur during due diligence and negotiations-you will want to have your business broker present your case to a buyer, particularly at times when it seems like things could get unpleasant. For example, if you need to make a counter offer, let your business broker handle it. You and your buyer may need to remain associated after the sale and an aggressive confrontation during the negotiation could sour the relationship.
Buying a Business?
Why Buy an Existing Business?
With so many options available to you, the questions will become which vein of the business-ownership arena should you pursue? Between franchises, existing businesses, start-ups, home based businesses and MLMs, it does become a bit overwhelming. When reviewing all of the possibilities you have to decide what will work best for you; however, your chances of success are clearly best when you buy an existing business or franchise resale for many reasons. With any new business you have two main challenges; developing the product or service and then seeing what, if anything, people are willing to pay you for it. Regardless of a company’s past performance, an existing business or franchise will. at the very least, have a history from which you will be able to make certain decisions. Even if the company was not profitable in the past, your strengths may lend themselves perfectly to turning it into a viable venture.
How to Value a Business
Accurately valuing a small business is often the most challenging part of the process for prospective business buyers. However, it doesn’t have to be an overwhelming or difficult undertaking. Above all, you should realize that the valuation is an art, not a science. As a buyer, always keep in mind that the “asking price” is not the purchase price. Quite often it does not even remotely represent what the business is truly worth. Naturally, a buyer’s valuation is usually quite different from what the seller believes their business is worth. Sellers are emotionally attached to their business. They usually factor their years of hard work into their calculation. Unfortunately, this has no business whatsoever being in the equation. The challenge for you, the buyer, is to formulate a valuation that is accurate, and will provide you with an acceptable return on your investment.
Due Diligence- How to uncover any problems BEFORE you buy
Due diligence is probably the most critical stage in the buying process. Many prospective buyers incorrectly identify this period as strictly a financial review, but it goes far beyond that. Due diligence encompasses a far greater project and that being the complete investigation and review of the business. One of the keys to buying a good business, comes from your ability to learn the intimate details of the business. to identify the strengths, weaknesses, pluses, minuses, growth opportunities and areas of concern. If you do not do a flawless job of gathering information, you will not be able to pull the trigger and complete the transaction since you’ll be uncertain about too many components of the business.
Business Brokers – How They can Help You!
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Show them you’re serious. A business broker wants to be sure that if the right opportunity comes along, you’ll be ready to buy! |
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Prepare a laundry list of the types of businesses you’re interested in purchasing |
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Present them with your personal financial statement |
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Tell them precisely how much money you have to invest |
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Ask them for suggestions as to how you should conduct your search |
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Ask them to show you how to best navigate the Internet |
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Call them regularly, at least once a week. |