During the process, the seller’s job is to do what he does best, which is to run the business as if he were going to keep it. The broker’s job is to confidentially market the business, find and screen the buyers, educate them, negotiate the terms of the sale and provide a buffer for the emotional highs and lows that we all experience.
The buyer benefits because their business broker has already pre-qualified a business before he lists it. He has psychologically prepared the seller for the sale He has also done a lot of the legwork to assemble the financial information and background of the business. This helps to reduce some of the uncertainty for the buyer and make this search more efficient.
We understand that public knowledge of a potential sale can affect the attitudes and actions of customers, employees, competitors, lenders, suppliers or investors, and thus the value of the company. We also want to safeguard the employment status of a potential buyer while he considers a very important change for his future. Go to our Confidentiality Page for more information.
If you buy an established business, you have an income from the day you take over. You already know what can be accomplished by the business. If you start a business, you face a lot of uncertainty over the success and desirability of your product or service. Buying a business takes a lot of the risk out of your decision.
Some buyers may want to make a no-money, or low-money, down offer, it is very rare that they will succeed. Usually a business cannot earn enough to pay salary to the owner and service such a level of debt. In addition, the lender, whether it is the seller or a bank, wants the buyer to show his commitment to the business by having vested financial interest in its success.
Sellers generally prefer to receive all cash at closing, and some buyers are able and willing to accommodate them. However, buyers are usually trying to get the most bang for their buck and will want to leverage their down payment into the largest business that they can buy. Although, buyers may want to make a no-money or low-money down offer, it is very rare that they will succeed. Usually a business cannot earn enough to pay salary to he owner and service such a level of debt. In addition, the lender, whether it is the seller or a bank, wants the buyer to show his commitment to the business by having a vested financial interest in its success.
Banks will loan money on businesses that show a strong earnings history on the tax returns. They require a lot of documentations and the payment of upfront fees. In recent years, bank loans, which are guaranteed by the Small Business Administration, have become very popular and more readily available. If all else fails, family is always an option.
Some business may sell within a month of being put on the market. Other may take several years to attract the right buyer. A business broker seeks out and talk to buyers everyday. The next one may be just right for a particular business.
Some businesses may sell within a month of being put on the market. Others may take several years to attract the right buyer. A business broker seeks out and talks to buyers everyday. The next one may be just right for a particular business.