Frequently Asked Questions

What separates you from the other professionals that sell businesses?

Each of us must determine how we will conduct business.  This is our this approach.  We really listen to sellers and buyers concerns because we have walked in their shoes. We take fewer listings and dive deeply into a company spending the amount of time and resources necessary to properly package a business for sale. No shortcuts; no surprises.

Once a business is market ready we don’t wait for the phone to ring. We personally meet with 2-3 financial institutions to get the business pre-approved for financing then spend our time finding a buyer that has something to gain by owning it.  We advise every interested buyer if you can’t make this business better, don’t buy it.  Better yet, we believe in the integrity of the transaction and those we work with and for.

We have numerous colleagues in this industry that are not only friends but trusted advisors and we collaborate with each other when putting transactions together. Affectionately called the Biz Brain Trust; operating under the premise that “one of us is not as smart as all of us.” We believe all of the above is the reason for our success.

How do you price a business?

First, both of us need to know what your business is worth. If we can’t substantiate the worth, how can we gauge offers? We are professionally trained in business valuation and equipment appraisals and perform a detailed analysis of the business financials, cataloging all furniture, fixtures, equipment, vehicles etc. We have access to the largest data base of comparable business sales and equipment sales in the world and the work we perform will meet the scrutiny of a financial institution. In addition, we will ensure that you fully understand why the value of your business makes sense prior to taking your company to market.

What is the seller’s role in the process?

The seller’s job is to do what they do best which is to run the business as if you would own it forever. You work closely with us providing information about the business as we prepare the business for sale. This is a joint venture where we work as a team and everyone is on the same page. Our dealing with prospective buyers saves you time, ensuring that your potential buyer has the financial ability to complete the transaction and carry your business forward.

How long does it take to sell a business?

In a general sense, six to eighteen months but there are exceptions. One month to four years or longer depending largely on the size of the business, the industry it’s in and the size of the pool of potential buyers. To illustrate, multi-million dollar businesses have a smaller pool of buyers because of capital requirements. There are more restaurants than land surveying companies; more automotive repair shops than wholesale distribution companies; more printing business than paper mills etc.

One thing for certain is that any business, properly prepared to sell, meaning provable and bankable financials will attract many more prospective buyers within its classification.

How do you find a buyer?

Our marketing campaign is designed together with the seller to fit their specific business and industry. First we identify who or what person or company could benefit from acquiring this business. We discuss those the seller deems inappropriate to contact. We generically advertise
businesses online through national and international online databases that specialize in listing businesses for sale. We may place ads in publications that target specific industries and use direct mail to owners of similar businesses. We may also contact people in organizations we are members of like these listed below

Networking Within Groups We Belong To

  • The International Society of Business Analysts (ISBA) A group of credentialed professionals trained in the area of business valuation, mergers and acquisitions, business consulting, and business brokerage 
  • The NEBB Institute, a national and international group of machinery and equipment appraisers. 
  • International Business Brokers Association (IBBA). A group of national and international business brokers 

Additional Marketing Contacts 

  • Private Equity Groups (PEGS) and Small Business Investment Company’s (SBIC’s).

Local Contacts 

  • We make calls to selected attorneys and accountants to see if they have clients that may have interest in buying a business.

What kind of financing is available?

Businesses are financed from many sources, all of which could be used in the transaction. It is expected that the buyer will have a vested interest in the business by investing his own funds. Banks and the Small Business Administration (SBA) offer loans to buyers and some financing can come from the Seller depending on the circumstances. Other cash injections can come from relatives, equity property or securities. We can also show you how retirement funds can be used to buy a business with having any tax penalties.

Why buy a business instead of starting one?

Having done both, I am of the opinion that it is much easier to buy an established business, make it better and expand it for these reasons because:

  • You have income from the day you take over.
  • You will know how much money it takes to service the debt. 
  • You will know if the business will pay you an acceptable income level. 
  • You will know how much return you should get for parting with your down payment. 
  • You have the historical financial background of what was accomplished by the business. 
  • You will know how much income should be left over after expenses to grow the company. 
  • You will know that the expertise you bring to the table will increase the company’s profits. 

Government surveys show that over 80% of new businesses fail in the first 3 years, for reasons such as poor location, low product quality, lack of capital, and lack of management skills. This risk can be eliminated by purchasing a quality business with a proven name, location, customer base, and cash flow.

In a startup, unless you have worked in or earned an education in that industry, you face some uncertainty over the success and desirability of your product, service or location. Buying an existing business takes a lot of that risk out the equation.

However, the advice that trumps mine and all the of the others is to follow your passion. If it’s a startup; go for it. If it is an established business don’t buy it unless you think you can make it better. If you love what you’re doing it doesn’t feel like work. Passion, hard work and dedication is what built businesses in America.

What is the best business to buy?

Most buyers want one that holds a personal interest for them. Some buyers may look for opportunities to improve business that have the right thing wrong with them if they have the expertise to fix it. These businesses are operated a few years, expanded and sold at a substantial profit. Two similar businesses can be located in different states or city blocks apart in the same town. One is profitable, the other not. One has a hands-on owner versus a new manager every other week. One may have more effective advertising, pricing, cleaner facilities and service. One, may be debt free the other high rent. One may have newer efficient equipment. It may pay less for supplies. It may have higher profits! The only way to find out which one is the best business to buy is compare the two.

How can I sell without competitors and employees knowing?

We maintain strict confidentiality. The owners name, company name and locations are never given out without a potential buyer signing a confidentially agreement. When we receive the signed copy back we send a two page business profile and financial summary highlighting the
attributes the company. This starts the conversation.

If they like what they see we set up a tour of the business. We never give out tax returns or any other financial information until the buyer has toured the business, met with the owners, made an offer accompanied with an earnest money check. After the offer is negotiated and accepted the buyer is given copies of the financials to review with their advisors and bankers.

Employee confidentially is easily maintained if you have people coming and going into your business. If not, we can meet in our office, at lunch, off premise, or after closing. Most buyer tours are arranged after hours or on weekends.

When is the best time to sell my business?

In a perfect world the best time to sell is when a business has experienced growth for three years or more. Everyone likes an upswing, but some businesses like agricultural and construction sectors are more subject to fluctuation than others. However it is not a perfect world just like there are no perfect businesses. There really are only three times to sell a business: When you want to - When you have to - When your heirs do it.

The good news is almost any business can be sold, even if it is not doing well if there are valid reasons for the decline like death, divorce, partnership disputes, or burnout. There are many valid reasons to fix a business because it’s much easier to fix one than starting from scratch. The business must be looked at objectively, handled professionally and priced correctly.

What is Goodwill?

Goodwill is an intangible asset of a company and an attractive force that generates sales revenue that add value to the hard assets. It includes factors such as reputation, market penetration, highly recognizable brands, customer lists, loyalty, patents, proprietary products and intellectual property. Its value is usually realized when the business is sold. Goodwill is a part of all businesses unless it is failing badly, in bankruptcy or closed. If there were no goodwill in a business its owner might as well auction off the equipment, lock the door and leave rather than spend time trying to sell it.

The Merger & Acquisition dictionary defines goodwill as: "An intangible fixed asset that is carried as an asset on the balance sheet, such as a recognizable company or product name or strong reputation with customers. If a business was bought for $ 2,000,000 and its net assets were $1,500,000 then $500,000 of the purchase could be allocated to goodwill on the balance sheet.

One could define both goodwill and patents as figments of the imagination, the former a banker and the latter an inventor’s. Yet accounting firms recognizes and assigns real value to both, based on the theory that both will deliver real benefits in the future.

Do you have another question that we can answer for you?

To send it in, contact us.