Why should you use a Business Brokers Network
(BBNSM) Affiliate
Broker?
There are many reasons. Most importantly,
BBNSM offers business owners the opportunity to have the
largest business brokerage network in the world working to sell your
business, not just one local broker. It is clear that it is better
to have the potential of 450 affiliate brokers nationwide seeking
the right buyer for your business than one local office.
Finding one prospective buyer is insufficient. Creating
competition among multiple buyers should be a broker’s goal, not to
just find a single buyer. A buyer without competition feels
free to offer less than the full value of a business. When a
buyer knows several other buyers are looking at the same business,
they are hesitant to offer less than the price and terms being
solicited.
As the only true national firm in the industry,
BBNSM has offices covering every state in the
nation. No other brokerage firm even comes close. Before
BBNSM was established, an individual living on the West
Coast, for instance, who wanted to relocate to the Southeast would
find no value working with a broker locally because the broker would
not know what was available outside the local market. As a
result, a prospective buyer would need to go from broker to broker
in the desired area. This only caused frustration and a waste
of time, and seldom, if ever, resulted in completion of a business
sale. Now, prospective buyers can contact a local
BBNSM Affiliate Broker, and the prospective buyer will
have access to listed businesses from affiliated offices in the
desired area.
Another factor to consider is packaging. Poor packaging
of business is one of the major complaints expressed by
buyers. We have been told by hundreds of buyers that
BBNSM has the best and most professional packaging in the
industry, ensuring that sellers are effectively motivating the
acquisition of their business. All BBNSM Affiliate
Brokers have standardized and detailed packaging, which, in addition
to its appeal to prospective buyers, makes it easy for one Affiliate
Broker to quickly understand a business listed by another.
When a prospective Buyer is presented the information on your
business, the Buyer will be able to have most of his questions
answered and be able to make an informed buying
decision.
Return to
FAQ
How do you protect my
confidentiality?
CONFIDENTIALITY is vitally important when working with
any broker during the selling process. BBNSM
Affiliate Brokers will not provide confidential information
about the business presented to unqualified buyers.
BBNSM Affiliate Brokers require potential buyers to
provide proof of financial ability to acquire your business.
Qualified buyers (and their professional agents) must sign an
individual non-disclosure agreement before details can be discussed.
Similarly, confidential buyer information will not be provided to
the seller until an offer to purchase is submitted. So, the Seller can make an
informed selling decision, all within the confines and security of
confidentiality.
Return to
FAQ
Why use a
business broker?
The process of buying or selling a business requires
dedication and the attention of a professional with the knowledge of
the complete flow of a business transaction, as well as a team in
place to accomplish every aspect of the transfer. Marketing
and facilitating a business transfer is a full-time job!
You deserve someone who will work as hard as you do. A
qualified broker will save business owners and prospective buyers
money by helping them avoid costly mistakes, effectively marketing
the appeal of the business, and maximizing exposure to serious,
qualified buyers--all with complete
confidentiality.
If you are interested in selling your business and don’t
know the answer to any of the questions below, you could benefit
from the assistance of a professional broker (and you are not
alone!)
·
How do you reach qualified buyers, including possibly
competitors, without disclosing your intentions to sell?
·
How do you evaluate your business objectively to ensure
you receive top dollar for your investment and avoid costly
negotiating tactics?
·
How do you prepare and provide the information a
prospective buyer will require to interest him in pursuing your
business in favor of other options?
·
How do you arrive at the best price and terms, including
the intangible and goodwill values of your business?
·
How do you maximize your favorable exposure to potential
offers while minimizing your potentially damaging public exposure to
customers, competitors, employees, and suppliers?
·
How do you market your business in all of the appropriate
markets, databases, and media efficiently, effectively and
confidentially?
·
How do you screen and pre-qualify buyers, determine their
motivations, managerial capabilities, and financial strength?
·
How do you effectively sell your business, diverting
significant time, effort and resources to that process, while
continuing to manage your ongoing business productively?
Business owners have focused their entire lives on
growing and developing their businesses and seldom know how to
answer all of the questions above. That is where a professional
BBNSM Affiliate Broker can come in. The sale of your
business demands a professional, just as running your business has
demanded your professional attention. BBNSM
Affiliate Brokers have the expertise, tools, and
professional team to market and sell your business successfully on a
national basis. The objective is to protect your business investment
and maximize your net after tax profit on the sale. It is to
your advantage and your broker’s as well, to obtain the best
possible price that a reasonable buyer will pay.
BBNSM Affiliate Brokers strive to maintain high ethical
standards and communicate in an open and honest manner in all of our
business relationships.
Return to
FAQ
What affects
the selling price?
Several factors come into play and can affect the sales
price. One of the most critical is the “terms” or the amount
of down payment and the amount financed. Asking for one-half
down will reduce the price by approximately twenty percent.
Asking for cash will reduce the price to about forty to sixty
percent of the amount attainable with one-third down.
Down payment or the “terms” is a key factor, because a
buyer is trying to buy as much business as possible for the money
available for down payment. So, when a seller asks for
$200,000 down on a $400,000 value business, buyers prefer to
continue looking until a $600,000 value business is found where the
owner will accept $200,000 down and finance the balance. The seller
who asks for all cash or a large down payment is not going to
succeed in obtaining the full fair market value of their business,
because buyers know they can buy three times as much business for
the same investment. In a nutshell, high percentage down payments
cause buyers to discount
offers.
A second critical factor is the quality of the
information provided to a prospective buyer. The value of the
assets and cash flow generated by the business must be provable and
verifiable. A professional business broker will be able to
assist the business owner in arriving at these values.
The third most important factor that effects the sales
price of a business is whether there is competition among
prospective buyers for the business. Competition creates higher
selling prices, as we all know from basic economic principles.
When a business owner asks for more than the fair market value for
their business or does not offer reasonable terms, there will be
few, if any, buyers interested in acquiring the business. On the
other hand, when a business is priced realistically and with proper
terms, multiple buyers are likely to pursue acquiring the business.
A buyer who knows he has other buyers competing for the business
will be motivated to offer the price being asked to ensure he does
not lose the business to another buyer's better offer.
Return to
FAQ
Will I have to finance the Business Sale?
Over eighty percent of all businesses sold between
$250,000 and $5,000,000 are sold with 20% to 33% down and the owner
financing at least an equivalent amount. It can be difficult to
obtain third party financing for an operating business. Commercial banks and other
sources of funds are wary of financing a transaction because of all
that can go wrong. They
want to see continued involvement by the seller which demonstrates
confidence the business will continue to be profitable. In addition, of course,
commercial paper will carry a higher interest rate than owner
financing, from which the required debt load will make the business
impossible to purchase.
There are many creative means to seller finance your
business. At JRI
Associates, we will be happy to discuss options with you, your legal
counsel, and accounting professional.
Return to
FAQ
What information will you need from the Seller to market
my business?
As mentioned earlier, the more informed buyer will offer
more for your business. At a minimum, the following information
should be provided:
- Profit/Loss, Cash Flow and Balance Sheets (last 3
fiscal years)
- Filed, signed IRS tax returns (last 3
years)
- Interim Financial Statements (current
year)
- Lease or Rental Agreements
- List of furniture, fixtures and equipment, including
fair market value
- Current business contracts with suppliers, customers,
employees, etc
- Intellectual property (patents, copyrights, trademarks,
etc)
- Customer lists
We will request additional information, as required,
during the selling process.
Return to
FAQ
How will my
business be advertised?
The advertising of each business will depend upon the
size and type of business. After the business is packaged, a listing
containing non-confidential information, approved by the seller,
will be published. BBNSM Affiliate Brokers use several
media to solicit prospective buyers, including local and national
newspapers, including the Wall Street Journal, trade publications
and top business listing sites on the internet. In addition,
qualified buyers from other affiliate offices comprising more than
1,000 individuals, corporate acquirers and investment groups will
have access to the listing. Local newspapers are used as
little as possible, because it is often more difficult to protect
confidentiality when a business is advertised locally.
Return to FAQ
What do I need to do to help sell my business?
The first thing you need to do is offer the business at a
realistic price and with reasonable terms. You need to provide
as much information as is possible to the broker so a professional
marketing package, including a business profile, can be prepared on
your company. While the Broker will perform the tasks required
to successfully market the business, as a Seller you must be
available to the Broker to expedite the sale. The quality of the
business profile will greatly enhance the “salability” of a
business. A package prepared by a BBNSM Affiliate Broker
will contain the financial, operational and historical information
about the business. Informed buyers make better offers. Other
things a seller can do are:
·
Continue to run your business in a normal manner.
·
Keep the business clean and organized (on paper and in
person), so potential buyers will like what they see.
·
Liquidate or set aside obsolete inventory and unneeded
equipment before you place the business on the market.
·
Notify your broker of any material changes in your
business.
·
Forward monthly financial statements to the broker as
soon as they are completed. This will keep your marketing
package current.
·
Do not meet with potential buyers without your broker
being present.
·
Avoid direct negotiations.
·
All offers and counter-offers should be in writing and
should be presented by the broker.
Return to FAQ
Can you sell my business?
A broker cannot really sell a business, because he or she
does not have the intimate understanding of the business and
its operations, and certainly not the level of knowledge the owner
has. Therefore, a professional broker's initial job is to get
a business listed at the best possible obtainable price and with
realistic terms of sale. The next job is to qualify buyers to
keep the seller from wasting time with people who are not
financially qualified. Qualified buyers will be presented your
business profile after they have completed a Buyer Warranty and
Confidentiality Agreement that protects the confidentiality of the
seller regarding the potential transfer. The broker will then
schedule a meeting between the business owner and the interested
buyer. During this meeting, the business owner will explain
the business to the buyer. After this meeting, the broker will
work to get a written offer to purchase. The broker will
present all offers and after acceptance will coordinate the due
diligence process that will lead to the
closing.
Return to FAQ
Do you have other questions about buying or selling a
business?
Contact JRI Associates
today!
Phone:
610-407-0197
Fax:
610-407-9666
e-mail:
info@jriassociates.com
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