Common Questions
What is a Business Broker?
A “Business Broker” is a person or firm that acts as an intermediary between sellers and buyers of businesses or business opportunities. Business Brokers, also called Business Intermediaries, Merger and Acquisition Advisors or Specialists, assist buyers and sellers of privately held businesses in negotiating the sale, purchase, exchange or lease of a business, or the assets and goodwill thereof, when the transaction involves any change in the ownership. The sale or purchase of a business is generally described as an asset sale, although stock sales are permitted providing certain conditions are met. A Business Broker should have broad knowledge and experience in business and various types of business structures, and in many states, must be a licensed real estate agent, broker, or associate broker.
There are over 5,500,000 businesses in the United States (with at least one employee). At any given point in time, approximately 20% of these businesses are for sale, which translates to over 1,000,000 companies on the market right now. Anyone who owns and operates his or her own business has, at one time or another, given thought to offering it for sale. Owning one’s own business is very much part of the American dream and the decision to sell is a serious step-both personally and professionally. It represents parting with one’s biggest asset, and in many cases, the bulk of one’s wealth.
A business should have a clear financial record with provable cash flow, stability in the industry, good employees, future growth potential, and maintained equipment. A Business Broker will handle the valuation process, promote and package the business confidentially, as well as bring qualified prospects.
Ownership transition is a critical juncture in the life cycle of a business and is a serious step for seller and buyer, both personally and professionally. Broker services are designed to compliment the services provided by attorneys, CPA’s, bankers and other professionals.
What about confidentiality?
Confidentiality begins at our very first meeting. I make every effort to ensure that no sensitive information (company name, location, financial) is revealed to a potential buyer until he/she has been financially qualified, background information has been provided, and a confidentiality agreement has been signed.
When is a good time to sell my business?
The best time to sell your business is when your business is financially sound and well-established. The company’s customer base must be intact and it’s debt situation under control. A distressed business will not retain it’s value or warrant the best price, regardless of your years of effort and hard work.
How do you get paid?
My fees are directly related to the value of the business and I typically get paid by the Seller when the transaction closes escrow.
