Why do I have to sign a confidentiality agreement before I can get information on a business?
It can be damaging to a seller if it is known that the business is for sale. Customers may not be interested in buying from a business that is selling, competitors could use the information to their advantage, and employees generally experience anxiety and often leave.
What are a seller’s discretionary earnings?
Sellers discretionary earnings are: Pre-tax net profit, plus non-cash expenses, discretionary expenses, costs of financing, depreciation, non-reoccurring expenses, and compensation paid to a single owner, less employee equivalent compensation to replace additional working owners and any known increases in fixed expenses. The taxable income shown on the tax return is not representative of the earnings of the business, but rather represents the best efforts of the business owner and his accountant to minimize the taxes that the business owner is required to pay.
What is Goodwill?
Goodwill an intangible asset valued according to the advantage or reputation a business has acquired (over and above its tangible assets), name recognition, reputation, customer base, and ongoing concern of the business.
Why is it beneficial to buy a business instead of starting a one?
It is estimated that just two-thirds of all start-ups see their second birthdays, and less than half make it to their fourth. The break-even point for buying a business versus starting a business is the cost to buy equipment, rent a space, pay a staff, pay for advertising, establish contractual relationships and support yourself while you are building up a customer base. If you buy an established business, you have an income from the day you purchase. You already know what can be accomplished by the business. If you start a business, you face a great deal of uncertainty and a high risk of failure.
How long does it take to sell a business?
It typically takes longer to sell a business than a house or a commercial property because of the confidential nature of a business sale, a business broker cannot put a For Sale sign on the window. The average time to sell a business is usually between six to eighteen months. However, there are exceptions. We have sold some businesses in as little as a week other have take up to 2 years to sell. It all depends on when the right buyer comes along for your business.
How do you advertise a business for sale?
We advertise on over 150 sites that are in alliance with the Wall Street Journal and the New York Times. We also advertise through the Business Brokers of Florida and the International Business Brokers Association.
Do I need an Attorney when buying a business?
It is advisable to have an attorney review the legal documents. It is important, however, that the attorney you hire is familiar with the business buying process and has the time available to handle the paperwork on a timely basis. Most business brokers have lists of attorneys who are familiar with the business buying process. Business brokers are not qualified to give legal advice. However, keep in mind the fact that many attorneys are not qualified to give business advice. If the attorney goes too far in trying to protect your interests, the seller’s attorney will instruct his or her client not to proceed. The transaction must be fair for all parties.
How do I know what a business is worth?
Placing a value on a business can be very complex. Each business is different with it’s own variables that can determine the value. Our database of businesses sold through our memberships provides us with extensive statistics of information to guide us in pricing your business. Knowing what buyers are looking for and what they are willing to pay, we can advise you in making your final decision. We make sure you don’t overprice your business and scare off good buyers or under-price and regret the sale. We use our database, extensive educational training and expertise to show buyers that your asking price is a fair market value.
How much does it cost for a business valuation?
Nothing with us. We evaluate your business, help you prepare your business for sale, discuss pricing, preparations, and design a marketing plan and package, market your business, interview prospective buyers, negotiate the sale, and do everything necessary for a smooth sale. We provide all of these services with no fee at all unless a buyer is found at the price and terms you agree upon. Then we charge a success fee at closing. If we don’t sell your business, our services have been free to you.