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Buyer
& Seller Questions. - Understanding the process of buying &
selling a Florida business.
BUYERS & BROKERS
I have decided to buy a business, what should I do
first?
Your
best guide for buying a business isn't words or
numbers on paper--it's the presence of an
experienced business broker to guide you through the
complicated task of buying a business. Your first
step should be to find the right broker for you. You
should talk with several brokers and then decide on
the broker you feel you would be the most
comfortable working with. Generally speaking it is
better to work with only one broker at a time if you
want to be treated as a serious buyer. If you do
plan to work with more than one broker make sure
they are all aware of each other to eliminate having
the same businesses shown to you by multiple
brokers. A business broker provides vital services
for both parties and acts as the "glue" for holding
together the pieces of the business sale process.
What can I expect and how does the process work?
The more information you give your broker the better
they will be able to help you find the best business
for you. When you meet with the business broker for
the first time be prepared to answer questions
similar to these:
1. Why do you want to buy a business?
2. When do you want to be in your own business?
3. Have you given any thought to the types of
business you may want?
4. How much personal income do you need from the
business?
5. How much money do you have for a down payment &
working capital?
6. Is the cash readily available?
7. Do you want to be a "hands on" owner or absentee?
8. What areas of Florida are you interested in?
9. What are your expectations about the purchase of
a business?
With the information gathered from this meeting the
broker can show you the businesses that most closely
meet your needs. This will save you time and effort
by negating the necessity to look at businesses that
do not meet your requirements or is more than you
want to pay.
Since sellers are (rightly) concerned about
confidentiality, the broker will ask you to sign a
non-disclosure or confidentiality agreement before
the name of any business is revealed. During this
initial meeting always ask questions to clarify
anything you don't fully understand.
When do I get to see the business and books and
records?
The broker will provide you with preliminary
information about one or more businesses including a
summary of financial data and will arrange for you
to see businesses of interest. Once you indicate a
strong interest in a particular business the broker
can then supply additional information and schedule
further on-site appointments with the seller. Over
the years we have had many buyers expect to see tax
returns, P & L's and balance sheets before making an
offer. Most sellers do not allow us to share this
information to anyone that is not a serious buyer.
We have found that the few times buyers insisted on
this they wasted a lot of time analyzing the books,
only to find that they couldn't agree with the
seller on price and terms, or that the type of
business just didn't suit them. It is to your
advantage to make an offer based upon the assumption
that the numbers on the preliminary info sheet are
correct By doing this you state what you are willing
to pay if the books & records prove the numbers.
Once your offer is accepted you will have access to
any records you need to verify the income is as
stated. If the seller is unable to prove the stated
income you can withdraw your offer or counter offer
at a lower price & terms.
When you find the right business and are ready to
make an offer your broker will be the best source
for answering questions, addressing concerns,
resolving problems, tying up loose ends, and easing
the way to a smooth closing.
SELLERS & BROKERS
I'm ready to sell my
business, what do I do first?
The
first thing you should do is to tell no one that you are
going to sell your business. If employees, vendors, and
customers learn that the business is for sale it can
cause major problems. Find an experienced business
broker that you feel comfortable working with and let
the broker guide you through the process.
You would hire an accountant and attorney to do your
taxes and legal work and should also hire a broker to
sell your business. Your stress level of trying to sell
a business while keeping it confidential and the
increased profit you realize from the sale should
outweigh the cost of doing so.
One of the best decisions a business owner can make is
to continue managing his or her business efficiently
(and profitably), while depending on the services of a
business broker to take care of the many steps of the
sale.
What do I need to do?
In
order to get the highest price for your business the
best time to sell is when there is steady growth so
don't wait until you need to sell to list your business,
One of the first things a buyer asks is, "Why do they
want to sell?" so you need a valid answer to this
question. You also need to allow enough time to sell the
business as the average business takes from 6 to 8
months to sell. Your broker will ask you to bring
several things for the first meeting. If you have these
items when you first meet it will save a great deal of
time in the future. At the very least, the broker will
need to have your books and records for at least the
last three years along with year to date numbers in
order to help you arrive at a selling price. This
includes tax returns, profit & loss reports, balance
sheets, and anything else you may have. You will also
need to have a copy of your lease and a list of all your
furniture, fixtures, and equipment.
What does the broker do?
The
business broker is an expert in placing a realistic
price on the business and incorporating intangibles;
thus reducing the danger that every seller fears, under
pricing the business. At the same time, the business
broker can help the seller to understand that the
selling price is dictated by the marketplace, not by a
well meaning accountant or friend who may have an
unrealistic idea of what the business is truly worth on
the market place.
Your broker has the expertise to market your business in
order to appeal to the most buyers. There is an
excellent chance the broker may already have a buyer
that would be right for your business however you should
not expect this.
For locating and qualifying prospective buyers, a
business broker uses many methods including computerized
databases to access comprehensive lists of local,
national, and international buyers all to increase the
chances of selling a business at peak value.
Your
business broker will present all "offers to purchase" to
you and will be a vital advisor during most stages of
the negotiation, bringing to "the table" objectivity as
well as negotiation skills developed through years of
experience in the buying and selling of businesses. Once
the "Offer" is accepted by both parties you broker will
guide you though the many steps to a smooth closing and
make the experience of selling your business as pleasant
and stress free as possible
We
can help you buy a business or sell a business in North
Florida or anywhere else in Florida.
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