Business purchasing

How long will it take to sell my business?

No one can look into the future and tell you when we will find the right buyer for your business or when they will decide to make an offer. Every business is different and every buyer is different. Some move quickly while others take time to think things over. A simple rule of thumb when you are selling anything is that the better the deal is for the buyer, the faster it will sell.

How long does it take to arrange financing?

Most SBA lenders will take up to 90 days to approve and fund a loan. A "preferred" lender can usually decrease the time to 45 days. Keep in mind that closing times will depend upon getting paperwork, appraisals, environmental impact studies, and other matters performed in a timely manner. It is also important to know that license transfers procedures, which can take 90 days or more themselves, often are not started until financing has been approved.

How do I value a business?

There are many formulas used by professionals in appraising a business, and many factors to be considered. Ultimately, value is determined by what a buyer is willing to pay and what a seller is willing to sell for. However, the acid test for valuation boils down to this: the income from the business must do three things. It must cover the debt service, it must compensate you for the time you invest in running the business, and it must compensate you for the money you invest in the business.

If this is a good business, why are they selling?

People sell businesses for many reasons including retirement, relocation, divorce, health problems, other opportunities they wish to pursue, or just general burnout. An owner§s desire to sell doesn§t indicate it is not a good business.

What are your fees?

The fees we charge depend on what work we will be doing for you. Our commission rates usually fall into a range between 2% and 12%. Each assignment is evaluated individually taking into account such factors as the size of the deal and how much work we will have to do to successfully reach your goal.

Does it cost me anything to meet with an analyst?

No, there is no cost or obligation for you to meet with one of our analysts. The purpose of meeting with an analyst is to determine what, if anything, we can do to help you and to answer any questions you may have before we enter a business relationship together. Unfortunately we cannot help everyone or take on every assignment.

What is the best time of year to sell my business?

There is no best time to put a business up for sale. New buyers are entering the market at all times. The busiest time of the year for one buyer may be the slow time for another. Since no one can tell you how long it will take to sell your business, the best time to start is now.

I plan to retire in 5 years. When should I put my business up for sale?

Many sellers fail to plan ahead when selling their business. It is better to have a buyer sooner than you would like than later than you need. You can always negotiate an employment contract with the buyer and stay on after the sale if you desire to keep working. It may be easier to sell this way as it offers the buyer an extended training and transition period. Don§t hesitate to put your business up for sale now even if you don§t need to sell for 5 years. It is better to sell when you want to rather than when you need to.

Who do you represent?

When a seller engages the services of a listing broker that seller becomes the broker§s client. This means the broker, and its subagents, represent the seller. They owe the seller undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. They must put the seller§s interest first and negotiate for the best price and terms for their client, the seller.

Will I have to hold paper when I sell?

We have many sources of financing available to qualified buyers. However, it is often advisable to hold some paper when selling a business. Holding paper will often make it easier for a buyer to get financing on a business. It also shows the buyer that you have faith in the future of the business and there are often tax advantages for a seller in holding paper. You should seek the advice of a transactional accountant to discuss the tax implications of holding paper.

Can I save on taxes by doing a 1031 exchange?

A 1031 exchange is a transaction that allows sellers of investment or business real estate to completely defer the capital gains tax on the sale of their property by using the proceeds to buy a "like kind" replacement. In a 1031 exchange, sale proceeds are placed in an escrow account outside of your control. A replacement property must be identified with 45 days and purchased within 180 days of the closing of your property in order to qualify. You should seek the advice of a transactional accountant.

Frequently Asked Questions