Questions Sellers Ask

The following are some of the most common topics and questions frequently brought up by sellers.

If you have any questions that we have not covered please don't hesitate to contact us.

Q: How long will it take to sell my business?
A: On average, between six to nine months to sell most businesses to find the right match of the right buyer for the right business Keep in mind that an average is just that. Some businesses will take longer to sell, while others will sell in a shorter period of time. There are many buyers looking right now, but your business must be the exact one that appeals to the buyer at this exact time. Not only must your business be just right, the price and terms must fit into our buyer's ability. Buyers want facts. Business Finders is performance driven and will make every effort to bring interested and qualified buyers to you as quickly as possible.

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Q: What is the value of my business?
A: Ultimately a business is only worth what the market will pay. This will be dependent upon a number of factors:

• How much are the assets of the business worth?
• How much positive cash flow does the business generate?
• How stable is the goodwill of the business?
• What opportunities are there to expand the business?
• How stable is the workforce?
• Does the business have security of premises?
• How dependent is the goodwill upon the current owner?

In summary, valuing a business is multi-faceted, and no set formula works for all.

It doesn't make any difference what you think your business is worth, or what you want for it. It also doesn't make any difference what your accountant, banker, attorney, or best friend thinks your business is worth. Only the marketplace can decide what its value is.

Determining the value of the business is the first step in preparing the marketing plan.

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Q: How will my business be advertised?
A: We will create a series of blind, non-specific advertisements that will go out to our Buyer’s Pipeline. We have several qualified buyers looking for business. Business Finders has developed a strong presence in the Internet and your business will be on over 250 websites across North America and beyond. We also speak to a list of prospects provided by you.

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Q: What do I need to prepare to sell my Business?
A: Buyer's will want to review several items during due diligence. The following is a list of what most buyers want to see:

Here is a general list that you need to prepare…

• Up to 3 years of Accountant prepared financials - including P&L statements if available
• Up to 3 years of balance sheets
• Up to 3 years tax returns
• Payables - trade or otherwise
• Vehicle list / titles to vehicles
• Vendor list, Inventory list, Equipment list, Customer list
• Franchise or licensing agreements
• Employment contracts
• Equipment list & value of equipment at current market value (used)
• Value of inventory at your cost (not retail)
• Value of real property (if included in the sale)
• Copy of the lease if business is on leased real property

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Q: What happens when there is a buyer for my business?
A: When a buyer is sufficiently interested, we will assist in the preparation of a written offer to purchase. This Purchase Agreement will spell out the buyers offer in detail. The offer will contain several contingencies that the buyer feels must be met before the transaction goes to actual closing. We will present all offers to you for consideration until you find one that is acceptable to you. This is a contract and you will have the right to accept, counter or reject. It is important to know that time is important and this contract will expire if you do not respond. If you accept the offer, or you counter it and the buyer accepts your counter, be prepared to do some fast work to remove the contingencies.

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Q: How do you show my business?
A: Business Finders will introduce your business to prospective buyers after they have signed our non-disclosure agreement. They will start the process through the written profile about your business along with detailed verbal description and response to questions. We encourage the buyer to visit your business (when possible )to get a feel for the location, facility and nature of your operation. If there is continued interest we will then setup a buyer/seller meeting that will allow you to meet each other and to go into your business with greater detail. We should now have a very interested prospect.

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Q: What can I do to help sell my business?
A: A buyer will want up-to-date financial information. If you use accountants, you can work with them on making current information available. If you and the buyer want to close the sale quickly, usually within a few weeks, unless there is an alcohol or other license involved that might delay things, you don't want to wait until the attorney can make the time to prepare the documents or attend the closing. Time is of the essence in any business sale transaction. The failure to close on schedule permits the buyer to reconsider or make changes in the original proposal.

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Q: Will I need to finance a portion of the transaction?
A: You are not required to finance any portion of the sale of your business, but you need to be aware of the many reasons to consider this option. With reasonable terms, the chances for a timely sale increase dramatically, and at a higher purchase price. The major reason is that most small businesses attempt to minimize the profits shown on financial statements to reduce tax liability. You will need to understand that your new buyer will be considered a new start-up without any track record. Seller financing may be the only way to sell your company.

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Q: What training will be required from me and for how long?
A: Training will be important to most buyers. They need to learn your bookkeeping system, opening and closing procedures, who your suppliers and vendors are and their agents, introduction to employees and customers and general product knowledge. The normal time asked for is for 30-days with under two weeks actually being utilized.

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Q: When should I tell everyone about the sale of my business?
A: Although it may sound cold, experience has shown that it is best to tell everyone about the change after the closing. The transfer of ownership should appear seamless, with no real change in relationships. Most all employees will stay with the new owner, vendors will accept the continuation of agreements and customers will not notice any difference. Of course there are exceptions: a key employee may need to know to assist in the training, suppliers may need to approve the credit of the new buyer, written agreements will need to be approved by the vendors and the buyer, leases will need to be approved, permits and licenses put in place, utilities transferred and other situations that may arise pertaining to specific businesses situations.

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Q: 11. What can a business broker do - and, what can't they do?
A: A business broker is a person or firm who/which acts as an intermediary between sellers and buyers of small businesses.

Business brokers are the professionals who will facilitate the successful sale of your business. It is important that you understand just what a professional business broker can do -- as well as what they can't. They can help you decide how to price your business and how to structure the sale so it makes sense for everyone - you and the buyer. They can find the right buyer for your business, work with you and the buyer in negotiating and every other step of the way until the transaction is successfully closed. They can also help the buyer in all the details of the business buying process.

A business broker is not, however, a magician who can sell an overpriced business. Most businesses are saleable if priced and structured properly. You should understand that only the marketplace can determine what a business will sell for. The amount of the down payment you are willing to accept, along with the terms of the seller financing, can greatly influence not only the ultimate selling price, but also the success of the sale itself.

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Q: 12. Do I need to use a lawyer? An accountant?
A: is strongly advised that both the buyer and the seller make use of appropriate professionals.

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