Frequently Asked Questions

The process of buying or selling a business requires dedicated, professional attention. Marketing and facilitating a business transfer is a full-time job! You deserve someone who will work as hard as you do. A qualified broker will save buyers and business owners money by helping them to avoid costly mistakes, effectively marketing the appeal of the seller's business, and maximizing exposure to serious, qualified buyers, all with complete confidentiality.

For example, ask yourself:

How do you reach qualified buyers, including possibly competitors, without disclosing your intentions to sell?

How do you evaluate your business objectively to ensure you receive the maximum return for your investment and avoid costly negotiating tactics?

How do you prepare and provide the information a prospective buyer will require to interest them in pursuing your business in favor of other options?

How do you arrive at the best price and terms, including the intangible and goodwill values of your business?

How do you maximize your favorable exposure to potential offers while minimizing your potentially damaging public exposure to customers, competitors, employees and suppliers?

How do you market your business in all of the appropriate markets, databases, and media efficiently, effectively and confidentially?

How do you screen and pre-qualify buyers and determine their motivations, managerial capabilities and financial strength?

How do you effectively sell your business, diverting significant time, effort, and resources to that process while continuing to manage your ongoing business productively?

The answer is clear: The sale of your business demands a professional, just as running your business has demanded a professional. Transaction Advisors has the expertise, tools, and connections to market and sell your business successfully on a national basis. We work hard to protect your business investment and maximize your potential on the sale. It is to our advantage and yours to obtain the best possible price that a reasonable buyer will pay. We pledge to maintain high ethical standards with open and honest communications in all of our business relationships.

Several factors come into play. Two of the most critical are price and terms. Many businesses sold above $100,000 are sold with one-third or less down and the owner financing the balance. Asking for one-half down will reduce the price by approximately twenty percent. Asking for cash will reduce the price to forty to sixty percent of the one-third down payment price.

A buyer is trying to buy as much business as possible for the money he has to pay down. When a seller asks for $200,000 down on a $400,000 value business, the buyer will keep looking until they can find a $600,000 value business where the owner will accept $200,000 down and finance the balance. High percentage down payments cause buyers to discount offers. The business owner who asks for all cash is not going to succeed because buyers know they can buy three times as much business for the same investment.

The quality of the information provided to a prospective buyer is critical. The value of the assets and cash flow generated by the business must be provable and verifiable. A professional business broker will be able to assist the business owner in arriving at these values.

Competition among buyers creates higher selling prices. When a business is over-priced or the owner does not offer reasonable terms, there will be few, if any, buyers interested in acquiring the business. When a business is priced realistically, and with proper terms, several buyers are likely to pursue acquiring the business. A buyer who knows they have other buyers competing for the business will be highly motivated to offer the price being asked to ensure they do not lose the business to another buyer's better offer.

The advertising of each business will depend upon the size and type of business and the number of potential buyers in our database. Transaction Advisors uses the Wall Street Journal, multiple business listing websites and buyers from other affiliate offices, plus our database of numerous investment groups to sell their larger listings. We try to use local newspapers as little as possible because it is extremely difficult to protect confidentiality when a business is advertised locally. We also use other top business listing sites on the Internet.

The first thing you need to do is offer the business at a realistic price and with reasonable terms. You need to provide as much information as possible to the broker so a professional marketing package can be prepared for your company. The quality of the business profile will greatly enhance the marketability of your business. Informed buyers make better offers. Hence, a properly prepared offering memorandum is essential to market the business successfully.

Continue to run your business in a normal manner. Keep the business clean and organized so that potential buyers will like what they see. Liquidate or set aside obsolete inventory and unneeded equipment before you place the business on the market.

Notify your broker of any material changes in your business. Forward monthly financial statements to the broker as soon as they are completed. This will keep your marketing package current.

Do not meet with potential buyers without your broker being present. Avoid direct negotiations. All offers and counter-offers should be in writing and should be presented by the broker.

A broker cannot really sell your business because he does not know how your business operates. A professional broker's initial job is to get a business listed at the best possible obtainable price and with realistic terms of sale. The next job is to qualify buyers to keep you from wasting time with people who are not financially qualified to meet your requirement. Qualified buyers will be presented with your business profile after they have completed a Buyer Warranty and Confidentiality Agreement. The broker will then schedule a meeting between the business owner and the interested buyer. The business owner will explain the business to the buyer. After this meeting, the broker will work to get a written offer to purchase. The broker will then present the offer and, after acceptance, will coordinate the due diligence process that will lead to the closing.

Contact our office for answers to your questions, or you may send an e-mail and we will be happy to assist you.