Should I Use A Broker To Sell My Business
Frequently Asked Question
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should i use a broker to sell my business
When considering the sale of your business, it’s common to want answers to your questions before deciding to sell. We understand selling can be a hard decision to make. It’s why we believe you deserve the best counsel, advice, and confidentiality you require before you sell.
Below you’ll find the answers to a few of the most common questions we get asked. If you still have questions, don’t forget we are here to help!
Don’t hesitate to Schedule A Call to get the answers you need.
Maximize The Sale Of Your Business: 5 Recommendations To Gain The Most Value When Selling.
You’ve worked hard to arrive at this stage of your life. If you are considering the sale of your business, make sure you will receive the most value possible. It’s been our experience that businesses that adhere to these 5 recommendations, do in fact receive the most value for their business when sold. Download this free PDF and review to see how your business measures up.
Frequently Asked Questions
Should I Use A Broker To Sell My Business
Should I use a broker to sell my business? When you’re ready to sell your business, there are a lot of questions that come up. How much is my business worth? What are the steps involved when I’m ready to sell? On this page you’ll find answers to some of the most common questions about selling a small business. Keep in mind that every situation is unique, so these answers should not be considered legal or financial advice. If you have specific questions about your business, be sure to Schedule A Call and speak with Al Lorenzen.
What is a Business Broker?
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A business broker is an individual or company that assists in the purchase and sale of small, main street businesses. These agents can take on a variety of tasks to help their clients achieve their acquisition and offloading objectives, and might specialize in companies belonging to certain industries or possessing specific, unique characteristics.
Transferring ownership of a company is a complex process. Among the various challenges that must be overcome include determining a fair valuation, making sure the company’s finances and accounting records are in order, negotiating a price, going through escrow and closing the sale.
Business brokers not only manage these steps but also ensure confidentiality by requiring interested buyers to agree not to disclose the details of the potential business sale. Business brokers, which may work independently or as part of a larger brokerage firm, can also help with licensing and permitting requirements and weed out unqualified suitors.
What is EBITDA?
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EBIT/Operating Profit in addition to (plus) Depreciation and (plus) Amortization.
What is EBIT /Operating Profit?
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A profit from business operations (gross profit less operating expenses) before deductions of interest
and taxes. Or operating profit in addition to (plus) Interest and (plus) Taxes.
What is Seller Discretionary Earnings (SDI)?
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EBIT/Operating Profit in addition to (plus) Depreciation in addition to (plus) Amortization and (plus) Owner’s Compensation
What are the national, industry accepted pricing methods?
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Nationally, for each specific industry, there are two generally accepted approaches:
- A calculation of a multiple (multiple the value whether EBIT, EBITDA or SDE, times a factor e.g
.8, 2x, 4x) to arrive at a value range. - A percentage of annual sales (50%, 75%, 125%).
What else determines the value of a business?
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Beyond the calculation from past tax returns, a business is worth what person will pay for it. This can
include factors such as
- customer concentration
- number of employees
would the seller help with a transition and what that does that timeline look like - are there appraisals that were recently done on the assets
- would the seller(s) be open to seller financing
- would the seller consider an earnout?
After working in the food service industry for 48 years and the last 20 years operating my own business I decided it was time to retire. The Business Brokers, Inc. found a qualified buyer, with the resources and experience necessary to acquire the business and successfully operate it in the future.
D.S.
Client
The Business Brokers worked with us at a comfortable pace in the listing and valuation process. They promptly & successfully sold our business to a well qualified buyer. All of our goals were met or exceeded and the Team at the Business Brokers were professional and a pleasure to work with!
P.H.
Client
should i use a broker to sell my business
What is Due Diligence?
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Due diligence is an investigation or audit of a potential investment consummated by a prospective buyer. The objective is to confirm the accuracy of the seller’s information and appraise its value.
These investigations are typically undertaken by investors and companies considering M&A deals. Generally, the legal terms in a contract or other purchase agreements express specifics of the transaction. These may include the length of the investigation period, items to be examined, and the expiration date. Audit tasks are subject to various situational contingencies. They typically include auditing financial records, evaluating assets and liabilities, and assessing operations or business practices.
What are Cost Of Goods (Merchandise) sold?
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Cost of Goods Sold or Cost of the merchandise that is sold is matched with the revenues versus selling,
general and administrative expenses (payroll/employee benefits, rent and utility costs). They are the
direct costs of producing the product (goods or services). Typically, it includes the cost of the labor and
materials directly used to create the product or service.
What are typical Operating Expenses?
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Cost of Goods Sold (COGS) includes all costs and expenses directly related to the productions of goods
(or services). Additionally, there may be costs such as postage, professional fees, utilities, and property
taxes.
What could be considered Non-Operating Expenses?
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Non-operating expenses are incurred that do not relate to the business’s main activity (one time or
unique events). This could be things such as loss on disposition of an asset, lawsuit settlement, obsolete
inventory charges, debt restructuring, etc.
What is Net Profit?
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The amount of money a business earns after deducting all operating (including interest and tax expense
aka EBIT/operating profit) and non-operating expenses for a fiscal period from gross profit.
What are Gross Sales?
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The total revenue earned during a fiscal period.
What are Net Sales?
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Net sales are the Fiscal (annual) Gross Sales, less (removing) returns, and discounts allowed (if any).
What is Gross Profit/Loss?
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Gross profit/loss is the Net sales less(minus) Cost of Goods Sold, which is a key component of operating
expenses. A business will also incur non-operating expenses such as interest payments on debt,
restructuring or one time costs, and inventory write-offs.
We started, owned and operated our business for many years and were ready to retire. The Business Brokers found a quality buyer. Anytime we had questions, they responded right away. We would definitely recommend them. We’re now doing many of those things we didn’t have time to do.
R.W.
Client
should i use a broker to sell my business
The Business Brokers, Inc.
Four Steps To Finding Freedom
Schedule A Consultation
The goal of this FREE consultation is to find answers to any questions you might have and allow us to learn more about you and your business.
We'll Determine The Value Of Your Business
We analyze your business and provide a “broker’s opinion” of its value. Unlike many business brokers who charge for this service, this valuation is FREE and requires no further obligation from you.
We'll Confidentially List, And Then Market Your Business
With an agreed valuation, we then confidentially list and market your business to our growing index of qualified buyers.
Sell Your Business And Live Free
Sell your business and move freely into the next chapter of your life, financially secure, unburdened, and with nothing holding you back.
Selling a business is hard. The Business Brokers, Inc., will confidentially; value, list, market, and sell your business to qualified buyers providing you the financial freedom to do whatever comes next.
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At The Business Brokers, Inc., we know you want the freedom to do whatever may come next, financially secure with nothing holding you back. In order to do that, you need to sell your business. The problem is, selling a business is hard, and it’s even more challenging when trying to sell it on your own. Opening your books to outsiders to get a realistic valuation can make you feel insecure and exposed. Dealing with unforeseen challenges, the fear of losing confidentiality, and the damage that could cause is stressful and overwhelming.
We believe you have worked hard to arrive at this stage of your life. Therefore, you deserve the opportunity to explore selling your business without jeopardy. This is why we provide the best counsel, advice, and confidentiality you need to consider your selling options. So you can transition into the next chapter of your life with confidence knowing your work will live on as the vibrant and thriving business your employees, customers, and the surrounding community have come to know.
At The Business Brokers, Inc., we understand what you are going through. Many of our agents themselves have navigated the successful transition and sale of their own business. For the past ten years, we’ve helped over 100 business owners like yourself, each with a different story and different needs, complete their journey with the successful closing and sale of their business.
Here’s how we do it. Our four-step process makes the complicated business of selling your business; simple.
We call it your Four Steps To Freedom!.
- Schedule A Consultation – The goal of this FREE call is to get answers to any questions you might have and allow us to learn more about you and your business.
- Get A FREE Business Valuation – We’ll analyze and provide you a “broker’s opinion” of your business’s value. Unlike other brokers who charge for this service, our valuation is entirely FREE and requires no further obligation.
- List And Then Market Your Business – Once we determine an agreed valuation. We then get to work to confidentially list and market your business to our growing index of qualified buyers.
- Sell Your Business And Live Free – You’ll breathe a sigh of relief and move into your next chapter of life; financially secure, unburdened, and free with nothing holding you back.
So Schedule A Consultation, and in the meantime, download this FREE PDF, [TBD]. So you can stop worrying about your future and instead gain the freedom to do what you want, wherever you want, and however you want to do it.
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