1How can a business broker help?
A professional business broker will help you to sell your business. They will assist with the whole process from marketing the business to ensuring the smooth transaction of the sale. They will work with both the buyer and the seller to negotiate and help with the steps of the sale until the transaction has been successfully finalised. A business broker in Florida, also helps buyers to find their business and guide them through the buying process. It is important to understand that while they are good at what they do, they aren’t miracle workers and it is critical to ensure that the business is priced correctly in the first place.
2How to help sale of a business?
Make sure that you have financial information that is up to date. A buyer will want to see three years of accounts and tax returns. Your accountant will be able to help you with this. If you are using an attorney, they need to have experience in the sale of businesses with knowledge of the closing laws and processes of the state of Florida. If you and the buyer are looking for a quick sale make sure that they are prepared to close on short notice and that they will make time to prepare the necessary documentation.
3What is the process when there is a buyer for a business?
If and when a buyer is interested in your business, they should, submit their offer or proposal in writing. The offer will be subject to contingencies which will include a detailed review of the business financials, a review of any lease agreements or any other clauses or stipulations concerning the business. You will either accept the proposal or make a counter-offer. By not accepting their terms however you risk them withdrawing their proposal. While you don’t have to accept the first offer that is made, it is always a good idea to study it carefully and give consideration to their demands. If you accept the buyer’s proposal you will move to satisfying the contingencies made. Make sure that you cooperate fully as you don’t want the buyer to think that you have anything to hide. At this point it is not uncommon for the buyer to bring in outside advisors to review the information. Once the conditions have been met, the final papers will be drawn and signed. The process then moves to closing, monies are distributed and the buyer becomes the owner of the business.
4How will seller financing help the sale of a business?
According to surveys, a seller that asks for cash will receive 70% of their asking price. Sellers that accept terms receive an extra 16% and average 86% of the price. Businesses that are listed for sale with an all cash requirement often don’t sell. By financing the sale of their business, a seller can not only increase the chance of a sale but also reduce the time it takes to sell. It is also a sign of the seller’s confidence in the business.
5Why buy a business rather than start one?
When you buy an existing business it already has a history. It has clients, a reputation, financial records and you have a much clearer picture of the business that you are taking on. A new business is very much an unknown quantity and if a business is to fail, this often happens at the start-up phase. Buying a business also means that you can draw on the experience of the seller. They will often stay on and help the new owner. Many often supply financing which makes a huge difference.
6Is it better to buy a small business or a new start-up?
Buying an existing small business means there is a lot more information available. The financial records are available and you can examine the trends of the business. Is it short-term, seasonal, long-term, resistant to depression? New start-ups mean there is none of this historical information available. Everything must be built from scratch. While ideas can be new there is no assurance of what works and what doesn’t. An established business can prove their success. Finance can be supplied from third parties for successful small businesses with a proven track record!
7 How should a seller price a business?
Deciding on a price is subject to a review of the financial information before a price or range of prices, can be suggested. While a seller will have some idea of what they feel their business should sell for, a business broker will be familiar with market considerations and will be able to make a recommendation based on this and the results of the financial review. It is common practice to set a price range with a low and high price. The more cash required, the lower the price and the smaller the case requirement, the higher the price. With most businesses financed by the seller, the down payment and terms of sale are extremely important. For many buyers, the structure of the sale is more relevant than the actual selling price. It is often the terms that are the difference between success or failure. If you are buying a business with a high net profit and a small down payment the price of the business becomes less significant.
8 What should a buyer look for from a business?
There are many important considerations when choosing a business: • Do you feel comfortable owning and operating it? • Are you proud to own this business? • Can you afford it with the cash you have available? • Will it supply you with enough income? • Is there room for improvement in productivity and profit? • Can you do better than the current owner? There are many examples of businesses that need improvement in order to thrive. A new owner can do just that. In contrast, there are also cases where a new owner takes over a very successful business and not soon after, it either closes or is sold.
9What does it take to be a successful business owner?
When buying a business, you need enough capital to both buy the business and to make any improvements required. You also need to have reserves in case of a slow start. You must be willing to put the work in to get the results. This may often involve putting in many hours. Many business owners aren’t prepared to do what is required to make a success of a business. This can often involve being the cleaner, the bookkeeper and a number of other roles that you will need to do fulfil, especially in the early days. It’s not all about sitting behind a desk giving out orders. Often, you are going to need to get your hands dirty.
10What happens when you find a business you want to buy?
The first step, with the help of a business broker, is to carry out some research. You may have questions which need answering. Your Florida business broker should be able to answer, or find out the answers to, those questions. Next, the broker will prepare a proposal based on an offer price that you feel reflects the value of the business. It is often subject to the approval of financial records that support the figures you have been provided with. The purpose of this offer is to see if the seller is willing to accept your terms. The seller then has the opportunity to accept your proposal, reject it or make a counter-offer. If both parties are agreed then the sale can proceed. At this point you move to “due diligence” where you address any areas of concern and make your checks. You can bring in outside advisors to help with this if you prefer. Once everything has been checked and approved the closing documents can be prepared and the purchase completed.
11Why should I go to a business broker?
Buying a business on your own can be a struggle, especially if you aren’t familiar with the business laws and processes of the state of Florida. A professional business broker can provide enormous help and support and make the process much easier. It starts with sourcing a business or selection of businesses for you to consider. Many of these businesses you might not have even considered on your own. Business brokers have an extensive wealth of experience and information about small businesses and the process of buying a business. Their familiarity with the market, trends, pricing and their local knowledge can be a huge benefit. They will handle all aspects of the business ale for you and offer invaluable guidance. They can also liase with other professionals and do everything possible to ensure a smooth transaction. A local, professional, Florida business broker is the best person to talk to about your business needs and requirements.
12Do I need an attorney to buy a business?
If you want to ensure that everything is handled correctly it is advisable to employ the services of an attorney, at least to review the legal documents. Choose carefully though. You need an attorney that is familiar with the process of buying a business and that has time to handle any paperwork within your deadlines. A business broker should be able to recommend an attorney that can help. Business brokers are not qualified to offer legal advice. By the same token, attorneys are not qualified to offer business advice. A good attorney will look after both the buyer and seller interests and be able to work with the seller’s attorney, ensuring that the transaction is fair for all parties.
13How do sellers make an effective exit for their business?
When is the right time to sell a business? That is tough to answer in a competitive and transient world. You must have a strong reason for selling a business and exiting the business environment. Profits and losses are a major reason for selling a business. Too much of either are connected with the sale of many businesses. Do you have a future plan? This may involve buying or entering another business or perhaps retirement. Transferring ownership is a big step that business owners have to plan before selling a business in Florida. You must get a fair business evaluation that reflect the market value. Also consider the options by which you sell the business to your buyer. An outright or complete sale ensures that you receive full payment right away. A gradual sale is one in which the business is handled by the contractor and you receive the substantial amount in result.