Why should I
use a business broker?
Selling or buying a business is
one of the most important financial decisions you will make. A business
broker has the training and expertise to guide you through the process in a
comfortable and efficient manner. He or she is a team player who will
coordinate the efforts of your professional advisors, such as attorneys and
accountants. He or she has handled many transactions and understands the
complexities of selling and buying a business.
During the process, the
seller's job is to do what he or she does best, which is to run the business as
if he or she were going to keep it. The broker's job is to confidentially
market the business, find and screen the buyers, educate them, negotiate the
terms of the sale and provide a buffer for the emotional highs and lows that we
all experience. The buyer benefits because the broker has already
pre-qualified a business before he or she lists it. He or she has
psychologically prepared the seller for the sale. He or she has also done
a lot of the legwork to assemble the financial information and background of the
business. This helps to reduce some of the uncertainty for the buyer and
make this search more efficient.
How do you
handle confidentiality?
Florida Property Sales, Inc.
requires that a prospective buyer review and sign a Buyer's Confidentiality and
Disclosure Agreement outlining his or her responsibility in having access to a
seller's confidential information. This occurs before any detailed
information concerning a specific opportunity is released. We are
committed to protecting the confidentiality of the business sale. We
understand that public knowledge of a potential sale can affect the attitudes
and actions of customers, employees, competitors, lenders, suppliers, or
investors, and thus the value of the company. We also want to safeguard
the employment status of a potential buyer while he or she considers a very
important change for his or her future.
Confidentiality is an integral part of
every sale so as to not alert competitors, worry employees, or rattle customers'
faith in the company's future operations.
Florida Property Sales, Inc. requires prospective
buyers to complete and sign a non-disclosure agreement before they release the
details of any business offering, and, they further qualify prospective buyers
for their financial capability and business acumen. Legitimate buyers
appreciate an opportunity to "walk in the owner's shoes" and will protect the
owners and their business.
Why buy a
business instead of starting one?
It may take more money than
time to buy a business. It takes more time than money to start one.
The break-even point for buying versus starting a business is the cost to buy
equipment, rent a space, pay a staff, pay for advertising, establish contractual
relationships and support yourself while you are building up a customer base.
If you buy an established business, you have an income from the day you take
over. You already know what can be accomplished by the business. If
you start a business, you face a lot of uncertainty over the success and
desirability of your product or service. Buying a business takes a lot of
the risk out of your decision.
What is the
best business to own?
Beauty is in the eye of the
beholder. Most buyers want to own a profitable, well-managed business in
an industry that holds a personal interest for them. On the other hand,
some buyers may look for opportunities that offer turnaround potential, where
they can apply their special skills. In general, there is no industry that
is particularly better than another. However, there are specific
businesses that are more successful than others - even in the same industry.
How is an
offer structured?
Most businesses sell for
one-third to one-half down. The remainder is financed by the seller, by a
bank or through family resources. Sellers generally prefer to receive all
cash at closing and some buyers are able and willing to accommodate them.
However, buyers are usually trying to get the most bang for their buck and will
want to leverage their down payment into the largest business they can buy.
Although, buyers may want to make a no-money or low-money down offer, it is very
rare that they will succeed. Usually a business cannot earn enough to pay
salary to the owner and service such a level of debt. In addition, the
lender, whether it is the seller or a bank, wants the buyer to show his or her
commitment to the business by having vested financial interest in its success.
What kind of
financing is available?
Seller financing is usually the
cheapest and easiest to obtain. It also tells the buyer that the seller
has confidence in the business. There are no loan fees and the interest
rate is usually lower than the bank rates, but the term of the loan is often
shorter. Seller notes make up the majority of buyer financing. Banks
will loan money on businesses that show a strong earnings history on the tax
returns. They require a lot of documentations and the payment of upfront fees.
In recent years, bank loans, which are guaranteed by the Small Business
Administration, have become very popular and more readily available. If
all else fails, family or friends will sometimes offer to help out. They
can either provide funds or sign a guarantee for a bank loan.
How long does
it take to sell a business?
It usually takes longer to sell
a business than a house or a commercial building. Because of the confidential
nature of a business sale, a business broker cannot put a For Sale sign on the
window. The average time to sell a business is usually between six to
eighteen months. However, there are exceptions. Some businesses may
sell within a month of being put on the market. Others may take several
years to attract the right buyer. A business broker seeks out and talks to
buyers everyday. The next one may be just right for a particular business.
How do you
advertise a business for sale?
We advertise on the Internet
using several different sites i.e. BizBuySell.com, Business Brokers of Florida MLS,
Mid-Florida Regional MLS, BizMls.com, to name a few. We also advertise in the local newspapers,
which still generate a large number of calls. We place ads in journals and
publications that target particular industries. We network with members of
trade associations such as the International Business Brokers Association and
the Business Brokers of Florida. We also receive referrals from
attorneys, accountants, and real estate professionals.
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