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Seller Benefits |
The following pages provide essential information Business Owners need to have an understanding of when considering the sale of their business. It is divided into the following sections:
If you are interested in selling your business, a knowledgeable BBN Affiliate Member Business Broker can always make a better deal for the Seller than the Business Owner/Seller can make for his/herself. Training counts! Experience counts!
Four Things BBN Affiliate Member Business Brokers
“CAN DO”
For Business Owners
- We can help you know the market price for your business
- We know how to correctly position your business in the market place
- We know how to locate the right Buyer for your business
- We know how to get your business Sold and Closed!
Our Focus Benefits Clients…
- Our number one objective is to sell your business for “Top Dollar.”
- Selling a business is a full-time job! Continue to build additional value for your business! Operate your business in the same manner you would if you were going to keep the business.
- National exposure for your business via One of America’s Largest Network of Business Brokers.
- The BBN Proven Process to Market and Sell Businesses is the professional approach that gets the Best Results!
The bottom line...BBN Affiliate Members are positioned to professionally represent Business Sellers and to attract “Top Dollar” for their business. Our Affiliate Member Business Brokers are capable of guiding Business Sellers through the process to help them realize “Top Dollar” from the sale.
If you are contemplating selling your business, now is the time to contact a professional BBN Affiliate Member Business Broker.
Training and Experience Counts!
Click here to find a qualified broker or click here to contact BBN.
Several factors effect the selling price of your business including but not limited to the following:
- Properly positioning the business to sell in the marketplace
- Level of competition within the industry
- Level of profitability within the industry
- Level of sales volume recently achieved by the business
- Stability of the business and its industry
- Organizational structure of the business
- Presentation of business information such as our Confidential Memorandum
- Recent performance of the business such as sales revenue increases or decreases
- Type of business such as manufacturing, service, wholesale, retail, internet or other
- Considering today's financial markets, some level of seller financing is usually required when selling a business
- For most businesses, the larger amount of seller financing, the more likely the business will sell.
Seller’s Terms and Conditions effect the sale
Seller’s Terms and Conditions of Sale for their business can be the most important factors effecting the transaction. In today's financial market, seller's requirements must be consistent with requirements of business acquisition lenders, usually banks or non-bank lenders such as GE Capital, CIT Financial or others.
Most Business Buyers strive to acquire as large a business as their finances will permit. They stretch their financial limits to achieve their goal of acquiring a large business.
Most business acquisition lenders require that the Seller participate in the financing of the sale. Lenders achieve seller participation by requiring them to hold a fully subordinated second lien note from the Buyer, fully subordinated to the first lien holder, usually a bank.
Additionally, the Seller's Promissory Note is often precluded from receiving any cash payment of interest or principal for a set number of months or years, usually not more than three years, but the Seller's Promissory Note will accrue interest at the stated rate. The objective of the lender is to be in position to provide the requested acquisition financing, but they want the Seller to be an active participant in supporting the new Owner to be as successful as possible.
Creating Buyer Competition
Another important factor that affects the selling price of a business is whether there is competition among prospective buyers for the business. Competition creates a higher selling price.
When a Business Owner asks more than the Fair Market Value for their business, there will be few, if any, Business Buyers interested in acquiring the business. On the other hand, when a business is priced realistically with proper terms, multiple Business Buyers are likely to pursue acquiring the business.
A Business Buyer who knows other Buyers are competing for the business will be motivated to offer a relatively higher price to ensure that they do not lose the business to a better offer.
Confidential Memorandum (Marketing Book)
BBN Affiliate Members are trained and skilled at creating the best Confidential Memorandum (Marketing Book) available in the business brokerage industry today. Our Confidential Memorandum sets the standard as the most complete, informative and user friendly business descriptive document needed to attract highly Qualified and Motivated Business Buyers.
The Confidential Memorandum developed by an Affiliate Member Business Broker for your business includes current business and financial information most often required by a qualified prospective Business Buyer.
It will contain information provided by the Business Owner that is analyzed by the Affiliate Member and presented in an understandable manner that allows a qualified Business Buyer to make an informed decision when submitting an offer to purchase the business.
The value of the assets included in the sale and cash flow generated by the business must be provable and verifiable by the Business Buyer. A professional Affiliate Member Business Broker is able to guide the Business Owner in arriving at these values.
A qualified Business Buyer usually starts their verification and due diligence by referencing the Confidential Memorandum.
Advertising the Business for Sale
The advertising of each business will depend upon its size and type. Affiliate Member Business Brokers use several different media to solicit Prospective Buyers, including:
- BBN's Affiliate Member Proprietary Internet Websites
- BBN's Featured Five-Star Businesses for Sale - An Exclusive Website
- BBN's Featured Five-Star Businesses Buyer Search - An Exclusive Website
- Networking with qualified Business Buyers from other BBN Affiliate Member offices
- Industry competitors (Complete Confidentiality)
- Investment groups
- National newspapers (optional)
- Trade publications (optional)
- Other selected business listing sites on the Internet. (optional)
Due to the complete confidentiality involved in our process, local newspapers are used as little as possible.
Featured Five-Star Businesses for Sale
An “Exclusive” Website
Speak to your Affiliate Member Business Broker about the benefits of listing your business on the Featured Five-Star Businesses for Sale, An Exclusive Website.
Confidentiality
Affiliate Member Business Brokers schedule, coordinate and attend all meetings between the Seller and Buyer. They represent their client throughout all discussions, negotiations and closing.
The first step towards selling your business is to interview and select the best available Business Broker.
Preparing your Business to be Sold:
Determine the Selling Price:
When selling a business, the Seller needs a properly prepared business valuation focused on the current Fair Market Value or Selling Price. The Seller needs to be certain the business valuation is prepared for the purpose of marketing and selling the business and not for any other purpose, which likely would result in an inappropriate business value.
Fix the Business:
In some instances, the business valuation will reveal information about the business to be sold that indicate corrective or remedial action might be necessary on the part of the businesses management prior to taking the business to market.
BBN Affiliate Members are capable of assisting the Seller in identifying fundamental business concerns revealed by a business valuation, and helping the Seller understand the process to make corrections as needed. Frequently, it takes several weeks, months or even a year or longer to implement proper corrective measures and get the business positioned to attract the best Business Buyers at "Top Dollar" selling price.
List the Business…Go to Market:
Once the Seller and Business Broker complete the review of the business valuation, and assuming they agree the business is ready to go to market, the Seller works with the Business Broker to effectively market and sell the business. A properly prepared business is far more likely to sell for "Top Dollar" price than otherwise might be the case.
Business Brokers Network Affiliate Members are trained and motivated to represent the Seller's best interest. They strive to sell the business at the maximum Fair Market Value or Selling Price as determined by the business valuation, consistent with fair treatment of all parties involved in the transaction including Buyers and Lenders.
Marketing and Selling the Business:
A properly priced business will enjoy a high success rate of closing, usually less than one year after offered for sale.
Businesses offered for sale that are not properly priced and are not accompanied by a professionally prepared Confidential Memorandum (Marketing Book) usually do not sell.
Other things a Seller can do:
- Continue to manage your business in a normal manner.
- Keep the business clean and organized (on paper and in person) so 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 must be in writing and be submitted to the broker.
Yes we can! Our Affiliate Members know how to sell your business. However, he/she must gain a thorough understanding of the business and its operations. As the Business Owner, you and the Broker must work as partners to prepare your business to “Go to Market” and “Get it Sold!”
The BBN Proven Process to Market and Sell Businesses - A Brief Overview:
- The Affiliate Member Business Broker is your “exclusive” representative.
- Confidentiality is vitally important. Affiliate Member Business Brokers protect your business information by the following steps:
- Obtain proof of financial ability from the prospective Buyer to acquire your business.
- Obtain background information and management capabilities such as industry experience or other important management qualifications to acquire your business.
- You will use this information about prospective Buyers to make an informed decision regarding the sale of your business.
- Qualified Buyers complete and sign a Buyer's Warranty and Confidentiality Agreement designed to protect information about the business regarding the potential transfer. The next step is for your Affiliate Member Business Broker to present your Company's Confidential Memorandum (Marketing Book).
- After Qualified Buyers review the Confidential Memorandum, and indicate a positive interest regarding the purchase of the business, your Affiliate Member Business Broker's next step is to schedule and attend a meeting between you and the prospective Buyer.
- During this meeting, you will explain the operations of the business to the prospective Buyer and answer important questions about the business. This meeting often requires two or more hours which allows the parties to get acquainted.
- After a Buyer/Seller meeting, your Affiliate Member Business Broker will schedule another time to meet privately with the Buyer and work towards obtaining a written Offer to Purchase. The Affiliate Member Business Broker is your “exclusive” representative.
- You will not be involved in any negotiations about price, terms, or conditions of sale prior to an Offer to Purchase being signed by you and the Buyer(s).
- The Affiliate Member Business Broker will present and discuss all offers with you and make appropriate recommendations.
- After your acceptance of an offer, the Affiliate Member Business Broker will coordinate the due diligence process. Buyer's due diligence is a cooperative effort between Seller and Buyer. Affiliate Member Business Brokers neither participate in nor conduct due diligence on behalf of either Seller or Buyer.
- Your Affiliate Member Business Broker will continue to manage The BBN Proven Process to Market and Sell Businesses and attend the closing with you.
Training and Experience Counts!
Contact a BBN Affiliate Member Business Broker office by navigating to the home page and clicking on Locate a Broker; or you may send an e-mail to our corporate headquarters by selecting our Contact Us link.
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