Selling your business can be a life-changing decision. It’s best not to take such a grand decision lightly, so here are a couple of frequently asked questions that will help you understand the entire process.
How much do you charge?
We don’t charge a fee if your business does not sell through our services. Our fee is a percentage of the sale and we are only paid if your business is successfully sold. As a result of this business model, it’s in our best interests to sell your business for the highest price possible. We don’t ask for a retainer fee and we are performance-based, meaning you’ll have peace of mind knowing that we’ll do everything in our power to sell your business.
Will my information be confidential?
Yes. Our advertising is done in a blind format, eliminating any detailed information regarding your location, competitors, staff, suppliers and so on. This means that only you will know that you’re selling your business and it will be kept hidden from your employees, clients, customers and suppliers.
Can I sell my business by myself?
Absolutely. However, keep in mind that you will still need to run your business while you negotiate the terms and conditions on your own. In most cases, the time, effort and money spent don’t outweigh the costs of hiring a professional service such as us. In addition, you may be contacted by unqualified buyers and fail to give your businesses the exposure it deserves. It will also be difficult to maintain confidentiality if you sell your business yourself. For these reasons, we cannot recommend trying to sell your business yourself.
How much is my business worth?
The value of your business is based on a number of different factors such as the Seller’s Discretionary Earnings. This is the total earnings for the business after all of the owner benefits. The size of the business, the type of industry it’s involved with and recent market trends will have an effect on the value of the business. We’ll make sure to prepare a market value report for your business and review it with you so you get a better understanding of how much your business is worth.
Do I need to worry about taxes?
The intermediary that works with you to sell your business will contact your accountant or tax advisor in order to minimize tax liability. This is achieved through structuring the transaction in the appropriate manner. If you currently don’t have an accountant or tax advisor then we can assist you in making a recommendation. We have an established network of trustworthy accountants and tax advisors who are more than willing to help you sell your business.
Can I secure financing?
A qualified buyer will have access to many different forms of business financing. This will be taken care of and you won’t need to worry about this part of the process. We ensure that all prospective buyers are in a strong financial position by requesting a buyer profile to be completed before we progress through the transaction.
When is the right time to sell my business?
It’s difficult to say when the right time to sell your business is due to the number of factors involved. However, it’s never too early or too late to start the planning process, and that’s where we can help you. Professional intermediaries understand that the earlier you start planning your exit strategy, the more likely you’ll be able to maximize the value of your business. The earlier you plan, the more comprehensive your exit strategy will be and the more time you’ll have to evaluate your business.
Are you a trustworthy and full-time business intermediary?
Yes. We have a wealth of experience helping both buyers and sellers. We dedicate our time to ensuring that your transaction goes smoothly and that you find the right buyer for your business.
Do you recast my business’s financials?
We have a lot of experience with evaluating and recasting your financials. Your profit and loss statement doesn’t represent an accurate story of your business’s current state, which is why we recast your financials so that buyers can see the real value of your business. This will ensure that you get the best value for your company.
Will you provide a market value analysis?
Yes. Prior to accepting any engagement, we’ll give you a detailed market analysis to give you a solid idea of what your company is worth and how much you can expect to receive.
Will you help prepare a confidential business review (CBR)?
Yes. We put a lot of effort and time into preparing a confidential business review for you. This will be used as marketing material that prospective buyers will see. This ultimately helps them decide if your business is a match for their needs and will contain information about your company and its position in the industry.
Will buyers be asked to sign a non-disclosure agreement (NDA)?
Confidentiality is important when making a transaction so important, and we take every step we can to ensure that you remain confidential until the later stages of the transaction. We will never give prospective buyers detailed information regarding your business that could otherwise lead to your identity or company name until they sign a non-disclosure agreement and complete a buyer profile.
What comes after selling my business?
Many business managers fear they are too young to retire or have no viable career path after they sell their business. However, the reality is that you’re free to do anything that you want once you sell your business. Many sellers use this time as an opportunity to take a break from the entrepreneurial world, while others delve into other industries and chase their past passions. Whatever you decide, the choice is yours and you are free to do anything you want.
Why should I use a CBI professional when buying or selling a business?
If you own a business, then you’ve likely thought about the day that you eventually leave your company. Selling your business is a decision not to be taken lightly, especially if you have plans to remain in the industry or take on a different role. You likely have an idea of what your business is worth, but there are more factors to consider when selling a business than just counting up the price of your assets and putting your business on a market. There are likely countless questions on your mind such as “when’s the best time to sell?” and “how do I look for a potential buyer?”.
If you’re considering the idea of purchasing or selling a business, then you might have some questions regarding the valuation of a business and how its worth is determined. You might also be thinking about the potential financing options available to you if you were to buy a business. With so many to think about, it’s natural to find the purchase or sale of a business a daunting thing.
That’s where a certified business intermediary, or a CBI, can come in handy. A CBI is awarded by the International Business Brokers Association (IBBA) to members that have met educational and ethical standards. With other 1,100 members worldwide, it’s the largest international, non-profit organization that operates exclusively for the benefit of people and firms that are engaged in business brokerage, mergers and acquisitions. 500 of its members hold the distinguished CBI designation.
In many states, a license is not required in order to become a business broker. As such, it’s difficult to trust anyone that just calls themselves a business broker. A CBI designation is a great way to tell if a CBI can be trusted or not. An experienced CBI can help with the sale or purchase of a business by negotiating the terms, ensuring your confidentiality and simplifying many of the complex processes to help you understand them better.
To become a CBI, you must bee the following qualifications:
- Education - A minimum of 60 class hours of business brokerage courses offered through IBBA and the ability to demonstrate an ongoing commitment to professional development through continuing education and recertification.
- Experience - The ability to demonstrate competence in the application of knowledge gained through practical experience with a combined minimum of three years’ worth of experience and education in business brokerage.
- Knowledge - The ability to demonstrate a high degree of knowledge garnered through the successful completion of required courses and evidenced by passing a CBI examination.
- Ethics - A thorough understanding of the IBBA’s Code of Ethics and the ability to apply the code to their business practices.
A high level of education and training mean that a CBI will have access to people and information that other business brokers do not. A CBI has professional contacts and affiliations with hundreds of other intermediaries and has easy access to up-to-date industry information that could involve taxes, government and legislation.
A CBI’s preparation and knowledge of industry trends and conditions, coupled with the judgement and skill they bring to the transaction of a business, make them indispensable when you’re seriously considering the possibility of buying or selling a business.