This page will describe to you the
reasons as well as the process for using a BBN Broker to sell your
business and is divided into the following sections:
There are many
reasons. Most importantly, BBN offers business owners the
opportunity to have the largest business brokerage network in the
world working to sell your business, not just one local broker.
Common sense says it is better to have the potential of 450
affiliate brokers nationwide seeking the right buyer for your
business instead of one local office.
Finding one
prospective buyer is insufficient. Creating competition among
multiple buyers should be a brokers goal, not to just find a
single buyer. A buyer without competition feels free to offer
less than the full value of a business. When a buyer knows
several other buyers are looking at the same business, they are
hesitant to offer less than the price and terms being solicited.
As the only true
national firm in the industry, BBN has offices covering every
state in the nation. No other brokerage firm even comes close.
Before BBN was established, an individual living on the West
Coast, for instance, who wanted to relocate to the Southeast would
find no value working with a broker locally because the broker
would not know what was available outside the local market. As a
result, a prospective buyer would need to go from broker to broker
in the desired area. This only caused frustration and a waste of
time, and seldom, if ever, resulted in completion of a business
sale. Now, prospective buyers can contact a local BBN Affiliate
Broker, and the prospective buyer will have access to listed
businesses from Affiliated offices in the desired area.
Another factor to
consider is packaging. Poor packaging of business is one of the
major complaints expressed by buyers. We have been told by
hundreds of buyers that BBN has the best and most professional
packaging in the industry, ensuring that sellers are effectively
motivating the acquisition of their business. All BBN Affiliate
Brokers have standardized and detailed packaging, which, in
addition to its appeal to prospective buyers, makes it easy for
one Affiliate Broker to quickly understand a business listed by
another. When a prospective Buyer is presented the information on
your business, the Buyer will be able to have most of his
questions answered and be able to make an informed buying
decision.
CONFIDENTIALITY is
vitally important when working with any broker during the selling
process. BBN Affiliate Brokers protect information about the
business for sale from being presented to unqualified buyers. In
addition, BBN Affiliate Brokers require potential buyers to
provide proof of financial ability to acquire your business. So,
the Seller can make an informed selling decision, all within the
confines and security of confidentiality.
The process of buying
or selling a business requires dedication and the attention of a
professional with the knowledge of the complete flow of a business
transaction, as well as a team in place to accomplish every aspect
of the transfer. Marketing and facilitating a business transfer
is a full-time job! You deserve someone who will work as hard as
you do. A qualified broker will save business owners and
prospective buyers money by helping them avoid costly mistakes,
effectively marketing the appeal of the business, and maximizing
exposure to serious, qualified buyers--all with complete
confidentiality.
If you are interested
in selling your business and don’t know the answer to any of the
questions below, you could benefit from the assistance of a
professional broker (and you are not alone!)
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How do you reach
qualified buyers, including possibly competitors, without
disclosing your intentions to sell?
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How do you evaluate
your business objectively to ensure you receive top dollar for
your investment and avoid costly negotiating tactics?
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How do you prepare
and provide the information a prospective buyer will require to
interest him in pursuing your business in favor of other
options?
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How do you arrive at
the best price and terms, including the intangible and goodwill
values of your business?
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How do you maximize
your favorable exposure to potential offers while minimizing
your potentially damaging public exposure to customers,
competitors, employees, and suppliers?
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How do you market
your business in all of the appropriate markets, databases, and
media efficiently, effectively and confidentially?
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How do you screen and
pre-qualify buyers, determine their motivations, managerial
capabilities, and financial strength?
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How do you
effectively sell your business, diverting significant time,
effort and resources to that process, while continuing to manage
your ongoing business productively?
Business owners have
focused their entire lives on growing and developing their
businesses and seldom know how to answer all of the questions
above. That is where a professional BBN Affiliate Broker can come
in. The sale of your business demands a professional, just as
running your business has demanded your professional attention.
BBN Affiliate Brokers have the expertise, tools, and professional
team to market and sell your business successfully on a national
basis. The objective is to protect your business investment and
maximize your net after tax profit on the sale. It is to your
advantage and in connection, your broker’s as well, to obtain the
best possible price that a reasonable buyer will pay. BBN
Affiliate Brokers strive to maintain high ethical standards and
communicate in an open and honest manner in all of business
relationships.
Several factors come
into play and can affect the sales price. One of the most
critical is the “terms” or the amount of down payment and the
amount financed. Over eighty percent of all businesses sold above
$100,000 are sold with one-third or less down and the owner
financing the balance. Asking for one-half down will reduce the
price by approximately twenty percent. Asking for cash will
reduce the price to about forty to sixty percent of the amount
attainable with one-third down.
Down payment or the
“terms” is a key factor, because a buyer is trying to buy as much
business as possible for the money available for down payment.
So, when a seller asks for $200,000 down on a $400,000 value
business, buyers prefer to continue looking until a $600,000 value
business is found where the owner will accept $200,000 down and
finance the balance. The seller who asks for all cash or a large
down payment is not going to succeed in obtaining the full fair
market value of their business, because buyers know they can buy
three times as much business for the same investment. In a
nutshell, high percentage down payments cause buyers to discount
offers.
A second critical
factor is the quality of the information provided to a prospective
buyer. The value of the assets and cash flow generated by the
business must be provable and verifiable. A professional business
broker will be able to assist the business owner in arriving at
these values.
The third most
important factor that effects the sales price of a business is
whether there is competition among prospective buyers for the
business. Competition creates higher selling prices, as we all
know from basic economic principles. When a business owner asks
for more than the fair market value for their business or does not
offer reasonable terms, there will be few, if any, buyers
interested in acquiring the business. On the other hand, when a
business is priced realistically and with proper terms, multiple
buyers are likely to pursue acquiring the business. A buyer who
knows he has other buyers competing for the business will be
motivated to offer the price being asked to ensure he does not
lose the business to another buyer's better offer.
The advertising of
each business will depend upon the size and type of business. BBN
Affiliate Brokers use several media to solicit prospective buyers,
including local and national newspapers, including the Wall Street
Journal, trade publications and the internet. In addition,
qualified buyers from other affiliate offices comprising more than
1,000 individuals, corporate acquirers and investment groups.
Local newspapers are used as little as possible, because it is
often more difficult to protect confidentiality when a business is
advertised locally. Affiliates also use other top business listing
sites on the Internet.
The first thing you
need to do is offer the business at a realistic price and with
reasonable terms. You need to provide as much information as is
possible to the broker so a professional marketing package,
including a business profile, can be prepared on your company.
The quality of the business profile will greatly enhance the
“saleability” of a business. A package prepared by a BBN Affiliate
Broker will contain the financial, operational and historical
information about the business. Informed buyers make better
offers. Other things a seller can do are:
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Continue to run your
business in a normal manner.
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Keep the business
clean and organized (on paper and in person), so potential
buyers will like what they see.
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Liquidate or set
aside obsolete inventory and unneeded equipment before you place
the business on the market.
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Notify your broker of
any material changes in your business.
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Forward monthly
financial statements to the broker as soon as they are
completed.
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This will keep your
marketing package current. Do not meet with potential buyers
without your broker being present.
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Avoid direct
negotiations.
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All offers and
counter-offers should be in writing and should be presented by
the broker.
A broker cannot really
sell a business, because he or she does not have the intimate
understanding of the business and its operations, and certainly
not the level of knowledge the owner has. Therefore, a
professional broker's initial job is to get a business listed at
the best possible obtainable price and with realistic terms of
sale. The next job is to qualify buyers to keep the seller from
wasting time with people who are not financially qualified.
Qualified buyers will be presented your business profile after
they have completed a Buyer Warranty and Confidentiality Agreement
that protects the confidentiality of the seller regarding the
potential transfer. The broker will then schedule a meeting
between the business owner and the interested buyer. During this
meeting, the business owner will explain the business to the
buyer. After this meeting, the broker will work to get a written
offer to purchase. The broker will present all offers and after
acceptance will coordinate the due diligence process that will
lead to the closing.
Contact a BBN
Affiliate Broker offices for answers to your questions or you may
send an e-mail to our corporate headquarters by selecting the
"Contact Us" link.
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