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What do business brokers do?
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Date : 9/4/2009
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As professional business intermediaries, Aberdeen Advisors facilitates the successful sale of your business. We advise you on valuing your business and structuring the sale so it’s effective for both you and the buyer. We can find the right buyer for your business and work with you and the buyer on all transaction details until the closing.
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What skill set and experience are important when seeking a business broker?
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Date : 9/4/2009
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Trust and integrity are key, as is reputation. You also want an experienced broker who relies on a proven process and one with a strong marketing reach.
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How is Aberdeen compensated?
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Date : 9/4/2009
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We use a success-based compensation model. Simply put, Aberdeen gets paid when you get paid. There are no consulting or retainer fees, and Aberdeen is compensated when a transaction closes. We won’t accept assignments unless we think we can successfully achieve the seller’s objectives.
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Given the challenging economic times, is now really an opportune time to try to sell a business?
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Date : 5/14/2009
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Yes. There are plenty of business buyers and it’s still possible to put deals together in these economic times.
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Why is it important to use a business intermediary to sell a business?
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Date : 5/21/2009
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Intermediaries like Aberdeen Advisors are experts at buying and selling businesses. Using a competitive bid process and other negotiating tactics, we can get top dollar when you sell your business and ensure that business sellers don’t have any long-term legal liabilities in a transaction. Selling a business is a difficult process and we provide valuable advice throughout the process and reduce sellers’ stress.
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My business is local and has a local clientele. Why should I hire someone to market my business nationally and internationally?
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Date : 5/14/2009
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Many buyers move from all over the world, especially to Florida, to buy businesses. You need an international reach to get top dollar and find the best buyers.
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What information do I need to provide for Aberdeen to do a valuation of my business and market it?
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Date : 8/12/2009
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Revealing everything is important. That includes tax returns for the last three years, income projections for the next 12 months, the assets being sold, and what personnel will remain and what employees will leave. Legal and tax issues are very important to discuss, too.
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How long will it take to sell my business?
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Date : 9/4/2009
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It varies from business to business, but typically it requires a minimum of four months to sell a business. The quicker we have your paperwork and financial documentation in order, the quicker we can begin marketing your business. It’s important that businesses are well-priced from the start. Sellers often think they can reduce a price later, but they can miss out on serious buyers who simply won’t look at overpriced businesses.
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What happens when there’s a buyer for my business?
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Date : 5/14/2009
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When a buyer is sufficiently interested in your business, we prepare an offer or proposal. It may contain one or more contingencies, often associated with getting detailed reviews of financial records, lease reviews, franchise agreements (if there is one) or other pertinent details of the business. The buyer’s proposal is then presented to you and you can accept the terms or offer a counter proposal. We submit all offers to you and recommend that you consider them carefully, even if specific details displease you. Offers lacking in some areas, often provide advantages worth considering.
Once you and a buyer agree to move ahead, we work with both parties to remove the contingencies in the offer. Buyers may invite outside advisors to help them review the information. Once all conditions have been met, final papers are drawn and signed.
When the closing is completed, money is distributed and the new owner takes possession of the business.
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Why is seller financing important to the sale of my business?
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Date : 5/14/2009
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Industry surveys indicate that sellers asking for all-cash deals receive, on average, only 70 percent of their asking price and those who accept terms receive, on average, 86 percent of their asking price. Often, businesses listed for all cash just don’t sell. With reasonable terms, however, the opportunity of a sale increases dramatically and the time from listing to closing greatly decreases. Most sellers are unaware of how much interest they can generate by offering financing. To buyers, it’s one indication that sellers are confident that the business will pay for itself.
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What can I do to expedite the sale of my business?
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Date : 5/14/2009
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You can cooperate fully with us and other professionals participating in the process. A buyer needs up-to-date financial information, so if you use an accountant or bookkeeping firm, you can work with them to make current information available. And if you’re consulting with lawyers, be sure they’re familiar with the business closing process and the laws of your state.
Often closings happen quickly and it’s important that the team members’ schedules allow them to work on the closing on short notice. Failing to close on time allows buyers to reconsider or make changes to the original proposal.
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The economy has had an impact on my revenues. How will this affect the sale of my business?
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Date : 5/28/2009
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It will generally lower the business valuation.
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What’s the climate in the credit markets?
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Date : 9/4/2009
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Though they’re still quite tight, we’re starting to see signs of life in the U.S. credit markets. While we are a long way from getting out of this credit crisis, it is encouraging to see things starting to loosen up. In this climate, sellers need to expect to participate in financing business transactions to close deals.
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What are private equity groups?
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Date : 5/14/2009
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Private Equity Groups come in all shapes and sizes, but they are generally formed to buy businesses that fit their investment criteria. Private Equity Groups may have hundreds of millions of dollars in a fund to purchase businesses. Generally, Private Equity Groups want to buy a company with a minimum of $1.5 million or more in EBITDA (Earnings Before Interest Depreciation and Amortization).
The higher the EBITDA the more buyers there are. They generally want a management team to stay in place because they do not generally run the business.
Private Equity Groups typically want sellers to maintain some equity in the new entity. Such firms can be terrific buyers if you select the right firm in which to partner. The goal is to get cash at closing and hopefully have your equity portion of the new company to increase in value.
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How will an increase in the Capital Gains Tax affect the sale of my business?
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Date : 5/14/2009
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If the Capital Gains Tax goes up, there will be an effect on the sale of your business in two ways. One way will be the tax increase you will pay on the taxable portion of your gain. Currently the capital gains tax is 15 percent. So if you sold your business and had taxable capital gains of $10 million then you would pay a capital gains tax of $1.5 million. If the tax is increased to 25 percent, then your tax will increase by $1 million to $2.5 tax.
This is important as you plan your exit strategy. If you have a large capital gain then there should be a big incentive to sell while the current tax rate is in place.
The other factor is that business buyers will add this additional tax in mind when they purchase a business.
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What’s the benefit of buying an existing business?
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Date : 5/14/2009
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The start-up costs and headaches are eliminated and an existing business has already proven itself. If it’s thriving, you know there’s a need for it and that it has a clientele.
Often, existing business owners will, for a transition period, work with you to help you learn the ropes of that particular business. In addition, seller financing is frequently available to buyers.
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Are there viable business opportunities available right now?
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Date : 9/4/2009
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With the changing economic cycle, there are plenty of businesses. There are manufacturing, distribution and health care companies for sale now. Just in the state of Florida, there are currently more than 5,000 businesses for sale.
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What are lenders looking for when they’re financing new deals?
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Date : 9/4/2009
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Cash flow and assets. Banks are cherry-picking deals and being very selective about new loans. The result is that you have to have a strong business plan, financial strength, and your ducks in a row to borrow money to buy a business right now.
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What do I need to know about a business before making an offer?
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Date : 5/14/2009
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A business intermediary can help you gather all the necessary information. You want to look at price, terms, income, cash flow, and location and be sure the business serves your financial needs. If possible, visit the business to assess the ambiance and if it’s run well and seems cared for.
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How do I know if I’m cut out to be a business owner?
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Date : 5/14/2009
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You have to do some self-exploration and assess your reasons for owning a business. Some questions to ask yourself are as follows: Do I have the stamina and willingness to put in long hours? Am I willing to make the financial commitment and accept the risks of ownership? Do I have the personality and motivation to own a business? Can I make decisions and hire and manage employees?
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