CBBMA

Charlotte Business Brokers, Mergers and Acquisitions
Helping Entrepreneurs Buy and Sell Businesses


Phone
Seller - Frequently Asked Questions

Below is a list of Questions Sellers frequently asked.

We hope you find what you're looking for in the list of questions below.

If you have a question that is not answered below,  ask us?

We will get right back to you with the answer.





Question: Is this a good time to Sell My Business ?

Answer: It depends.  I know, this is not a very good answer, but it is the truth. 

For example, Merger and Acquisitions are rising quickly again.  So if your company is large enough for M&A then it is a great time.  Rates are low and buyers are looking.

Smaller companies that have fared OK during this slower economic climate have good sales potential as well.  Banks are still financing the purchases of good companies and with the economy changing from its traditional employment base to more of a contracted base there are a lot of people looking at buying a business as a new career goal.

However, if your company has been significantly affected by the economy, and your profits are now very marginal then it is a unique time to be in the market.  These businesses are still selling because there are a lot of buyers out there.  But bank financing is almost impossible.  So the seller must be more flexible in financing more of the deal.



Question: How long does it take to sell a business ?

Answer:  It generally takes, on average, between five to eight months to sell most businesses. Keep in mind that an average is just that. Some businesses will take longer to sell, while others will sell in a shorter period of time. The sooner you have all the information needed to begin the marketing process, the shorter the time period should be. It is also important that the business be priced properly right from the start. Some sellers, operating under the premise that they can always come down in price, overprice their business. This theory often "backfires," because buyers often will refuse to look at an overpriced business. It has been shown that the amount of the down payment may be the key ingredient to a quick sale. The lower the down payment, generally 40 percent of the asking price or less, the shorter the time to a successful sale. A reasonable down payment also tells a potential buyer that the seller has confidence in the business's ability to make the payments.




Question: What can a business broker do and what can they not do ?

Answer: Business brokers are the professionals who will facilitate the successful sale of your business. It is important that you understand just what a professional business broker can do -- as well as what they can't. They can help you decide how to price your business and how to structure the sale so it makes sense for everyone -- you and the buyer. They can find the right buyer for your business, work with you and the buyer in negotiating and every other step of the way until the transaction is successfully closed. They can also help the buyer in all the details of the business buying process. A business broker is not, however, a magician who can sell an overpriced business. Most businesses are saleable if priced and structured properly. You should understand that only the marketplace can determine what a business will sell for. The amount of the down payment you are willing to accept, along with the terms of the seller financing, can greatly influence not only the ultimate selling price, but also the success of the sale itself.


Question: What happens when there is a buyer for my business ?

Answer: When a buyer is sufficiently interested in your business, he or she will, or should, submit an offer in writing. This offer or proposal may have one or more contingencies. Usually, they concern a detailed review of your financial records and may also include a review of your lease arrangements, franchise agreement (if there is one), or other pertinent details of the business. You may accept the terms of the offer or you may make a counter-proposal. You should understand, however, that if you do not accept the buyer's proposal, the buyer can withdraw it at any time. At first review, you may not be pleased with a particular offer; however, it is important to look at it carefully. It may be lacking in some areas, but it might also have some pluses to seriously consider. There is an old adage that says, "The first offer is generally the best one the seller will receive." This does not mean that you should accept the first, or any offer -- just that all offers should be looked at carefully. When you and the buyer are in agreement, both of you should work to satisfy and remove the contingencies in the offer. It is important that you cooperate fully in this process. You don't want the buyer to think that you are hiding anything. The buyer may, at this point, bring in outside advisors to help them review the information. When all the conditions have been met, final papers will be drawn and signed. Once the closing has been completed, money will be distributed and the new owner will take possession of the business.