I want to sell my business but need confidential help, where do I start?
It’s simple. Call or email and we’ll help. We’ll be happy to talk confidentially about the process, the cost and the timing. We’re accustomed to the sensitive nature of selling your business.
What are Sellers Discretionary Earnings? (aka Cash Flow)
It’s very important that buyers and sellers understand exactly what discretionary earnings are. It’s what buyers want to buy and sellers should have to sell. The short answer is; “the true benefit ($) to the owner” or more properly stated: Discretionary Earnings are the sum of earnings before compensation available to a working owner/manager, depreciation and amortization, interest expense, owners benefits and expenses that are “one time” or extraordinary which are not representative of the continuing operation of the business or are discretionary to the owner and/or primarily for the owners benefit.
How much do you charge to appraise or sell a business?
They’re all different…but here are some averages. Appraisals usually start around $500 to $1,000 and can go up to $10,000, it simply depends on the purpose of the report. Basically, appraisers get paid for their expertise and the amount of time it takes to communicate that expertise in a report. If you’re simply contemplating a sale, it’s usually on the lower end of the spectrum.
The typical success fee (aka commission) is based on the selling price:
The first $1M is 10%,
The second $1M is 8%,
The third $1M is 6% and
5% of everything over $4M.
Can I talk to the Owner?
Of course, simply call or email and ask for Charlie Cole. He will be glad to speak with you.
What is the difference between a Business Intermediary and a Real Estate Agent?
Theres a huge difference! The most obvious being the training and expertise required to represent a buyer or seller in a business acquisition. Real estate agents simply do not have this expertise. Why would they? They’re in a completely different occupation. Businesses have many moving parts such as inventory, non-competes, allocation, employees, customers, AR, etc., whereas with real estate, it’s just one simple asset to sell and the title company does the majority of the work. Real Estate Agents take “bizop” listings because many real estate firms use a graduating pay scale to compensate their agents. In other words, agents receive a higher commission share when they have more listings which is why they will take a listing at any price without any experience. Always ask what certifications and experience the broker has and check their website to determine what they specialize in?
Why should I use a Business Intermediary/Business Broker?
Primarily, to gain access to his/her buyers and transaction experience. We believe there are many reasons. Here are a few more considerations.
Business Brokers work with buyers and sellers in establishing a price for the business.
Business Brokers are skilled at marketing businesses confidentially to protect from harming the relationship with employees, suppliers, competitors and customers.
Business Brokers prepare a marketing strategy to maximize the price.
Business Brokers are skilled at negotiating all aspects of the sale including deal structuring, non-compete agreements, consulting agreements, seller finance notes and allocation of purchase price to name a few.
Business Brokers interview, screen and qualify prospective buyers and sellers.
Business Brokers market the business through many different methods (not just the local MLS) including our own database of buyers, the Internet, our network of other brokers and industry experts, trade publications and other sources.
Business Brokers market businesses for sale on a national and international basis.
Business Brokers work with outside advisors to help make sure the transactions progresses smoothly.
Business Brokers have access to lenders who can pre-qualify buyers and sellers.
Business Brokers have a database of experts relating to the sale of businesses.
What is Fair Market Value?
The price at which property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.
What is an Appraisal?
Simply stated… a definsible estimate of value. Remember though, when buying or selling a business, an Appriasal is not about what a business is worth in the current owners hands, it about the transferrable value.
How much do you charge to sell a business?
The average over the past 25 years is 10%.
Can I use a rule of thumb (a multiple or percentage) to value a business?
Sure, go ahead. We’ll even help…our free online calculator is here. Use caution though, you’ll be asked to defend your price. Would you buy a business based on math a 10 year old can do in their head?
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