The Essential Questions to Ask Before Hiring a Business Broker
If you’re looking to hire a business broker, the first step is to make sure you’ve asked all the right questions. It’s important that the broker you choose is the right fit for your needs and that they understand the complexities of your business. Here are five key questions to ask in order to ensure you hire the best broker for your situation.
What kind of background do you have
One of the most important questions you should be asking any potential business brokers is what experience they have working with businesses like yours. How long have they been in business? What types of businesses have they worked with in the past? A knowledgeable and experienced Colorado business brokerage can assist you in navigating any complicated issues that may arise during the sale or acquisition process.
Do you have any areas of expertise?
Another question worth asking is whether or not your potential broker has any specialties. Are they familiar with certain industries or types of businesses? Do they specialize in helping small businesses or large corporations? Asking this question can help narrow down your list of potential brokers and ensure that you’re hiring someone who has specific expertise related to your transaction.
What services do you provide?
When it comes to hiring a business broker, it’s important to know what services they offer and how much those services will cost. Different brokers may offer different packages, so it’s important to find out exactly what their services include so that you know what kind of value for money you’ll be getting for your investment. For example, some brokers may only handle transactions such as buying and selling, while others may also provide financial advice or consultation services related to tax law or accounting.
How will you market my business?
The next question worth asking is how a potential broker plans on marketing your business when it comes time to sell or acquire it. Find out if they plan on using traditional methods such as newspaper advertisements, magazine ads, radio spots, etc., or if they plan on utilizing more modern methods such as social media campaigns or targeted email campaigns. Knowing how a brokerage intends to market your business can give you an idea of how effective their strategy might be and whether or not it fits within your budget constraints.
How will we communicate during the process?
Last but certainly not least, communication is key when working with any professional service provider—especially a business broker, who will be handling one of the biggest transactions of your life! Make sure that your prospective broker clearly outlines exactly how often you can expect them to communicate with you throughout the entire process, and make sure there are no surprises along the way!
Conclusion:
Working with a reputable and experienced Colorado business broker can help simplify complicated transactions such as buying or selling a business. Asking these five essential questions before making any decisions will help ensure that you hire someone who’s well-suited to meeting all of your needs during this critical period in life!
Read MoreThe Role of Business Brokers in Big Deals
Business brokers are an integral part of any large-scale business transaction. As a broker, their job is to act as a mediator between the parties involved and ensure that both sides get the best possible deal. You’ll be responsible for finding potential buyers or sellers, negotiating terms, and ensuring that all paperwork is completed correctly.
Colorado business brokers, are professionals and experts at making big deals happen. They provide the necessary guidance and expertise that can be invaluable when clients are trying to acquire or merge with a business. A broker will use their experience and knowledge to put together a comprehensive package of services that best suits the needs of their clients, while they also help develop strategies to evaluate the industry landscape, identify desirable targets, and seek out fair deal terms that can benefit both parties. Brokers specialize in understanding the dynamics of each market they operate in and applying these tools to help guide their clients through successful negotiations. All these skills combine to make completing big deals easier for all involved, no doubt explaining why more people are seeking out business brokers for their high-stakes transactions. Let’s take a closer look at how business brokers do big deals.
Researching potential buyers and sellers
When brokers are working on a big deal, their first step is to identify potential buyers or sellers who may be interested in the deal. This usually involves researching the market for companies that meet certain criteria, such as size, financial stability, and industry experience. Once you’ve narrowed down your list of potential clients, you can contact them to discuss their needs and interests further.
Negotiating terms
The next step is negotiating terms with both sides of the transaction. This requires a deep understanding of both parties’ needs and objectives. As a broker, it’s their job to determine which terms will satisfy both sides while also protecting their interests. This often involves extensive research into financials, legal documents, contracts, and other areas related to the transaction.
Closing the deal
After both sides have agreed on terms, it’s time to close the deal. This usually involves preparing paperwork such as purchase agreements and sales contracts to make sure that everything is legally binding. It’s important to ensure that all documents are accurate and complete before they’re signed off by all parties involved in the transaction. Additionally, you’ll need to coordinate with lawyers or other professionals who may be helping with the closing process.
Conclusion
Business brokers in Colorado can help you with large-scale transactions by providing expertise on market trends and negotiations while also making sure that all paperwork is accurate and complete before closing the deal. By taking these steps carefully and methodically throughout each transaction process, business brokers can help ensure that both parties get what they need out of any big deal they participate in.
Read MoreHow Does a Broker Save You Money?
Many small business owners don’t realize the many benefits of using a professional business broker. A business broker in Colorado is an experienced professional who can help you buy or sell a business, and they are often well-versed in the ins and outs of the transaction process. There are many reasons why hiring a business broker to assist with your sale or purchase can save you time, money, and stress in the long run.
They have the resources and know-how to handle every step in the process, from assessing a business’s value to connecting potential buyers and sellers. This saves you time and energy from having to navigate the complicated world of commercial transactions, as well as the costs associated with expensive market research. Moreover, because a business broker is an expert negotiator, they can often secure better deals than individual buyers and sellers could on their own. All in all, engaging the services of a reliable business broker is sure to save you money and headaches when it comes time to make such a big decision. Let’s take a look at some of these advantages.
Time Savings
Business brokers handle all aspects of the transaction process, from finding buyers to negotiating deals to closing the deal. This means that as a small business owner, you can focus on running your business instead of worrying about tedious details related to buying or selling it. In addition, brokers often have access to resources such as proprietary databases that allow them to quickly find potential buyers or sellers for your company, which could save you weeks or months if you were searching for them on your own.
Expertise
Business brokers in Colorado have years of experience working with businesses just like yours on transactions. They know all the intricacies involved in buying and selling businesses and are trained professionals who specialize in mergers and acquisitions (M&A). This means that your broker will be able to anticipate potential pitfalls during negotiations and provide advice throughout the entire process. Additionally, they will be able to provide valuable insight into how much your company is worth and what type of offer would be most beneficial for you as a seller or buyer.
Cost Savings
Using a business broker also has monetary benefits for both buyers and sellers. Brokers typically charge lower commissions than other types of M&A advisors, such as attorneys or accountants, because they are not responsible for handling any legal paperwork or financial analysis associated with the transaction process. Also, since brokers usually have access to proprietary data sources that would otherwise cost thousands of dollars to access on their own, they can help buyers quickly identify businesses that fit their criteria without having to search through countless listings online or in print publications. This saves both time and money!
Conclusion
Hiring a professional business broker CO comes with many benefits when it comes time to buy or sell a business. They not only provide expertise in navigating complex transactions, but they also save time by managing every aspect of the process from beginning to end, allowing you to focus on running your business more efficiently while still receiving excellent results from your sale or purchase.
Read MoreHigher a Business Broker and Get the Best Price Of Your Business
When you are ready to sell a business in Colorado, one of the most important decisions you will make is choosing whether or not to hire a business broker. Hiring a professional business broker can help ensure that you get the best possible price for your business.
There are many benefits to working with a business broker. One of the most important is that a business broker can help you assess the value of your business. They will take into account things like your company’s history, financials, and growth potential to come up with a fair market value for your business. This is important because it will help you price your business accurately and avoid leaving money on the table.
Professional Business Brokers in Colorado can help you with your Durango CO business for sale and navigate the sale process. They will handle everything from marketing your business to potential buyers to negotiating the terms of the sale. This can be a huge help if you are not familiar with the ins and outs of selling a business. Overall, working with a business broker is a smart move if you want to get the best possible price for your business.
Increase business value before a sale
Before selling your business, it is important to take steps to increase its value first. This will help you get the best possible price when you do eventually sell. Some things you can do to increase the value of your business include:
-Improving your financials: Make sure your financial statements are up-to-date and in good shape. This will give potential buyers confidence that your business is a sound investment.
-Growing your revenue: Focus on growing your top line by bringing in new customers and increasing sales to existing customers.
-Investing in marketing: A strong marketing strategy can help attract new customers and21 grow brand awareness. This can make your business more attractive to potential buyers.
-Improving operations: streamlining your operations can make your business more efficient and profitable. This is something potential buyers will look for when considering a purchase.
Taking these steps to increase the value of your business, you will be in a better position to get the best possible price when you do sell. Business brokers can help you with this process and provide valuable insight into how to maximize the value of your business.
Hire a business broker, you are more likely to:
– assess the value of your business accurately
-get the best possible price for your business
-navigate the sale process successfully
-find a reputable broker in your area.
Conclusion
If you’re looking to get the best price for your business, it’s important to work with a professional business broker. Denver business brokers has the experience and expertise necessary to help you negotiate the best deal possible. Contact us today to learn more about our services and how we can help you sell your business quickly and efficiently.
Read MoreReasons to Hire a Business Broker to Sell Your Business
There are many reasons to hire a business broker to sell a business in Colorado. A business broker can help you get the best price for your business, and can also help you find the right buyer.
When it comes time to sell your business, you need to get the best possible price. But finding the right buyer can be just as important. That’s where a business broker comes in. A business broker can help you find the right buyer for your business, and can also help you get the best possible price. Business brokers have a wide network of contacts, and they know how to match buyers and sellers. They also have a lot of experience negotiating deals. And because they’re not emotionally attached to your business, they can offer impartial advice and guidance. So if you’re thinking of selling a business in Colorado, consider hiring a business broker to help you through the process.
Here are some of the top reasons to hire a business broker when selling your business:
- Experience: Business brokers have years of experience in buying and selling businesses. They know the ins and outs of the process, and can help you get the best price for your business.
- Access to buyers: Business brokers have a network of potential buyers that they can tap into when selling your business. This gives you a better chance of finding a buyer who is willing to pay your asking price.
- Negotiation skills: Business brokers are experienced negotiators. They can help you get the best price for your business by negotiating with buyers on your behalf.
- Marketing expertise: Business brokers know how to market businesses for sale. They can help you create a marketing plan that will reach potential buyers and help you sell your business quickly.
- Knowledge of the law: Business brokers are familiar with the laws surrounding business sales. This means they can help you avoid any legal problems that may arise during the sale of your business.
- Access to resources: Business brokers have a network of resources that they can tap into when selling your business. This includes accountants, lawyers, and other professionals who can help you with the sale of your business.
- Peace of mind: Selling your business can be a stressful process. Hiring a business broker can help you reduce the stress by taking care of the details for you. This includes finding buyers, negotiating price, and handling paperwork.
- Save time: Selling your business takes time. If you don’t have the time to dedicate to the process, hiring a business broker can help you free up your time so that you can focus on running your business.
Conclusion
If you’re ready to sell your business, it’s important to partner with an experienced broker who can guide you through the process and help you get the best price for your company. Contact us today if you have any questions about selling a business Denver or would like more information about our services.
Read MoreWhat You Need to Know About Foreign Buyers
There is a potentially lucrative group of buyers that many sellers don’t initially think about. We are talking about foreign buyers. While there are some hurdles to working with these types of buyers, it is important to note that there are many huge advantages as well. Let’s take a closer look.
How Are Foreign Buyers Different?
At the top of the list of ways in which foreign buyers are different is that they are often seeking a visa. Another commonality among foreign buyers, one that will surprise many, is that they may want access to the U.S. educational system.
It is common for foreign buyers to want to buy a business so that they can get their children into a particular U.S. school district or college. Sometimes the desire to be eligible for state tuition also plays a role in the selection of a business and the decision-making process. In this sense, business location takes on a level of importance that it might not have for domestic buyers.
It is important to keep in mind that there are cultural and business differences that play a role with foreign buyers. Everything from a different use of business terminology to expectations can play a role. This could impact negotiations.
What About Visas and Immigration?
One of the most important things to remember is that foreign buyers are often navigating the complex world of visas and immigration. Whether or not a visa is issued can dramatically impact whether or not a deal ultimately takes place. This fact is often built into agreements. For example, a purchase condition may be conditional upon visa approval. Nonrefundable deposits may also play a role in the process.
What Do Foreign Buyers Really Want?
Foreign buyers have been impacted by the pandemic too. Yet, some factors remain unchanged. Not too surprisingly, they will want to see that a business is profitable. In this regard, you should be able to showcase profitability in a clear fashion. You can expect foreign buyers to want to see tax returns and all the typical documentation that you’d need to provide to any buyer.
A second factor that foreign buyers are interested in is longevity. If your business has successfully operated for decades, this will be a major advantage.
Ultimately, most of what domestic buyers are looking for in a business will translate over to what foreign buyers are seeking as well. With that stated, however, there are factors that are often unique to foreign buyers. As mentioned above, navigating the often-complex visa process can add a wrinkle to the entire process.
Copyright: Business Brokerage Press, Inc.
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Essential Meeting Tips for Buyers & Sellers
The buyer-seller meeting is quite often a “make or break” meeting. Your business broker or M&A Advisor will do everything possible to ensure that this meeting goes as well as possible.
It is vitally important to realize that rarely is there an offer before buyers and sellers actually meet. The all-important offer usually comes directly after this all-important meeting. As a result, you want to ensure that meetings are as positive and productive as possible.
Buyers need to understand how the process of selling a business works and what is expected of them from the process. Buyers also need to understand that following their broker’s advice will increase the chances of a successful outcome.
Sellers should be ready to be honest and forthcoming during the meeting. They also want to be sure to not say or do anything that could come across as a strong-armed sales tactic.
Asking the Right Questions
If you are a buyer preparing to meet a business owner for the first time, you’ll want to make sure any questions you ask are appropriate and logical. It is important for buyers to place themselves in the shoes of the other party.
Buyers also shouldn’t show up to the buyer-seller meeting without having done their homework. So be sure to do a little planning ahead so that you are ready to go with good questions that show you understand the business.
Building a Positive Relationship
Buyers should, of course, plan to be polite and respectful. They should also be prepared to avoid discussing politics and religion, which often can be flashpoints for confrontation. When sellers don’t like prospective buyers, then the odds are good that they will also not place trust in them.
For most sellers, their business is a legacy. It quite often represents years, or even decades, of hard work. Needless to say, sellers value their businesses. Many will feel as though it reflects them personally, at least in some fashion. Buyers should keep these facts in mind when dealing with sellers. A failure to follow these guidelines could lead to ill will between buyers and sellers and negatively impact the chances of success.
Sellers Should Be Truthful
Sellers also have a significant role in the process. While it is true that sellers are trying to sell their business, they don’t want to come across as a salesperson. Instead, sellers should try to be as real and honest as possible.
Every business has some level of competition. With this in mind, sellers should not pretend that there is zero competition. A savvy buyer will be more than a little skeptical.
The key to a successful outcome is for business brokers and M&A Advisors to work with their buyers and sellers well in advance and make sure that they understand what is expected and how best to approach the buyer-seller meeting. With the right preparation, the odds of success will skyrocket.
Copyright: Business Brokerage Press, Inc.
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The Main Street Lending Program
There is no doubt that the COVID-19 situation seems to change with each and every day. The disruption and chaos that the pandemic has injected into both daily life and business is obvious. Just as it is often difficult to keep track of the ebbs and flows of the pandemic, the same can be stated for keeping up to speed on the government’s response and what options exist to assist companies of all sizes.
In this article, we’ll turn our attention to an overlooked area of the government’s pandemic response and how businesses can use a whole new lending platform to navigate the choppy waters.
As the pandemic continues, you will want to be aware of the main street lending program, which is a whole new lending platform. It was designed for businesses that were financially sound prior to the pandemic. Authorized under the CARE Act, the main street lending program is quite attractive for an array of reasons. Let’s take a closer look at what makes this program almost too good to be true.
This lender delivered program is a commercial loan. Unlike the PPP, there is no forgivable component. However, the main street lending program does have one remarkable feature that will certainly grab the attention of all kinds of businesses. It can be used to refinance existing debt at a rate of around 3%. With that stated, it is also important to note that businesses cannot refinance existing debt with the current lender. Instead, a new lender must be found. Generally, loans are a minimum of a quarter million dollars and have a five-year term. In another piece of good news, there is a two-year payment deferment period.
The main street lending program can be used in a variety of ways. In short, the program is not simply for refinancing existing debt. Additionally, there is no penalty for prepayment. The way the program works is that lenders make the loans and then sell 95% of the loan value to the Fed. This of course means that the lender is only required to retain 5% of the loan on their balance sheet. The end result is that lenders can dramatically expand the amount of loans they can make.
Whether it is the PPP or a program like the main street lending program, there are solid options available to help you. Businesses looking to restructure debt or put an infusion of cash to good use may find that the main street lending program offers a very flexible loan with great interest rates.
Copyright: Business Brokerage Press, Inc.
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Seller Financing: It Makes Dollars and Sense
When contemplating the sale of a business, an important option to consider is seller financing. Many potential buyers don’t have the necessary capital or lender resources to pay cash. Even if they do, they are often reluctant to put such a hefty sum of cash into what, for them, is a new and untried venture.
Why the hesitation? The typical buyer feels that, if the business is really all that it’s “advertised” to be, it should pay for itself. Buyers often interpret the seller’s insistence on all cash as a lack of confidence–in the business, in the buyer’s chances to succeed, or both.
The buyer’s interpretation has some basis in fact. The primary reason sellers shy away from offering terms is their fear that the buyer will be unsuccessful. If the buyer should cease payments–for any reason–the seller would be forced either to take back the business or forfeit the balance of the note.
The seller who operates under the influence of this fear should take a hard look at the upside of seller financing. Statistics show that sellers receive a significantly higher purchase price if they decide to accept terms. On average, a seller who sells for all cash receives approximately 70 percent of the asking price. This adds up to approximately 16 percent difference on a business listed for $150,000, meaning that the seller who is willing to accept terms will receive approximately $24,000 more than the seller who is asking for all cash.
Even with these compelling reasons to accept terms, sellers may still be reluctant. Selling a business can be perceived as a once-in-a-lifetime opportunity to hit the cash jackpot. Therefore, it is important to note that seller financing has advantages that, in many instances, far outweigh the immediate satisfaction of cash-in-hand.
- Seller financing greatly increases the chances that the business will sell.
- The seller offering terms will command a much higher price.
- The interest on a seller-financed deal will add significantly to the actual selling price. (For example, a seller carry-back note at eight percent carried over nine years will double the amount carried. Over a nine-year period, $100,000 at eight percent will result in the seller receiving $200,000.)
- With interest rates currently the lowest in years, sellers can get a much higher rate from a buyer than they can get from any financial institution.
- The tax consequences of accepting terms can be much more advantageous than those of an all-cash sale.
- Financing the sale helps assure the success of both the sale and the business, since the buyer will perceive the offer of terms as a vote of confidence.
Obviously, there are no guarantees that the buyer will be successful in operating the business. However, it is well to note that, in most transactions, buyers are putting a substantial amount of personal cash on the line–in many cases, their entire capital. Although this investment doesn’t insure success, it does mean that the buyer will work hard to support such a commitment.
There are many ways to structure the seller-financed sale that make sense for both buyer and seller. Creative financing is an area where your business broker professional can be of help. He or she can recommend a variety of payment plans that, in many cases, can mean the difference between a successful transaction and one that is not. Serious sellers owe it to themselves to consider financing the sale. By lending a helping hand to buyers, they will, in most cases, be helping themselves as well.
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Negotiating the Price Gap Between Buyers and Sellers
Sellers generally desire all-cash transactions; however, oftentimes partial seller financing is necessary in typical middle market company transactions. Furthermore, sellers who demand all-cash deals typically receive a lower purchase price than they would have if the deal were structured differently.
Although buyers may be able to pay all-cash at closing, they often want to structure a deal where the seller has left some portion of the price on the table, either in the form of a note or an earnout. Deferring some of the owner’s remuneration from the transaction will provide leverage in the event that the owner has misrepresented the business. An earnout is a mechanism to provide payment based on future performance. Acquirers like to suggest that, if the business is as it is represented, there should be no problem with this type of payout. The owner’s retort is that he or she knows the business is sound under his or her management but does not know whether the buyer will be as successful in operating the business.
Moreover, the owner has taken the business risk while owning the business; why would he or she continue to be at risk with someone else at the helm? Nevertheless, there are circumstances in which an earnout can be quite useful in recognizing full value and consummating a transaction. For example, suppose that a company had spent three years and vast sums developing a new product and had just launched the product at the time of a sale. A certain value could be arrived at for the current business, and an earnout could be structured to compensate the owner for the effort and expense of developing the new product if and when the sales of the new product materialize. Under this scenario, everyone wins.
The terms of the deal are extremely important to both parties involved in the transaction. Many times the buyers and sellers, and their advisors, are in agreement with all the terms of the transaction, except for the price. Although the variance on price may seem to be a “deal killer,” the price gap can often be resolved so that both parties can move forward to complete the transaction.
Listed below are some suggestions on how to bridge the price gap:
- If the real estate was originally included in the deal, the seller may choose to rent the premise to the acquirer rather than sell it outright. This will decrease the price of the transaction by the value of the real estate. The buyer might also choose to pay higher rent in order to decrease the “goodwill” portion of the sale. The seller may choose to retain the title to certain machinery and equipment and lease it back to the buyer.
- The purchaser can acquire less than 100% of the company initially and have the option to buy the remaining interest in the future. For example, a buyer could purchase 70% of the seller’s stock with an option to acquire an additional 10% a year for three years based on a predetermined formula. The seller will enjoy 30% of the profits plus a multiple of the earnings at the end of the period. The buyer will be able to complete the transaction in a two-step process, making the purchase easier to accomplish. The seller may also have a “put” which will force the buyer to purchase the remaining 30% at some future date.
- A subsidiary can be created for the fastest growing portion of the business being acquired. The buyer and seller can then share 50/50 in the part of the business that was “spun-off” until the original transaction is paid off.
- A royalty can be structured based on revenue, gross margins, EBIT, or EBITDA. This is usually easier to structure than an earnout.
- Certain assets, such as automobiles or non-business-related real estate, can be carved out of the sale to reduce the actual purchase price.
Although the above suggestions will not solve all of the pricing gap problems, they may lead the participants in the necessary direction to resolve them. The ability to structure successful transactions that satisfy both buyer and seller requires an immense amount of time, skill, experience, and most of all – imagination.
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