Selling a Business? – 10 Reasons Why You Should Consider Using a Business Broker

After 20 years in business the owner decides that it is time to sell his business. He thinks about calling a business broker, but decides to sell it on his own and save the fee that he would have to pay a business broker. Is this a good decision? I think if you interviewed the majority of owners who have attempted to sell their business on their own they would tell you that this is was necessarily the best decision. As a business broker I can tell you that close to half the calls I get are from business owners who attempted to sell their business and realized it is best to leave such an important task to a professional.

I can also tell you that if you interviewed the majority of my clients they would tell you that I must be out of my mind to be doing this for a living. Once they go through the process and see what it takes for a business to successfully change hands they have no problem what so ever signing my commission check at the closing. Let me give you ten reasons why my clients will tell you that if you are seriously considering selling your business you must retain an experienced knowledgeable business broker:

* Time Savings – Most business owners spend the majority of their business day managing their businesses. Selling a business is what business brokers do full time. Qualifying and working with buyers is a time consuming tedious process. An owner will have to make a compromise in the time that they normally dedicate to running their business.

* Experience – A broker has the knowledge and experience of selling businesses. Having this on your team will only increase the chances of getting the most value for your business and making it to a closing.

* Realistic Valuation – It is my experience that most business owners feel their businesses are worth a lot more that what the market dictates. When one goes to market at a price that is too high they risk losing many qualified buyers. This will also increase the time it takes to sell their business. In some cases an owner will price their business too low forfeiting dollars on their selling price. An experienced business broker will perform a market valuation so the asking price is realistic.

* Marketing expertise – A good business broker knows where to and how to advertise your business. They have databases of buyers of which many might be looking for a business like yours. They also proactively know where to find buyers that might not be looking at your ads.

* Financing – The majority of business sales involve some sort of financing. Very few buyers are all cash. A good business broker has banking contacts that will enable deals to get financed. They also can advise you about seller financing.

* Negotiations – In every transaction there are negotiations. Negotiating on your own behalf is similar to the saying “a lawyer that represents himself has a fool for a client.”

* Buyer experience – Most business buyers are first time buyers and do not have experience. A good business broker works and nurtures their buyers to make sure they make it to the finish line and close. They help them obtain financing and facilitate due diligence.

* Confidentiality – Most business owners are very concerned about confidentiality in a transaction. They do not want their employees, customers, vendors, and competitors to know they are up for sale. An experienced business broker is accustomed to taking all precautions in keeping the sale confidential.

* Closing deals – I always tell my clients not to get excited when I bring them an offer that they are pleased with. A good business broker earns their stripes getting a deal from accepted offer to a successful closing. So many obstructions present themselves during this process and a good broker will constantly be thinking creatively to move deals along to the finish line.

*Business brokers work for free – That’s right, most business brokers work on 100% commission so if they don’t find a buyer they do not get paid. Do you know a lawyer, accountant, or a consultant that will work on your behalf and in some cases for up to a year and possibly not get paid?

Selling a business is the most important decision many entrepreneurs make in their lifetime. Their companies in most cases represent the bulk of their net worth as well as the majority of their retirement savings. Is it really something they should risk by trying to sell on their own?

Sell-Side Services Provided by a Business Broker

Business owners seeking to sell their privately owned company will often retain a business intermediary based upon their expertise in the following areas:

Confidentiality:
Listing a business for sale in a quiet and discreet manner is critical as the consequences could be very negative if competitors, employees, and customers find out the owner is selling the company. In many cases a business intermediary can pre-screen a number of buyers without revealing the name and location of the business, something that would be nearly impossible for the owner to accomplish. Approaching the sale in a confidential manner will: prevent competitors from utilizing the data to influence customers or spread damaging rumors, avoid issues with key employees who might be nervous about the uncertainty a change in ownership might bring, and eliminate unwanted concerns by customers who feel their relationship might be in jeopardy. There is a delicate balance in providing the necessary information to the buyer to allow them to make a proper evaluation and protecting the sellers’ need for confidentiality. Experienced business brokers recognize the significance of the confidential nature of the business sale and generally will provide proprietary financial and business data in stages. Less information is provided upfront but will increase over time as the relationship with the buyer matures and it is confirmed that they are a serious and qualified candidate. It is important for the buyer to recognize that some highly confidential information, such as customer databases and contracts, will not be made available until after a binding DPA has been executed and the contingencies have been removed.

Valuing Your Business:
Credentialed business brokers are trained to establish a current fair market value of a business using the income, asset, and market approaches. Business brokers are skilled at evaluating and re-casting financial statements in addition to having a solid understanding of what key values buyers are seeking. These professionals have access to large business transaction databases that are used as guidelines or reference points to establish an estimated price range based upon industry, financial, and geographical data. Understanding the worth of one’s business and how that value is derived is extremely important. In some cases, there are minor changes that an owner can make that would dramatically increase the value of the business. Owners who are equipped with a business value report will be well positioned to identify those areas that will drive company value in the coming years, enabling them to fully maximize the business value and capture a higher sales price when it comes time to sell the enterprise. There are a variety of other situations where a business valuation will be important, including: obtaining additional financing, recapitalizing the business, creating buy/sell agreements, ensuring adequate insurance is in place, dissolving a marriage/partnership, and establishing an employee stock ownership plan (ESOP), to name a few. There are several different types of valuations available so it will be important to identify the purpose to ensure that the proper report is obtained.

Financing ‘Pre-Approval’:
For the majority of small business transactions, it is rare for a buyer to acquire a business without the assistance of 3rd party financing. Experienced business brokers have relationships with a variety of funding sources including SBA lenders, commercial banks, and private capital companies. While the credit market has tightened considerably over the last several years, business brokers understand which lenders are active and the type of deals, cash flow or asset based, they will finance. Business brokers are experienced in preparing and submitting the required documents to these small business lenders whereby they are reviewed and a financing “pre-approval” can be generated. Lender involvement at an early stage will enable the business owner to be well educated on the type of financing and terms that are available, the buyer down payment required for the loan, and any seller financing commitments that may be requested. Additionally, performing this work up front, before a buyer is located, will often decrease the time period in closing a transaction. Securing financial capital is one of the most critical issues for buyers pursuing a business acquisition and it is those businesses that are distinguished as being pre-qualified for financing that will be in greater demand.

Business Continuity:
Selling a privately held business is a major undertaking as it can be a long, complex, tedious, and stressful process. Business owners who have attempted to approach a sale without a transaction team are quick to realize that the process is a full-time job and can be extremely distracting for those are who are active in managing the daily business operations. A business broker will take ownership of the entire sales process allowing the business owner, who is already wearing many hats, to focus on their core competency in providing 100% of their attention to running the business to maintain or increase its value, mitigating the risk of business erosion during the sale process.

Qualify Buyers:
Established business brokerage firms have large databases of qualified buyers in addition to networks of business intermediaries and other professionals that have access to people who are in the market to purchase a company. Most business brokers have the tools, resources, and processes to attract and screen buyers through a structured and confidential marketing program designed to solicit interest from a wide range of buyers where they are systematically pre-qualified based upon experience, time table, and financial capacity. The broker will create a comprehensive marketing circular containing a historical summary of the business operations, personnel, products and services, adjusted financial statements, and valuation data. A marketing strategy will be developed, based upon the type and size of business, targeting either financial or strategic buyers, or in some cases, both. Financial buyers are characterized as either entrepreneurs or executives leaving corporate America, interested in pursuing their dream of owning a business. Their focus is on the earnings and cash flow that the business generates and whether it will generate sufficient funds to service debt and provide the required ‘owner financial benefit’ to support their lifestyle. Strategic buyers are typically companies who are either in a similar industry looking to acquire market share/economies of scale or a complimentary business seeking to broaden their product or service offering. Strategic buyers will often pay a premium for the business based upon anticipated synergies that the acquisition offers.

Intermediary:
A skilled negotiator acts as a buffer between the buyer and seller and is able to diplomatically address any sensitive, confrontational, or polarizing issues without jeopardizing the chemistry that was developed between the buyer and seller. Closing a transaction is a complicated process with unique factors involved and a variety of conflicting issues and personalities from each side. The paperwork involved can be astounding and the intermediary will bring enormous value in coordinating, disseminating, and reviewing the plethora of documents involved with the buyer’s/seller’s professional advisors. There are often situations that require the delivery of unpleasant information, a retraction or modification of an offer, the untangling of red tape, or addressing sensitive financial issues. Having a third party intermediary involved in the transaction mitigates direct conflicts between the buyer and seller, preventing potential emotionally charged questions and concerns from damaging the negotiation process. The broker’s key function is to close the transaction and their involvement as a middleman will enable the owner to take a step back and approach the sale in a methodical approach that maximizes the value, minimizes the stress, and one that should address both parties’ objectives and be more likely to result in a successful transaction.

Exit Planning:
An Exit Plan is a written roadmap that is developed in conjunction with legal, accounting, and financial professionals and is designed to maximize the value an owner receives when exiting the business. Whether the goal is to exit the business in six months or ten years, it is critical that a business owner recognize that succession planning is the single most important way to take control of the terms and conditions of exiting their business. Proper exit planning will reduce the variability of the business control transfer, and can secure a sound financial future for their family. By establishing the current market value of the business in conjunction with a determination of the owner’s exit timetable and the income needed for retirement, the Business Intermediary will have the essential elements for the foundation of the exit plan. The longer that a business owner has to implement the exit plan, the greater the opportunities will be to maximize the business value, minimize tax liabilities, avoid key employee turnover, and eliminate emotionally charged family issues. By developing a formal business exit plan and setting out a specific timetable of actions to be taken, a business owner will have a clear plan of action and know exactly when and how they will be leaving the business.

The Secrets to a High Income Home Revealed

How many times have you asked yourself “self…is there a more desirable job in the world than working from home? Then asking yourself the next question, “is the home ?” Followed of course by “where exactly is this high income home ?”

I am going to go over some valuable information for you take with you and I promise by the end of reading all this you will have learned something valuable to take with you through your successes to find the a high income home .

I am going to break down the concepts that produce a high income home with the following ingredients necessary. The first is what it takes to succeed in a high income home . Point blank it is consistency and knowledge. Here is what I mean. If you want to succeed you have to keep plugging yourself into all of the things that I am discussing on this page. This consistency of work must be applied everyday for the time you have set for yourself. The knowledge portion is about taking everyday as a learning experience. My best gift to myself for my first year was learning and soaking up knowledge everyday about home , learning from some mistakes, and most of all keep driving, kept going. I was consistent. Both the need for knowledge and consistent work combined daily will lead to growth and wealth for your business. Now, can you earn a high income fairly quickly from a home ? Yes, I see it in my own team fairly regularly. I encourage that kind of drive. However, to sustain that high income levels for your home you are required good solid personal development and basic online business training. Guess where that comes from? It comes from that knowledge you seek everyday, soaking up and reading everything you see about home .

The second concept that produces a high income home for yourself is lead generation. This ingredient is always necessary for any high income home . For this what you do need is a pipeline filled with prospects (leads). This pipeline can be manifested for your business in two ways; free lead generation and paid lead generation. Paid lead generation does wonders for your time management for your home . Here are a few paid lead generation tactics: P.P.C. (Pay per click), lead campaign buying, and ezine ads, just to name a few. Some of the successful free lead generation tactics are email marketing, forum posting, article writing, and my favorite video marketing. It is best to experience both paid and free marketing to see what works for you and your business. This experience and consistency of free and paid lead generation will create growth for your business, that I promise. The key is to generate more leads that you can handle in a single day. Because after you have gone through all the leads you can handle in that one day, you have the next day ready with enough leads from the previous day to work with. No single lead, prospect or person is the drive or success for your business. The only single person is you.

The third concept that produces a high income home for yourself is true mentor and guidance. True mentorship and guidance is providing real value and teaching you about real marketing. It is to help build a mindset of a real entrepreneur. For me also what I do is really give out all the goodies. Duplication! All the tactics that I test that work and make money, I give out. Now that doesn’t mean you won’t be working hard to apply those tactics, oh you will. But there is no need to struggle on something that is already hard enough for most new people to grasp. What you need to do is look for true mentorship and guidance to produce a high income home for yourself.

The forth concept that produces a high income home for yourself is effective marketing campaigns. It’s all about what you are trying to do for your home . If you are direct selling for a company making $1,000 sales off of each sale it doesn’t make sense to use crappy banner ads on a site for car ads. More than anything you must find out what works for your home . Called simply “testing.” In a successful team for home the testing has been done for you before you join a home . When it comes to finding the best marketing campaigns for your home the true marketers have to test it. I personally tested my home before I went out to promote it to my list and new prospects. I would never want to market something to the masses that doesn’t work. Once I tested the business itself, my team partners and I started testing out the marketing campaigns that would either work or not work for the home . I tested, tested, tested, until there is enough feedback that calls for the right adjustments. All that was left is the right direction to earn high income from my home .

The fifth concept that produces a high income home for yourself is true leverage. Any online company that claims that they are the 9th wonder but they can’t prove they DUPLICATE true leverage with their compensation plan in a reasonable amount of your attention span is not a wonder for you to waste your time investing in. To save yourself months or years of frustration on finding a high income home follow everything that I am discussing here on this page. You want 1 hour each out of 1000 people rather than 1000 of your own hours

The sixth concept that produces a high income home for yourself is high conversions. Without high conversions there is no high income. The first crucial step in high conversations for your home is web copy. The web copy has to be crafted with content where that content contains a funnel that produces desirable information and opportunities. The business I work with contains $20,000 a page web copy. Most web copy for their home sites are not designed with the psychological conversions tactics needed to truly convert.

The seventh concept that produces a high income home for yourself is automation. One of the big problems with ANY home is that people can not communicate effectively. People cannot close sales effectively. After the opportunity is surrounded their life, time and money, action is then required, they take action by get their prospects on the phone…then they screw it all up. Well let’s start with the problem of the phone. If you are a high income home earner then chances you are not on the phone. Trying to convert your prospects on the phone does not earn you high income for your home . Automation. What you need is to remove human error of people who cant sell by setting up automation from a system.

The eighth concept that produces a high income home for yourself is a system. Here it is, the big reason for the success of anyone I have seen online. I can’t tell you enough how key this is for any high income home . It is so important to have some sort of system in place so the human error of bad communication can be removed. Once human error is removed the system sells for you, trains your prospects, and automates your business for you. This way people you sign up can actually make money. Otherwise 95% of the people who join the home business industry and try to earn high income from their home don’t make that much money because they have to do all the selling, all the training, with almost no automation. Unless you want to seriously develop the skills of communication that most humans lack so much in selling and be that system yourself. Get a home that has a system that communicates for you. Where can I find the right one your asking huh? Well, contact me and check out what I offer and I will explain more for you.