1. We will assist you in pricing your business based on the financial records, history of your business, current market conditions and demand. 2. A professional marketing package will be prepared with data featuring the most desirable aspects of your business. 3. We will check our office referral files for a buyer, notify our confidential contacts, plan and place effective advertising and follow up immediately on all serious leads. 4. To ensure the confidentiality of your sale, we will expose your business only to qualified prospective buyers after a non-disclosure agreement has been signed. 5. Once an offer to purchase has been submitted and accepted, we will continue to work closely with you and the buyer to bring the sale to a successful conclusion.
KEYS TO SELLING YOUR BUSINESS
In order to provide the most professional service possible and obtain an optimum price in the shortest time. Pacific Business Investments needs your cooperation.
DETAILED AND VERIFIABLE INFORMATION
It is extremely important that you provide Pacific Business Investments with detailed and accurate information about your business including factual, historical, statistical, narrative, financial data, as well as company and product literature. All data will be held in strictest confidence. So that we can properly market your business, it is important for us to have a complete understanding of it. We submit a prospective Buyer/Seller meeting to see and discuss the business in greater detail. Prior to this meeting, the Buyer has probably not seen your financials. Buyers need to earn the right to the financials in proving to you and Pacific Business Investments that they are serious. This often means the Buyer is required to make an offer with contingencies, including satisfactory review of the financials. However Pacific Business Investments must be able to provide the Buyer with the business's true gross sales, cash flow, fair market value of all assets included in the sale, and the inventory value at cost before an offer can be submitted.
Many factors may affect the value of your business. The most important is Cash Flow. Although Pacific Business Investments points out to all its Buyers to understand that the financials of most businesses are done to minimize taxes, it is up to you, the Seller, to explain the true earnings of the business. Buyers must be comfortable and satisfied with what they see and hear from the Seller or the price they will be willing to pay may be greatly affected.
Cash Flow usually becomes a multiplier factor that is added to the Fair Market Value of your Furniture, Fixtures, Equipment (FF & E), Real estate, and the cost value of the Inventory. Other factors that affect the market value include marketing indexes on your type of business, historical sales and Cash Flow, market and economic conditions, competition, location, lease terms, employees and management, established contracts, customer lists, and other intangibles. Note that "Potential" was not mentioned. Few Buyers are willing to pay much for the potential although it may contribute to their interest in the business. Most importantly, the numbers must work. The business must be able to still pay the owner a reasonable salary, pay the new debt service, and still leave the owner with a reasonable profit. Pacific Business Investments can help you get the best deal that the market will bring through our professional marketing service. We are confident that the price and terms will be much higher than you might get without our services.
FREQUENTLY ASKED QUESTIONS ABOUT THE SELLING PROCESS
HOW LONG WILL IT TAKE TO SELL MY BUSINESS?
The time needed for sale depends on a great many factors, including the price of your business, type of business and your willingness to finance the buyer. In general it takes 6 to 12 months to find a buyer for a business. The price and terms you are offering are important factors. The more reasonably priced, and the better the terms offered, the faster the sale. Your Pacific Business Investments broker can discuss with you how your business fits into these general guidelines.
HOW WILL MY BUSINESS BE ADVERTISED?
The internet is rapidly becoming the most effective way to reach qualified buyers on a regional and national level. In addition to our website https://www.PacificBusinessInvestments.com, we post our listings on three other websites, Bizbuysell, Bizquest and Businessmart.
WHAT TYPES OF OFFERS SHOULD I EXPECT TO RECEIVE?
An astute buyer is going to structure the initial offer to insure that they get the best possible price and terms from you. Therefore you should expect to receive a "low" initial offer. Don't be offended this is just an initial offer to "test the waters." If you are asking $100,000 for your business, a prudent buyer may offer 1/2 or less in the initial offer. The buyer does not expect you to take the initial offer, nor should you expect the buyer to accept your initial counter offer.
All offers that you receive will have some contingencies. Generally, these contingencies concern review of the financial information, obtaining a satisfactory lease and agreement on a training and transition period. Other contingencies specific to your business may be included. Contingencies are normal and provide the buyer with the ability to "check out" the business before closing.
HOW LONG IS THE TRAINING PERIOD FOR THE BUYER?
Generally, you will be expected to provide one to two weeks training in the business with an equal time of telephone consultation. Remember, you still have an investment in the business, so properly training the buyer is in your best interest.
WILL I HAVE TO SIGN A NON-COMPETE AGREEMENT?
Yes. Generally, the non-compete agreement covers the area from which your current customers are generated and the time period usually equals the term of the financing you are providing to the buyer. For example, if your customers come from a 3-mile radius of your business and you are providing the buyer with a five year loan, you will be asked to sign a non-compete for a five year period covering a three-mile radius from your business.
WHEN SHOULD I TELL MY EMPLOYEES ABOUT THE SALE?
Although it sounds cruel, our considerable experience has proven that it is best to tell your employees about the sale after the sale is complete. Of course, if there is an employee whose expertise will be needed after the sale, you should introduce the buyer to this employee shortly before closing. Your Pacific Business Investments broker can assist you in determining the timing for notifying employees.
DOES PACIFIC BUSINESS INVESTORS QUALIFY THE BUYER?
No. We sometimes ask for a personal financial statement from the buyer, but do not verify the information submitted. We do not run credit reports on buyers. It is your responsibility to do whatever you feel is appropriate regarding qualifiying the buyer. Generally, if the buyer has sufficient funds for the down payment and for working capital that is adequate qualification.
TIPS FOR SELLING YOUR BUSINESS
Be as accommodating as possible in setting appointments to meet with buyers.
Keep the business clean and in good repair, as well as removing equipment or furniture that is not part of the sale.
Work with us and not directly with potential buyers. Always refer buyers to us. You hired us to sell your business so let us do our job.
Getting your financial information is crucial. Tax records, P & L's an equipment list and other financial information are necessary. Buyers want to buy an income stream and need facts to substantiate the business's worth. Provide us with the required information in a timely manner.
Make sure that your lease can be assumed and extended at a reasonable rate. The location is very important to a buyer and they need to feel secure that they can continue to do business in the same location.
Track record is also important. Good customer relations and records, as well as, reputation help a new buyer see the possibility of doing business successfully.
When your business is on the market, do business as usual. Keep normal business hours and do not let inventory levels dip below normal. Also keep the business clean and in good repair.
The time needed for a sale depends on a great many factors, including the price of your business, the type of business and your willingness to finance a buyer.
The more reasonably priced, and the better the terms offered the faster the sale. A third party evaluation lends credibility to the sale price and also can speed up the process.
Remember that a negotiated deal is a deal that will close. Do not become offended by what you consider to be a "low" offer. Counter all offers on a timely basis.