Frequently Asked Questions
What is a Business Broker?
A Business Broker is a licensed representative for buyers and sellers of businesses. A Business Broker seeks out businesses for Buyers, whether to purchase as Owner/Operators, Partners, or Investors. The Business Broker lists businesses for sale, and promotes those listings via various marketing efforts and circulation among potential Buyers. Typically, Business Brokers work with businesses with revenues $25 million and less.
What is a Value Advisor?
A Value Advisor works with business owners to understand how their business is valued and facilitates efforts to enhance value through targeted strategies. A Value Advisor often works in coordination with CPAs, Attorneys, and Insurance Advisors to ensure the “team” is progressing toward the goals of the business owner.
Who do I need to sell my business?
A Value Advisor is a wise option for business owners approaching their time horizon goals for exiting the business. If an owner is considering transitioning out of the business within five years, defining value goals will greatly impact the exit planning process.
A Business Broker is an important representative during both the purchase and sale process. The Business Broker manages the sale of the business, from the listing process through the close. From promoting a listed business, to receiving Letters of Intent/Offers, creating and managing the completion of a Due Diligence checklist, providing clients with options for financing, managing the escrow process, and facilitating a successful close, the Business Broker manages the transaction for the business owner client.
How long will it take to sell my business?
The length of time it will take to sell a business depends on how prepared the business is for sale and how attractive the business is among its peers in the marketplace. Businesses that have been properly prepared for sale are much more likely to have a successful close at the highest possible value, within the shortest time frame, as compared to those businesses that have not prepared for sale.
Preparing a business for sale can begin as far out as five years from the time horizon goal. Typically, clients develop exit plans with an 18-24 month time frame. It is advised that business owners dedicate at least six months to preparing a business to enter the marketplace for sale.
Once a business is ready for sale, the Business Broker will employ different efforts to solicit offers for the business. This marketing process can take months before an appealing offer presents.
A typical due diligence period can range from 45-90 days, which is the average time from acceptance of an offer to close.
If I sell my business, do I have to sign a non-compete contract?
Every sale is different and a non-compete agreement is relevant in some sales, while unnecessary in others. The Buyer may or may not desire such a restriction on a Seller. A Value Advisor or Attorney can provide insight regarding the importance of a non-compete agreement in the sale of your business.
Once I sell my business, will I have to stay on? For how long?
You might, but not necessarily. It is common for a Seller to provide training as well as transition assistance to the Buyer, post sale. There are many variations of the agreements that can be made between a Buyer and Seller and how the Seller will be compensated for this time. Some factors that might influence this topic are: whether or not the executive functions are carried out personally by the Seller or by employees, how involved in the daily operations and client relationships the Seller is.