How it Works
No Up-Front Fee, Pay when you Sell
What is your Business worth?
We review financials, demographics, and comparable sale data to let you know what the business is worth and what kind of offers you would expect in the market. Your financials and information are strictly Confidential, we provide an NDA to put that in writing.
Brokers Opinion of Value
BOV provides current market value range. Typically 6 page report giving a range from low to high of current value using comparable sold data for the multiple, on market competition arriving at Value. Perfect for a gut check on value, gives ballpark method to determine how much growth needed to reach desired sale price.
Will typically be sufficient for smaller Main Street Business with simple cash accounting.
Formal 30+ Page deeper financial history dive with key KPI. Key performance indicators to measure the overall financial and operational health of a business. Answers Key Buyer & Banker questions for speed to Offer, speed to Close. Four distinct estimates of value: asset value, equity value, enterprise and liquidation value.
Important tool to reach top purchase price for Middle Market Companies. Speed to Offer, speed to Close with clean books and records.
2) Confidential Information Memorandum "CIM"
The "CIM" tells the Story of your Business.
Where you came from, where you are Today
and what Potential the Future holds.
We start with the 100 questions every Buyer and Banker will ask. It's best practice to answer these known questions "Once and Well".
We then utilize all available creative content that helps describe and enhance the Company Story. Site Tour Video, Photo Shoot, Articles, Promotional Materials, Charts, Photos, Products, Services, Reviews, Organizational Chart, Customer Demographics type of features.
We never reveal confidential or possible competitive information, like an Actual client name. We can instead provide the data needed by renaming generically as customer 1, customer 2, customer 3 as an example of "Redaction" or the removal of this confidential information. Sellers must review and approve all content before use and we welcome you and your team contribute to the effort, after all you know your Story best. You want Buyers to Taste it, but you don't reveal the Secret Sauce Recipe itself.
3) Advertising & Strategic Buyer
Sourcing the "Right Buyer"
Advertising and Marketing are costs paid by the Business Broker. We use several online “businesses for sale” portals to gain maximum exposure across 106 media outlets. Advertising is effectively done with what is known as the “Teaser” a Headline, Revenue, Profit with One Paragraph Description, without revealing the Identity of the Business.
You catch what you fish for, and the ideal Buyer should always be well described in the Teaser.
Interested Buyers will need to execute an NDA Confidentiality agreement protecting the Seller and reviewed for buyer qualifications before additional information is provided.
We have a massive 20-year database of Buyer Matching Data, Buyers that have identified acquisitions that fit their buying criteria. These matched buyers receive outbound teaser contact from the Broker via calls, email, text. Cold Sourcing for Strategic Buyers is your Broker manually hunting down contact with ideally suited Buyers identified by the Seller or Industry Niche. Where your Business is advertised will depend upon the size and type of Business.
Middle Market companies that are attractive enough for Private Equity Group acquisition have separate invite only Portals that our Brokerage holds membership with and are within Buyer Matching.
4) Offer Stage / Letter of Intent
Acquisition Offers come as an “LOI” or Letter of Intent. Form of a Letter, describing detailed Terms of the Offer. Temporary, non-binding, deadline to be replaced by formal agreement.
LOI expects “exclusivity”, Seller to cease advertising or receiving competing offers.
LOI is used for back & forth negotiation of terms until mutually acceptable.
An LOI is a document that gives a Buyer acceptance of an Offer and its general terms and conditions, while providing a Buyer enough days to apply for a loan, conduct Due Diligence and have an Attorney produce the First Draft of the formal purchase agreement. For this reason, an LOI must contain enough information regarding the deal points that an Attorney can construct the formal agreement and the Broker will help ensure the quality of the LOI for any possible conflicts left undiscussed or unanswered.
Our objective is to introduce our Seller, via in person meetings "site tours" with 3 to 6 qualified Buyers that are at the stage of making an Offer. Broker will schedule Video Conferences with the highly qualified Buyers, providing Seller Face time to discuss the opportunity and get to know each other, talk industry. The Seller will Only Meet with Buyers In-Person that have made it through the Broker qualifying and Seller Video qualifying process.
As we discuss in our Video, it is actually important to time our Buyer activities to produce our Offers close together in offer timing. The top reason is that you cannot expect a Buyers Offer to sit and wait for a response for too long, and your LOI will have an acceptance deadline. As a Seller, you want to choose wisely from the Buyer Candidates, and you desire all the Offers on your table at one time. This also has the crescendo effect, multiple buyers that know they have competition will sharpen a pencil to their best and highest offer, for fear of losing out on the opportunity.
Let’s say, a typical listing generates 120 Buyer Inquiries or NDA at the top of our sales funnel. Broker will conduct buyer qualifying presentations, walking Buyer through the CIM and verifying buyer candidate abilities, financial resources and company culture fit. The Buyer will typically then take days to review and agree to reach back out with any questions. The right Buyers will have several Broker presentations while they craft an internal opinion. Statistically, we are going to get One Offer for every 20 Inquiries on average listings and provide the Seller 3 to 6 Offers to choose from.
Closing the Transaction, Escrow, Loans, Attorneys, CPAs
Your Business Broker is responsible for marketing your Business to Procure an Offer from a qualified willing Buyer. Providing the Support and Documentation that third party advisors require to approve the Loan, Escrow, Legal and Accounting.
Your Broker will be with you All the way to Close, coordinating the efforts of all these parties and keeping the process moving smoothly.
Your Broker is Not qualified to give Tax or Legal advice.
Escrow / Title
Depending upon the State, you will have a third-party Escrow or Title Company for protection of all parties. The escrow agent, is an impartial third party who holds the assets until both parties have fulfilled their contractual requirements. In Short, they hold funds and will not disburse those funds until all parties agree in writing that conditions are met. Lender and Buyer will wire funds to Escrow and Escrow will publicly record the transaction per the transactions Escrow Instructions.
Business Banking
The Buyer will need to have a business banking account ready to accept revenue on the first day of Ownership. If it is a Stock Sale, the Buyer is replacing the Seller on the existing Bank account. However, most transactions are Asset Sales when the Buyer forms a New Corporate Entity. To open this new bank account, buyer will have to provide Corporate Entity documentation including the DBA that was purchased from Seller. Most often, company payment is received in the name of the DBA.
Buyers need to think about how they want to receive payment from customers, comparing existing method to how they envision the future payments through alternative Vendors.
Attorney
Both Buyer and Seller must rely upon legal advice from their Own Attorney. Your Broker can bring the horse to the water; however, your Attorney writes the Liability Waiver for the Rider. It is the Buyers responsibility to produce the first draft of the formal purchase agreement. It will be delivered as a Word Document to the receiving parties Attorney. This allows the Attorneys to “Redline” or share comments within the Purchase agreement, back and forth, until they Agree it is complete and acceptable to both Parties.
CPA / Accounting
Both Buyer and Seller must rely upon Tax advice from their Own CPA. The first piece of advice concerns the difference between an Asset Sale & Stock Sale as far as the Tax ramifications, which are different perspectives as Buyer and Seller. Both CPAs will be involved in providing reliable reporting and reviewing provided financials for accuracy. This is another time a Business Valuation or a Quality of Earnings report would make that review process much quicker and less expensive.
Buyers need to plan ahead for how they are going to handle payroll, consult with the existing payroll vendor for transfer or choose another provider.
Lender / SBA
SBA / Lender will have their own requirements to underwrite, approve and fund an SBA backed business acquisition loan. Broker will be prepared with the “Data Room” containing all of the known SBA Loan Documentation requirements. This is when a formal business valuation or Quality of Earnings Report will save you months getting your Loan approved. The Lender also provides a set of closing guidelines that ensure the transaction is completed legally and ethically, require that Buyer entity has insurance, licensing, banking, lease, state sales tax numbers and everything else needed to be at the ready for the Close.
License / Insurance
The Buyer will need to obtain the proper licensing to operate the Company. In some cases a Seller’s specialty business license may be utilized post sale, there is a legal process with the State of either a RMO or RME that must be completed, designating the Responsible Managing Employee license holder or the Responsible Managing Officer license holder so that this is accomplished legally and your License is in full force. Buyers must get all Insurance coverage switched over into the new Buyer name with coverage beginning on the date of Close. Many Buyers stick with the existing insurance company to transfer new Buyer information into the policy more easily and without a lapse.
