Every business is unique, so we design the marketing campaign to fit your specific business. We typically advertise businesses online through our website and through several prominent national online databases. These include: BizBuySell.com and BusinessesForSale.com.
We may also advertise in the local newspapers; place ads in journals and publications that target particular industries; and, mail confidential “For Sale” flyers to owners of similar businesses. Industry trade journal advertising or a direct marketing campaign to businesses that are industry aligned may also be appropriate.
We also network nationally and locally with members of trade associations such as the Australian Institute of Business Brokers (AIBB), Various Chamber of Commerce Chapters and local business groups. We receive many referrals from accountants, migration agents and real estate professionals. We use social media and Youtube to make our presence known by all of the major search engines, such as Google, Bing and Yahoo. We are listed in local searches and online. In short, if someone is looking to buy or sell a business, they will find us!
How long does it take to sell a business?
There are so many factors which come into play here. The price, the terms, the lease, the stock, the age of the equipment etc. can all be stumbling blocks which need careful consideration. It usually takes longer to sell a business than a house or a commercial building. Because of the confidential nature of a business sale, a business broker cannot put a For Sale sign in the window. The average time to sell a business is usually between six to eighteen months, depending on the nature of the business. However, there are exceptions. Some businesses may sell within a month of being put on the market. Others may take several years to attract the right buyer. A business broker seeks out and talks to buyers constantly. The next one may be just right!
What kind of financing is available?
Financing sources typically include: the buyer’s own cash or funds obtained from equity in real estate, shares or retirement funds; loans from banks and lending institutions; or seller financing. It is expected that the buyer will have a vested interest in the business by investing some of his/her own money.
Vendor finance (work for equity) is often an appealing option, and it tells the buyer that the seller has confidence in their business. However most sellers are reluctant to offer it without substantial collateral, and the terms are usually shorter.
Banks will usually loan money on businesses that show a strong earning history on their tax returns. However, extensive documentation is required as well as upfront fees, so be prepared.
Finally, family members or investment partners are also sources of investment funds, which may be the only way a buyer can get into a business of their own.
How is an offer structured?
A 20% deposit with the balance of funds at closing is common, however most buyers will try to get the best deal and try for a price and terms that are more favourable to them. If the business has been for sale for a very long time, a cheeky offer may prove successful. However, an offer without a deposit or some money down, is very unlikely to be well received. In addition, most lenders will want the buyer to show some commitment to the business by having some skin in the game (a vested financial interest).
What is the best business to buy?
Most buyers will want to own a profitable, well-managed business in an industry that holds a personal interest for them. On the other hand, some buyers may look for opportunities that offer turnaround or improvement potential, where they can apply their special skills. In general, there is no industry that is particularly better than another. However, there are specific businesses that are more successful than others – even in the same industry!
For instance, two butcher shops can be located in the same shopping center, but one is successful and the other is not. The successful one may have a hands-on owner versus an absentee owner. It may have more effective advertising. It may have friendlier employees. It may provide better customer service or offer more competitive prices. It may pay less rent. It may have newer and more efficient equipment. It may pay less for supplies. It may have higher profits! The only way to find out which one is better is to compare the two and do your research.
Why buy a business instead of starting one?
It usually takes more time than money to start a business. You will need some ability to support yourself while you buy equipment, pay rent, pay staff, pay for advertising etc, while you establish contractual relationships and build a customer base.
On the other hand, if you buy an established business, you have an income from the day you take over. You already have a trading history and know what the likely turnover will be. If you start a business, you face a lot of uncertainty over the success and desirability of your product, service or location. Buying a business takes a lot of the risk out of your decision.
How do you handle confidentiality?
We conduct our transactions in the strictest of confidence to protect the interests of all parties. We require that a prospective buyer sign a Confidentiality Agreement outlining their responsibility in having access to a seller’s confidential information. This occurs before any detailed information concerning a specific opportunity is released.
We are committed to protecting the confidentiality of the business sale. We understand that public knowledge of a potential sale can affect the attitudes and actions of customers, employees, competitors, lenders, suppliers or investors, and therefore the value of the company. We also want to safeguard the rights of a potential buyer before any important changes take place.
Why should I use a Business Broker?
Selling or buying a business is one of the most important and potentially risky decisions that you can make. A business broker has the training and experience to guide you through the process, avoiding major pitfalls and liaising with other professionals such as Solicitors and Accountants on your behalf.
During the process, the seller’s job is to keep the business running as if they were going to keep it. The broker’s job is to confidentially market the business, find and screen buyers, educate them, negotiate the terms of a sale and provide a buffer for the emotional highs and lows that can trigger unfavourable outcomes if left unchecked.
The buyer benefits because the broker has already pre-qualified a business before listing it and has psychologically prepared the seller for the sale. He/she has also done a lot of the legwork to collate all of the financial information and background of the business. This helps to reduce some of the uncertainty for the buyer and make for a more efficient transaction.