For all businesses, a confidentiality/buyer profile in downloadable of
email format will have to be completed before name and location of business is
released. For extensive information, many of these businesses require a Seller
Approval of Buyer prior to releasing information.
All information is subject to change without prior notification
and some businesses that you inquire about may be under contract or sold. Some
of these businesses will require Buyer fee participation.
If we don’t have it, we will get it for
Contact us at 239.770.2421 for a
confidential discussion of your options.
We will listen to your needs and find solutions that work for
It is important that a buyer or seller know the value of a business. If the
SBA, a conventional bank, or seller is financing, both buyer & seller should
have a clear idea as to the function of cash flow.
It is advised for both buyer & seller have an accountant to verify
The seller sets the price and buyer sets the
terms. Approximately 70 percent of all small businesses sold include
seller financing. Most buyers will not want to commit to pay the full price up
front. One of a buyer’s principal objectives is to obtain the highest return
on his or her down payment (return on investment) possible by leveraging his
investment. The more a seller is willing to carry back or hold in a note, the
more attractive that investment will appear to a buyer. The seller should be
prepared to carry back from 20-50% with terms that the buyer can afford from the
business cash flow. This is particularly important where there is high cash in
Banks and other lending agencies provide
“unsecured” loans commensurate with the cash available for servicing the debt.
Banks and other lenders of this type will secure their loans if the collateral
exists. These loans are also easier to come by if the buyer is already a favored
customer or one qualifying for the SBA loan program. These banks will typically
finance 50 to 75 percent of the real estate value, 75 to 90 percent of new
equipment value, or 50 percent of inventory. The only intangible assets
attractive to banks are accounts receivable, which they will finance, from 80 to
90 percent. The bank will use the Tax Returns for committing to loans and do not
add back what is not in the returns as does the SBA.
The SBA is the Small Business Administration Loan
Guarantee Program; loans have long amortization periods (ten years), and up to
70 percent financing (more than usually available with the seller-financed
sale). It does not fund the money only guarantee the money from one of its
participating banks. Contact us for their loan packages. Typically, it will
require that the buyer and seller both contribute to the financing.
How to Value A Business
Deciding to sell your business or grow your business by
acquiring another company?
As everybusiness is unique, determining the value of a business
is one of the most critical aspects of any transaction. The terms of the deal
is another determining aspect… the more you know, the better prepared you are
to consummate a deal! We are here to make that education transparent to both
buyers and sellers.
Assets, liabilities, historical earnings, cash
flow, projected earnings, future cash flow, current market conditions, industry
popularity, and, most important, the objectives of the seller or buyer as well
as the value of intangibles (patents, know-how, the quality of management,
leases) are all taken into consideration to determine a company’s fair market
The final selling price can be either higher or lower than the
estimated range of values for the company, depending on the eagerness of the
buyer to buy and the seller to sell, the demand for the type of company, the
form of consideration paid, the negotiating skills of the parties, and most
importantly, the terms of the deal.
In order for a buyer to formulate a fair market opinion of value, the seller
will need to supply the following:
- Three years of tax returns, and financial statements.
- Copies of all contracts and leases and property tax bills
- History of the business
- List of key persons with job descriptions and salaries
- Seller Criteria and Information Sheet
- List of Equipment
Below is one method of valuation which can be used in purchasing a
business and determining its market value. Not included but to be considered is
“Good Will” the value attached to the business’s Name and
Reputation. This is what creates the revenues of the business. There are many
other factors that must be considered when placing a price on a business.
Consult with us, your professional business brokerage, for further information.
Our services create added value to the transaction.
and appraisals are other services offered by International Business Brokerage
& Realty, Inc. The key to having a credible and viable valuation performed
on the business is to have it performed by an independent third-party. Without
this service the seller should be prepared for heavy negotiations due to the
conflicting opinions of the seller’s opinion of value versus the buyer’s
valuation. International Business Brokerage & Realty, Inc. uses the services
of various independent agencies to prepare its business valuations. Also to be
taken into consideration is the owner’s terms that he is prepared to offer such
as consulting agreements, holding a note, etc.
Buying a business is an intensive and emotional process even though it is
considered “numbers.” Also to be considered is the owner’s personality if you
are going to have him hold a note (or the buyer’s personality if the seller is
going to hold a note…and a note is almost inevitable uneven with SBA
financing). Also important is the transition of the business…are the employees
going to stay, is the business going to be re-located, the value of any
inventory at seller’s cost, …so many other factors are important other than
the PRICE. Let us help you.