1) Why do I need a business broker or advisor?
The selling of a business is a very complex process. It involves many aspects that most successful business people are not exposed to in the day- to-day operation of a company. Business owners in general do not have the time or knowledge to recognize and understand the complexities of selling their own business. Most businesses do not have the personnel capable of handling the sale of a business. Selling a business involves much more than just placing an ad in a newspaper. You should rely on experts trained in the sale of businesses. Someone familiar with the nuances of selling a business will prove an invaluable asset.
During the process, the Seller’s job is to do what he does best, which is to run the business as if he were going to keep it. The Broker’s job is to confidentially market the business, find and screen the Buyers, educate them, negotiate the terms of the sale and provide a buffer for the emotional highs and lows that we all experience. The Buyer benefits because the Broker has already pre-qualified a business before he lists it. He has psychologically prepared the Seller for the sale. He has also done a lot of the legwork to assemble the financial information and background of the business. This helps to reduce some of the uncertainty for the Buyer and make this search more efficient.
2) Why should I use Murphy Business Brokers?
Confidentiality, as well as establishing the right selling price, is crucial to the success of the deal. As a business advisor, Murphy Business Brokers has the ability to maintain your confidentiality, properly research highly qualified buyers, utilize a worldwide network to advertise your business and establish the right selling price. Transactions handled by Murphy Business Brokers are held parties. We require that a prospective Buyer review and sign a non-disclosure statement outlining his 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 thus the value of the company. We also want to safeguard the employment status of a potential Buyer while he considers a very important change for his future.
Let Murphy Business Brokers do the work for you. We’ll maximize the selling price of your business. Our goal is always to obtain the best deal for each client.
Murphy Business Brokers has been a mainstay in the business brokerage industry for over 20 years. Murphy Business Brokers specializes only in selling businesses. We focus on your specific industry to find the right buyer. This means faster results for you.
Our staff is one of the most sophisticated and experienced in the industry. Many have owned businesses and can relate to your specific needs.
Our service, dedication and drive is your guarantee that if you are prepared to sell your business, we are ready to sell it for you.
3) How is an offer structured?
Most businesses sell for 50% to 75% down. The remainder is financed by the Seller, by a bank or through family resources. Sellers generally prefer to receive all cash at closing and some Buyers are able and willing to accommodate them. However, Buyers are usually trying to get the most bang for their buck and will want to leverage their down payment into the largest business they can buy. Although, Buyers may want to make a no-money or low-money down offer, it is very rare that they will succeed. Usually a business cannot earn enough to pay salary to the owner and service such a level of debt. In addition, the lender, whether it is the seller or a bank, wants the Buyer to show his commitment to the business by having vested financial interest in its success.
4) What kind of financing is available?
Seller financing is usually the cheapest and easiest to obtain. It also tells the Buyer that the seller has confidence in the business. There are no loan fees and the interest rate is usually lower than the bank rates, but the term of the loan is often shorter. Seller notes make up the majority of Buyer financing. Banks will loan money on businesses that show a strong earnings history on the tax returns. They require a lot of documentations and the payment of upfront fees. In recent years, bank loans, which are guaranteed by the Small Business Administration, have become very popular and more readily available. If all else fails, family or friends will sometimes offer to help out. They can either provide funds or sign a guarantee for a bank loan.
5) How long does it take to sell a business?
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 on the window. The average time to sell a business is usually between six to eighteen months. 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 everyday. The next one may be just right for a particular business.
6) How do you advertise a business for sale?
We advertise on the Internet using ten different sites i.e.
www.sflabusinesses4sale.com (my personal website)
We also advertise in the local newspapers, which still generate daily phonecalls. We place ads in journals and publications that target particular industries. We network with members of trade associations such as the International Business Brokers Association and the Florida Business Brokers Association. We also receive referrals from attorneys, accountants, and real estate professionals.
12 Fatal Mistakes You Can Make When Selling Your Business
Many factors come into play that affect the selling of a business. Though every business is unique, whether in manufacturing, service, distribution or retail, each shares the same opportunities and the same problems that must be evaluated carefully when selling it.
As one of the most successful business brokers in Florida, Murphy Business Brokers believes that outsourcing expertise in the selling of a business is a wise investment.
Many entrepreneurs build a successful business through vision, excellent management skills and sheer hard work. But most do not have a thorough understanding of the complexities and factors that are present in the deal structuring and business selling process.
Factors, such as:
This document presents 12 of the most vital concerns that will have a direct effect on the selling of your business. The omission or even wrong interpretation of just one can greatly affect the value of the business or future success of the potential sale. Some of these must be implemented immediately, such as maintaining confidentiality of the future sale, while others can be addressed during the selling process. You will find these 12 suggestions highly informative.
These are guidelines you will need to know when selling your business to achieve a faster transaction and the best possible price.
1) Lack of deal structure expertise
When the seller has limited knowledge about the available alternatives for structuring the deal, he is at a definite disadvantage! And probably a costly one. Items such as leverage buy-outs, leases, royalties, earn-outs, consulting agreements, non-compete contracts can add immeasurable value and security to both buyer and seller alike.
2) Failure to adjust the net owner benefit
If you are to determine a proper value, the balance sheet and income statements must be recast. Items such as owner’s salary, depreciation, interest and fringe benefits may be added or subtracted depending on the circumstances. The adjusted income statement will reflect the actual owner benefit in order to help determine the market value.
3) Failure to maintain confidentiality
Confidentiality is vital to the selling of a business. If employees know that you are selling and changes are coming, they may seek other opportunities. Competitors may use this information as a selling tool. Vendors may not continue to extend favorable terms. Profitability and market value may be reduced.
4) Failure to secure qualified buyers
Knowing how to qualify a buyer is critical. Murphy Business Brokers pre-qualifies each buyer to avoid a negotiation that is doomed to fail. This saves you time and money. It can eliminate hundreds of wasted hours and misdirected efforts.
5) Failure to continue to run your business
It is important to maintain your business at peak operating capacity. The performance and productivity of your business is what you are really selling. The time taken from your business to sell it will have a toll on the business and as a direct result lower its market value.
6) Failure to properly adjust for economic conditions and owner’s ability
Generally speaking, the higher the skill level required to operate the business, the more difficult it will be to sell it. The value tends to increase when the owner can be replaced easily. The value also may increase when an industry is in a growth stage. For many industries there are specific valuation methods that are highly subject to the owner’s duties in the company as well as outside economic conditions.
7) Failure to provide credible information
A potential buyer will want information about your customer base, competition, financial history and industry characteristics, such as size, growth potential and areas of opportunity. This information must be provided in a salable format and in a way to ensure your confidentiality.
8) Poor negotiating techniques
In many deals, poor negotiating techniques can cost the seller considerably in terms of selling price, terms and other opportunities. Many times a deal will fail to close because of poor negotiation or communication between parties.
9) Failure to place the proper value on your business
A business has value to a buyer because of its anticipated earnings from its established resources and a demonstrated successful track record. Proper evaluation is crucial, enhancing the chances of selling your business.
10) Failure to consider alternative investments
All buyers have alternative investment options. To make your business attractive, you must show a return on investment greater than stocks, bonds, real estate or other similar business opportunities. You should be prepared to offer seller financing.
11) Failure to prepare for proper due diligence
Due diligence issues are very important to the selling process. These issues can have a major impact on the closing of a business sale. It is imperative to be prepared and organized. You must be able to defend and substantiate representations made during the selling process.
12) Failure to seek professional assistance and consultation
There are legal, financial. marketing and other vital considerations that must be addressed in the selling process. Many decisions in the selling process should not be made without the advice of the right professionals. A wrong decision could lead to a fatal mistake!
These are just 12 areas of concern. There are many more just as important, depending on your particular situation.
Some of these are:
We believe in results. Now you must take the next step!
By now we hope you are aware of the potential economic gain and the possibility of fatal errors when selling your business. Our main objective is to ensure that every client receives the maximum value for his or her business. That is our purpose.
Since 1979, Murphy Business Brokers has sold hundreds of businesses, some just like yours. Unlike other brokerages, you get 100% directed expertise in selling your type of business. No distractions!
We specialize in virtually every type of business in most market segments. Chances are that we have an expert on board, experienced in the sale of your type of business. This works in your favor because we are familiar with the challenges associated with the marketing of your business.
Our vast network and aggressive marketing efforts ensure your business will be confidentially introduced to qualified buyers throughout the world!
Murphy Business Brokers will also provide you with a well-researched business evaluation, addressing crucial areas of concern that must be dealt with when selling your business.
Call Russell Cohen from Murphy Business (954) 646-7651
What You Will Need To Sell Your Business
There are certain criteria that buyers have when acquiring a business. Most buyers approach the purchase with a certain level of skepticism. It is our job to reassure them with solid facts and believable information that your business is a good investment.
1) Effective records
We assist you in preparing all required documents and relevant business listing information. We’ll guide you and support you in presenting the information in the best possible format.
2) Competitive price
You need to be attractively priced to entice offers. The price should not be too high or too low.
You must be receptive to seller financing. Most businesses are sold with seller financing.
4) Equipment inventory.
You will need a complete list of all assets. Furniture, vehicles, fixtures and equipment should be in working order and acceptable to a buyer.
All buyers will want a good lease. This must be pre-arranged so there are no problems as the transaction progresses.
You must be prepared to train the new owner and possibly some of the new staff. This is customary and almost always required.
From the moment you place your business for sale, you need to keep it neat, clean and organized. Make any necessary repairs prior to showing.
You must be prepared to sign a non-compete covenant or contract. This provides the buyer some peace-of-mind. Many buyers fear that you will open up the same type of business and become their competition.
Because time is of the essence, it is crucial that you place yourself in a position to respond to an offer as quickly as possible.
10) No surprises
Surprises will make the buyers uneasy. It is imperative that we know everything about your business. What may seem to you a trivial matter could potentially become a “deal killer” if not handled properly.
The Murphy Business Brokers 10 Step Business Selling Strategy
We believe that you come to us to achieve the highest possible price with the least amount of time taken from your business. We know that your time is more valuable when invested in running your business. In order to achieve the best price, your business must continue to grow. After all, that will be the basis for a buyer to want to purchase your business, rather than consider any other business or investment option.
Our philosophy has created a multiple step strategy that culminates with the sale of your business. It is a proven method for selling any business.
Step 1. Comprehensive business analysis.
As your business advisor, we analyze your operation, finances, market potential and trends. We generate a business profile that represents your company in the most attractive way possible.
Step 2. We structure the sale.
We then identify the best possible price range for your business. This is based on solid facts, the condition of the market, projected growth, sales potential and the sale of similar businesses within your industry. We apply sophisticated, time proven valuation techniques to ensure that your price is appropriate for the current market condition. The price must not be too high or too low. Yet, it must represent an attractive investment potential.
Step 3. We network the sale.
We utilize the latest technology to present your business to potential buyers all over the world. This greatly multiplies the effort in your favor.
Step 4. We advertise your business.
Our aggressive marketing program ensures your confidentiality and provides maximum exposure for your business. Your listing is placed in various industry databases and publications which are constantly updated.
With Murphy Business Brokers, you have literally thousands of industry professionals selling your business, yet your confidentiality is always respected.
Step 5. We organize all necessary documentation.
As part of our service, we gather and organize all documentation that is relevant to the selling of your business. Buyers are pre-qualified and required to execute a confidentiality agreement before receiving any sensitive information concerning the sale.
Step 6. We qualify the buyers.
We prepare and present all offers. Buyers are qualified for financial ability to meet the offer. Many times a negotiation is doomed to fail because of lack of proper qualifying. As your business advisor, we can approach potential buyers without weakening your position.
Step 7. We negotiate for you to achieve the best price.
Appropriate negotiation is crucial to achieving your price and terms. We have the expertise to establish sound and resourceful negotiating techniques on your behalf.
Step 8. We provide exceptional support to you.
We take pride in our exceptional service. We realize that you depend on us to guide you through the sale of your business. We make the transition simple and easy for you. We know when an opportunity may arise and are always there to take advantage of it.
Step 9. We are there from beginning to the closing.
We manage all administrative procedures, licenses, inventory counts and lease assignments that may be required. We work closely with your advisors to ensure a smooth transition.
Step 10. We are there for the transitional phase.
Because we are in the business community, you have the option to consult with us at any time after the sale. We will provide you with any assistance you may require after the closing. We always remain in your corner!
Cooper City Office
10620 Griffin Rd B-105,
Cooper City, Fl 33328
4720 NW Boca Raton Blvd,
(NW 2nd Ave) D-103
Boca Raton, Fl 33431