Why go to a Business Broker/ Business Adviser?
The professional business broker can be helpful to
a buyer in many ways. In addition to showing several different
acquisition targets, a professional broker:
• Will have likely been a business owner /
operator and will have a vast amount of practical knowledge.
• Will have businesses that a buyer may not be
able to find on his own.
• Is an excellent source of information on the
buying process.
• May be able to assist you identifying what
attributes you are really seeking in the acquisition.
• Can help with financing options.
• Has information on pricing and trends and
other information taking place locally.
• Has relationships with other professionals
that may be required or utilized in some way.
Seek out an experienced business broker who can
assist you in finding a suitable business and coordinate the sequence
of events.
Arizona Business Sales professionals are
knowledgeable and skilled in profitable and timely business
transfers.
Call us today to find out how we can help.(623)
295-9620
Considerations
There are many reasons why someone makes the
decision to go into business for themselves. To do my own
thing, control my own destiny, don’t want to work for someone else,
to better utilize my skills and abilities or to make money are just a
few. There are also unique reasons why someone decides to acquire an
existing business rather than go through a startup. Some of the
attributes of purchasing an existing business are: the business has
an existing track record, giving you the ability of knowing what it’s
capabilities are under current leadership; there are skilled and
trained employees in place; future capital needs may be leveraged
with your instant equity and acquired tangible assets; there are
established customers and a history of those relationships; there may
me some licenses or permits that transfer or are assignable; working
capital requirements may be reduced by immediate cash flow; avoiding
the high failure rate of startup by some estimates as high as 75%,
and most importantly the financial and lifestyle benefits.
The Process
Buying a business should not be taken lightly.
Working with professional advisors is the key to successfully finding
and purchasing the right business. Friends and well-meaning relatives
are not usually qualified to provide the broad range of advice needed
for a business acquisition.
Once you have made the decision to acquire a
business, you should be prepared to execute a non-disclosure
agreement AND a profile with the broker. You will have to do this
with each broker you contact. These two documents assist the broker
in the qualification process and it is in your best interest to
provide them quickly and with little resistance. Be prepared to
discuss your background, work experience and financial capabilities.
(Remember that sellers, lenders and landlords will be very interested
in your credit and personal financial statement at some point in the
process).
Sales
and Acquisitions of companies usually need the assistance of
brokerage firms which will properly evaluate the costs and profits so
both sides can reach a profitable agreement. A business
sales and acquisitions is the process of purchasing a company
in order to build on strengths or improve on weaknesses of the
acquiring company. A merger is similar to an acquisition but refers
more strictly to combining all of the interests of both companies
into a stronger single company.
If you have identified a specific target, the
broker should share a detailed overview of the business that may be
titled “Executive Summary” or “Profile”. It frequently
contains a multi-period summary of its financial performance along
with many other details such as brief employee information, leasehold
or real property summary, a SWOT analysis, financing options, a brief
history and terms of the sale. Do NOT expect to receive tax returns
or financials at this time.
Remember to keep all information provided to
you about the business confidential. Discuss only with your
professional advisors and significant other and remind them that the
information is confidential and is not to be disclosed to other
parties. In most cases, the employees, customers, suppliers,
landlords and lenders are not aware that these businesses are for
sale. Premature disclosure could have a negative impact on the
business being sold which could harm you and the seller.
After reviewing the information on the business
profile, the broker will answer any questions you may have or will
obtain the answers from persons deemed reliable. Assuming your
satisfaction with the answers and review, the broker will schedule
appointments with the business owners to view the facilities,
operations and spend some time with the owner. This is a terrific
opportunity to hear directly from the seller what it is like to own
and manage the business. Will you have pride of ownership?