selling a business

Top Ten Ways to Avoid Wrecking a Deal When Selling A Business

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The Psychology of Selling Your Business – Are You Sure You’re Ready?

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The Importance of Owner Flexibility When Selling a Business

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How to Optimize Your Chances of Selling Your Business

The simple fact is that selling your business is likely to be the single most important financial decision you’ll ever make.  With this important fact in mind, it is essential that you prepare far in advance.  Let’s dive in and take a look at some of the key items you’ll want to check off your list before placing your business on the market. Think About Legalities When it comes to selling a business, legal issues should be at the forefront of your thoughts; after all, selling your business does involve the creation and execution of a complex and detailed legal agreement.  There are many times in life where it is possible to cut corners, but hiring a good lawyer or law firm is not one of those times.  Moreover, you’ll want to settle all litigation, environmental issues or other issues that could potentially derail a sale. Deal with Serious Buyers Working with a experienced Business Broker or M&A Advisor is an essential part of the selling process, as these professionals … [Read more...]

The Importance Of A Confidentiality Agreement When Selling a Business

When it comes to buying or selling a business, there is no replacement for a solid confidentiality agreement.  One of the key ways that Business Brokers / M&A Advisors are able to help buyers and sellers alike is through their extensive knowledge of confidentiality agreements and how best to implement them.  In this article, we will provide you with an overview of what you should expect out of your confidentiality agreements. A confidentiality agreement is a legal agreement that essentially forbids both buyers and sellers, as well as related parties such as agents, from disclosing information regarding the transition.  It is a best practice to have a confidentiality agreement in place before discussing the business in any way and especially before divulging key information on the operation of the business or trade secrets. While a confidentiality agreement can be used to keep the fact that a business is for sale private, that is only a small aspect of what modern confidentiality … [Read more...]

Four Common Seller Mistakes When Selling a Business

Sellers of businesses are just like everyone else in that they can make mistakes.  In this article, we’ll explore some of the most common mistakes that we see along with some of the repercussions.  1. Not Seeing the Buyer’s Point of View The first major mistake that sellers make is that they simply fail to look at the situation from the buyer’s perspective.  One of the smartest moves any seller can make is to step back and ask themselves two key questions.   “What information would I expect to see if I was thinking about buying this business?  “Would I trust the information being presented to me if I was the buyer?”  While there are many other questions sellers can ask to help reframe their thinking, these two simple questions can orient a seller’s thinking towards a buyer’s perspective.  Additionally, investing the time to understand the buyer’s position can help avoid a range of problems and help smooth out the negotiation process. It is also important to understand … [Read more...]

Price or Terms: The Structure of the Deal When Selling a Business

An old saying in negotiating the sale of a business goes like this: The buyer says to the seller, “You name the price, and I get to name the terms.” Another saying used to explain the actual value of the term full price: “If we could find you a business that nets you $500,000 a year after debt service, and you could buy it for $100 down, would you really care what the full price was?” It seems that everyone is concerned only about full price.  And yet, the price is just part of the equation.  If a seller is willing to accept a relatively small down payment and carry the balance, a higher price can be achieved.  On the other hand, the more cash the seller wants up front, the lower the price. If the seller demands all cash, barring some form of outside financing, the price lowers – and, in most cases, the chance of selling decreases as well.  Even in cases where outside financing is used, such as through SBA, etc., the lender will do everything possible to ensure that the price … [Read more...]

Confidential Business Reviews Should Establish Trust

When you are selling a business, your Business Broker or M&A Advisor will likely create a Comprehensive Business Review, or CBR.  This comprehensive document can then be presented to prospective buyers once they have signed all necessary confidentiality documentation.  It is essential that this document builds trust between both parties, as this will go a long way towards achieving a successful deal.  Be Honest The bottom line is that your CBR will be 95% positive.  The majority of the document will be dedicated towards selling and promoting your business.   Therefore, it only makes sense to disclose some potential problems.  When handled correctly, the disclosure of problems can actually be a strong asset.  For example, current weaknesses of your business could become strengths in the mind of the buyer.  For example, a business with a very poor online presence represents a substantial opportunity for a buyer to improve marketing and communications.  Summed up another way, … [Read more...]

Essential Meeting Tips for Buyers & Sellers of Businesses

The buyer-seller meeting is quite often a “make or break” meeting.  Your Business Broker or M&A Advisor will do everything possible to ensure that this meeting goes as well as possible. It is vitally important to realize that rarely is there an offer before buyers and sellers actually meet.  The all-important offer usually comes directly after this all-important meeting.  As a result, you want to ensure that meetings are as positive and productive as possible. Buyers need to understand how the process of selling a business works and what is expected of them from the process. Buyers should also take the time to clearly express their background and financial capabilities to the seller since this is highly important to the seller. A lot of buyers dive into questions on the business without discussing their qualifications first. As sellers get more comfortable with buyers and a rapport is built, they will be more willing to share information and provide better terms. Buyers also … [Read more...]

Negotiating the Price Gap Between Buyers and Sellers on the Sale of a Business

  Sellers generally desire all-cash transactions; however, oftentimes some form of seller financing is necessary in business sale transactions.  Furthermore, sellers who demand all-cash deals typically receive a lower purchase price than they would have if the deal were structured differently. Although buyers may be able to pay all-cash at closing, they often want to structure a deal where the seller has left some portion of the price on the table, either in the form of a note or an earnout.  Deferring some of the owner’s remuneration from the transaction will provide leverage in the event that the owner has misrepresented the business.  An earnout is a mechanism to provide payment based on future performance.  Acquirers like to suggest that, if the business is as it is represented, there should be no problem with this type of payout.  The owner’s retort is that he or she knows the business is sound under his or her management but does not know whether the buyer will be as … [Read more...]

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M&A Business Advisors represents sellers and buyers of privately owned businesses in a wide range of industries in California and Nevada. Our services include Selling a Business, Buying a Business, Mergers & Acquisitions, Business Sales and Acquisitions, Valuations, Opinion of Value, SBA Finance and Business Consulting. Sell your Business, Buy a Business, How do I determine the Value of a Business, How do I Sell my Business Confidentially, What is a Safe Way to Sell my Business, How long does it take to Sell a Business, How do I Sell a Business in California, How do I Sell a Business in Nevada, Search Businesses for sale. We represent Sellers and Buyers in Southern California, Los Angeles County, Orange County, Ventura County, Santa Barbara County, Kern County, San Bernardino County, Riverside County, San Diego County, Los Angeles, Torrance, Gardena, South Bay, San Fernando Valley, San Gabriel, Upland, Woodland Hills, Chatsworth, North Hollywood, Van Nuys, Burbank, Glendale, Pasadena, Santa Clarita, Palmdale, Thousand Oaks, Ventura, Camarillo, Anaheim, Irvine, Santa Ana, Huntington Beach, Newport Beach, Fullerton, Laguna Beach, Aliso Viejo, Rancho Santa Margarita, Orange, Costa Mesa, Brea, Loa Alamitos, Mission Viejo, Fountain valley, San Clemente, Northern California, San Jose, San Francisco, Oakland, San Ramon, Napa, Sacramento, Nevada, Northern Nevada, Southern Nevada, Reno, Carson City, Tahoe, Las Vegas.