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When is the best time to sell my business?

Typically the best time to sell is when the business has at least 3 years of profitable trading indicating growth in sales and profitability, without any major changes its costs or negative environmental factors. Of course, your personal situation may not allow for the optimal timing but businesses can still be sold providing the sale is handled professionally and priced correctly.

How much is my business worth?

There are many factors influencing the value of your business including cash flow, financing terms, value of assets, industry, location, financial history, condition of equipment and premises, patents and intellectual property, property lease terms and competition. For smaller firms we can provide a broker's opinion of value after reviewing your financials and for larger businesses we recommend a third party valuation which we can help organize.

What steps can I take before a sale to aid a smooth transition?

In the relationship between buyers and sellers, both sides must prove the numbers they bring to each other so the most important part as a seller is to ensure that your financial statements and filings are accurate and current. In the due diligence process, these documents will be analyzed to ensure they reflect what is being sold. Additionally, it's sensible to ensure that premises and equipment are well maintained, working and clean and that inventory is saleable and current. Much like presenting anything for sale, a business must be presentable to be shown to prospective buyers.

As a buyer, why can't I see the company's detailed financials prior to making an offer?

We provide general information about our listed businesses prior to buyers making an offer but not confidential information. The offer you make is contingent on the information provided being fully verifiable and correct during due diligence. Due diligence is the phase where confidential and detailed information about the company changes hands. In the event that there is a problem with this information supporting the seller's original claims, the offer can we withdrawn.

This process is designed to protect both the buyer and seller. The buyer is protected by making an offer based upon verifiable information, and then having the opportunity to rigorously review the business. The seller is protected from competitors and frivolous parties attempting to extract proprietary information about the business without any intention to purchase.

How can I finance a business purchase?

This will depend upon the size and type of the transaction but as a rule of thumb you should expect to have 30-50% of the sale price available as a down payment to acquire a business. We work with buyers to help them tap into all available resources to finance your new business which can include seller financing, SBA loans and a range of other sources. For larger transactions, financing is more complicated and varies substantially from deal to deal.

How can I be certain a buyer will pay me if I offer seller financing?

If seller financing is offered as part of a business sale, a default by the seller puts his ownership and original deposit at risk as the entire business (including the down payment) will revert back to the ownership of the seller. The financial integrity of the buyer is part of the due diligence process and the vast majority of seller financing deals work out without any issues. However, in the event of a problem, the security agreement provides considerable protection for the seller.

Why not sell the business myself?

There's nothing to stop you listing your business for sale but statistically the vast majority of For Sale By Owner (FSBO) listings are never sold. There are several reasons for this from failure to price and list appropriately, failure to qualify buyers effectively to failure to structure financing to close the transaction. Most sellers find that the frustration, expense and time involved do not yield cost savings and ultimately using an experienced broker often will pay for itself in the eventual selling price. Confidentiality is also very difficult to maintain in FSBO transactions and the market knowledge that a business is for sale can be damaging to maintain existing sales, customers and staff. Selling businesses is a specialized trade and we would recommend seeking professional assistance when it comes to selling an asset as valuable as your business. As your broker, VR doesn't receive any commission until your business is successfully sold.

Why use a full-time professional business broker?

There are many benefits from the expertise provided by a professional business broker. One of the more significant benefits is the ability of the seller to spend their time managing their business during the selling process, thereby maintaining or increasing their cash flow and ultimately maximizing their sales price. A professional broker will also guide you through the complex legal and financial process of closing a transaction. We manage the selling process from beginning to end including the coordination of all forms and documents and work alongside professional advisors such as attorneys and accountants

Why should I use VR to sell my business?

Professionalism, expertise and a long track record of success that has led to the development of a proven system for selling businesses. Since 1979, VR has over 100,000 of thousand businesses through our network of national and international offices. VR is the only international network of full-time business broker professionals that focus exclusively on the sale of small to mid-size companies.

VR is also a member of some of the largest business broker networks to help provide maximum exposure. In Texas alone VR has 7 offices to serve the needs of business sellers and buyers in the local market but we have presence domestically and internationally to cater to complex and larger transactions.

Why should I use a Business Broker instead of a realtor to handle my sale?

Externally, it would seem that real estate and business sales are similar transactions but there are more differences than you might imagine. Whereas real estate is focused on advertising a listing as broadly as possible with little confidentiality, business brokerage is just the opposite - confidentiality is our paramount concern. It is also important to keep in mind that a business usually takes longer to sell versus a home - on average about 182 days to sell a business, though it can often take much longer due to the specialized work involved.

Additionally, business brokers must understand financial statements, perform cash flow analyses and advise the seller in such vital areas as pricing, terms, offer structure, negotiations, legal issues, and business enhancement prior to offering a business for sale. An experienced business broker is better positioned to perform these functions to the best advantage of a seller compared with a realtor.

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