Frequently Asked Questions - For Sellers

Advantage Business Acquisitions has experience in selling all types of businesses.  If you are thinking about selling your business now, or in the future, you probably have many questions.  The following are some of the most common questions we are asked.

Q. Why does someone decide to sell a business?
There are many reasons for selling.  Retirement, a death in the family, illness, or the desire to relocate are often given.  Occasionally a dispute between partners, or with a landlord or even a divorce may prompt the desire to sell.  An owner may want to expand, or he/she may want to downsize.  Sometimes an owner is just burnt out, after spending many years in the business and desires a change of pace.

Q. I've thought about selling but I didn't want to use a broker.  Why couldn't I just try to sell it myself?
Many sellers feel this way at first.  However, we at Advantage Business Acquisitions have found most sellers can't provide the time and marketing expertise to effectively sell their business for it's maximum value.  It's also very difficult to find serious buyers with the necessary capital to acquire a business. A successful sale is the result of a complete marketing plan.  The marketing plan must determine proper market value, justify the asking price, create acceptable terms and provide maximum exposure.  We maximize your business exposure by attracting interest from a wide range of potential buyers & helping them identify the areas of opportunity regarding your business.

Q. What does a business broker do to attract potential buyers & consummate a sale?
At Advantage Business Acquisitions, we develop a marketing plan incorporating all the elements needed to complete the successful sale of your business.  We handle all the tedious work, allowing you to concentrate on running your business without interruptions.  An Advantage Business Acquisitions broker screens potential buyers in order to qualify them as ready, willing and able purchasers.  We maintain strict confidentiality regarding the proposed sale in order to protect your employees, your business and your customers.  Not only do we point out the strengths of your business, we also point out areas of opportunity to help buyers identify the changes they can make going forward to maximize value & grow their new business.  Buyers often desire to acquire businesses and take the business to the next level by increasing the sales and minimizing the expenses.  Pointing out the areas of opportunity, helps buyers see where and how they can grow the business.

Q. Does using a business broker cost a lot of money?
You pay our fee only if and when we bring you a ready, willing, and able buyer who meets the terms of your offer to sell.  Advertising and all other marketing costs are paid for by Advantage Business Acquisitions.  Use of a broker to negotiate the sale of your business is often critical to making the deal and usually results in a better price & terms for the seller.  The use of a broker and the resulting successful sale of your business is usually of greater value than the cost of their services.  An experienced broker can bring you a final sale price that far exceeds their fee.

Q. How do I determine an asking price for my business?
Advantage Business Acquisitions professionals are trained to evaluate businesses using a variety of techniques.  We can meet with you to review the facts that will help you determine a price that is optimal to you while being attractive to potential buyers.  An estimate of market value by an Advantage Business Acquisitions professional helps ensure that the asking price is based on knowledge of the current marketplace.

Q. When is the optimal time to sell?
The best time to sell is before you are forced to do so by health or financial reasons.  This places you in the best possible negotiating position.  For some types of businesses such as seasonal businesses, the best time to sell can depend on the type of buyer.  For example, a buyer experienced in the type of business that's being sold may prefer to buy the business just before the busy season while a buyer having no experience in the type of business being sold may feel more comfortable acquiring the business during the slow season to allow time to learn & get acquainted with the business before the busy season.  Almost any business can be sold, even when it's not profitable, if it's handled correctly.

Q. How can I determine how much my business is worth?
The best way to approximate the value of your business, is to choose an experienced business broker to walk you through the process. An experienced broker will consider both its assets and earning power, among other important factors.  The appraised or fair market value of assets provides the minimum value you can expect.  Each business is unique and requires that all aspects of the business are carefully considered when estimating the value.  Some of the aspects influencing value include location, length & terms of lease, condition & quality of assets, potential for future growth, profits, name recognition, reputation, history of the business, gross sales, competition, the sale price of comparable businesses and whether or not the business is being run absentee or by an owner/operator.   As in most things in life, demand can also influence value.  For example, technology businesses commanded a larger premium several years ago then they do today.  The important thing to remember is that nearly every business, whether profitable or not, has value.

Q. How do you get the best price and find the right buyer?
Choosing the most qualified business broker is how you get the best price and find the right buyer.  After choosing a broker you feel comfortable with, providing your broker with as much information about your business as possible is the key to a successful conclusion & sale of your business.  Good accounting records and accurate information are critical in maximizing value.  Discretion and confidentiality are very important as well.  An experienced business broker will work with you to develop a customized marketing plan to help maintain confidentiality and maximize value.

Q. How do you keep the general public from finding out my business is for sale?
If the word gets out that a business is for sale, it can be destructive to the relationships the business has in place among its employees, creditors, competitors and customers.  Weakened relationships can deteriorate a company's position and thereby make it less valuable.  In order to help maintain confidentiality, Advantage Business Acquisitions requires that all buyers sign a Confidentiality Agreement and fill out a Financial Statement prior to releasing any confidential information about your business. We don't place any signs on or around your business location. We never advertise the name of your business, the exact location of your business or any other information that would indicate your business is for sale. Advantage Business Acquisitions understands the need for confidentiality and carefully screens each and every potential buyer to ensure that your employees, customers, competitors and neighbors are not aware you are selling your business.   

Q. Should I seek the assistance of a business broker when trying to sell my business?
Selling a business can be a long and time-consuming job.  Generally, the best thing an owner can do is manage his business effectively and profitably while engaging an experienced business broker to prepare a confidential presentation package, screen prospective buyers, negotiate and evaluate offers, and perform the myriad of other necessary tasks associated with selling your business.  In addition, an outside party brings objectivity and can act as a buffer between you and prospective buyers.

Selling a business can often be a difficult undertaking.  An owner trying to sell a business without the help of an experienced business broker may find themselves distracted from his or her most important responsibility, running the business.  If the sale is not handled properly, the process can damage the business irreparably.  What if competitors find out the business if for sale?  What about employees?  Suppliers?  Customers?

Having an experienced professional representing you in the sale of your business is critical to realizing maximum value.  Inexperience can be a terrible handicap in such an important endeavor.  For the process to work, potential buyers need to be first identified, then qualified, before any information about the business is disclosed.  The buyers need to be contacted after presentations are made, to ensure all of their questions have been answered and to also solicit feedback.  An owner directly contacting a buyer may weaken his or her negotiating strength.  A third party, such as a broker, is useful because of their relative objectivity and experience, especially if the process gets delicate.

A professional business broker with extensive experience, references, and a pool of qualified buyers, who has the experience and resources to efficiently and effectively sell businesses, working with an owner and his or her advisors is the best combination to sell a business.   At Advantage Business Acquisitions, most of our representatives have previously owned and/or currently own businesses, which helps give us the knowledge to understand the concerns a business owner has when selling their business.  We have been in your "shoes".  We understand your position, concerns and goals.

If you are considering selling your business, contact Advantage Business Acquisitions, for a confidential (no cost or obligation) appointment and interview.  We will explain our services, our commission, what your business may be worth and if we feel we can help you.

Q. How do you find qualified potential buyers?
Advantage Business Acquisitions is a national organization having access to a large number of buyers.  We market our listings in many different ways to generate buyer activity.  We also search by industry and associated industries to stimulate buyer activity.  The largest source of buyers happens to be our own Advantage Business Acquisitions network of buyers.  Our goal is to locate qualified buyers who have determined a genuine interest, are willing to pay market value and are motivated to move quickly.  Advantage Business Acquisitions locates qualified potential buyers through many sources such as internet advertising, print advertising, sending out mailers, mass emails, telemarketers, search engine optimization and many referrals from satisfied buyers & sellers.

Q. How do I pick the right business broker to sell my business?
Look for a broker who is on top of the local market but has national access through the organizations he/she is associated with.  Many of our associates are former business owners.  We believe our experience and professionalism differentiates us and allows us to provide the highest level or services to our clients - whether they are buying or selling a business.  It's also important to choose a broker you feel comfortable with and someone you see yourself potentially working with for many months. Generally speaking, if you feel comfortable with the broker you have selected, potential buyers will also feel comfortable with your broker as well. Another important factor is choosing a broker with a proven track record. Take a peek at our "Sold Businesses" page along with our "Testimonials" page and you'll see that our brokers have a proven track record.

Q. How long will it take to sell my business?
It generally takes anywhere between three to twelve months to sell most businesses.  Some businesses will take longer to sell, while others will sell in a shorter period of time.  The sooner you have all the information needed to begin the marketing process, the shorter the time period should be.  It is also important that the business be priced properly right from the start.  Some sellers, operating under the premise that they can always come down in price, overprice their business.  This theory often "backfires", because buyers often will refuse to look at an overpriced business.  It has been shown that the willingness of the seller to provide some degree of seller financing may be the key ingredient to a quick sale.  The greater the amount of seller financing offered, generally 40 percent of the asking price or less, the shorter the time to a successful sale.  A reasonable amount of seller financing also tells a potential buyer that the seller has confidence in the business's ability to have future success.

Q. What can I do to help sell my business?
Most potential buyers will want up-to-date financial information.  If you use accountants, you can work with them on providing current  and accurate financial information.  If you are using an attorney, make sure they are familiar with business acquisitions.  You might also ask if their schedule will allow them to participate in the closing on very shore notice, if necessary.  If you and the buyer expect to close the sale in a timely manner (usually within 6-8 weeks, unless there is a liquor license or other business license involved that might delay things), you don't want to have to wait until the attorney can find the time to prepare the documents or attend the closing.  Time is of the essence in any business sale transaction.  The failure to close on schedule could cause the buyer to reconsider the deal altogether or make changes to the original proposal. Advantage Business Acquisitions has worked with many attorneys throughout the years and selected the most efficient and experienced in business acquisitions and listed their contact information on our "Referrals" page as a courtesy to you.

Q.What happens when there is an interested buyer for my business?
When a buyer is sufficiently interested in your business, he or she will, or should, submit an offer in writing.  This offer to purchase or letter of intent will usually contain some customary contingencies.  Such contingencies often include a more detailed review of your financial records as well as a review and successful assignment of your lease and franchise agreement (if applicable).  Other contingencies may include bank financing approval, business license approval (such as a liquor license), verification of sales & expenses, on-site observation of the business, lien searches and completion and review of an agreed upon final purchase agreement. You then have the option of either accepting the offer to purchase or submitting a counter offer to the buyer. Once you and the buyer have agreed on the price & terms of the deal and your respective attorneys have reviewed the letter of intent or offer to purchase, the next step is for both parties to sign the agreement. Shortly after signing the offer to purchase or letter of intent, the buyer will deposit the earnest money with your broker. At this time, you and the buyer will begin satisfying the contingencies of the offer and the attorneys will begin preparing the final purchase agreement as well as any other necessary closing documents & lien searches. This period is commonly referred to as "The Due Diligence Phase". Once the buyer has completed his/her due diligence & is satisfied that all contingencies have been met, and the attorneys have completed the final purchase agreement & all closing documents, the closing date is scheduled, and you can begin planning where & when you will go on a well deserved vacation. 

Q. Why is seller financing so important to the sale of my business?
Surveys have shown that a seller, who asks for all cash, receives on average only about 70 to 75 percent of their asking price, while sellers who offer some amount of seller financing, receive on average about 86 to 91 percent of their asking price.  That's a huge difference!  In many cases, businesses that are listed for all cash and no seller financing, often take much longer to sell.  With attractive terms, however, the chances of selling increase dramatically and the time period from listing to closing greatly decreases.  Most sellers are unaware of how much interest they can receive by financing the sale of their business.  In some cases it can greatly increase the amount received.  And, again, it tells the buyer that the seller has enough confidence that the business can, indeed, be successful.

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The information in this listing has been provided to us by the business seller or their representative. Advantage Business Acquisitions, Inc. (ABA) has no monetary interest in the sale of this business. As an organization we try to provide quality information but we make no claims, warrants, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to this website and its associated sites.  ABA has not verified the accuracy of the information, and assumes no responsibility for its accuracy or completeness.


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