FAQ About Selling Your Business
Bill Whitehurst, Dallas business broker, offers you nearly 20 years of broker business experience and an 80% success rate versus the business broker Dallas standard 35% success rate.
01. What is my company worth?
Texas Business Broker, Whitehurst Mergers & Acquisitions will work with you to determine the market price range of your company. Timing considerations, proposed transaction structure, industry conditions and lending market conditions are all key elements to consider in estimating your company’s worth.
02. How long will I have to stay on after the sale?
In some situations a business can only be sold if the seller stays for years after the sale. In most business sales Whitehurst has handled, the seller has only had to stay for a month or two at most.
03. What about the tax implications of selling my business?
Effective business selling only happens if your broker has accurately determined the highest justifiable price in selling the business and made sure you have the most money from the sale in your pockets on April 16th, the year after the sale. An experienced business broker does not replace your CPA, and does not give out tax advice, but the broker must to be aware of the tax implications in any prospective sale, and as such, to get the business deal started with the seller’s tax implications in mind.
04. How do I get the best deal selling my business?
It is important to have your broker take you, the business owner, through all of detailed steps, from start to finish, when selling your company. Knowing what to expect, and when, will enable you to handle the sale effectively and be able to get the highest price.
05. Are there upfront costs with a broker?
Whitehurst does not take any upfront fees or valuation fees and believes business brokerage should be a success fee endeavor. As such, Whitehurst only gets paid if the deal closes, and at closing.
06. How do I choose a business broker?
Whitehurst suggests meeting with the broker at the broker’s office, looking at the broker’s marketing packages on former deals and meeting the broker’s support staff. A business owner should also ask for seller references before making the final decision on which agency to hire.
07. When should I develop an exit strategy?
The sooner the better. The ideal time to develop an exit strategy for selling your business is when you start or purchase a business. You may find that puzzling, but a business is an investment – of your time, your money – let’s face it, your blood, sweat and tears. The end result is to (hopefully) have a gain on that investment. Business brokerage industry statistics indicate that 85% of all business owners do not have a defined exit strategy although, on average, 75% of their net worth is tied up in their business.
08. Is my company ready for sale?
The company’s financial records and operations must be evaluated and analyzed to determine the strengths and weaknesses of the company. Proper planning will help you address and minimize any operational or financial weaknesses of the company before launching the marketing phase of the disposition process.
09. What is my company worth?
We will work with you to determine the market price range of your company. Timing considerations, proposed transaction structure, industry conditions and lending market conditions are all key elements to consider in estimating your company’s worth.
10. How do I maintain confidentiality in the business broker process?
Confidentiality in dealing with internal personnel and external sources is strongly encouraged and is critical to achieve a successful transaction. For the Seller’s protection, we require a Buyer’s Confidentiality Agreement to be signed by the potential buyer before the release of the Business Memorandum.
11. Does Whitehurst Mergers & Acquisitions have buyers for my company?
Very possibly. Our extensive buyer database includes over 2,000 high net worth individuals, corporations, and private equity groups. As a leading business broker, we work with you to find the right buyer when selling your business. As we begin the process, we perform key interviews with stakeholders, competitive market analysis, and work with you to determine a key list of qualified buyers.
12. Who will be my contact person at Whitehurst Mergers & Acquisitions?
One of our principals will serve as your primary contact and will guide you through the entire business transfer process. Personalized 24/7 service is the trademark of Whitehurst Mergers & Acquisitions.
13. What is the business broker fee structure ?
Our fees and expenses are specific to the services required for the engagement and the size of the business. We are available, at no cost to you, to consult by phone or in person to determine the level of service required to accomplish your goals and objectives.
14. Does Whitehurst Mergers & Acquisitions offer exclusive representation?
In our experience, a team approach is the most effective way to serve our clients. As your exclusive Merger & Acquisition advisor, we will work in concert with your attorney, CPA, and other key advisors.
15. What is Whitehurst’s geographical representation?
We typically represents business owners in the South Central United States: however, we market and sell to regional, national, and international buyers.
16. What can a Business Broker do — and what can’t they do?
Business Brokers are professionals who facilitate the successful sale of your business. As your Business Broker, we can help you decide how to price your business and how to structure the sale so it makes sense for everyone – you and the buyer. We can find the right buyer for your business, work with you and the buyer in negotiations, and assist every step of the way until the transaction is successfully closed. We will also help the buyer with all the details of the business buying process.
A Business Intermediary is not, however, a magician who can sell an overpriced business. Most businesses are sellable if priced and structured properly. You should understand that only the marketplace can determine what a business will sell for. The amount of the down payment you are willing to accept along with the terms of the seller financing can greatly influence not only the ultimate selling price, but the success of the sale itself.
17. How long does it take to sell my business?
It generally takes, on average, between six to nine months to sell most businesses. Keep in mind that an average is just that. Some businesses will take longer to sell, while others will sell in a shorter period of time. The sooner we 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 strategy often backfires because buyers often refuse to look at an overpriced business.
18. 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, 70% of their asking price, while sellers who accept terms receive an average 86% of their asking price. That’s a difference of 16%! In many cases, businesses that are listed for all cash just don’t sell. With reasonable terms, the chances of selling increase dramatically and the time period from listing to sale 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 it tells the buyer that the seller has confidence in the continued success of the business.
19. What happens when there is a buyer for my business?
When a buyer is sufficiently interested in your business, we will help in the preparation of an offer or proposal. This offer or proposal may have one or more contingencies. Usually they concern a detailed review of your financial records and perhaps a review of your lease arrangements, franchise agreement (if there is one) or other pertinent details of the business. The buyer’s proposal will be presented to you for your consideration. You may accept the terms of the offer or you may make a counter-proposal. You should understand, however, that if you do not accept the buyer’s proposal, the buyer can withdraw it at any time.
We will submit all offers to you for your consideration. At first review, you may not be pleased with a particular offer, but it is important to look at it carefully. Although it may be lacking in some areas, it may also have pluses to seriously consider. There is an old adage that says, “The first offer is generally the best one the seller will receive.” This does not mean that you should accept the first offer – just that all offers should be looked at carefully.
When you and the buyer are in agreement, we work with both of you to satisfy and/or remove the contingencies in the offer. It is important that you cooperate fully in this process. You don’t want the buyer to think that you are hiding anything. The buyer may, at this point, bring in outside advisors to help them review the information. When all the conditions have been met, final papers will be drawn and signed. Once the closing has been completed, money will be distributed and the new owner will take possession of the business. As your Business Intermediary professional, we will work with you throughout the entire sales process.
20. What can I do to help sell my business?
A buyer will want up-to-date financial information. If you have an accountant, work with them on making current information available. If you are using an attorney, make sure they are familiar with the business closing process and the laws of your particular state. You might also ask if their schedule will allow them to participate in the closing on very short notice. If you and the buyer choose to close the sale quickly, you don’t want to wait until the attorney can make 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 allows the buyer time to reconsider or make changes in the original proposal.
And, finally, your team of advisors must all be working toward the common goal of selling your business for the best price and for the best terms available in the marketplace, and closing the sale as quickly as possible. Remember that, as your professional Business Intermediary, we are on your side. Only with your cooperation can we best handle your business interests.