After years of hard work building your business, when you are ready to sell your business who should you turn to for help? Business Brokers specialize in the sale of small to midsize businesses. Business Brokers do much more than just finding a buyer for your business. Your business broker is the matchmaker in the early stages of selling your business, and once an offer is signed, they become the quarterback of the transaction process.
A professional business broker will guide you through the process of selling your business from calculating the current market value, to taking it to market, screening prospective buyers, facilitating buyer-seller meeting, preparing the offer, SBA financing, escrow, and the closing process.
Benefits of Using a Business Broker
Why bother with a business broker, you might ask why can’t I sell it myself? Selling a business is no small task. It takes time, energy, and a lot of experience in deal structures, SBA financing, purchase agreements, and Due Diligence. take the weight off your shoulders, allowing you to focus on what matters most – running your business. They have the expertise and resources to help you attain maximum value for your business, package your business in the most attractive way possible, advertise the business confidentiality, obtain SBA financing so you don’t have to finance the transaction with a large Seller Note, all of which lead to a successful sale of your business. A critical first step with a business broker is preparing a comprehensive market value analysis for your business using professional business valuation software.
Types of Businesses Sold by Business Brokers
Many business brokers are a jack-of-all-trades, selling businesses ranging from pizza shops and restaurants to retail, main-street businesses and B2C service businesses.
At Pacific Business Sales our focus is on B2B businesses and industrial businesses including manufacturing, construction-contractors, distribution, technology, and aerospace-military suppliers. Transactions for these businesses are very different from main street businesses as are the prospective buyers and businesses themselves.
- Aerospace
- Technology
- Manufacturing
- Construction & Contractors
- Distribution & 3PL
- E-commerce
- Healthcare & health services
- Insurance Agencies and CPA-Accounting Firms
- B2B Services
Business Market Value, What’s My Business Worth?
Determining the market value of your business is an important first step. Every business owner wants to get the maximum value for their business, and at the same time they want to sell it, and in a reasonable amount of time. There is a delicate balance between putting your business on the market for the maximum market value and successfully selling it versus overpricing it and having it sit with no inquiries.
Buyers, especially the more sophisticated buyers, have access to general business valuation information via the internet. They may not be capable of doing a professional business valuation, but they have a good idea of what a reasonable range of values is for a given business. Thus, businesses that are overpriced just sit and don’t sell.
At Pacific Business Sales we use PeerComps professional business valuation software for our Market Value Analysis. PeerComps uses the same business valuation methodologies used by Business Valuation Analysist for SBA loan business valuations and uses the comparable sales data from closed SBA financed transactions. PeerComps provides us with reliable comparable sales data by industry and company size (revenue and earnings) which enables us to narrow the comparable sales to match your company.
The resulting Market Value Analysis is one where you can be confident in the market value and asking price set for your company.
Financing Options for Buyers
There is a common belief that an SBA Loan is difficult to obtain, and it takes several months. While SBA financing is not simple, it provides both the buyer and seller with the best financing option for small to midsize business sales. At Pacific Business Sales SBA financing is our preferred financing method and approximately 90% of our transactions use SBA financing.
For sellers, SBA financing often provides 100% cash at closing. In some instances, the lender may want the seller to carry a 10% seller note, which results in 90% cash at closing. Both are a great deal for the seller as opposed to having to finance a large part of the transaction with a seller note.
For buyers, SBA financing enables them to acquire a much larger business with a 10% down payment and 10-year financing.
Pacific Business Sales obtains a Pre-Qualification letter from at least one of our SBA lenders for businesses we represent for sale. We advertise our businesses with SBA financing available and 10% down, giving prospective buyers confidence in the business as well as informing them the business can be acquired with just a 10% down payment.
Marketing Your Business
Pacific Business Sales advertises our businesses for sale on the top business for sale websites. This is not all that special, as other brokers do the same. We standout because we pay to feature all our businesses for sale, placing them above the general listings, we write excellent and very compelling ad copy, and we send email blasts to the BizBuySell email new business for sale list as well as our own buyer list of nearly 3,000 buyers.
We also advertise larger businesses on an M&A website not open to the public, and exclusively available to Private Equity Groups and Institutional Investors.
Another critical aspect of our marketing is our CIM (Confidential Information Memorandum). The CIM is effectively the marketing brochure or prospectus for your business and is sent to buyers after they sign our NDA and provide a buyer profile. Our CIM is comprehensive and typically 30 to 40 pages. The CIM enables the buyer to make an intelligent decision about the acquisition of your business, the value of the business, financing available, and most importantly if it is a fit for them.
Negotiations, Writing the Offer, Due Diligence and Closing
One might think finding a buyer is the most important aspect of a business broker’s role in successfully selling a business. While this is obviously important, there is much more involved in a successful sale.
A professional business broker will facilitate the negotiations between you and the buyer, keeping you out of uncomfortable discussion about price and terms and maintaining your relationship with the buyer.
With price and terms agreed on, your business broker will prepare the purchase agreement and addendums and once signed by the buyer and seller, due diligence starts.
The business broker facilitates due diligence to keep it on track and during due diligence will get the buyer started on obtaining their SBA financing.
With Due Diligence completed, and the bank ready for closing, the business broker works with all parties, buyer, seller, SBA lender, and escrow to close the transaction.
Choose Pacific Business Sales as your Trusted Business Sales Brokers
Pacific Business Sales has a well-established track record of successful transactions and experience in the sale of industrial businesses. With over 48 5-star reviews from buyers and seller, our record speaks for itself.
Contact us for your Free-Market Value Analysis and to learn more about the steps in selling your business.
