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Why do I need a business broker?
Selling a business is a very complex process. Most business owners
concentrate on their own business and are not exposed to the myriad
of specific codes, rules, regulations and contractual agreements
required for the sale.
There are many questions that must be answered!
What type of evaluation is required? What is earn out? Contingency
payments? Stock vs. asset sales? Goodwill profile? Lease agreements?
Licenses? Permits required? Assignability of contracts and agreements?
Bulk sale laws? Contract of withholding from market? Due diligent
process? Escrow to offset-account? Research of UCC's? Federal
ID number? Liens and encumbrances?
Most businesses, especially the companies with less than five million
dollars in sales, do not have personnel capable of handling the
sale of the business. In most cases, when it becomes known that
a company is for sale, it adversely affects the employee moral,
vendors, outside contractors, creditors, customers, and it helps
the competitors.
Why do I need a business valuation?
I know how much my business is worth!
As we mentioned before, most businesses do not sell as they have
an incorrect valuation. In the majority of cases, the business owner's
opinion of value is notoriously biased for their business. An industry
study shows that more than 75% of all businesses in the market are
over priced. On the other hand, some companies with sales over five
million dollars are often under evaluated, especially when the seller
does his/her own evaluation. Whether under or over evaluated, the
major problem is that business owners and the personnel are not
trained to evaluate businesses. This is even true for some CPAs
and intermediary lawyers.
Please view our "Evaluation"
link for more details.
Why are third party certified evaluations very important?
- You as the seller know that the business is priced at a fair
market value. You do not want to leave any extra money on the
table. On the other hand, if it is not evaluated properly, the
asking price could be over-priced, and the business may not be
sold.
- In many cases, buyers and their representatives, {CPA's, Lawyers}
are suspicious, about the seller's financial statements and bookkeeping.
The third party valuation creates trust and credibility with the
information that is presented by the seller.
- Frankly, it assists us in selling a business faster and much
closer to the evaluation price.
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