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Buying
a business - FAQs |
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Why should I use a Business
Broker? |
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Selling or buying a business is one of
the most important financial decisions you will make. A Business Broker has the
training and expertise to guide you through the process in a comfortable and
efficient manner. He is a team player who will coordinate the efforts of your
professional advisors, such as attorneys and accountants. He has handled many
transactions and understands the complexities of selling and buying a business.
During the process, the Seller's job is to
do what he does best, which is to run the business as if he were going to keep
it. The Broker's job is to confidentially market the business, find and screen
the Buyers, educate them, negotiate the terms of the sale and provide a buffer
for the emotional highs and lows that we all experience.
The Buyer benefits because the Broker has
already pre-qualified a business before he lists it. He has psychologically prepared
the Seller for the sale. He has also done a lot of the legwork to assemble the
financial information and background of the business. This helps to reduce some
of the uncertainty for the Buyer and make this search more efficient.
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How do you handle confidentiality? |
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Transactions handled by American Business Brokers are held parties. We require
that a prospective Buyer review and sign a non-disclosure statement outlining
his responsibility in having access to a Seller's confidential information. This
occurs before any detailed information concerning a specific opportunity is released.
We are committed to protecting the confidentiality of the business sale.
We understand that public knowledge of a potential sale can affect the attitudes
and actions of customers, employees, competitors, lenders, suppliers, or investors,
and thus the value of the company. We also want to safeguard the employment status
of a potential Buyer while he considers a very important change for his future.
Go to our Confidentiality page for
more information.
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Why buy a business instead of starting
one? |
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It may take more money than time to buy a business. It takes more time than
money to start one. The break-even point for buying versus starting a business
is the cost to buy equipment, rent a space, pay a staff, pay for advertising,
establish contractual relationships and support yourself while you are building
up a customer base.
If you buy an established business, you have an income from the day you take
over. You already know what can be accomplished by the business. If you start
a business, you face a lot of uncertainty over the success and desirability of
your product or service. Buying a business takes a lot of the risk out of your
decision
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What is the best business to own? |
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Beauty is in the eye of
the beholder. Most Buyers want to own a profitable, well-managed business in
an industry that holds a personal interest for them. On the other hand, some
Buyers may look for opportunities that offer turnaround potential, where they
can apply their special skills. In general, there is no industry that is particularly
better than another. However, there are specific businesses that are more successful
than others - even in the same industry.
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How is an offer structured? |
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Most businesses sell for one-third to one-half down. The remainder is financed
by the Seller, by a bank or through family resources. Sellers generally prefer
to receive all cash at closing and some Buyers are able and willing to accommodate
them. However, Buyers are usually trying to get the most bang for their buck
and will want to leverage their down payment into the largest business they can
buy.
Although, Buyers may want to make a no-money or low-money down offer, it is
very rare that they will succeed. Usually a business cannot earn enough to pay
salary to the owner and service such a level of debt. In addition, the lender,
whether it is the seller or a bank, wants the Buyer to show his commitment to
the business by having vested financial interest in its success.
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What kind of financing is available? |
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Seller financing is usually the cheapest
and easiest to obtain. It also tells the Buyer that the seller has confidence
in the business. There are no loan fees and the interest rate is usually lower
than the bank rates, but the term of the loan is often shorter. Seller notes
make up the majority of Buyer financing.
Banks will loan money on businesses that
show a strong earnings history on the tax returns. They require a lot of documentations
and the payment of upfront fees. In recent years, bank loans, which are guaranteed
by the Small Business Administration, have become very popular and more readily
available. If all else fails, family |
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How long does it take to sell a business? |
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It usually takes longer to sell a business than a house or a commercial building.
Because of the confidential nature of a business sale, a business broker cannot
put a For Sale sign on the window. The average time to sell a business is usually
between six to eighteen months. However, there are exceptions.
Some businesses may sell within a month of being put on the market. Others
may take several years to attract the right Buyer. A business broker seeks out
and talks to Buyers everyday. The next one may be just right for a particular
business.
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How do you advertise a business for sale? |
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American Business Brokers uses various
vehicles to market and advertise a Seller's business in the most confidential
and discreet method possible. At American Business Brokers we realize the sensitivity
of this issue and work diligently to protect the Seller's employees and vendors
from knowing that their business is for sale.
At the present time American Business Brokers
uses a combination of internet marketing, local marketing sometimes in the form
of newspapers, association publications and journals, referrals from past clients,
accountants, attorneys, real estate professionals and have a strong data base
of qualified Buyers. |
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The list of questions could go on and on so I'll stop here
for now. Hopefully we anticipated and answered most of your questions. If you
have others, just give us a call at 1-888-800-6898. |
American Business Brokers
Business Brokers - Mergers & Acquisitions
Businesses for Sale - Business Consulting
Franchise Opportunities - Business Valuations
Phone: 888-800-6898 Fax: 305-574-0173
Email: info@AmericanBusinessBrokers.com
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by onlinedesignFLA / IOT -
Web Solutions For Business Brokers
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