Frequently Asked Questions

Peak Business Brokers

How long does it take to sell my business?

Buyers meet with the seller, evaluate information about the business, and present offers before negotiating a deal. The process can take as little as a few weeks to several months. Usually, this takes between 3 and 6 months. Depending on how quickly the parties respond, it can take anywhere from a day to several weeks to negotiate an offer. Some businesses will take longer to sell, while others will sell in a shorter period. To speed up the process of selling a business, you should gather all the data you need before beginning the marketing process.

Keeping the business's pricing correct from the start is also important. Some sellers overprice their business for sale based on the belief that they can always decrease the price. Often, this theory backfires since buyers often refuse to consider overpriced business opportunities. A quick sale can be attributed to the amount of down payment. The seller can finance 20 - 30% of the purchase price. In some cases, SBA loans require 10-15% owner financing if the buyer does not have experience in the business being purchased.

How will Peak Business Brokers protect my confidential information during the selling process?

A successful business sale requires confidentiality.

Our lawyers draft confidentiality agreements for each client (sometimes called a non-disclosure agreement) to protect the client's confidential information and facilitate a smooth sales process. In addition, the confidentiality agreement is usually written to provide the seller with protection against the misuse of the information by a potential buyer.

Each prospective buyer is subject to a screening process, and each one must sign a non-disclosure agreement before being presented with the company's prospectus. Furthermore, we ensure that each business's most important "trade secrets" remain confidential, even during the due diligence phase, ensuring that sensitive information is only revealed a few days before closing the business deal.

How does Peak Business Brokers determine the value of my business?

The first question we receive from business owners is, "What is my business worth?" We answer this question in several ways.

When calculating the listing price, many variables are taken into consideration (substantial and insubstantial). These factors include the company's current financial performance, its organizational structure, profit margin ratios, profitability trends, and its competitive landscape.

As part of our analysis of your financials, Peak Business Brokers will review your revenue and expense to include any addbacks to arrive at the seller's discretionary earnings (SDE). SDEs are used in conjunction with earnings multipliers to determine valuation ranges. Additionally, the multiplier for your business will require consideration of recent sales comparatives within your industry. The low and high price of a valuation range is typically set. When the seller demands more cash, the selling price will be lower; if the seller requires less cash, the selling price will be higher. The down payment and the terms of the sale are essential in business sales since most include seller financing.

What can a business broker do – and what can't they do?

Business brokers are professionals who can help you sell your business successfully. Understanding what a business broker can and cannot do is essential. You can work with them to decide how to price your business and structure the sale so that everyone benefits - both you and the buyer. A business broker is capable of finding the right buyer for your company, assisting you and the buyer during the negotiation process and each step of the transaction. Furthermore, they can assist the buyer with all the details of the process of purchasing a business. In retrospect, Brokers are not magicians who can sell overpriced businesses. A well-priced, well-structured business is typically saleable. The market place is the main determinant of the business's sale price. The down payment and financing terms you are willing to accept will largely determine the ultimate sale price of the business and the success of the selling process.

Is there anything I can do to help sell my business?

You should provide a buyer with current financial information about the business you are selling. If you use accountants, you should work with them to provide up to date information about your business. Also, if you are willing to use an Attorney, ensure your attorney understands the business closing process and state laws. Additionally, ask them if they can attend the business closing on short notice if the schedule allows it. If you and the buyer want a quick close, usually within a few weeks, let's assume you both agree that this is the best approach. Then, unless there are any discrepancies or other licenses involved that might delay things, you shouldn't wait until the attorney can attend the closing or prepare the documents. When it comes to business sales, timing is everything. Buyers can change their original proposal if the transaction does not close on schedule.

What happens when Peak Business brokers find a qualified buyer for my business?

Interested buyers will submit a written offer when they are sufficiently interested in your business for sale. One or more contingencies may apply to this offer or proposal. Most contingencies involve reviewing your financial records in detail. Additionally, they will likely review your lease agreement, franchise agreement (In case you are selling a franchise), or other pertinent business opportunity details.

If you are not satisfied with the offer, you may counter-propose. Nevertheless, you should understand that the buyer can withdraw his proposal at any time if you do not accept his proposal.

You may not be happy with a particular offer at first glance; however, it is essential to review it carefully. It may be lacking in some areas, but it may also have some benefits worth considering. There is an old adage that says, "The first offer is generally the best one the seller will receive." Of course, you don't have to accept the first offer - just that you need to evaluate all offers thoroughly.

It would be best if you both worked together to remove and satisfy any contingencies once you agree to the proposal's terms. This process requires your full cooperation. You do not want to give the impression that you are hiding anything. At this point, the buyer may bring in outside advisors to help review the information. The final documents will be drawn and signed when all conditions are met. The new owner will make the payment during the closing process, and he will take over the business.

How does seller financing work? Why is it important to help sell my business?

According to surveys, sellers who ask for cash only receive 70 percent of their asking price, while sellers who accept terms receive 86 percent. That's a whopping 16 percent difference! Most times, all-cash business for sale listings often doesn’t sell quickly. A business listed with reasonable terms has a much higher chance of being sold, and it takes much less time to get the business to market. In most cases, the seller finances between 10% and 30% of the purchase price. Sellers may not realize how much interest they can receive by offering seller financing.

It can sometimes result in a significant increase in the amount received. Additionally, it tells the buyer that the seller is confident that the business opportunity can, indeed, pay for itself.

How much is the upfront fee at Peak Business Brokers?

You won't have to pay anything upfront. We win when you win. Our goal is to ensure that our business owners receive the best market price and guide them through the selling process.