Sellers

1. When is the best time to sell a business?
   • The best time to sell a business is when it has shown a profit and consistent growth over a 3-5 year period.
       
2. What do I have to do to sell my business?
   • Get financial records in order; show a strong profit and growth.  Start 3 years before you want to sell.
   • Keep operating the business as though you were not going to sell.  Keep it profitable.
   • Make sure that all equipment and vehicles are in operating order.  Clean and up-fit buildings and equipment.
   • Seek outside council - legal, accounting/taxes, and business broker.
   • Make up your mind to sell and stay with the decision.
   • Have a financial audit for at least the last two years
       
3. How do I arrive at a price?
   • Seek outside help from professionals who are experienced in evaluating a business; i.e.: business brokers/consultants, CPA.
   • Asset Sale versus Stock Sale
     • Most small privately held businesses are sold as an Asset Sale.  Buyers like this approach as it gives them some extra advantage.
         
4. How do I get paid for my business?
   • Rarely is a business sold for all cash.  95% of buyers will require up to 50% owner financing of the sale price.
   • Most businesses are financed as follows:
     • Buyer:  25% to 50% Cash
     • Financial Institution:  25% to 50% Note
     • Seller:  25% to 50% usually over 3-7 years.
5. How much taxes will I have to pay?
   • Consult with your CPA as you will have to pay taxes.  The amount will depend on your tax bracket and how you have your company structured.
6. How do I keep the sale confidential?
   • Tell as few people as possible that you are selling your business.  "Word of Mouth" from the Seller is generally the greatest source of leaks.  
   • Buyers are required to sign confidentiality agreements.  These agreements give the Seller recourse against the Buyer, but they are not "fool-proof."
   • Employ a qualified business broker.

Buyers

1. When is the best time to buy a business?
   • NOW!  Don't wait if you are strongly interested about buying a business.
   • Do your homework.
     • Review your finances - you need sufficient income to live a year.
     • Develop a set of objectives which will include the type of businesses that you will consider buying.  Set a time table to buy as buying a business takes considerable time and energy.
     • Employ a professional (Business Broker or Business Consultant) who can give you guidance.
     • See your banker about financing.
         
2. What type of business should I buy?
   • Review your experience and background.  Something close to this will generally be the one in which you will feel the most comfortable.
   • Look at something that relates to your education.
   • Hobbies - Do you have a hobby that would make a good business?
   • Are you buying a business in which your family would be involved?
   • Do you want a business that will be a "hands on" approach or one that requires your management skills?
   • MOST IMPORTANT - Be sure that it will be the type of a business in which you feel comfortable and has the ability to grow.
3. How do I got about buying a business?
   • First, and foremost, make-up your mind that this is something that you REALLY want to do.
   • Seek professional assistance - i.e.: banker, business consultant, business broker, CPA, or an attorney.
   • Review your finances - you need one year's income.
   • Develop a resume and a financial statement.
   • Develop a business plan for the business that you select.  It will be required by the bank.
4. How do I know that the business that I buy will be successful?
   • There is NO guarantee.  Keeping the previous owner involved for 6-12 months will help.
   • Do a detail due diligence of the business records and performance.  Use a professional consultant, if needed - i.e.: CPA
   • Determine what YOU can do to grow the business.
   • Three Keys to Success:
     • MONEY - Watch it!!!  Do not over-spend.
     • MANAGEMENT - Build a strong management team to ensure that you do not have to do everything yourself.
     • MARKETING - Develop a marketing plan.  Be aggressive in selling your best products and service.
5. What and how much support will I get from the Seller after closing?
   • Normally, the Seller will be available 30-60 days after closing to help in the transition.
   • Sometimes, the Seller will be hired by you to act as a consultant for 1-3 years or be a salesperson for 1-3 years.