Q: How long will it take to sell my business?
A: The time needed for the sale depends on several factors, including the price of your business, type of business and your willingness to finance the buyer. In general, it takes about 60 to 180 days to find a buyer for a business. Your broker can discuss with you how long it may or may not take to complete the sale.
Q: How will my business be marketed?
A: Our primary source of advertising is through other broker-related web-sites and associations. We advertise aggressively over the internet, which gives your business exposure to thousands of internet users. We attend several organization and association meetings, conferences and conventions throughout the year which also gives us a great opportunity to introduce your business for sale. We may send mailings to a targeted group of buyers, which complements our regular phone and personal contact with our group of listed buyers. Lastly, we may run “blind” advertisements in the local newspaper, which do not include any specific information about your company but will attract those interested in your type of business.
Q: What types of offers should I expect to receive?
A: An astute buyer is going to structure the initial offer to ensure that they are getting the best possible price and terms from you. Therefore, you should expect to receive a “low” initial offer. Don’t be offended – this is just an initial offer to “test the waters.” The buyer typically does not expect you to take the initial offer, nor should you expect the buyer to accept your initial counter offer. Most offers will have some contingencies. These could range from reviewing financial information, to obtaining a solid lease and agreement, to determining a training and transition period. These are normal and provide the buyer the chance to “check out” the business before closing.
Q: What is a non-compete agreement and will I have to sign one?
A: Yes. A non-compete agreement covers the area from which your current customers are generated and the time period usually equals the term of the financing you are providing to the buyer.
Q: Will the buyer pledge any additional collateral for my loan?
A: Buyers do not pledge additional collateral for your loan. When a buyer buys your business, they do so based on the business being able to generate sufficient cash flow to pay the loan and provide them with cash flow. If the buyer needed additional collateral, it is a sign that the business is not doing well and they will be paying too much for it.
Q: How will I know that the buyer is financially qualified?
A: It is your responsibility to do whatever you feel is appropriate regarding qualifying the buyer. Alamo Corporate Group requests financial statements from the buyers, but we do not run credit reports on them. Generally, if the buyer has sufficient funds for the down payment and for working capital, then they should be adequately qualified.
Q: What can I do to help sell my business?
A: The first is to continue doing business as usual. Do not let inventory or profit levels drop below normal. Secondly, keep the business clean and in good repair. Third, remove equipment or furniture that is not part of the sale. Fourth, provide us with required information in a timely matter. Fifth, be as accommodating as possible in setting appointments with buyers. Sixth, work directly with us, not the potential buyers. We can protect you and help ensure the deal is successful.