How Business Brokers Connect Buyers with Sellers Across the Globe
Posted On 09/15/2018 By admin
Business Brokers connect buyers to sellers of businesses. This narrative gives background information on and explains the process on how the Business Exchange serves both buyers and sellers of businesses.
Lothar Soliwon of ZG Worldwide, teamed with the Business Exchange, is an Illinois licensed business broker who can help you buy or sell hotels, manufacturing plants, medical practices, retail stores, restaurants, gas stations and many other types of small to medium-sized businesses. Lothar speaks German and Spanish. We provide all the services and support necessary to complete the sale of a business to the satisfaction of both the buyer and the seller. The Business Exchange’s track record of success and solid reputation as a leader in our industry spans over three decades and was built on delivering positive results.
The Business Exchange has offices in Chicago, Springfield IL and St. Louis. We offer many opportunities and are seeking businesses to sell throughout the region. We have brokered businesses valued from less than $50,000 to $5 million. The Business Exchange is also a commercial real estate brokerage that handles the sale and purchase of any real estate that is part of the business transfer transaction.
National & International Business Brokerage
For those interested in buying in other regions of the country or globally, we have a partnership with a mergers and acquisitions firm that highly experienced in the national markets we don’t serve and in international business transactions. They deal in business sales, acquisitions and mergers and have offices in many top markets. Doing business brokerage internationally adds to the complexity of a multifaceted process that requires a number of specialized skills.
Contact us at lothar@theBX.com for assistance with your business purchase or sale.
The Buying Process
Step 1: Self Assessment and Education
Business ownership is a worthy goal. However, in order to be successful, you need adequate knowledge about your business. Lack of capital and knowledge are two of the top reasons why businesses fail. Both of these risks can be mitigated by approaching the task of buying a business with an understanding of your capacity to buy and what you would be able to do with the business once you bought it. Before diving into the business-for-sale marketplace:
You should educate yourself on the buying process.
-Assess your finances to ascertain how much you actually have as a down payment and to get you through the initial transition.
-Target businesses that suit your background, lifestyle, knowledge base and natural talents in order to reduce risk.
Step 2: Evaluation
We begin our process by gathering information about you to establish your financial capabilities, your skills and experiences, and your personal goals. This information helps us gain your commitment to the process and enables us to competently assist you in your acquisition search. It is important to recognize that lenders, landlords and others who will be party to your eventual business acquisition will also require personal and financial information.
Step 3: Review Businesses for Sale
Prior to discussing confidential information about businesses for sale, we require prospective buyers to complete a Confidentiality Agreement (also known as a Non Disclosure Agreement) that protects the interests of the business owners during the sale process. Based on your qualifications and acquisition criteria, we will review several businesses with you that potentially meet your needs. Should you indicate an interest in one or more of these businesses, you will be given the Business Profile that describes the business, its market, assets, financials, price and terms of sale.
Step 4: Meeting the Business Owner and Touring the Facilities
Once you have reviewed the information on the Business Profiles and we have answered your questions about the businesses, the next step is to meet with the business owner and facilities. We will schedule all appointments with the business owners. It is common for business owners to require that such meetings be during non-operating hours or locations other than the business to avoid premature disclosure to employees and customers. We will gladly attend these meetings with you to introduce the business owner and facilitate the flow of information.
When meeting with a business owner, you may tour the facilities and ask questions regarding the operations of the business. Questions pertaining to the price and terms of the sale are NOT appropriate topics to discuss at this meeting. We are the liaison between you and the owner regarding the basis on which the business was valued and the terms of sale required by the owner.
Remember, you signed an agreement to keep all proprietary information you obtain about the business confidential. Only discuss this information with your professional advisors and spouse. Remind them that the information is confidential and not to be discussed with other parties. In most cases, the employees, customers, suppliers, landlords and lenders are not aware that these businesses are for sale. Premature disclosure could have a negative impact on the business being sold.
Step 5: Making an Offer
At this point you have reviewed operation information and financial summaries of the businesses that meet your acquisition criteria, and you have met with the businesses owners and toured their business facilities. When you select the business that best meets your needs, you are ready to make an offer.
Since the inspection period, known as due diligence, can be very time consuming for both you and the business owner and costs may be incurred for such things as professional advisors, copies of documents and records, lien searches, the business owner does not want to go through a detailed due diligence process without knowing the buyer is serious and willing to pay an acceptable price to purchase the business.
Before copies of tax returns and other business documents can be obtained, and before and contact with landlords, bankers, suppliers, employees, or customers, an Earnest Money Offer or Letter of Intent must be presented and accepted by the business owner. An Earnest Money Agreement provides the terms and conditions under which you are willing to buy the business and the seller is willing to sell the business. If real estate is included, a separate Earnest Money Agreement will be completed for the property. The amount of earnest money required to be submitted along with the Earnest Money Agreement will depend upon the size of the business transaction. The amount needs to be sufficient to show your serious intent to buy the business and to encourage the seller to take the business off the market while you complete your due diligence. For small to mid-size businesses, earnest money of $5,000 to $10,000 is typical. We will facilitate the negotiations between you and the business owner to secure an Earnest Money Agreement that is acceptable to both parties.
Step 6: The Due Diligence Process
The Standard Earnest Money Agreement gives you up to 15 calendar days to perform due diligence, which is the period where you fully inspect the owner’s representations and verify their accuracy. You can review the business financial documents, operating agreements, property leases and other aspects of the business after the purchase agreement has been approved by you and the business owner.
During the due diligence period, we will coordinate your request for documents and assist in arranging meetings with related parties to the transaction. This includes the business owner’s professional advisors, your professional advisors, the landlord, lenders, the escrow attorney and others as needed.
If institutional financing is required, we can recommend various lending sources, depending upon the type of financing needed.
Step 7: The Closing Process
When you have completed your due diligence and are satisfied with all aspects of the business, you will authorize an escrow attorney to conduct lien searches, prepare closing documents, such as bill for sale, note and security agreements, closing statements and non-competition agreements prior to closing for all parties to review. Final preparations will be made for lease assignments, utility transfers, financing, merchant service accounts, inventory counts and any other last minute preparations to make the transfer as seamless as possible. After the closing documents have been approved by the principals, a closing date will be scheduled. A cashiers check will be required at closing for the amount due. We will coordinate with the principals and their advisors, landlord, lender and others to ensure that all necessary paperwork is completed prior to the closing date.
Post Closing
Transitional training by the seller may include meetings with employees and clients, technical education, computer updating and other essential knowledge transfer. We will be available to assist you with any questions or post closing requirements you may have. Remember what you have learned throughout this process, because when the time comes, ZG Worldwide and the Business Exchange will be here to help you when and if it comes time for you to sell or expand and merge.
The Selling Process
As a business owner considering your options for selling, you know about running your business but you don’t know how to go about selling it. You need to know:
-The confidentiality of your business will be protected.
-You will get maximum exposure to qualified business prospects.
-You will receive sound advice in responding to offers.
-You will get the best possible price.
-You are choosing the right firm to represent you.
You need a reputable business brokerage firm that has a verifiable track record and holds current membership in all the important professional associations because you want their knowledge and techniques to be current. You want a firm that has a stable history and an experienced team of professionals working on your behalf to maximize the chances for a successful sale.
Our standardized methodology is a system that has been honed and proven over a number of years. We use automation and modern technology to qualify buyers, execute non-disclosure agreements, track disclosures to potential buyers and give monthly reports to all clients listed with us. This is what you, as a seller, can expect:
Step 1: Valuation
A pre-sale valuation determines if your business is positioned to sell and if a sale would meet your financial needs. It provides you with an objective price range that you can expect in the current market. We provide free valuations of your business.
Step 2: Contract
A contractual listing agreement is entered into between you and the Business Exchange, giving us the right to market the company as your representative for a specified time period and price, under specific terms and conditions. Once a contract is in place, we gather an array of data in preparation for launching your business into the marketplace.
Step 3: Marketing
With the data provided and your input, the Business Exchange generates a unique campaign to market your business to potential buyers. The cornerstone of this campaign is a detailed business profile, which is a document that educates potential buyers about the operation,
facility, marketing, financial status and future opportunities of the business. An advertising campaign using our extensive buyer database and search resources is then implemented to confidentially target buyers as well as approach the general business community. Our aggressive marketing program ensures your confidentiality and provides maximum exposure for your business.
Step 4: Vetting Qualified Buyers
Before receiving sensitive information about your business, the Business Exchange works with each buyer prospect by having them sign a Confidentiality Agreement and determining if they are qualified financially and/or strategically to purchase your business. We field buyer questions as best we can using the data provided during the information gathering period, contacting you only when required.
Step 5: Maintain Business Operations
During the entire process you are responsible for maintaining or improving the value of your company by tending to daily operations. You are also responsible for providing us with updated financial and operation information so we can keep our marketing of your business current.
Step 6: The Buyer/Seller Meeting
The Business Exchange confidentially schedules all showings at your convenience. An appointment for a buyer and seller to meet is usually made when a buyer is considering making an offer to purchase the business. The buyer would have already reviewed the business profile and financials and received answers to their questions. It is common for sellers to require that all such meetings be during non-operating hours to avoid premature disclosure to employees and customers. This is the chance for the buyer to tour the facilities, ask questions and get a feel for what it would be like to walk in the owner’s shoes. However, this meeting is not the time to discuss the price and terms of sale. A Business Exchange professional will be the liaison for the two parties on that subject.
Step 7: Offers
The Business Exchange presents all offers and negotiates on your behalf. Appropriate negotiation is crucial to achieving a successful sale. Half of the job is finding the right buyer — the other half is getting to the closing table. The deal must achieve a win for both parties, and we have the expertise required to conduct sound negotiations to make that happen.
Step 8: Due Diligence
Once a contractual agreement has been entered into between the buyer and seller outlining the price and terms of the sale, the due diligence period begins. The Business Exchange coordinates the due diligence process. This is the time when the buyer requests from the seller any documents and materials needed to verify all representations made by the seller are accurate. Depending on the size of the business, a buyer will typically have about two to four weeks to complete this inspection process.
Step 9: Closing
The Business Exchange facilitates the closing process once the buyer authorizes closing activities to commence. We coordinate with the principals and their advisors, landlord, lender and others to ensure that all necessary paperwork is completed on time. An escrow attorney will conduct lien searches, prepare closing documents, such as bill of sale, note security agreements, closing statements and noncompete agreements prior to closing for all parties to review. Final preparations will be made for lease assignments, utility transfers, financing, merchant service accounts, inventory controls, alcohol or other special license transfers and any other last-minute preparations to make the transfer as seamless as possible. After the closing documents have been approved by the principals, a closing date is scheduled. A formal closing takes place in our office where legal documents are signed, funds are received and ownership is transferred. We realize that you depend on us to guide you through every step.
For more information, contact us at lothar@theBX.com
