Frequently Asked Questions
A look at the 20 most common questions
Is my business sellable?
Virtually any business can be sold; the question becomes how quickly and for how much? In any event, a business is made more sellable when presented to the right kinds of buyers at the right price. This is where ABMI can help.
How much is my business worth?
The only way to accurately assess a business’ value is to complete a formal appraisal, which typically is not a free process. Factors that affect a business’ value include cash flow, sustainable profit, asset value, financial history, location, competition, customer base, industry standards, ongoing management and the economy. Bear in mind that what you or your bank think it’s worth carries little weight with potential buyers because they don’t perceive either of you as objective. Ultimately the marketplace determines the value. In short, your business is worth precisely what someone is willing to pay. And if you price your business too high based on your subjective view of its value, you are simply hurting your changes of selling it at all.
When is the best time to sell my business?
The best time to sell is when business is booming. A “going concern” is far more attractive to potential buyers than a business that is losing money. However, this does not mean that a business currently losing money is simply not sellable. Buyers will be looking at the potential for profit as well as the current financial condition of the company.
Why should I use a business intermediary?
Simply put, expertise. Selling a business is a complex affair and one that requires expertise in many areas. Beyond that, a broker will be able to more quickly locate potential buyers than someone unfamiliar with the selling process or current marketplace. What’s key is that ABMI can find buyers you would not likely uncover on your own. In fact, ABMI maintains an ongoing list of over 6,000 persons/entities actively interested in acquiring businesses. A business broker can also act as a buffer between you and potential buyers. You’ll need a tough negotiator, one familiar with the process, and ABMI has the experience to effectively fill this role for you. Then there is this: You are the expert at running your business, and that is where your focus should be, not on the complicated process of selling it. You focus on your business and let ABMI focus on selling it for you.
How long does it take to sell a business?
This depends on the market conditions and what is for sale. Our average business sale takes between five to eight months from start to finish. You should allow a full year. In most cases, ABMI will be in discussions with an interested party within the first two months.
What are the tax implications of selling a business?
This will depend on your personal circumstances. Some form of tax is inevitable and it is vital you get advice from your accountant about what taxes you’re likely to face.
What information will I have to provide?
What we’ll need from you first is 1) your latest set of accounting files, 2) your business plan, and 3) any company literature you’ve amassed. ABMI will then contact you in confidence to discuss your business’ salability and to answer any questions you may have about how to proceed with selling your business.
Should my accountant sell the business for me?
The first steps of a business sale are neither legal- nor accountancy-based, so, no, your accountant isn’t in the best position to quickly and profitably sell your business. At this early stage, selling your business is primarily a sales and marketing exercise, which is where ABMI and its team of experts come in.
What kinds of businesses do you sell?
ABMI sells sole proprietorship’s, partnerships, LLCs, and corporations in business sectors ranging from industrial/manufacturing to entertainment/leisure to service sectors. However, we only seek instructions from profitable going concerns with a minimum adjusted net profit of $100,000 or more. We do not get involved in turnarounds or liquidations. We are selective and cautious about the engagements we undertake. Our preference is to handle a smaller number of high-quality transactions.
How do you keep the sale of my business confidential?
We go to great lengths to protect your confidentiality. Potential buyers are required to sign nondisclosure agreements before confidential information about your business is made available to them. We vet and pre-qualify all potential buyers. No confidential details of your business will be given to any potential purchasers without a your consent. You control who we talk to and what we tell them. We are accountable to you at every step of the way.
How will I know what is going on?
The project manager assigned to your case will provide you regular updates as the sale of your business progresses.
How do you find a buyer for my business?
ABMI maintains an ongoing list of 6,000 potential buyers of businesses. Beyond that, our experts will research your industry and your business’ place in it to discover who has the financial capability, appetite, and interest in acquiring your business. Most of our clients are positively surprised with the levels of serious purchaser inquiries our sales process generate.
How are meetings held and managed?
We organize viewing meetings, which can be held off site or at a neutral location. Our job is to look after your best interests, guiding you through every step of the sales process and making sure you get best value for your business.
Who will handle the sale for me?
The project manager assigned to your transaction will handle the sale, all the while keeping you informed through every step of the process.
What are your fees?
Our fee is success-contingent. This means we have the incentive to get you the best possible price. Unlike many brokers, we do not make money on excessive up-front fees. We do not have sneaky or hidden extras and our fee structure is transparent and fully inclusive.
I’ve tried to sell before, but nothing happened. Can you help?
ABMI has seen this before, and our team has the skill to quickly determine what went wrong the first time around so those pitfalls can be avoided this time. For more information, see 10 Seller Mistakes.
I’ve been approached about selling. What should I do?
Contact ABMI right away. An obvious first question is this: How serious is the offer? ABMI can help separate the “tire kickers” from those truly interested in acquiring your business. We can also help establish a competitive bidding scenario between potential buyers, which is the best way to ensure you receive the best value for your business. (Also See Negotiation Only.)
What are the main reasons businesses don’t sell?
The two principal reasons that businesses don’t sell are 1) setting the wrong asking price and 2) not identifying and talking to enough serious buyers. Effectively marketing your business requires that both these issues be addressed early on. For more information, see 10 Seller Mistakes.
How much time will be required of me to sell my business?
That of course depends on how well-organized you are with respect to your business specifics: accounting records, employee records, asset lists, etc., and how swiftly you respond to ABMI’s requests for information. handles most of the time-consuming or potentially intrusive elements of the selling process on your behalf, allowing you to continue to focus on running your business without disruption or distraction. When ABMI successfully negotiates a transaction with a potential buyer, you will need to spend some time with your attorney reviewing the documents involved. Again, organization is key, so start now by gathering the relevant documents for ABMI to review.