Frequently Asked Questions - Buyer

Isn't there something wrong with a business that is for sale? There are many legitimate reasons for a Business Owner to want to exit the business. Health, Retirement, Burn-out, Death, and Divorce are among the most common.

Isn't it more risky to buy a business than to build one with my own skeletons? There is risk in any business; acquired, started, or even working as an employee. The key is to manage your risk by doing proper due diligence. If that business has been around for several years, it has passed the "death rate" of start-ups and may be a safer bet than starting from scratch.

Should I purchase a business or start my own? In purchasing an existing business, you leap past a lot of the struggles of a startup. Branding, finding vendors, building a customer base, testing pricing, and testing market needs are among those. You can adapt the business to fit your personality once you are in control.

Why can't I just approach businesses myself? I did this when I first decided to go into business for myself, and it was very awkward. Both the Business Owner and myself were uncomfortable with the situation and the negotiations were cumbersome. In using a professional Business Broker, you will be using the experience and knowledge of a trained professional to help ensure you are not overpaying or overlooking critical factors.

Why should I use CEO Business Brokerage to purchase a business? At CEO Business Brokerage, we have been selling businesses since the beginning of 2006, and have the experience and training to do it right. We are active members of CABB (California Association of Business Brokers), and chair the Inland Empire Sub-Chapter of CABB. This ensures you are working with a broker of the highest integrity and ability.

How much does it cost to purchase a business? There are a lot of factors that affect the amount of money you need to purchase a business. Much like purchasing a home, there are loans that can pre-qualify you. In addition, many Sellers will carry a note and the down payment and terms are often negotiable.

How long will it take for CEO to find me a business? This is a slow process, and it takes time to find a Seller and do the calculations and preliminary research into a business opportunity before you can make a good assessment. This is a huge decision, and you should be patient to ensure it is not a hasty one.

Frequently Asked Questions - Seller

Why should I use CEO Business Brokerage to sell my business? At CEO Business Brokerage, we have been selling businesses since the beginning of 2006, and have the experience and training to do it right. We are active members of CABB (California Association of Business Brokers), and chair the Inland Empire Sub-Chapter of CABB. This ensures you are working with a broker of the highest integrity and ability.

Why use a broker when I can sell my business myself? There are many reasons to use a professional broker including:

• Maintaining Confidentiality
• Negotiating a Win-Win deal
• Marketing the business in the proper places to get true buyer's attention
• Having a trained professional screen and qualify buyer prospects.

A "good business" marketed in the right places will draw a lot of inquiries. A Business Owner that is trying to run his/her business and manage this process "on the side", will likely become wary of the process and will likely negotiate away more than a broker's fee would have been. To ensure the entire process is done correctly, a professional Business Broker is a valuable asset.

Why can't I just put a For Sale sign in my front window? It is important to prevent your employees, suppliers, customers, and competitors from finding out about the pending sale of your business for many reasons. You want your business to be as strong during negotiations as possible, and the process will likely take months. Tell as few people as possible, and let the Business Broker do the talking.

My neighbor's friend's cousin is a Realtor; can't he sell my business? A real estate agent is licensed properly to sell your business, but the process is substantially different from selling a home; or even a commercial property. There are some agents that are capable of properly selling a business, but you should ask a lot of questions or seek out a Business Broker. At CEO Business Brokerage, if it doesn't have a P&L, we don't touch it.

What do I need to do to prepare my business for sale? There are a lot of steps to preparing your business for sale. The key is to think like a Buyer, and imagine what they will want to see. Among the most obvious are: Complete financial statements and tax returns, employee records, policies and procedures manuals, and lease agreements.

How do I determine the right price for my business? A professional Business Broker has access to tools to help determine the Market Value of a business. This is an assessment based on a financial review and factors that affect your specific industry. You can also pay for a Certified Business Valuation.

Why should I consider Seller Financing; isn't that risky? Seller Financing does a lot to help a Seller in the sale of his/her business. Among those benefits are:

• Collect interest on the balance you carry
• Potentially lower your Tax Liability, thus putting more money in your pocket
• Speeds up the process as opposed to a lender's lengthy evaluation process
• Gives you a STRONG negotiation stance for terms and Selling Price.

There is some risk associated with Seller Financing, but proper Due Diligence on your part, and a strategic negotiation will help lower your risk substantially.

How long will it take to sell my business? Selling a business is a process, and the escrow period alone can take 45 days. To market a business confidentially requires creativity and extensive screening, which all takes time. In a poor economy, qualified Buyer Prospects are fewer than in good times. This, along with the number of alternatives on the market can affect the time needed to complete a sale. It is important that the business is priced properly for your needs.