A professional who assist in the buying and selling of a business. The main value of a business broker is to act as a buffer between the buyer and the seller. If you are in the market to buy an existing business, a broker can help you find a business for sale that fits your parameters, including industry size and location. When it comes to selling a business, finding the right buyer can be time consuming if you try to do it yourself. The business broker will locate the right buyer for the business and will help to keep the process confidential. The business broker will incorporate attorneys and CPAs to the process, at the right moment.

A Business Broker is trained to guide the Seller through the process, to make it simple and efficient. He will coordinate the efforts of the attorneys and the accountants involved. He has the expertise and has handled many transactions and understands the process of buying and selling a business.

It is very important that the business owner focus on running his business as if he were going to keep it. The Broker’s job is to confidentially market the business, screen the buyers, negotiate the terms of the sale and facilitating the transaction.

Buyers benefit in using a Broker, because the Broker will help him locate an appropriate business that matched the desired criteria. The Broker will coordinate meetings at the businesses, will help the Buyer to understand the business, drafting an offer and will guide him during the purchase process.

In most cases, the commission is paid once the transaction is closed. This is usually money well spent, because the broker most of the times will get more money for your business, make negotiations run smoothly, handle administrative matters and make a sale possible. Usually the Seller pays the commission once the business is sold. The commissions vary depending on the size of the transaction. For main street businesses the commission percentage will be between 10% – 12%.

It really depends on several factors such as, pricing, location, industry, time of the year, condition of the business to name a few. According to industry statistics, it can take from 9 to 12 months to sell a business.

It may take less money to start a business, but it will take more time. When you start your own business, you need to locate the real estate where the business will operate, request all the permits, purchase de equipment and then it will take resources until you reach the break even point of the business, it may take years and there is a chance that it will never be reached/

When you purchase an ongoing business, the business will be making money from day one. It eliminates a lot of the uncertainty of starting a new business if the business will ever be profitable or not.

  1. You are taking over an operation that’s already generating cash flow and profits.
  2. You have an established customer base and reputation in the industry.
  3. You have employees who are familiar with all aspects of the business.
  4. You already have a successful formula for running the business including procedures, systems, and policies.
  5. Typically, an existing business comes with legal rights like patents and copyrights which can end up being very profitable.
  • The business owner decides to sell the business and calls a business broker
  • The business broker gathers the information of the business and prepares a Brokers Opinion of Value (BOV)
  • If the Seller is comfortable with the price, the Broker prepares the listing documents and a business summary
  • The business is marketed through: several web sites, brokers buyer’s list, other brokers in the network, CPA’s and attorneys. Each prospect will sign a Non-disclosure agreement and will be financially approved
  • Once a prospect submits an offer and the offer is negotiated, will coordinate the process so that the deadlines are met until it reaches the closing

It is very important to keep the sale of a business confidential. For example, if the employees or costumers find out about the sale of a business, the business may be negatively affected. Also, it is very important to keep confidential the information of the business. A business brokers understands the importance of the confidentiality and understands when the information and how much information of the business must be submitted during the process. Each time a prospect approaches the Broker, a non-disclosure agreement is requested to be signed.

An SBA Loan is a loan given through the Small Business Association. The SBA is a government agency built solely for the purpose of assisting small businesses acquire the funding they need. SBA loan is one that has been approved by the SBA, and in most cases co-sponsored by a traditional financial institution. The SBA provides some of the loan money, while the financial institution provides the remainder, together meeting the funding needs of the approved loan. The primary benefit of an SBA loan is that it allows you to get rates and terms that are comparable to bank loans even when you may not be able to secure a bank loan.