Important Questions

Why should I use a BBN Affiliate Broker?

There are many reasons. Most importantly the BBN^© network offers business owners the opportunity to have the largest business brokerage network in the world working to sell your business, not just one local broker. Common sense says it is better to have the potential of 500 affiliate brokers nationwide seeking the right buyer for your business instead of one local office.

Finding one prospective buyer is insufficient. Creating competition among multiple buyers should be a brokers goal, not to just find a single buyer. A buyer without competition feels free to offer less than the full value of a business. When a buyer knows several other buyers are looking at the same business, they are hesitant to offer less than the price and terms being solicited.

As the only true national firm in the industry, Business Broker Network^SM covers every state in the nation. Before BBN^© was established, an individual living on the West Coast, for instance, who wanted to relocate to the Southeast would find no value working with a broker locally because the broker would not know what was available outside the local market. As a result, a prospective buyer would need to go from broker to broker in the desired area. This only caused frustration and a waste of time, and seldom, if ever, resulted in completion of a business sale. Now, prospective buyers can contact a local BBN^© Affiliate Broker, and the prospective buyer will have access to listed businesses from Affiliated offices in the desired area.

Another factor to consider is packaging. Poor packaging of a business is one of the major complaints expressed by buyers. Hundreds of buyers have told us that BBNY provides the best and most professional packaging in the industry, ensuring that sellers are effectively communicating the attractiveness of thier business. All BBN^© Affiliate Brokers have standardized and detailed packaging, which, in addition to its appeal to prospective buyers, makes it easy for one Affiliate Broker to quickly understand a business listed by another. When a prospective Buyer is presented the information on your business, the Buyer will be able to have many of his questions answered and be able to make an informed buying decision.

CONFIDENTIALITY is vitally important when working with any broker during the selling process. BBN^© Affiliate Brokers protect information about the business for sale from being presented to unqualified buyers. In addition, BBN^© Affiliate Brokers require potential buyers to provide proof of financial ability to acquire your business. So, the Seller can pursue an informed selling decision process, all within the confines and security of confidentiality.

Why use a business broker?

The process of buying or selling a business requires dedication and the attention of a professional with the knowledge of the complete flow of a business transaction, as well as a team in place to accomplish every aspect of the transfer. Marketing and facilitating a business transfer is a full-time job! You, the business owner, deserve someone who will work as hard as you do. A qualified broker will save business owners and prospective buyers money by helping them avoid costly mistakes, effectively marketing the appeal of the business, and maximizing exposure to serious, qualified buyers--all with complete confidentiality.

If you are interested in selling your business and don’t know the answer to any of the questions below, you could benefit from the assistance of a professional broker...and you are not alone!

How do you reach qualified buyers, including possibly competitors, without disclosing your intentions to sell? How do you evaluate your business objectively to ensure you receive top dollar for your investment and avoid costly negotiating tactics?
How do you prepare and provide the information a prospective buyer will require to interest him in pursuing your business in favor of other options?
How do you arrive at the best price and terms, including the intangible and goodwill values of your business?
How do you maximize your favorable exposure to potential offers while minimizing your potentially damaging public exposure to customers, competitors, employees, and suppliers?
How do you market your business in all of the appropriate markets, databases, and media efficiently, effectively and confidentially?
How do you screen and pre-qualify buyers, determine their motivations, managerial capabilities, and financial strength?
How do you effectively sell your business, diverting significant time, effort and resources to that process, while continuing to manage your ongoing business productively?

Business owners have focused their entire lives on growing and developing their businesses and seldom know how to answer all of the questions above. That is where a professional BBN^© Affiliate Broker can come in. The sale of your business demands a professional, just as running your business has demanded your professional attention. BBN^© Affiliate Brokers have the expertise, tools, and professional team to market and sell your business successfully on a national basis. The objective is to protect your business investment and maximize your net after tax profit on the sale. It is to your advantage and in connection, your broker’s as well, to obtain the best possible price that a reasonable buyer will pay. BBN^© Affiliate Brokers strive to maintain high ethical standards and communicate in an open and honest manner in all of business relationships.

What affects the selling price?

Several factors come into play and can affect the sales price. One of the most critical is the “terms” or the amount of down payment and the amount financed. Over eighty percent of all businesses sold above $100,000 are sold with one-third or less down and the owner financing the balance. Asking for one-half down will reduce the price by approximately twenty percent. Asking for cash will reduce the price to about forty to sixty percent of the amount attainable with one-third down.

Down payment or the “terms” is a key factor, because a buyer is trying to buy as much business as possible for the money available for down payment. So, when a seller asks for $200,000 down on a $400,000 value business, buyers prefer to continue looking until a $600,000 value business is found where the owner will accept $200,000 down and finance the balance. The seller who asks for all cash or a large down payment is not going to succeed in obtaining the full fair market value of their business, because buyers know they can buy three times as much business for the same investment. In a nutshell, high percentage down payments cause buyers to discount or reduce their offers.

A second critical factor is the quality of the information provided to a prospective buyer. The value of the assets and cash flow generated by the business must be provable and verifiable. A professional business broker will be able to assist the business owner in arriving at these values.

The third most important factor that affects the sales price of a business is whether there is competition among prospective buyers for the business. Competition creates higher selling prices, as we all know from basic economic principles. When a business owner asks for more than the fair market value for their business or does not offer reasonable terms, there will be few, if any, buyers interested in acquiring the business. On the other hand, when a business is priced realistically and with proper terms, multiple buyers are likely to pursue acquiring the business. A buyer who knows he has other buyers competing for the business will be motivated to offer the price being asked to ensure he does not lose the business to another buyer's better offer.

The first thing you need to do is establish the fair market value of the business. Business Brokers New York^SM can assist with this task and has partners relationships with business valuations firms. offer the business at a realistic price and with reasonable terms. You need to provide as much information as is possible to the broker so a professional marketing package, including a business profile, can be prepared on your company. The quality of the business profile will greatly enhance the “saleability” of a business. A package prepared by a BBN Affiliate Broker will contain the financial, operational and historical information about the business. Informed buyers make better offers. Other things a seller can do are: