Selling a Small Business With a Business Broker

If you are a business owner thinking that the time is right to sell, there are a few options that are open to you. Usually though, it boils down to selling the business privately or using the services of a business broker. This article will focus on a few items to bear in mind if you do decide to sell your business with a business broker.

Patience. It takes time to sell a business. Most reputable business brokers are constantly being approached by small business owners who would like to sell a business. Unfortunately, many of these businesses are losing money or are very difficult to sell for a host of other reasons. Business brokers usually turn down more business listings than they take on. Even with this being the case, it usually takes several months for a business brokerage to find a buyer for a company listed for sale. Many times, business owners that have “just listed” their business with a professional business intermediary expect rapid response and a lineup of buyers hoping to view the business. Things don’t usually work this way, unfortunately. If you have decided to list your company with a business brokerage then there are many positive benefits you can expect from the relationship. However, please do be patient.

Multiple Showings. After you enlist the services of a business brokerage to sell your small business, don’t expect the first buyer to be shown your business to be “the one”. Often, it takes showings to 10-12 different ‘qualified’ buyers before a purchaser of found. Sellers tend to get excited at the first showing of the business to a prospect but the reality is that it many take many different people to see the business. There are times, however, where the first person who sees the business ends up buying it so please take these comments with a grain of salt.

Expect False Starts. Selling a business sometimes means being expected for a few false starts. When a business is sold, the first step is (usually) the conditional sale agreement. Typically then, buyers enter into a conditional due diligence period where the operations and financials of the business are scrutinized. In this scenario, the business buyer can walk away from the deal at any time. Sellers are usually quite disappointed if this happens since they put so much time and effort into the deal and now they must start again at square one and start the process over to find a new buyer.

Deal Must Be “Win Win”. In a business sale, the dynamic between the buyers and the sellers must be such that both parties to the transaction feel comfortable with the terms. Unlike some real estate transactions, a business sale must not be confrontational in order to successfully come to a close. The process in a business transaction, especially small business sales, can be quite emotional. The buyer must feel good about the seller and vice versa. The process is much too long and there are too many “outs” along the way for both parties that if a confrontational or aggressive negotiating stance is taken that the deal process could potentially fall apart. The role of the business broker is to ‘reign in’ the emotions of both sides. Be prepared for frank discussions with a business brokerage professional if negotiations (or emotions) get heated.

Selling a small business with a business broker is a good decision that should increase your chances of selling significantly.

Selling a Small Business – Why Selling a Smaller Business is Different

If you are a business owner thinking of selling a small business, the process is somewhat different than selling a much larger, more involved company.

Smaller businesses are bought by investors for different reasons and, depending on the size of the company, attract completely different buyer profiles. This article looks at some of the differences in selling a small business from the owner’s point of view.

Micro-Businesses
What is meant by “micro businesses” are businesses that are valued at less than $100,000. There are many different types of micro-businesses and each can attract a different buyer profile. For instance, if you own a small, home-based business valued at $75,000 or so, this usually attracts a potential buyer that is completely different than the person looking for a business valued up to $250,000. To expand, businesses valued under $100,000 or so usually fall into a number of categories. They can be home-based businesses where a good buyer candidate can be a stay-at-home parent looking to augment an income. At this lower price range the business may also be a service based business such as landscaping or home inspection, as an example. This type of business is attractive to the “do it yourselfer” who is purely looking to ‘buy a job’ and a book of existing accounts. The $100,000 and under price range might also reflect a business that could be larger but has suffered a setback and has the potential for stronger earnings going forward, with right management in place. Micro businesses do not necessarily mean ‘micro earnings’. Many smaller companies have excellent income potential and could make a great investment for the right buyer. The point is, when you are selling a small business (especially a micro business) please don’t merely characterize the type of potential buyer based on price. Smaller businesses are attractive to many people for many different reasons.

Small businesses valued in the $300,000 price range
The price point of $300,000 is a ‘sweet spot’ for selling a business in that it is a price that is ‘doable’ by a relatively large pool of buyers. Businesses valued at approximately $300,000 (typically) earn an income to an owner/operator that is over $100,000. This size of business is attractive in that it allows an owner to operate it and pay off debt and earn a comfortable living off of the business income. That price range is within reach for many people, especially home owners who can finance a portion of the business purchase with home equity. If you own a small business in the $300,000 range and if your business is profitable, priced right, stable and showing consistent returns, there should be a relatively large pool of buyers for your business.

Small businesses valued up to $750,000
If you own a business valued in the neighbourhood of $750,000 this is still characterized as a “small business” but it would attract a completely different type of buyer (or investor) to your company. Selling a small business in this higher price range usually attracts a buyer with more financial resources or perhaps a partnership or group of buyers. Many times, the idea with buying a business at this price range is that it can earn enough income to justify hiring a manager with enough cashflow left over to pay the debt and earn a return for the buyers.

If you are thinking of selling a small business think about the type of buyer that would be ‘ideal’ to purchase your company. Think in terms of price and financial ability but also pay attention to things like aptitude and lifestyle choice. There are many small business resources on the internet to answer some of your questions. Talk to a business broker to help you sell a smaller business.

7 Tips For Selecting the Best Small Business Brokers to Sell Your Business

Are you thinking about selling your business? Have you ever gone through the process before? Are you confidant that you can do it yourself? Where would your time be better spent, running your business at peak performance while trying to sell it, or focused on the advertising campaign, networking, negotiating, and coordinating the closure of the sale of your business? Maybe you should consider doing what you do best, running the business, and search out small business brokers and let them do what they do best, sell businesses. If you go that route, here are 7 tips to choosing a business broker that makes sense for you.

1. Don’t get lost in the shuffle

You want your broker to have a proven record and a great reputation but you don’t want the organization to be so big that your deal is passed off to a junior staffer. You want the active involvement of the principals.

2. Do your due diligence

You’re about to engage the services of someone that is going to have a big impact on your financial life. Make sure you are comfortable with the relationship. Check with the International Business Brokers Association and see if your broker is a member in good standing. Follow up on the references provided and determine just how satisfied past clients are. Check with your local better business bureau and see if there are any unresolved complaints.

3. Use a specialist

Real estate agents and other professionals sometimes hold themselves out as business brokers on a part time basis. You want someone who makes their entire living selling businesses full time. Preferably somebody who has experience in your particular industry and someone who can point to successful sales they have made for your competitors.

4. Avoid heavy up front fee structures

Typically a business broker will charge between 10% and 15% of the sale price as a fee. While it is customary for them to ask for some up front fees to initiate the process, avoid those brokers who are looking for greater than a third. Also make sure that the up front fee is deductible from the sales fee when the business sells. Following this advice will save you from having to invest a ton of cash before you actually sell the business.

5. Only contract for the business selling services

Smaller business brokers will offer accounting and legal services that you will need during closing for an additional fee and these services are typically outsourced by the broker. It may be to your advantage to contract for those services directly leaving the broker with only the requirement to focus on the selling process and not generating add on fees.

6. Share your expectations

Before you select a broker you should have at least a general idea of what you want to accomplish by selling your business. You should have a rough valuation number and you should know if you want a cash sale or stock. Share this with the broker and see if he agrees with your plan. While there probably will be differences in valuation, your broker should be in tune with the rest of your objectives. If he’s reluctant or believes that it will be difficult to achieve your goals, find another broker.

7. Keep the whole process confidential

The last thing you want to do is let the word that you are seeking a business broker or that you are in negotiations with a buyer leak out. Once it becomes common knowledge that you are selling, your relationships with your employees, customers, vendors and bankers could be adversely affected. Have an exit plan for after the sale that includes sharing the news with all those listed above.

Using business brokers to help sell a business is usually the smart route to take for any business of substance. You want your organization to have as much “curb appeal” as possible during the process and that means you should be focusing your time on optimizing the business not chasing down buyers.

Business Analyst Training For IT Job Seekers in a Competitive Market

How To Give Your Business Analyst Job Search A Boost

Looking for a new business analyst job or a new business analyst career is not particularly exciting. It’s even less exciting when you are transitioning from a university or a different career into a field like Business Analysis. However, the flip side of this is that when you do land that new business analyst job, you’ll be on your way to an exciting new career, more personal growth and fulfillment and hopefully a lot more income too. Whether you are a seasoned business analyst looking for a new and exciting position, or you have a newly minted business analyst education, you will need a lot of focus and preparation to get yourself the job and salary you want. The key is to give the right impression, shine the spotlight on your business analyst skills and convince the recruiters and that you’re the right person for the job.

Your Cover Letter Is Key To Landing The Next Business Analyst Job

The cover letter you include with your resume is the first thing about you that will be read, noticed and analyzed by potential recruiters, employers and hiring managers.
Some job seekers assume that their job search starts with their resume or the business analyst job interview. Boy, are they so wrong! The process of actively soliciting a business analyst job actually starts with the cover letter and here is why:

Before you are scheduled for an interview or have your resume read by a hiring manager, the cover letter attached to your resume has to be read first. Whether you send in your resume by email, fax or snail mail, you have to include a cover letter with your job solicitation or application.
Now human resource departments receive a good number of resumes for any business analyst job position that they post and because of it, they will review your cover letter and only proceed to read the rest of your resume if your cover letter draws them in. This is exactly the reason why you must prepare a really good cover letter for your next business analyst job search.
The way hiring managers or staffing firms handle business analyst job seekers is similar to the way you search for information on the internet.

Typically when you search for information on the internet, you end your information search as soon as you find a high quality site that provides all the answers you are looking for. You will probably quickly narrow your focus to a few websites out of the several websites listed on the search results page. Now, picture a potential employer sifting through a pile of resumes in their inbox or mail folder. They will quickly also select few resumes out of the pile of resumes available based on the cover letter attached to the resume.

So, do not make the mistake of neglecting your cover letter or focusing all of your attention on your resume, give it the attention it deserves!

Use a Cover Letter to Overcome Hiring Objections

Using a cover letter presents you with an opportunity to set yourself apart from the other candidates who may have similar business analyst training and education. If you have no previous experience, your cover letter is your chance to give the manager the rationale to consider you for the job anyway. In your cover letter you can focus on your most attractive qualities that would otherwise have gotten lost in the many points on your resume. Your cover letter is your chance to maximize that favorable first impression. Now that you know just how important your cover letter is to landing your next business analyst job, you also know that the days of writing one cover letter and reusing it for every business you apply are gone.

Get Started Writing Your Winning Cover Letter

When writing your cover letter closely examine the job description for the business analyst position that you are applying for. Note the business analyst skills that are required for the job and the role and responsibilities. Compare your training and past business analysis experience with the skills that the job requires. You’ll need to note every area that you are a fit for the job in the body of your letter.Next, start your letter by introducing yourself to the company. Your introduction should only include items of interest to the company.

If the job does not call for Joint Application Development skills, do not waste space by mentioning the fact that you have spent the last three years facilitating JAD sessions. Irrelevant facts will only distract the manager or recruiter from the reasons why you are great for the job. Finally in your introduction mention the name of the person who referred you to the company or any connections you have to the company.

Get the Attention of the Hiring Manager

How do you get noticed from a cover letter? The answer is getting the hiring managers attention right from the beginning of your cover letter The introduction of your cover letter should be concentrated on grabbing attention in order to interest the reader into reading the letter through to completion.

In the introduction you can tell of how you became interested in the business analysis industry, any formal experiences you may have in gathering business requirements, your successes, and your passion for being a business analyst. Then get into some of your previous business analyst projects and the results of the projects. Continue on by filling in the details about the business analyst skills you have mastered and the experience that makes you the better choice for the position. Accentuate how those learned skills will help the company to accomplish its objective of requirements gathering.

Finish Off with Great Grammar, Spelling and Style

When writing your cover letter stay close to the straight and narrow path in formatting the letter. Use normal business conventions in the opening paragraph, when addressing the position, and in the closing paragraph of your letter. This will apply to cover letters that you send using email or job boards as well. Be courteous and business-like. Formality will not take away from you if you have something interesting to say. Keep the letter short by being focused and getting straight to the point. The entire letter should not be more than four paragraphs. Avoid starting out with “to whom it may concern.” If possible, you should try to get the name of the person to address your letter to. Do not use slang, cute phrases, emoticons or graphics. Make sure your spelling and grammar are correct. Use a spell-checker and if possible, get a friend or mentor to proof-read the letter before you send it out. Finally, remember that your cover letter can be an excellent tool to help you get the right business analyst job. It is an opportunity to connect with and capture the recruiter’s attention, tell your professional story and stand out from the crowd. It will take hard work to create the right letter, but it will all be worth it in the end.