The first step is to determine the value of your business, but before that, we will answer all of your questions about the process, our experience, confidentiality, etc. To start things off, we do not charge any upfront fees. After we have answered your questions and learned about your business, the next step is to determine the market value of the business. We explain the full process below and it is outlined in the infographic below.
a) We prepare a Free Market Value Analysis prior to listing your business to determine market value. We review your financial statements and the Market Value Analysis with you to determine the price your business will be offered at.
b) With the asking price agreed upon we send you the Representation Agreement for our firm to represent you in the sale of your business.
c) The next step in taking your business to market is preparing the CIM (Confidential Information Memorandum) which is the prospectus or marketing brochure for your company. This is only sent to prospective buyers after they have signed an NDA. We also prepare and post the advertisements for your company (these do not have any confidential information and are very general) and send out email blasts to our buyer email lists.
As inquiries are received we send prospective buyers our NDA and Buyer Profile and then proceed to qualify them. The first buyer meeting is with us and following that meeting we schedule the next meeting with your after-hours when no employees are present.
We prepare the offer with the Buyer and review it with you. If a Counter Offer is required we prepare the Counter Offer and review it with the buyer. We facilitate the negotiations between you and the buyer and recommend the transaction (deal) structure.
After the offer has been accepted Due Diligence commences. This is a critical time in the transaction as this is when the buyer verifies the earnings and revenue claimed in the business as well as evaluates the overall business. We facilitate Due Diligence and guide both buyer and seller through the process. Frequently buyers use a CPA to do the financial review. Our firm cannot do any Due Diligence analysis or review for either party as we are not CPAs, financial or legal advisors, but we do facilitate the process guiding both parties through it.
Our firm has close relationships with several SBA PLP (Preferred Lending Progam) banks. We work with the buyer to submit his SBA application, the seller in submitting the necessary financial statements, and directly with the bank throughout the pre-approval, underwriting, final approval, and closing process. We normally start the SBA pre-approval process during Due Diligence as this is the longest lead time step in the closing process.
When Due Diligence is completed and the contingency is removed Escrow is opened. The Escrow Officer prepares the escrow documents and sends them to the buyer and seller. Escrow works directly with the Bank Closer to prepare closing documents and for the closing.
After the close of Escrow, the initial training period starts. This is typically 4 to 6 weeks which is included in the Purchase Agreement at no cost to the buyer. If additional training or consulting is required a paid consulting agreement is negotiated.
Our commitment and first priority is to sell your business for the maximum value. We have a long track record of successful business sales transactions across a wide range of industries throughout Southern California. We are Professional Business Brokers representing small business owners and M&A clients in Orange County, the Inland Empire, and LA County. Our past client testimonials show the results we deliver and our commitment to your success.
The CIM is the prospectus and marketing brochure for your business. This is sent to prospective buyers after they have signed an NDA and provided a Buyer Profile with their financial information. The CIM is critical in selling your business. It tells the story of your business, what your business does, and includes summarized financial statements, equipment list, staff list (without names), and lease information. The CIM has everything a buyer needs to determine if this is the right business for them.
To sell a business for its maximum value you need a market value analysis (valuation) that both defends the asking price and explains how the value was determined. Buyers don’t know how to value a business and always ask “how was the value determined”. Our Market Value Analysis is prepared using software we license from one of the largest Business Valuation companies in the US. We use the same methodologies and databases the business appraisers use.
Of course, to sell a business buyers have to find it. We advertise on the major business for sale websites and we feature all of our businesses for sale so they are at the top of the listings and pages.
We also send email blasts to our buyer database of over 2,400 buyers and the BizBuySell buyer database for buyers interested in businesses similar to yours.
Of course, reaching thousands of buyers in only half the challenge, we need them to inquire about your business. We create engaging ads for the businesses we advertise selling the strengths and benefits of owning the business. The ads we create are general in nature and do not name the business or identify the location of the business but describe it in a general nature to maintain confidentiality.
Over 90% of our transactions use SBA financing. With SBA financing qualified buyers can buy a business with as little as 10% down and excellent terms at Prime+2.75% over 10 years. The great thing about SBA financing for sellers is you get cash at closing! We work with serval SBA PLP (Preferred Lender Program) banks and we get all of our businesses pre-qualified for SBA financing upfront. We include the Pre Qualification letter from the lender in our CIM giving buyer confidence in both the business and that financing is available.
We use our CRM to stay in touch with buyers and follow up. We also screen the buyer before setting up a meeting with you. Buyers that are clearly not qualified we filter out. When a buyer is “thinking” about making an offer we explain the process, go through the purchase agreement with them, and help them get over the initial hurdles and get comfortable with the process and purchase. We also help them with SBA financing and provide referrals to CPAs and other professionals if they need help.