1. What types or sizes of businesses does Raincatcher work with? Why?

While we don't focus on any specific industry or region, we do target businesses with strong cash flow and other characteristics buyers are seeking. We've built a practice around finding the best buyers for the businesses we represent, regardless of industry, location or size. The most common valuation of businesses we bring to the market is between $1MM - $10MM, though we have a specialized Mergers & Acquisition (M&A) Team who can handle deals over $10MM and as high as $80MM.

That said, it’s important to us to have products and services that can help a business owner of any shape or size grow a healthy enterprise that’s primed to take to market. We have sold businesses that are valued as low as $250,000. We also have a Sell by Owner Program for businesses that net less than $75,000 a year.

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2. I'm proud of the brand I've built for my business. Can you tell me more about Raincatcher as a brand?

We are incredibly proud of our brand too! What sets us apart from other brokerages is that we are a team united behind a mission to have a great impact on small business owners. We believe small business is the heartbeat of America, and every business owner deserves their chance at the American Dream. At Raincatcher, we rapidly transform small to medium-sized businesses into companies that are built to sell and, in turn, help buyers find remarkable enterprises in which to create their legacy. We want business owners to capture the lifetime value of their entrepreneurial efforts. It’s not just about a quick sale.

Many of us have been entrepreneurs, or still are. We're a passionate team that constantly seeks to improve and leave a greater impact on our clients. We also see a need out there to provide M&A-quality services to businesses that are smaller than what an investment bank would typically handle.

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3. I've heard from others who have had issues with business brokers. What makes Raincatcher unique?

Simply put: our team. Our team cares about you and your business. Our approach is different from the average business brokerage. While many business brokers will sign as many clients as they can, knowing they only need a small number of sales to be successful, we are very selective about the business owners we partner with and list for sale. Several members of our team will dedicate extensive hours to each deal, so we need to be very confident that the deal will successfully close.

We pride ourselves on servicing our clients with empathy and compassion, prioritizing their success as we partner alongside them on their journeys. Many on our team have been business owners so we understand what it takes to build a successful business. We care about your business, and we will work hard to help you understand its value throughout your selling journey.

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4. Can you tell me more about Raincatcher’s mission to redefine the business brokerage industry?

We are passionate about disrupting the business brokerage industry. In the past, we considered calling ourselves an M&A team, but we decided we didn't want to run from the business broker label; we want to be change agents and raise the bar in an industry that is often transactional and shortsighted, focused on closing the deal.

We have services to help people sell their companies, and we also have services that help you build value for your company even if you are not ready to sell at this time. Our business growth coaches can help you strengthen your business while helping you get out of the day-to-day operations which is a win-win for all. You will have a healthier company and more free time to pursue whatever endeavors you wish. Like we said, our mission is to support business owners in every way possible.

As for the businesses who are ready to go to market, we will only take on clients that the entire team has reviewed and decided it's a great fit for our services, so we can provide our level of service to them and be confident that that deal will close. We invest a significant amount of time, energy, and resources into each one of our clients. That’s why it’s important to ascertain that they are the right fit for us, and there's a high likelihood of success with bringing the company to market. After all, we only get paid when the deal closes, so we need to know that it will close.

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5. Who should I work with to sell my business? How much will they cost?

Having the right team is a necessity to successfully sell your business. We recommend that you work with a broker, a qualified attorney, a Certified Personal Accountant (CPA), and a wealth advisor.

First and foremost, we highly recommend working with a business broker. Sure, we're biased, but that is because we know what is involved in order to have a successful closing. We strive to always bring value to the table, and not just become another expense in the course of selling your business. We create an impressive marketing package and work tirelessly to generate as much interest as possible so that there are several buyers at the table. Deal tension allows us to drive competition to win your business, so you can gain maximum value from the sale. With any brokers, we receive a success fee. There’s a percentage commission, oftentimes 10%.

We highly encourage our clients to hire an M&A attorney. While most business owners already have an attorney, a specialized M&A attorney has an extensive practice in this space. They're much more efficient and can complete the work needed for your deal in fewer hours. They also know the major pitfalls to look for and can help ensure that you get the best possible outcome.

Beyond a broker and an M&A attorney, the third person we highly recommend is having a CPA if you don't already. They will help you review the potential tax implications of the sale of your business and especially capital gains taxes. An expert who has mastery over your state and local taxes will also have a handle on potential issues that may come down the road, and how that can impact you and your business.

Lastly, we highly encourage you to work with a wealth advisor. This key component of your team will help etch a post-sale plan for you.

As for how to find these professionals, we can refer you to talented, dedicated M&A attorneys, CPAs, and wealth advisors to ensure the best possible outcome for you. You can also speak to other business owners in your area and ask them for recommendations.

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6. Why would I pay a business broker 10% of the purchase price?

Because you get what you pay for. If you want to have the best chance in finding the best buyer, getting the maximum price and best deal terms so you do not have any regrets you need a business broker. You only have so many chances to find the right buyer for your business and there is a lot involved in selling your business.

We encourage you to shift your mindset and think of the fee more as, “How can I find the right broker to generate more value for my business than they'll cost?”

That’s an important shift. There are some brokers that may sell your business and charge you less, but their approach likely will not enable you to generate additional value. You get what you pay for and it takes extra time and thought to find the right buyer at the best price.

At Raincatcher, we will generate as much interest as possible with the buyers. We seek out strategic buyers and do extensive research to ensure that we have thought of all possible angles, and have found as many potential buyers as possible, so we can get them to compete against each other. This approach ultimately will raise the price of your business, and more than cover our cost to you.

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7. What role do lawyers play during the sale process?

When it comes to reviewing purchase agreements, many items need to be addressed in detail about your business so that you are not vulnerable to any unnecessary post-sale liabilities. Lawyers can help you detect any blind spots and bolster you so that you will remain in a legally safe place not just during the sale, but in the future.

It is very important to work with an attorney who focuses on mergers and acquisitions vs. a litigation attorney. Finding the right attorney is as important as finding the right broker. We have several options and would be happy to provide you with a referral if needed.

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8. How can I sell my business and run the day-to-day operations without the business suffering?

This is a great question and one of the 9 deal-breakers to avoid. There are two different avenues by which we approach this question. Firstly, if you want to sell your company, you have to figure out how to get out of the weeds of its day-to-day operations. This is called owner dependency. Your company has to be able to thrive without you if you plan to sell. For those of you who may not be ready to sell today and avoid deal breakers. Our Value Building services can help you learn how to take a step back while increasing your company’s profitability and overall health.

For those who are ready to sell, a broker will help you handle as much of the sale of the business as possible so you can focus on running it. Our process ensures that we are ready to handle each qualified buyer’s questions and we will take care of the communication to ensure they are given the answers they seek.

Many business owners think that they can sell their company on their own. The problem with this approach is that the business may suffer while they spend time bringing the company to market and vetting buyers and their questions. As a result, profits may decrease and drive down the value of your business.

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9. I've seen several different methods for determining a business valuation. How can I know what buyers are likely to pay for my business?

We have a saying in our business, “A business is worth what a buyer is willing to pay.” We highly encourage you to reach out to our team to receive a Free Confidential Business Valuation. The standard approach to a valuation is looking at your seller's discretionary earnings, which is your net income plus add-backs. Add-backs are the expenses that a new business owner would not need to continue running this business at that level of performance.

Once you determine those discretionary earnings, you apply a multiple based on what is standard for the industry. We use several different databases to have as much data as possible to determine what that multiple should be. But in general, for smaller businesses, it may be closer to two to three times earnings. For larger businesses, it will be higher. But again, it depends on the industry and the specifics of your business to know what buyers are likely to pay.

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10. How should I determine the listing price once I understand the valuation?

First, avoid fixating on a round number that is significantly higher than an expert’s valuation – you’ll likely find that there isn’t enough interest. If you end up with only one interested buyer, they will likely drive down the price as much as they can.

Our method is to list the business at a price that will attract multiple buyers. This enables us to generate extensive interest, and even if some buyers try to talk down the price, we can maintain and even surpass our valuation through competition and deal tension.

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