FREQUENTLY ASKED QUESTIONS WHEN SELLING YOUR BUSINESS
WHAT IS THE COST OF SELLING A BUSINESS?
The primary selling costs you need to consider when you sell your business are paying for your broker, lawyer, and accountant.
WHAT IS THE TIMEFRAME FOR SELLING MY BUSINESS?
Generally, 3-6 months for smaller company and 6-12 months for larger companies. Time fluctuates based on the company, market conditions, and listing price.
WILL THE BUYER BE PURCHASING THE ASSETS OF MY COMPANY, OR THE WHOLE COMPANY?
Generally, when people sell their businesses they sell the assets of the business via an asset purchase agreement. That means the buyer acquires the brand, website, the customer list, the staff contracts, etc. not the actual company itself. Essentially, everything the company owns but not the shares in the company. A share purchase agreement is used when the buyer acquires the LLC or corporation as well.
WHAT CAN I DO TO HELP WITH THE PROCESS OF SELLING MY COMPANY?
Your primary objective when selling your company is to keep operating the business as usual while you let us, the business broker, execute the selling process. The biggest risk is that you take your eye off the ball, leading to a decline in earnings. This would lead to a discount on the valuation of the company.
Your primary role will be transferring information when necessary and eventually meeting with prospective buyers.
HOW WILL THE BUYER FINANCE THE DEAL TO BUY MY BUSINESS?
The buyer is going to finance the deal either through cash, seller financing, bank financing, and either private or commercial debt. The most common form of financing is seller financing or an earn-out.
WHY IS SELLER FINANCING SO IMPORTANT IN THE SALE OF MY BUSINESS?
More than 80% of deals have some level of seller financing. Seller financing shows the buyer that you have confidence that your business will continue to grow.
DOES THE BROKER NEED TO BE LOCATED IN MY TOWN/CITY/STATE/COUNTY TO SELL MY COMPANY?
Raincatcher is an international company. We sell companies across all borders. When you work with us, you join a team of experienced national experts who will guide you through all phases of the business selling process. You won’t work with a franchise location with limited national reach, a single broker with little experience, or be passed off from one specialist to another. We use a team approach to bring the most value and experience to you.
Plus, our marketing process allows us to get the highest number of buyers to the table to maximize the price of your business at exit.
IS NOW A GOOD TIME TO SELL?
According to a recent survey from The Market Pulse, conducted by the International Business Brokers Association, studies have confirmed that NOW is a remarkable time to sell a business. Survey results found that roughly 21-percent of advisors said 2018 was the best year yet for business owners to sell their businesses and these trends are continuing into 2019. Another 37-percent say it’s the best time in five years, and 17-percent say it’s the best in the last 10 years.
“The current environment means there may never be a better time to sell your business” said Craig Everett, PhD, Director of the Pepperdine Private Capital Markets Project. “Capital is readily available from lenders, private equity firms, and family offices, and existing companies have record cash sitting on the sidelines. Interest rates are still relatively low, the economy is going strong, and business confidence remains high. Well-run companies are doing well in the M&A market right now.”