Q: How can I prevent my employees, my customers, and my vendors from knowing I’m considering selling?
A: Confidentiality is, perhaps, the most critical issue for a business broker. Virtually every business seller doesn’t want his employees, customers or vendors to know that his business is for sale. Transworld is very cognizant of this fact and in every step that we take we emphasize confidentiality.
Q: How long will it take to sell my company?
A: There is a great deal of variation in the time frame, but, if we had to pick an average time, eight to nine months may be close. While this may sound like a long time, all of the facets of selling a company, including listing the business, finding buyers, interviewing buyers, writing contracts, due diligence and finally the closing process are all time consuming.
Q: I have a long term lease with my landlord? Am I going to be able to transfer that?
A: Transfer of the lease is crucial to the success of the transaction. It will be almost impossible to consummate a deal unless the lease can be transferred. Leases will have a clause that defines the landlord’s rights regarding transfer. Frequently the seller will be required to remain as a guarantor of the lease and often there may be a charge by the landlord for the transfer.
Q: I’ve taken a good bit of cash out of my company and not recorded it, in valuing my business do I get credit for that?
A: This is a difficult one, it is very, very difficult to prove to a prospective buyer that you have earned income that has not been reported. The only suggestion here is if you are not reporting income stop right now and maintain accurate records including all income. There are some businesses that do sell in spite of this fact.
Q: What’s selling my business going to cost me?
A: Transworld has no upfront fees. We will analyze your company and go through the entire process with no cost to you. Your only obligation is when we find a buyer for your business. We traditionally receive our payment at closing.
Q: How do I determine what my business is worth?
A: The analysis of your business’ value or worth is another crucial function of the business intermediary. “The Market” makes the final determination of value. At Transworld, we have tremendous experience in valuing almost any business. Our estimates of value are not “certified business valuations” although we can provide this service for a fee. However, our experience and volume of comparable businesses allows us to give the business owner a very good estimate of value.
Q: I own the property where my company is worth, do I have to sell that as well?
A: This can be handled in many ways. Often the property is sold as a separate listing. However, the company owner will frequently retain the property, obtain a long term lease and earn an ongoing cash flow stream. Also, the property can aid a buyer’s ability to finance the business.
Q: I keep a lot of cash, inventory, and receivables in my business, what generally happens to those items?
A: Most small businesses are sold with the seller retaining cash and accounts receivable. A working level of inventory is generally granted to the new owner.
Q: I owe a lot of money for various things that my company acquired over the years. What happens to that debt?
A: Most often, the company is sold free of all debt. This means that the former owner will be responsible for accounts payable as well as all long term debt.
Q: What records are you going to need from me to help sell my business?
A: The lack of good business records is the single most common reason for a business sales deal to fall apart. We can’t emphasize enough the importance of maintaining good books and records before selling. This includes accurate financial statements, cash register receipts or whatever records are necessary to prove income and expenses. Of course, current tax returns are a must. However, we are used to selling businesses that may have less than adequate records.
Q: What are the most important things that I can do to get my business ready to sell?
A: We have a list of the ten most important things that you can do to improve your business before selling, and you can review them on our website.
Q: How far in advance should I start planning my exit strategy?
A: Today, no later. Even if you think you are not ready to sell your company right now you can’t start preparing too early. One of our experienced agents will be more than happy to meet with you to help you to start thinking about your exit strategy.
Q: Do I need an attorney and an accountant to sell a company?
A: Buying or selling a company can be a complicated venture. While some companies are sold without the help of accountants and attorneys, we strongly recommend that both the buyer and seller engage professionals.