BUYER FAQs
Why is confidentiality so important in the business buying process?
Confidentiality is critical when purchasing a business. If employees, customers, suppliers, or lenders become aware that a business is for sale prematurely, it can create uncertainty and disrupt operations, even if a transaction is never completed. Read about our stance on confidentiality here.
While a buyer can move on to other opportunities, the seller must continue operating the business and managing any resulting impact. Both buyers and employees typically share a common interest: buyers want continuity and stability, and employees want security in their roles. Maintaining confidentiality protects all parties and preserves business value.
Why buy an existing business instead of starting one from scratch?
One of the primary advantages of purchasing an existing business is that revenue, customers, and operations are already in place from day one.
In addition to an established customer base, buyers acquire proven systems, trained employees, supplier relationships, brand recognition, and operational infrastructure. Furthermore, businesses with demonstrated and verifiable cash flow are generally more attractive to lenders and easier to finance than startups without a track record of performance.
What does “cash flow” mean when buying a business?
In business acquisitions, “cash flow” is often defined differently than in traditional accounting.
For acquisition purposes, cash flow is typically calculated as: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), plus the current owner’s compensation and discretionary expenses.
For example, if EBITDA is $50,000 and the owner’s total compensation and discretionary benefits equal $150,000, the adjusted cash flow would be $200,000. This figure represents the total financial benefit available to a new owner before financing costs and taxes.
What financing options are available to purchase a business?
Many acquisitions in this market are financed through banks offering loans backed by the Small Business Administration (SBA).
As a general guideline, qualified buyers should expect to contribute approximately 20 percent of the purchase price as a down payment from personal funds. Financing terms vary depending on the buyer’s qualifications and the strength of the business. Your broker can provide guidance on lenders currently active in SBA-backed acquisition financing.
How long does it take to buy a business?
The timeline for purchasing a business varies based on the complexity of the transaction, due diligence requirements, and financing arrangements.
In today’s market, once a business is listed, buyers can generally expect the process to take approximately 6 months to one year to secure financing, complete due diligence, and close the transaction.
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SELLER FAQs
Is my information and our conversation confidential?
Yes. All information shared, including financial records, operational details, and discussions, is treated with strict confidentiality.
Protecting your privacy and preserving the stability of your business during the sale process is a fundamental part of our commitment and professional responsibility. Read more about our process here.
How do I prepare my business for sale?
Preparation is essential to maximizing value and ensuring a smooth transaction.
In summary, sellers should focus on:
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Documented and transferable processes
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Clean, accurate financial reporting
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Reduced owner dependency
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A stable management structure
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Diversified customer concentration
Proper preparation strengthens buyer confidence and can significantly improve valuation. See more of our proven process here.
When is the best time to sell my business?
The optimal time to sell is when three factors align:
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Favorable market conditions
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Strong financial performance
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Personal readiness for transition
Economic growth, industry demand, and a healthy business with consistent profitability typically create the strongest selling environment. Equally important is ensuring that your personal and financial goals align with the decision to sell. Read more about selling here.
What type of business valuation is right for me?
The appropriate valuation approach depends on the size, structure, and objectives of your business. You can read about the different options here.
Valuation methods may include broker opinions of value, formal valuation reports, or more comprehensive analyses, depending on your needs. We provide several valuation options tailored to different circumstances and stages of the selling process.
How can I determine the value of my business?
A professional business broker here at Sunbelt evaluates your company through a structured valuation process that includes:
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Reviewing historical financial statements
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Analyzing adjusted cash flow
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Assessing market conditions
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Comparing industry benchmarks and comparable sales
This comprehensive analysis provides a realistic estimate of market value and positions your business competitively. Read about Business Valuations here.
What is your fee structure?
Our standard fee structure follows a graduated model:
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10 percent of the sale price up to $1,000,000
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8 percent of the second $1,000,000
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6 percent of the third $1,000,000
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The greater of the remaining percentage calculation or $50,000 minimum fee
This structure aligns our incentives with achieving the highest possible sale price for our clients.
Am I ready to sell?
Readiness to sell involves both financial and emotional preparedness.
Sellers should evaluate whether their personal goals, retirement plans, lifestyle changes, or new ventures align with exiting the business. Selling a company is a significant transition, and clarity around your next chapter is essential to making a confident decision. Read more in this blog.
What is the typical timeframe for selling a business?
The timeframe for selling a business varies depending on complexity, market demand, industry conditions, and buyer availability.
On average, most businesses sell within six to twelve months. Proper preparation and realistic pricing can significantly influence the speed and success of the transaction. Read more about this here.