1. Why is Confidentiality so important in the business buying process?
If employees, customers, suppliers or lenders hear about a business being for sale it could cause issues for the seller even if the buyer doesn’t buy the business. The buyer can move on to the next business but the seller has to deal with the fallout. Employees and business buyers have a common interest. Buyers usually want the employees to stay and employees want the buyers to keep them as employees.
2. Why Buy an Existing Business?
3. What does “Cash Flow” mean?
4. What Kind of Financing is Available to Purchase a Business?
The primary lender for this market are banks who offer Small Business Administration (SBA) backed loans. For qualified buyers and businesses a rule of thumb is the buyer needs approximately 20% down payment from their own funds. Speak to your broker for more details and which banks are active with SBA loans for business acquisitions.
5. How long does it take to buy a business?
1. How long will it take to sell my business?
As you might imagine there are many variables. It typically takes 6-9 months to sell a business, in some cases up to a year. In general, in today’s market once an offer is made on a business it takes about 75-90 days to get SBA financing in place and close on the purchase.
2. What should I do in preparation to sell my business?
- In short, lower the risk to a buyer while increasing the value of your business. Click here to learn more about the specifics of how to prepare to sell a business
- The above link has incorrect information…two of the nine “strategies” are left out of the content (I’m only talking about the numbered items in this link, not the entire article). Please replace with this content from the blog https://www.sunbelttexas.com/sell-a-business/a-prepared-business-owners-9-step-strategy-to-sell-a-business/ or we can link here, but it takes you to SBN. It’s a downloadable resource https://www.sunbeltnetwork.com/houston-west-tx/whitepapers/prepare-your-business-for-sale/
3. How is the Asking Price determined?
The process of pricing a business is complex. There are 9 key elements for pricing a business correctly and about 12-15 more issues to be considered when determining what a buyer might be willing to pay for the business.
4. How do we maintain confidentiality?
The protection of confidential information is a very important element of selling a business in Texas. Confidentiality Agreements (CA) are also often called Non-Disclosure Agreements (NDA) and are signed by all potential buyers before releasing information specific to your business. Failure to honor the terms of the confidentiality agreement could subject potential buyers to legal action and possible damages.