Keeping the Sale of Your Business Confidential

Keeping the sale of a business confidential is most commonly the number one concern for business owners. Employees may become worried about the security of their employment, and clients may become concerned about quality and service.  

Business brokers specialize in confidentiality. Every business they sell is a confidential transaction. A broker acts on your behalf allowing you to remain anonymous. It’s important to maintain confidentiality.

When should you tell your employees about the sale? 

 Our considerable experience has proven that it is best to tell your employees about the sale after the sale is complete. Of course, if there is an employee whose expertise will be needed after the sale, you should introduce the buyer to this employee shortly before closing.

We have found that once employees find out that the business is for sale, they often just assume that their position will be replaced with the new owner’s personnel. However, this is far from the truth. Current employees are a wealth of knowledge. After the transaction has occurred and the seller is no longer there, employees become a real asset to the business. It usually is best if employees are introduced to the new owner right after closing the sale. This enables the new owner to tell about his background and to take time to assure the employees of their value and that no one is going anywhere– all without distressing anyone.

If you have a business you would like to sell, please contact our office at 250-751-7917 or toll-free 1-877-289-0969.  We will be happy to discuss how we can meet your goals as a seller while maintaining confidentiality.

Secrets for Successful Business Sales

Are you looking to buy a business?  Or are you looking to sell a business?  A recent survey of business broker professionals reported the following response to the question: What was the main obstacle that caused pending sales from closing?

1.  Misunderstandings force many deals to fall apart. The buyer and seller should be in agreement from the beginning and understand the terms of the sale.

2.  Patience. Putting a deal together and closing it takes time. It’s crucial that the buyer and seller advise their lawyers of the timelines and that unless the deal is illegal or unethical, they want it to work.

3.  No surprises. Everything should be revealed from the start. No business is perfect and buyers are more understanding if company weaknesses are disclosed from the get go.

4.  If buyer and seller should both feel like they got a good deal, closing is a mere formality. That’s the sign of a win-win transaction.

5.  The real secret is one word – listen. Everyone involved in the deal must listen. No one can win on every point. By listening, both sides will understand what is really important to the other.

Business Brokerage is all about relationships and connections. If you are interested in exploring business opportunities or are contemplating the sale of your business, contact the Sunbelt Nanaimo office at 1-877-289-0969 or visit us at www.bcbusinessbroker.ca or www.sunbeltnetwork.com/vancouverisland.

Take it to the Bank: Buying and Selling a Business

Some of the first questions potential buyers ask a business brokerage specialist are: “How much is it?” “How much can I make?” And then, “How much money do I need to buy it?” Many sellers expect, or at least want, an all-cash sale. Interestingly, when asked if they paid cash when they purchased the business, most respond with a “no”. Most business sales are financed either by an outside source, by the seller or most often both. ‘Seller Financing’ also known as ‘Vendor Take Back’ has several pluses:

1. There is a better chance the business will sell.

2. Sellers usually receive a much higher price when willing to finance a portion of the sale.

3. Interest realized from a seller-financed note can substantially increase the total paid for the business.

4. Seller financing may provide a higher rate of return than conventional investing.

5. Positive tax consequences are, in some cases, another benefit of seller financing.

6. Financing the seller tells the buyer—and the bank—that a seller has sufficient confidence in the business.

7. Without vendor take back, many banks will not agree to finance, or will fund only a fraction of what they would otherwise.

Other than needing the cash to purchase another business, the biggest obstacle to seller financing is the seller’s concern that the new owner can pay off the loan from the profits of the business. Some sellers check the buyer’s work history, obtain personal references and a credit report. Creative financing can also be helpful. Example: a toy store does 40 percent of its business in October, November and December. Make financing payments higher in those months and lower in the summer. Seller financing or vendor take back has been the mainstay for many successful business sales.

How the sale is structured is important to the best deal for the buyer and seller. A professional business broker can be the key player in accomplishing this goal. Business brokers can’t provide legal advice, but their deal-making knowledge and experience can greatly assist in ensuring a win-win transaction.

If you are interested in exploring business opportunities or are contemplating the sale of your business, feel free to contact our office.