FREQUENTLY ASKED QUESTIONS for SELLERS
Q.What about confidentiality?
A. Unlike the sale of real estate or franchises, the sale of an ongoing business is very confidential for both the seller and the buyer. All inquiries are held in strict confidence. Meetings are confidential, and Sunbelt Business Brokers are available after hours and on weekends. The need for confidentiality is a major reason to use a Sunbelt Business Broker since it is very difficult for a business owner to screen possible buyers without disclosing their own identity or the identity of the business.

Q.What is the value of my business?
A. Determining the value of the business is the first step in preparing the marketing plan for the business. Most buyers of small businesses are buying an income stream to provide a living for themselves and their family. Determining the value for the business based on the assets and owners discretionary income is vital to initiating a successful transaction. The seller needs to be realistic in setting the sales price and the down payment amount. A Sunbelt Business Broker can assist you in determining an appropriate fair market price or coordinating a business valuation.

Q.Why should I use a Sunbelt Business Broker?
A. A Sunbelt Business Broker receives extensive training on selling businesses and has the resources from over 150 offices in the United States and several international offices. The number of brokers and transactions that are successfully completed each year give us a wide range of experiences and resources to handle every size of business and virtually every type of business. The Sunbelt Network has an extensive database of local, regional, national, and international buyers. Sunbelt Business Brokers interview potential buyers on a daily basis to match appropriate buyers with the right business. Sunbelt can focus on marketing your business so that the business owner can focus on running the business during the period when the business needs to be strongest. The Sunbelt Business Broker will assist in finding the right price, marketing the business, interviewing potential buyers, insuring appropriate non-disclosure documents are completed, setting up and facilitating buyer/seller meetings, educating the buyer on the buying process, initiating an offer from the buyer, negotiating the terms and conditions, guiding both parties through the due diligence process, negotiating transition and training plans, removing buyer contingencies, coordinating inventory schedules, and getting both parties to the closing table with the appropriate documentation to complete the transaction. The Sunbelt Business Broker is there to guide both parties through the process and to insure a smooth transition of the business.

Q.How do you find a buyer for my business?
A. Sunbelt has been in business since 1979 and is well established in the industry. Many buyers seek us out because of our excellent reputation and track record. We also develop specific marketing programs designed for each business. Any advertising or marketing is conducted with a blind ad that will protect the confidentiality of the business. The type of business and the types of buyers we are targeting will drive the actual marketing mix. We currently use local newspapers, yellow pages, trade publications, The Wall Street Journal, and many internet sites. We also have relationships with organizations that refer buyers to us to include the SBAs SCORES group. In many situations buyers find us, many buyers do not know what type of business they are interested in buying and we can present your business to these buyers. We interview new buyers on a daily basis to insure an appropriate match for the businesses we represent.

Q.How long will it take to sell my business?
A. Unlike real estate where there are several choices of the same type of house in the same geographical area there is only one business like yours. It normally takes several months to find the right match and on average a small business will sell in 184 days. Many factors drive the process for finding the right buyer. Sales price, location, type of business, owners available compensation, down payment, financing, terms and conditions, and availability of buyers. The main reasons for not selling a business are; unrealistic asking price, low owners compensation and down payment. This is a down payment driven transaction. The more reasonable the down payment the larger the number of available buyers.

Q. Will I need to finance a portion of the transaction?
A. The majority of small to medium business transaction have some form of owner financing which is paid from the revenues of the business. Banks are reluctant to finance business purchases for several reasons. A major reason is that all small businesses attempt to minimize profits shown on financial statements to reduce tax liability. Also, a bank cannot come in and manage a business if foreclosure becomes necessary. Therefore, over ninety percent of business purchases are financed by the owner themselves, which demonstrates their confidence in the ongoing success of the business.

Q.How are negotiations handled?
A. All negotiations are handled at arms length through your Sunbelt Business Broker. The primary reason is to maximize the price you can get for your business, but just as importantly is to facilitate a smooth transition of the business under new ownership. All negotiations can be stressful and after you have closed the transaction you and the new owner will have a good working relationship to begin the transition period. Let your broker buffer any stressful negotiations. Your Sunbelt Broker has been trained and is experienced in negotiating successful terms and conditions for the transfer of businesses.

Q.What is the closing process?
A. Your Sunbelt Business Broker will recommend using a professional closing officer. This improves the efficiency of getting the business transaction completed. While you will sell your business only one time, the closing organization closes hundreds. The advantage of the closing officer is that they represent the transaction and the best interest of both parties. It is very difficult, time consuming and expensive if either the buyer or seller have their attorneys prepare the documents. Let your Sunbelt Business Broker coordinate the process of getting lien searches, property tax settlements, bills of sale, escrow and closing instructions, non-compete agreements, offset agreements, security agreements, abandonment of assumed names, documentation of incorporation, settlement statements and the wide variety of documents which are specific to each different transaction. You should be able to prepare your business for the transfer while the broker is coordinating the preparation of the documents for the transaction.

FREQUENTLY ASKED QUESTIONS for BUYERS
Q.What about confidentiality?
A. Unlike the sale of real estate or franchises, the sale of an ongoing business is very confidential for both the seller and the buyer. All inquiries are held in strict confidence. Meetings are confidential, and Sunbelt Business Brokers are available after hours and on weekends. The need for confidentiality is a major reason to use a Sunbelt Business Broker since it is very difficult for a business owner to screen possible buyers without disclosing their own identity or the identity of the business.

Q.How much downpayment will I need?
A.The downpayment amount varies depending on the type of business, the sellers situation and the buyers downpayment ability. Selling businesses is truly a downpayment driven industry. Typically, the more downpayment you can offer a seller the lower the total sale price of the business. Your Sunbelt Business Broker will discuss with you the level of cash investment you are comfortable committing to the right business. Your broker also is experienced enough to know that you cannot totally commit all of your available cash. You will need some for operating capital, deposits, and other requirements. We like to insure you have extra set aside for emergencies and unforeseen situations to give you a higher comfort level. If you are getting outside financing you can expect a 15 to 30 percent cash investment on your part. If the business is being owner financed it varies widely depending on the value of the hard assets within the business. (Hard assets would include: Furniture, Fixtures and Equipment (FF&E) as well as any inventory). A good rule of thumb is to expect to pay 1 to 1.5 times the annual owner's discretionary income (owner's cash flow) as a downpayment. Knowing your comfort level of cash investment is the most important information that your business broker needs to know to match you with the right business. This allows the broker to focus on businesses that are the right size.
Q.Why should I buy an existing business?
A. There are several reasons to buy an existing business: Actual results rather than pro-forma. Immediate cash flow. Trained employees in place. Established suppliers and credit. Established customers and referral business. Existing licenses and permits. Training by the seller. The availablity of owner financing.

Q. Should I consider a franchise?
A. Some of the advantages of buying a franchise: Known name means instant recognition Proven product or service. Ongoing support means you are in business for yourself but not by yourself. Better than 90% of new franchises are successful. Operating system in place - lessons have already been learned at someone elses expense. Opportunity to add additional units within the franchise system. More flexibility in location. Cost to get into a franchise is less than an existing business. Training by the franchisor. The availablity of financing programs established by the franchisor.

Q. What are some of the key things to consider when buying a business?
A. The main thing to consider is, Do You Like The Business?" Additional considerations are: location, downpayment and owner's discretionary income. What training will the seller provide? Can I improve on the business? What can I do that the current owner is not doing or has ceased doing because of "burn out" or lack of initiative and enthusiasm?

Q.What is the process for buying a business? A. The process of buying an existing business is as follows:1. Evaluate the basic information on alternative businesses that sound interesting to you.2. Visit the business (if possible) without announcing yourself as a buyer (incognito) to get a "feel" for the business.3. Coordinate with your broker to meet with the Seller. Ask the seller general questions to probing questions on anything and everything, except actual price or terms.4. Allow your Sunbelt Business Broker to show you how an offer would be made that will protect you and that you can use for your preliminary evaluation.5. Do your preliminary evaluations, based on the information provided by the seller to Sunbelt Business Brokers and to you. 6. Make an offer, assuming that all the information provided is correct, but include contingencies which will allow you to confirm such information. Sunbelt Business Brokers will show you how to write an offer to protect you as the buyer.7. Once a sales price is agreed upon, make a closer investigation of the business, confirming to your satisfaction the validity of your offer.8. Have documents prepared for closing. You may agree with the seller to share the cost of the closing attorney. This lawyer will not argue the position for either party, but drafts all necessary legal documents to comply with the agreement a buyer and seller have reached.9. Close the purchase, and begin your first day as the owner of your own business. The seller will assist in an orderly transition because most of their money is coming from your success.Congratulations - You are a part of the American Dream - You and your family own your own business!!!

Q.Why should I use a broker to buy a business?
A. First, you will save time and money. A broker's services are paid by the seller and the broker knows what businesses are available. The broker knows which businesses are in your price range. The broker knows what the seller's needs are and what your requirements are. Therefore, a broker can structure a transaction that is good for all parties involved. The broker works professionally and confidentially and has experience in overcoming every imaginable obstacle. The broker can show you how to make an offer that protects you. He can coordinate the process and handle the negotiations at "arms length". this is important because after the closing you still need to work with the seller during the transition period. You certainly would not want any friction remaining from the negotiations. Let the broker absorb any frictions and conflicts so that you and the seller can work harmoniously during the transition period. The broker knows the process to include getting all the documents prepared for closing to include lien searches, property tax searches and filing of UCCs. The broker can also assist you in getting organized to assume ownership.

Q. Can a broker help me if I don't know what kind of business I want to buy?
A. Yes, a broker is trained to match the needs of the buyer with the businesses available on the market. There are 4 main components to help the broker find the right business for you. The most important factor is to find a business you like. Your broker will assist by learning about your areas of interest, past work experience, hobbies and background. The broker will present a number of different types of businesses and will be able to identify components of these businesses which will help focus on the business best suited to your liking. Finding a business you like is the most important step in the process. If you don't like the business then move on until you find one that you like. The other factors include geographical location, amount of cash you are comfortable committing to an investment and the amount of compensation you need from the business. Our goal is to find a business you like, in the area you prefer, with the downpayment you are comfortable committing and with the level of compensation required by you and your family. It also helps if you are truly serious about buying a business. If you have any doubts if you really want to buy a business and be your own boss then you should wait until you have resolved that question.
Q. How are negotiations handled?
A. All negotiations are handled at arms length through your Sunbelt Business Broker. The primary reason is to facilitate a smooth transition of the business under new ownership. All negotiations can be stressful and after you have closed the transaction you and the new owner will have a good working relationship to begin the transition period. Let your broker buffer any stressful negotiations. Your Sunbelt Broker has been trained and is experienced in negotiating successful terms and conditions for the transfer of businesses.
Q.What is the closing process?
A. Your Sunbelt Business Broker will recommend using a professional closing officer. This improves the efficiency of getting the business transaction completed. While you will sell your business only one time, the closing organization closes hundreds. The advantage of the closing officer is that they represent the transaction and the best interest of both parties. It is very difficult, time consuming and expensive if either the buyer or seller have their attorneys prepare the documents. Let your Sunbelt Business Broker coordinate the process of getting lien searches, property tax settlements, bills of sale, escrow and closing instructions, non-compete agreements, offset agreements, security agreements, abandonment of assumed names, documentation of incorporation, settlement statements and the wide variety of documents which are specific to each different transaction. You should be able to prepare your business for the transfer while the broker is coordinating the preparation of the documents for the transaction.