Please fill out our Confidentiality Form and the Buyer Qualification Form. They are interactive. You can fill the forms out on the computer. Print the form and scan it and email it back or fax it back. After we get that back we will give you all of the information that you require to make a good decision.

As you are probably aware, Banks will not finance most businesses today. The Banking climate is the worst that it has been in decades. We do hope that will change in the near future. However if the buyer has a credit score of 700+ with 20 to 30% as a down payment, we have relationships with banks that will finance this business.

Since it is an all cash deal we have been hired to verify a prospects ability to do a deal. There is no obligation on your part to buy. The only thing that we work to achieve is to verify that you are a capable buyer. The final decision to buy is obviously yours.

I want to point out that your information is kept strictly confidential. The purpose is for us to see that you are capable of doing a deal, not that you will, but at least capable. If there are other businesses in that same financial category we will be happy to introduce those to you as well.

In the event that you have an interest in buying said business, we will do everything within our resources to help you and the seller get the deal done.

I assure you that the cash flow that we have presented on the web site for this business, are based on the financials that were presented to us by the seller.

Look forward to working with you.

One more very important point I want to make. We will put you into our data base, once we have your buyer qualification form, . Any business that you qualify for and have an interest in, we will be happy to share with you. If for some reason you elect not to buy this business, we will work very hard to help you find another business that will meet your specific requirements.

Let us know how long have you been looking to purchase a business and the types of businesses that you have considered?

There are a number of reasons to use a third party appraisal. Once the business has been packaged for selling and a prospective buyer shows interest, the first question that a buyer typically asks is how did you arrive at a selling price for the business. If you tell a buyer that the broker, that is selling the business, came up with the selling price or the accountant for the seller, came up with the selling price, it will not have the same credibility as having a third party appraisal of the business. You don’t want to tell a buyer that you pulled the selling price out of thin air. Having a third party appraisal provides confidence to both the buyer and the seller about the true value of the business based upon an unbiased professional appraisers opinion of value. It provides an informed opinion about the business value that is justifiable. This way the seller can decide if the asking price will be enough. A business appraisal will also help the owner of the business see the strengths and weaknesses from a third party’s perspective. With the help of the sellers accountant the owner will also clearly understand the tax consequences of the sale of his business.

There are Strategic Buyers that are already in a similar type of business. We screen these buyers to determine if they are genuine buyers or looking to take some of the customers that the sellers has. Some of these buyers see added value in growth through an acquisition. That buyer is capable of consummating a sizable deal if he sees this as a business that will have synergy with his existing business. Buyers without money are just good people who wish they could own a business.

We ask for proof that they have the funds to do a deal. We act as intermediaries in the negotiations of the deal, address the issues that need to be addressed to get a written offer. MBABB has formed relationships with Bankers that know us. They recognize that we will not bring them deals that banks are not interested in. We also have relationships with Title Companies to hold monies in escrow for earnest money deposits. We will instruct a seller of the business not to accept any purchase agreement with out a decent amount of earnest money deposit. We facilitate and orchestrate the closing. When a buyer requires additional terms in the lease, we help negotiate those terms with the buyer and the landlord.

Before a potential buyer seriously considers purchasing a business, they need to assess their financial assets and cash available to do the deal.  We often ask people who inquire about a business, “How much cash do you have to purchase a business?”  Sellers will sometimes finance part of the deal and banks will only finance if the buyer can put 20-30% down.  So the first question is always, “ How much cash do you have to put down?”  Keep in mind that not all sellers will provide any financing, so that leaves the buyer responsible for the entire purchase price.

Take a look our Buyer Qualification Form  to see what types of information we ask for.  We do not want account numbers and names of financial institutions, just a rough idea of your financial picture.  You should also be able to provide a copy of your Credit Report and Score.  Banks will want this information up front and the seller will require this also.  If you are a potential buyer, you can get a free yearly credit report from www.freecreditreport.com.

As a business owner considers placing his or her company on the market, ascertaining the proper value for the company is critical.  Too often the owner assigns an unrealistic and unachievable arbitrary value then proceeds into the sale process only to be disappointed with the market’s response.  As a result, the asking price is reduced several times.  During this unfortunate period buyer prospects and valuable time is lost.

In truth, a company’s value is determined by a compilation of factors such as the company’s sales, earnings, performance, market outlook, personnel, net book value and fair market replacement value of equivalent operating assets.  But it can also be influenced by intangible assets like the company’s image, reputation and goodwill.

There are several approaches to valuing your business.

Balance Sheet Value

There are several balance sheet valuation methods, including adjusted book value, book value and liquidation value.  The adjusted book value is determined by revising the asset’s book value to reflect the cost it would take to replace the assets in their current condition.  This method requires the total values to be offset against the sum of the liabilities.

The book value considers the figures from the company’s financial records, as depreciated at the time of the sale.  The book value can pose some difficulties for sellers, particularly if the seller has depreciated the assets too much to gain prior tax advantages.

The liquidation value is the amount that could be realized if all assets – equipment, furnishings and inventory – were sold separately.  This value is typically much lower since it doesn’t consider a company’s intrinsic value.

Income Approach

The income approach takes into consideration the company’s level of earnings using a capitalization rate, discount rate or multiplier.  Several income approach methods are frequently used.  Each method requires a level of earnings and a conversion factor to translate the earnings into a company value.  Selecting the proper level of earnings – after-tax, pretax, discretionary or cash flow – and matching it with the proper conversion factor – discount rate, cap rate or a multiplier – is critical to calculating a reasonable value.

Market Approach

The market approach sets a value based on the values of other businesses that have been sold.  Setting the market value involves researching the sale prices for similar businesses in a geographic area.  In some cases, however, finding a company that is similar in many ways to your company may be difficult.

Whatever your goal, you want a good advisor to help you assess the value of your company.  Question your advisor on the effects of deal structure and how multiples are used.  A business owner should never accept a computer-generated valuation or a one-size-fits-all approach when selling the business.  And don’t be impressed by the person who presents the highest value – you may only be setting yourself up for failure during the sale process.

Six months later we sold him another auto repair shop that was already well run and profitable. Within two years he had 4 locations all making money.

Tony is what is called a serial entrepreneur.

A recent survey revealed the following about the length of time that selling a business requires:

Average time from putting the business on the market to time of sale:

It takes from 4 – 12 months to sell almost 82 percent of businesses; 38 percent fall in the 7-12 month range; over      8 percent are on the market for over 12 months.  Why does it take so long to sell a business?  The biggest reasons are the price and terms.  Many sellers over-price their business in the beginning with a stipulation of all cash.  Since there is very little financing available from lenders at this time, this prohibits qualified buyers from doing the deal.

If the business is priced right from the beginning, and the deal is structured to accept a reasonable down payment with the seller financing the balance, that is a big plus.  Sellers also need to be prepared with all of the important information regarding their business, right from the beginning.   Some of the information that a seller must provide include the following:

• Copies of the financials for the past three years.  This includes Tax Returns and Profit and Loss Statements.
• A copy of the lease and any assignments of the lease from previous sales.
• A list of the furniture, fixtures and equipment that will be included in the sale. Note: If something is not included, it is best to remove it prior to the sale or at least have a list of items not included.
• How much inventory is there at cost, and will it be included in the sale price
• A copy of the franchise agreement if applicable or any agreements with suppliers or vendors.
• Sales brochures, press releases, advertisements, menus or other sales materials.

Here are some of the questions that buyers may have. Sellers should have this information ready to share with the prospective buyers:

• Is the seller willing to train a new owner at no charge and for how long?
• Are there any zoning or local restrictions that would impact the business?
• Is there any pending litigation?
• Are any license issues involved?
• Are there any federal or state requirements, or environmental OSHA issues that could affect the business?
• Who are the key employees and will they stay with the business?
• How much time does the seller spend working the business?  Is there a manager who can take over when the owner is out of town or wants to take a vacation?
• Who are the major suppliers or vendors?

Being prepared can reduce the time it takes to sell a business.  Using the services of a professional business broker can also reduce the time period.  Business brokers are knowledgeable about the current market, know how to market the business, and can advise a seller on price and terms.

Before deciding to sell your business, get all of your records together, including tax returns, profit and loss statements, copies of the lease, agreements with the franchisor if applicable, a list of the furniture, fixtures and equipment, and a list of the inventory at cost.  Business brokers will require this information so that they can determine a fair market value for your business.

A good business broker will require all prospective buyers to fill out confidentiality and buyer qualification forms.  This helps to insure that time won’t be wasted on buyers who don’t have the means to do the deal.

So remember:  BE PREPARED, PRICE IT RIGHT, AND BE WILLING TO CONSIDER SELLER FINANCING.

Hopefully it will be sold within the year.