Robert W. (Bob) Hatton
Family Business Intermediary
E-Mail:  biz4saleusa@atlantic.net
Phone: 904-396-9800, Fax: 386-659-1131
Robert C. Conolly, Lic. R.E. Broker

FREQUENTLY ASKED QUESTIONS

Why should I use a Business Broker?

Buying or selling a business is one of the most important financial decisions that you will make. A Business Broker has the training and experience to guide you through the process in a comfortable and efficient manner. He/or she is a team player who will coordinate the efforts of your professional advisors, such as attorneys and accountants. He/she has handled many transactions and understands the complexities of buying and selling businesses.
During the process, the Seller's job is to do what he does best, which is to run the business as if he was going to keep it. The Broker's job is to confidentially market the business, find and screen the Buyers, educate them, negotiate the terms of the sale and provide a buffer for the emotional highs and lows that we all experience. The Buyer benefits because the Broker has already pre-qualified a business before he lists it. He has psychologically prepared the Seller for the sale. He has also done a lot of the legwork to assemble the financial information and background of the business. This helps to reduce some of the uncertainty for the Buyer and makes his search more efficient.

What does adjusted net income mean?

Adjusted net income is the projected amount of money earned by the new owner of the business and what the new owner can expect to put in his pocket before debt service (P&I) has been deducted. It usually includes; owner's salary and fringe benefits like personal autos, insurance, credit cards, interest, depreciation, and any other expenses paid by the business that are not entirely business related or they may be a one-time expense that will not be incurred by the new owner. Cash flow or SDC, Seller's discretionary cash are similar terms. It is very important that the Buyer's CPA review the Seller's financial records during the due diligence period to determine if the adjusted net income numbers are valid.

How do you handle confidentiality?

Transactions handled by Biz4saleUSA are held in the strictest of confidence to protect the interests of all parties. We require that a prospective Buyer review and sign a non-disclosure statement outlining his responsibility in having access to a Seller's confidential information. This occurs before any detailed information concerning a specific opportunity is released. We are committed to protecting the confidentiality of the business sale. We understand that public knowledge of a potential sale can affect the attitudes and actions of customers, employees, competitors, lenders, suppliers or investors, and thus the value of the company. We also want to safeguard the employment status of a potential Buyer while he considers a very important change for his future.

Why buy a business instead of starting one?

It may take more money than time to buy a business. It takes more time than money to start one. The break-even point for buying versus starting a business is the cost to buy equipment, rent a space, pay a staff, pay for a sales force, purchase inventory, pay for advertising, establish contractual relationships and support yourself and your family while you are building up a customer base while fighting off established competitors. If you buy an established business, you'll have income from the day you take over. You already know what can be accomplished by the business. If you start a business, you face a lot of uncertainty over the success and suitability of your product or service and the probability of failure is much higher for start-ups. Buying a successful business takes a lot of the risk out of your decision.

What is the best business to own?

Beauty is in the eye of the beholder. Most Buyers want to own a profitable, well-managed business in an industry that holds a personal interest for them. On the other had, some Buyers may look for opportunities that offer turnaround potential, where they can apply their special skills. In general, there is no industry that is particularly better than another, however, there are specific businesses that are more successful than others, even in the same industry!
For instance, hair salons can be located in the same shopping center, but one is successful and the other is not. The successful one may have a hands-on owner versus an absentee owner. It may have more effective advertising. It may have friendlier employees. It may provide better customer service or more competitive prices. It may pay less rent. It may have better equipment, It may pay less for supplies. It may have higher profits. The only way to find out which one is better is to compare the two and select the more desirable one.

How is an offer structured?

Most businesses sell for one-third to one half cash down. The remainder is financed by the Seller, by a bank or though the Buyer's family resources. Sellers generally prefer to receive all cash at closing and some Buyers are able and willing to accommodate them; However, Buyers are usually trying to get the most bang for their buck, and will want to leverage their down payment into the largest business they can afford. Although Buyers may want to make a no-money or low-money down offer, it is very rare that they will succeed with such a high level of debt. In addition, the lender, whether it is the Seller or a bank wants the Buyer to show his commitment to the business by having a vested financial interest in its success

What kind of financing is available?

According to business brokerage industry statistics only 10% of small businesses are sold for all cash. Most businesses selling for cash sell for under $85,000. Seller financing is usually the cheapest and easiest for a Buyer to obtain. Seller participation in the financing also tells the Buyer that the Seller has confidence in the business. Approximately 70-80% of all small businesses are financed by the Seller. Seller finance terms typically run from five to ten years at prevailing rates of interest. Another 10%-20% of small business transactions are financed by banks, usually with some type of SBA guaranteed loan. Banks will typically require two to five years of proven earnings shown on tax returns. Banks prefer to loan on businesses that have tangible assets such as real estate, equipment, rolling stock and inventory, but SBA lenders will consider lending on successful, high cash-flow businesses with hard assets equaling as little as 25% of the selling price, if the Buyer has excellent credit and/or a strong net worth and the Seller is willing to hold a secondary note on the business.. SBA loans to purchase a small business (under $2,000,000) are typically for ten years, but can be amortized over longer periods if the business sale includes commercial real estate. Biz4saleUSA has good relations with several leading lenders and will introduce business Buyers to potential lending sources.

How do you advertise a business for sale?

We advertise on the Internet, through our Web Sites, through Business Brokers of Florida MLS (sole and exclusive listings required for MLS listing), and through leading business brokerage international web sites. We also advertise in local and out of town newspapers and trade journals. We receive many referrals from attorneys, accountants and from real estate professionals. In short, if someone out there is looking for an established family business for sale in the greater Jacksonville Florida area, they should quickly find us.

Please contact us with any questions
about your business needs.

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