The Process of Selling a Business

Initial Consultation

An experienced broker from our staff will confidentially meet with you to get to better know you and your company and to provide information about our company, Eranco Business Brokers.

Evaluation

This is the first step in determining if this is the right time to sell. We can tell you if the business can sell for the amount of money that will help you reach your financial goals. By analyzing your company, we develop a clear understanding of the financial position of your business and can then suggest a fair price that works in today’s financial market and will attract a maximum number of prospective buyers. Pricing a business too high will deter many buyers from considering your business as a serious candidate for acquisition, while pricing your business too low is an obvious mistake a seller wants to avoid. The information necessary to for us to proceed with an evaluation is further detailed and includes tax returns, lease and other contractual obligations and a detailed list of the assets that will be included in a sale.

See: Seller List of documents required

Engagement

Once we agree on a price at which to market your company, we will require an agreement to represent you that details the terms of our employment. You will have the entire staff of Eranco Business Brokers with combined experience of well over 100 years all working to find that right buyer for you. We also cooperatively work with many offices of the International Business Brokers Association and the Ohio Business Brokers Association in finding the right buyer for your business.

Marketing

We will need to gather a number of documents and information concerning your operation. It is important that we have a good understanding of your company so that we may anticipate the many types of questions that a prospect asks to make a decision about your business. This will save a great deal of time in the buying process. Our next step in the process is to prepare the necessary marketing materials. This would include a generic summary of your company and then placement on several appropriate internet sites to maximize exposure to a vast number of prospects. As your intermediary, we maintain the confidentiality required for you to continue operating your business undisturbed. We will also prepare a detailed marketing package specific to your company and industry. Advertising also is placed in selected other media to highlight your business. And now the difference between Eranco Business Brokers and others …… our aggressive buyer search. We maintain a database of buyers who have contacted our office over our years of operation. We will also actively approach candidates we feel could have an interest. We do not put up signs and sit and wait for a buyer to appear. Eranco Business Brokers takes a proactive approach to find the best prospective buyer for your business.

Buyer Introduction

Prior to introducing a prospect to your company, we require them to provide a non-disclosure agreement and show financial ability to pursue the acquisition of your company. Eranco saves you significant time by interviewing those who inquire about your company and sifting out the serious from the curious. First time buyers are not always sure what type of business they want. We may also be able to direct a prospect to your company who may have never even considered your type of business. We will arrange to show your business at a convenient time, answer their questions, review information, direct the buyers to appropriate financing options and minimize the time you will need to take away from operating your company. We provide prospective buyers with enough information to make an informed decision on buying your company.

Offer and Negotiation

The offer to purchase is the beginning of the acquisition process. We will assist the buyer in preparing the offer. Depending on the business, it may be a formal agreement, or a simple letter of intent, which will outline how the acquisition is to be structured, what financing is required, including any conditions and contingencies. We present all offers to you, review them with you and determine how to proceed. This includes acceptance of the offer, rejecting the offer or countering the offer. There are a number of factors that can determine whether an offer is acceptable or not. The price is only one. The structure has an impact on the tax consequences to the seller. Working with your accounting team, and having sold over 1,000 businesses, we have the experience to suggest a transaction that will be to your best tax advantage.

Due Diligence

Once an offer to purchase is accepted by both the buyer and seller, the buyer begins the due diligence process. Eranco will provide the buyer with the information necessary to complete this process. We will assist them in reviewing financial information, schedule inspections, work with their accountants and attorneys, application for and securing financing, negotiating a new lease or lease assignment, reviewing industry information and any other items that will satisfy any contingencies and complete and conditions of the offer.

Closing

The final step in the process occurs when all of the conditions and contingencies are met. A closing date is scheduled, an inventory is scheduled if necessary, a pre-closing check list is prepared and provided the buyer and seller which details all documents necessary to complete the transaction, any licenses that require transferred or applied for, transfer of specific utilities, any contracts that may need to be addressed, employees, suppliers, and other details as to who, when and where. This eliminates any missed items, and ties up all the loose ends prior to sitting at the closing table.

Also see: Advantages of Using an Eranco Business Broker

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