Small Business Report

A Guide For Business Buyers and Sellers

by Steve Monahan

required. They will also discuss your operating cash needs, buyer financing, Small Business Association (SBA) financing and other financing options - a second mortgage or possibly family loans.

The broker will review with the buyer businesses that are both feasible and would fit the buyer's lifestyle, financial and work type requirements. The broker will ask the prospective buyer to sign a nondisclosure or confidentiality agreement, providing the prospective buyer with preliminary information about one or more businesses, including pertinent financial data and arrange for the buyer to see businesses of interest. Once the buyer has indicated strong interest in a particular business, the broker will supply additional information and schedule further on-site appointments. The business broker is the best source for answering questions, addressing concerns, resolving loose ends, and offering expertise in the business sale transaction.

The Business Broker
and The Seller

When selling a business, it is a good decision for the business owner to continue managing his or her business efficiently and profitably while the business broker markets the business. To assist the seller, the business broker helps determine the right type of buyer. To locate and qualify prospective buyers, the business broker will use internal and external proprietary databases, and access comprehensive lists of local, national, and international buyers. The broker will also advise the seller on pricing and can assist in placing a realistic price for the business, incorporating intangibles. The broker will help the seller understand that the selling price is ultimately dictated by the marketplace.

The broker will help the seller in all key aspects of presenting the business, preparing a marketing plan, and offering advice about essential marketing tools, such as a business description memorandum. Later, the broker will help in the structure of the sale transaction, and presenting offers, pointing out both strengths and weaknesses of the offer. The business broker will be a vital advisor during all stages of the negotiation, bringing to "the table" objectivity as well as negotiation skills. The ultimate goal is to have the broker focus on the marketing of the business while the seller focuses on managing and keeping his business successful and profitable while it is for sale.

If everything falls in place as it should, the result will be a win - win situation for everyone involved in the buying and selling process.

If you would like more information or assistance in buying or selling a business, contact Steve Monahan of the Georgia Business Group at (770) 517-8210 ext. 800.

Small businesses and the entrepreneurial spirit truly exemplify the American foundation of freedom and independence. Small businesses - those companies with fewer than 19 employees represent over 85% of all businesses in the U.S. Businesses with fewer than 500 employees represent 99% of all businesses and over 50% of all employment in the U.S. Collectively, U.S. businesses posted over $20 trillion in annual revenue.

Small business employment growth along with consumer spending has helped keep our economy in check through the recent downsizing of Corporate America. Small Business Report will be dedicated to and will be an advocate for the small business community. It will be a guide to those who seek to buy or sell a business.

One of the best resources to assist both buyers and sellers of businesses isn't the Internet or newspaper ads, but the face-to-face presence of a professional business broker. Although business brokers generally represent the seller, the buyer also benefits from the expert guidance of the broker. Business brokers provide vital services for both parties and will act as the "glue," organizing the pieces of the business sale process.

Here's how a business broker will assist both the buyer and the seller.

The Business Broker
and the Buyer

During the initial meeting between the broker and the buyer, the broker will act as a consultant for the buyer and review the entire buying process. Typically, the broker will ask the prospective buyer:

- What are your work experiences and skills?

- What are your likes and dislikes in the work environment?

- What interests you most and where is your passion?

The business broker will help you assimilate information into businesses that would bring these factors all together - helping you to identify businesses that seem interesting, that you could improve, or that would give you pride of ownership. They will also explain and guide you through various financing options, such as the price you can afford, a down payment requirement, financial statements and credit information that would be