FAQs About Business Buyers
- Does Biz Owner Advisors have buyers for my business?
- How do you find potential buyers for my business?
- Will you try to sell the business to my competitors or suppliers?
- What is the typical business buyer profile?
- What is the typical buyer inquiry process?
- Who will respond to inquiries from buyers?
- How do you qualify buyers for my business?
- Do you run credit checks on buyers?
- Will buyers be visiting my business?
- What must a business owner prove to a prospective buyer?
- How will a buyer finance the purchase of my business?
Does Biz Owner Advisors have buyers for my business?
We do have a database of buyers who have previously inquired about businesses for sale. So, there is a possibility of a match, but that is not the primary thrust of our marketing program for your business. Prospective buyers come and go as their personal goals and interests change over time.
Rest assured, however, if we accept your listing, we are confident a buyer will be found. If we felt otherwise, we would not agree to work on your listing. Remember, we are only paid when you are paid – at closing. We are making a commitment to successfully selling your business and investing a lot of time to achieve that goal.
The facts are that the buyer demand for good businesses far exceeds the supply of good businesses. However, many buyers are first-timers and need to be educated about the process of looking for and evaluating a business. The quality of our marketing package (called a CBR – Confidential Business Review) is a major factor in our success in educating and attracting the right buyer for your business.
Here’s another fact: 90% of buyers who inquire about a business never buy a business. We have to filter through a lot of unqualified “tire-kickers”, as well as financially-qualified buyers for whom your business may not be a good match. Ultimately, qualified buyers with the right aptitude, attitude and financial resources will inquire about your business and we will usher them through the acquisition process.
How do you find potential buyers for my business?
We will create a blind description of the business which is posted to the top internet business-for-sale marketplaces. The description will provide enough information to entice prospective buyers to inquire for further information, but not enough to enable them to identify the business available for acquisition.
We will receive inquiries through the internet business-for-sale marketplaces and qualify the prospective buyers before requiring them to sign a non-disclosure agreement (NDA). After we obtain a signed NDA, we release the Confidential Business Review package and have an open and honest discussion about the business to determine if it might be a good fit for their interests. If there is ongoing interest after we disclose the specifics of the business and answer the buyer’s preliminary questions, the next step is to arrange a meeting with the seller.
Will you try to sell the business to my competitors or suppliers?
The circumstances where it is appropriate to contact competitors or suppliers are rare. In most instances, the risks, including a confidentiality breach and its related consequences, far outweigh the potential for success. For more information, please read Customers, Suppliers and Competitors as Buyer Prospects.
What is the typical business buyer profile?
The How to Plan and Sell a Business website has an article that provides a good response to this question. Please read: About Individual Buyers. The article explains a little about tire-kickers, first time buyers, income-replacement buyers, mid-level executive buyers from the corporate world, serial entrepreneurs and a variety of other types of individual buyers.
What is the typical buyer inquiry process?
Active buyers are constantly monitoring the internet business-for-sale marketplaces. Through those websites, they submit their contact information which is forwarded to our office. We immediately follow up to learn more about their specific interests, background and qualifications.
Who will respond to inquiries from buyers?
Jim Stauder, the owner of Biz Owner Advisors.
How do you qualify buyers for my business?
Prior to releasing any information that would allow a prospective buyer to identify your business, we discuss their interests, background and financial qualifications. If the inquirer is not a good match for your business (most aren’t), we let them know we will put their information into our database for any future opportunities that arise that might be a match for their aspirations, experience and financial qualifications.
For those who are financially qualified and seem to be a possible fit as a legitimate buyer of the business we represent, we will obtain a signed non-disclosure agreement. We then release the Confidential Business Review package and openly discuss the specifics of the business as well as answering the buyer’s preliminary questions. For a variety of reasons, many buyers decide not to proceed after this step. (Remember, prior to this step, the only information they had was a blind description of the business.)
Do you run credit checks on buyers?
We do not run credit checks on buyers. We do inquire of buyers if they know their credit score and discuss the importance of credit scores to obtaining financing for a business acquisition. If a buyer moves forward with an offer, the seller can always request a credit report as a condition of the sale.
Will buyers be visiting my business?
Yes. If necessary, to aid in confidentiality, buyer visits can be arranged to occur outside of the normal, operating hours of the business so as to not raise the suspicions of employees.
What must a business owner prove to a prospective buyer?
Because it directly affects the value of the business, the most important aspect that must be proved is the numbers that comprise the computation of Seller’s Discretionary Earnings.
Beyond that, buyers may ask you to prove all kinds of things. Each request for “proof” has to be independently considered and we will advise you on those matters. For instance, a buyer may ask to speak with employees to “prove” he can expect them to stay on. In most instances, we would recommend against allowing that “proof”.
Although having to “prove” something is an occasional issue, we are experienced in identifying obstacles to a successful sale and we address issues straight-on and early-on so that difficult “proof” issues seldom arise.
How will a buyer finance the purchase of my business?
For a seller and a buyer, the SBA 7a loan program is often the best option. Because of our experience in working with SBA preferred lenders, we can usually help buyers finance a major portion of the acquisition through SBA loans. However, there can be certain issues within the business itself that creates huge hurdles to obtaining a SBA loan.
The alternatives to SBA financing are too numerous to address here. Many are difficult. Where there is a will by both parties to get something done, there’s usually a way to obtain some third-party financing, but seller financing is likely to be a fairly significant portion.
Prior to listing your business for sale, we will discuss the degree of seller financing that may be required. We want to avoid any surprises.
If you have a question, send an email to email@example.com.