Las Vegas Business Broker Las Vegas Business Broker

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Las Vegas Business Broker
Are you wondering what Las Vegas Business Broker Services include? I’ll start off by explaining what a business brokers role is, because most buyers and sellers are going to need the services of a business broker unless they have friend or family that they can sell the business to, but even in that case, it is very discouraged because you still have contracts, closings, disclosing’s, liability releases and other agreement that you’ll have a hard time handling on your own.

The business broker primary role is that of a fiduciary (meaning a position of trust) for the business owner and/or new buyer. The broker can either represent the seller or the buyer or if disclosed and signed for, represent both parties as I most often do. 

But aren’t business brokers expensive?  It depends. Some sellers attempt to sell on their own and they usually end up coming back to the broker when they find out it is prohibitively difficult to:

  • The seller doesn't know how to value their business.
  • The seller can’t justify the asking price using standard business appraiser practices.
  • The seller typically has a hard time attracting potential buyers.
  • The seller has a hard, if not, impossible, time maintaining confidentiality that his or her business is for sale.
  • The seller has a hard time distinguishing between the potential buyers who are serious and those who are time wasters.
  • The seller is typically unable to create a competitive atmosphere among potential buyers.
  • The seller often doesn't know how to evaluate offers or structure a business sale price and terms to make it as attractive as possible to new buyers.
  • The buyer isn’t nearly as likely to trust what the seller says and the documents the seller provides but they do if it’s provided by a third party such as a broker.
  • The buyer and seller typically don't have a lot of experience arranging financing for the purchase.
  • The buyer and seller almost always have no experience bring the transaction to close.

Most sellers recognize the problems of attempting to sell their business without the help of a broker and are willing to pay for their services.

Depending on the state, some licensed real estate holder can help sell businesses, however, they typically have very little experience in business brokering and aren’t nearly as qualified or proficient as someone who only sells businesses and nothing else.

How to determine if you are working with the best business broker.

Because selling your business will probably be one of the biggest transactions events of your life, you owe it to yourself to be educated and research different business brokers to ensure you are working with a competent, experienced and talented business broker. Here are some questions you should ask any broker before you sign a contract with them.

  • How many businesses have you successfully brokered in the past year? Oddly enough, just yesterday someone asked me this question. I replied that I have closed 0 deal this year but that tomorrow I had my first closing of the year. I could tell that she was a little hesitant after that so I politely reminded her that she asked how many deals “this year” and today was January 4 th . We both had a good laugh and I then told her how “last year” went. Essentially, you want to find someone with experience selling the general price range of the business you are looking to sell. There are some brokers in my office who seem to only work with small, local shops who sell for under $250,000. If you have a business that you are hoping to sell for 5 million, I am not sure they are the right broker for you.
  • What type of business have you successfully represented? Realistically, it isn’t vital that the broker has experience within your niche, but it's helpful if he knows about and has experience within your industry. As an example, here are some of the industry’s I’ve worked with:
    • Franchise – start up
    • Franchise – resale
    • Restaurants
    • Manufacturing
    • Import/export businesses
    • Online websites
    • E-commerce websites
    • Amazon private label businesses
    • Vending routes
    • Professional practices
    • Marinas
    • Hotel and motels
    • Self storage facilities
  • What methods to you use to find a buyer for my business? Advertising methods are very important and you should spend time understanding how they will attract potential buyers, however, its not the end all, be all question. Most successful brokers will have a list of potential buyers that they can reach out to and find possible interest from. Many not only have their own buyers list but share a buyer list with the other brokers in their office.
  • What valuation methods to you use to establish a selling price for my business? If you are going to rely on a broker to help you determine a listing price for your business, you need to make sure that they have experience and training on valuing accurately. There are dozen of valuation methods, here are a few of the most common:
    • Asset based valuation
    • Market comparison valuation
    • Income based valuation
    • Rules of thumb formula
    • Multiple of discretionary earnings
    • Buyer test
    • Market Multiples

We could spend countless hours going over these valuation methods, I am sure you don't want to learn the ins and outs (besides, the valuation training and certification course I went through took nearly 12 months, a 5 hours proctored exam and 7 weeks of peer reviewed case studies). Just be sure that the broker is trained and choses the most accurate valuation methods for your situation.

  • What steps do you take to make sure that the highest level of confidentiality is maintained for my business? Most business owners, rightly so, are worried about publically announcing their business is for sale. What will the employee think? Will they all leave? There are many other reasons that you should maintain total confidentiality. You not only don't want employee to know prematurely but you don't want competitors to know either. A competent broker will use legally binding documentation that is signed prior to releasing confidential information out about your company.
  • What is your education and training background? This isn’t a guarantee that you are working with a good or bad broker but its helpful to know what type of education they’ve completed, what type of jobs and experience they’ve had in the past. While a business brokers track record is more important than their education or training, it's a good question to ask. Some of the training and experience you would hope to hear would be training and certification from at least one of these groups:
    • Institute of Business Appraisers (IBA) 954-584-1144 www.instbusapp.org 

    • American Society of Appraisers 703-478-2228 www.appraisers.org
    • National Association of Certified Valuation Analysts 801-486-0600 www.nacva.com 

    • International Business Brokers Association 888-686-4222 www.ibba.org 

  • What steps will you take to only introduce me to qualified buyers? A qualified buyer is someone who is ready, willing and able to buy a business. While technically the broker can only qualify if someone is ready and able, the willing part will come after they learn more about your business but is the broker’s role to make sure that they qualify the potential buyer before they introduce them to you. The broker should make sure the buyer meets some basic criteria:
    • Honestly looking to purchase a business
    • Has the motivation and personal commitment to purchase
    • Has the financial resources to purchase or get a loan
  • Are you a licensed real estate broker? This question is important because it leads to another follow up question that I feel is vital. Some states, such as Nevada where I am located, require a business broker to be licensed in real estate as well. So the first part ensures state compliance but the following question is the vital question. The next question you should be asking is, “How do you split your time between selling businesses and selling real estate?”. This is important because you are much better off working with a broker who only sells businesses.
  • What information do you need from me? Here is a list of items you should have ready:
    • Financial Statements (Profit & Loss and Balance Sheets for the last three fiscal years)
    • Projected Financial Statement, (to date, for the current fiscal year)

    • Tax returns for the last 3 years
    • Commercial lease or rental agreement
    • Franchise agreement  – if you are a franchise
    • List of assets, including fair market value

This will give the broker a good start and beginning the valuation and sales process.

  • What are the fees to sell my business? Most brokers have a minimum fee, such as $15,000 minimum or a percentage of transacted sales transaction, such as 12-15%.  Many brokers have a retainer or upfront fee that is deducted from the commission once the business closes. Usually, this fee is not refundable. I recommend working with a business broker who gets paid when you get paid, meaning a percentage of the transaction value. I personally do business valuations for free, as a value add to my clients and charge nothing upfront and have no retainers.

Services That First Choice Business Brokers (FCBB) Offers

Sell Your Business

Now is the right time to consider selling your business, learn why.

Business Valuation

Market Price Analysis

Business Custom Search

Buyers, you have the money, now let’s find you the right business!

Transactional Guidance

There is a safe course to chart the process of successfully buying or selling a business, learn more.

Las Vegas Business Broker