WHY USE US TO SELL YOUR BUSINESS OR BUY ONE
Our fees are lower than other firms
Our brokerage fee is 8% of the sales price. Almost all other brokerage firms charge 10-15%. We do a lot of business, so 8% is plenty, thank you. Besides, it is your business, we want you to keep more equity!
You Decide Contract Length and We Can Help Improve Your Operations
From 3 months to 18 months, the choice is yours. Some businesses sell quicker than others. This has to do with pricing it correctly as well as ensuring that the business is operating smoothly. With the ability to run analytics to help you improve everything from operations to marketing to ensure a higher price, smooth transition and happy buyer.
We have NO Up-Front or Signing Fees
To consider listing your firm with us, we provide you an hour of free consulting, with no obligations. We charge nothing and are due nothing until we sit with you, our clients, at the closing table. We get paid when you get paid, not a minute before. We deem this fair. Other brokers may want $5,000 or $8,000 and we have even heard of $12,000 or more to get you listed. We deem this unfair to you.
We have NO Minimum Fee
Some of our competitors have minimum fees of $10,000 and more. Not us. We will assist you to sell your business even if it is for $10,000, you pay us $800 at closing. Not a penny more. We deem this fair.
Confidentiality is #1 and We Find Qualified Buyers
Too many competitors list businesses for sale on their websites. This assists your competitors, employees and potential buyers to help uncover where the business is located, thereby ruining the confidentiality promised to you. We do not. We list the business for sale on the top business for sale websites, where 1,000s and 1,000s buyers go to find a business for sale. We also connect with our buyers to let them know of new offerings and we use these websites to connect with potential buyers. At that point, we qualify buyers and have you meet with them. We do not hide offers, nor do we sort what we deem to be the best offer to present to you. We show you all the offers and let you decide who you want to sell to and work with to train them to take over your business.
Qualified Businesses
Our buyers can rest assured that we only list qualified businesses. Those with consistent records, in other words qualified opportunities. We will not low ball a business to sell it. Nor will we present a questionable business to a buyer. We want to ensure that buyers are not only qualified but go into the deal understanding the fundamentals of the business so that they can appreciate the value that you built. We do not hide information from buyers. We do not hide information from sellers. This is our guarantee that all transactions are done correctly and above board. This is why we do not charge any up-front fees.
Co-Brokering for Buyers
Buyers, rest assured that we can help you buy any business, whether listed with us or not. We will co-broker any deal and work with any other broker to make it happen. Should another broker not want to co-broker we are more than willing to work for a fixed fee to be determined. We will use all of our analytical tools, guide you through financials, tax returns, and any other financial, accounting or legal documentation needed to ensure that you go into the deal with your eyes wide open, knowing all the benefits and pitfalls so that you can properly assess business value.
Most of our offerings feature owner financing…No bank needed!
We are more than willing and will work with any and all banks, SBA and non-SBA financing, as well as with any lawyers, accountants and other industry professionals.
And last, but not least, we work hard for YOU, our client.
SELLER'S GUIDE - HOW TO SELL A BUSINESS
Treating You and Your business with respect and white gloves is our most important objective. First, your business is perhaps your most valuable asset, and you may have unique financial, timing and/or legacy objectives. For us, the selling process begins with Rainmaker Business Alliance Advisors developing an understanding of your unique situation, then informing you on your options, the sequence of steps in the sales process and realities of today’s marketplace. Rainmaker Business Alliance Advisors are always here to help you, the business owner. This allows you to replace any reservations, fears or uncertainties by engaging with a trusted advisor who has years of expertise and a nationwide network of buyers. We bring value by focusing on selling businesses professionally in a confidential manner. To preserve your confidentiality we vet buyers and do not list your business on our website, but on national networks. We keep you informed and provide you with full knowledge of where we are in the process and the schedule for subsequent steps.
Our Services Delivered to You, Our Trusted Client:
· We value your business and work with you to maximize its value.
· We market your business professionally only to Qualified buyers.
· We limit interruptions, set appointments after-hours, and maintain confidentiality.
· We qualify buyers through a detailed screening process to bringing you only those who are ready, willing and able.
· We work with lenders to qualify buyers ahead of time, to facilitate the closing of the sale.
· Bring you and the buyer together to get the deal done and to work pro-actively with both of you to ensure a successful negotiation.
The Steps to the Selling:
1. Initial Meeting: We begin by offering you a no-cost meeting scheduled at your convenience. We never take payment up-front. The meeting is to exchange general information so that our business broker and you can become acquainted with each other and your business, as well as your objectives and your story.
2. Valuation: The business broker will then perform a business valuation in order to inform you of a realistic price range that you can expect in the marketplace. You and Rainmaker Business Alliance Advisors work together in establishing the asking price and terms for your company. The information required to analyze your company includes the following: Three to five years of detailed and up-to-date financial statements, including:
o Income Statements (Profit & Loss)
o Balance Sheets
o Business Tax Returns
o A list of furniture, fixtures, equipment, inventory, trade names, patents and other assets to be transferred with the company.
o Real property and equipment leases.
o Any contractual relationships of the business.
o Other information which influences company operations.
3. Listing Agreement: A contractual agreement is entered into between you and Rainmaker Business Alliance Advisors, giving Rainmaker Business Alliance Advisors the exclusive right to market the business for sale as your representative for a specified time period and under specified terms and conditions.
4. Preparation for Sale: Preparing your business for sale is a critically important process and can have a direct effect on both the price you receive and the time your business spends on the market. Rainmaker Business Alliance Advisors will help you focus on the things you should and shouldn’t do.
5. Marketing: Rainmaker Business Alliance Advisors, with your input and approval, creates a unique campaign to market your business opportunity to potential buyers. Our marketing objective is to reach the universe of qualified buyers who will derive the greatest value from an acquisition of your business. The cornerstone of this campaign is a detailed prospectus, which is a document that educates buyers about the operation, facility, marketing, financial status and future opportunities of the business. A national advertising campaign, using Rainmaker Business Alliance Advisors extensive buyer database and search resources, is then implemented to confidentially target specific buyers, as well as approach the general public.
6. Buyer Screening: Rainmaker Business Alliance Advisors works with each buyer by first having them sign a Confidentially Agreement, then determining if they are qualified financially and/or strategically to purchase your business for sale.
7. Business Operations: During the entire process you are responsible for maintaining or improving the value of your company by tending to daily operations. You are also responsible for providing current and/or additional information as requested by buyers.
8. Offers: Rainmaker Business Alliance Advisors confidentially schedules all buyer/seller meetings at your convenience, prepares offers, and conducts negotiations on your behalf. Strong seller and buyer emotions are a reality of business sales and negotiations. Our job is to be a buffer between buyers and sellers to temper emotions, manage the negotiation process and secure the high ground in negotiations on your behalf. Working as a team with your professional advisors, we will work to maximize the after-tax proceeds from the transaction.
9. Due Diligence: Rainmaker Business Alliance Advisors coordinates all aspects of the due diligence and contingency satisfaction process.
10. Closing: Rainmaker Business Alliance Advisors oversees the preparation of closing documents. Finally, a formal closing takes place where legal documents are signed, funds are received and ownership is transferred.
BUYER'S GUIDE
It is important to have a general understanding of the process of buying a business before you get started. Knowing this information will inform you if it will be a rewarding experience leading to purchasing a business or lots of frustration and an inability to buy a business. The brief explanation below covers the major components of buying a business.
Step 1: Evaluating your resources.
Performing a reality check is critical. You need to understand your personal goals, objectives and financial requirements. You also need to be realistic about your expectations and financial resources. In doing so, keep in mind the following:
- Very small businesses, those with income of $40,000 to $90,000 in seller’s discretionary earnings (SDE) should generally sell for 1.0 – 1.5x multiple of SDE.
- Small businesses, those with income from $100,000 to $300,000 in SDE, generally sell for 1.5-3x multiples plus inventory
- Lower middle market companies (over $300,000 in EBITDA) generally sell for 3-5x multiples of EBITDA, including inventory and a rational or realistic manager salary.
- Larger companies (over $1,000,000 in EBITDA) will sell for a higher multiplier.
- Lenders of SBA backed loans may require as little as 10% cash injection, provided that you have working capital and can get the seller to finance part of the business. In some cases the bank will provide working capital as part of the lending structure.
- Note, are you seeking a stable business with continuing customers or a business requiring you to find new customers for each sale.
Step 2: Commitment.
Business ownership requires time, energy and commitment, it is not for the “faint of heart.” Successful entrepreneurs do not have time to second guess themselves, they need to make decisions with available information and may not have time to wait to find out more information. It is important to not interpret this as making rash decisions, rather it is necessary to have the patience and commitment to collect data through research, to arrive at potential outcomes by examining the facts, and make a calculated decision. Once the data is collected, facts analyzed, then a decision is made to move forward. These same exact principles apply to buying a business. You the buyer, need to do your research, collect the facts, understand your expectations and know the resources you can bring to the table. If business ownership is the right step for you, then you need to commit to the work and patience involved in purchasing a business. It takes time to identify the right opportunity and the process requires a step by step approach, that cannot be rushed, nor delayed to insure you make the right acquisition.
Step 3: Meet with a Rainmaker Business Alliance professional business broker.
The initial meeting is about you getting to know the business broker and the business broker getting to know you and your goals. Do ask about their education, work experience and background. Ideally you want a business broker with (corporate) business and small business experience who can help you shape not only a strategy to take over a company but to operate it as well. Be prepared as they will also ask you specific questions. Be ready to provide accurate information about your background, your financial capabilities, skills, goals and expectations. This information will help the broker to zero in on the types of businesses for sale best suited to your experience and requirements.
All business owners will want the sale of their business to remain confidential, so you will also be asked to sign a Confidentiality Agreement (Non-Disclosure Agreement (NDA), Buyer Profile and Agency Disclosure. The Confidentiality Agreement basically states that you will not disclose the identity or share details about any business you are shown to third-parties (without prior written consent).
Step 4: Searching for Your Business.
Your business broker will be your confidant and colleague and help you find a suitable businesses for sale. Your Rainmaker Business Alliance professional business broker spends a lot of time gathering specific information about the financials, processes, management and structure of each business for sale. We develop detailed profiles, which can be shared and reviewed with you. We will also work with any other business broker in and out of the state to negotiate the proper deal for you.
Step 5: Visiting the Business for Sale and Speaking with the Seller in Person.
Having signed the NDA and reviewed businesses on paper, and had your preliminary questions answered it is now time to meet the business seller to get more information. Your business broker will arrange a confidential business meeting with the seller. This is your opportunity to get a feel for the business and ask any additional questions you might have. Your broker will allow you and the seller to interact directly, and will be there only to assist to insure the meeting is productive for both sides. Note, there are no stupid questions, and often times you may think of addition questions after thinking about and analyzing what you learned on this initial meeting. Please let your business broker know this questions and they will communicate those to the Seller and get the answers. Our job is to get you the information you need to make an informed decision on the purchase of the business.
Step 6: The LOI (Letter of Intent).
If you liked the business and want to move forward and want to learn more about the business by doing due diligence, the next step is for your business broker to help you draft an LOI (Letter of Intent). Do not be concerned about the words “Letter of Intent”. This does not lock you into buying the business. The purpose of an Letter of Intent is to define the terms upon which you are willing to buy. These often include specific contingencies that will be included in a Contingent Purchase Agreement. These will include obtaining a satisfactory lease (for you and your financing bank), further satisfactory review of financials, and the ability to obtain financing (SBA or private lenders). The accepted Letter of Intent specifies agreement between the parties on the terms and projected timing of signing a contingent Purchase Agreement accompanied by an earnest money deposit held in our trust account.
Step 7: Due Diligence Process (Books and Records Examinations).
The Contingencies to the Purchase Agreement trigger the due diligence process. During this process you have the opportunity to inspect the owner’s books & records. This is an opportunity to verify prior representations and confirm their accuracy. As an example, do the P&L’s (Profit and Loss Statements) or AR (Accounts Receivables) match the information previously disclosed on the Tax Returns. Your Rainmaker Business Alliance professional business broker will coordinate communications during this process and will provide ongoing updates. Your business broker will also be “symphony conductor” coordinating the efforts of legal and accounting professionals with lenders and closing attorneys to insure that the process moves forward in a timely manner.
Step 8: Financing/Lending.
Should financing be necessary, we can assist you with connecting to lending resources. This is a detail your business broker will ask early on. Some business buyers are able to use their 401k resources to purchase a business outright. Others use their 401k as a deposit and rely on bank financing for the remainder. Some will have savings and rely on lenders for the rest. However your finances are arranged, the business broker can give you suggestions and introduce you to the best lending resources available.
Step 9: Purchase/Sale and Closing.
Once every contingency has been met, then the final preparations to transfer the business begin. At the time the closing documents are drafted, and every effort is made to transfer the business as seamlessly as possible. We work with each party to ensure communication on transition issues. A training and transition period (defined by the Purchase Agreement) begins on the day of closing, and is structured to ensure your familiarization with the business operations, employees, clients and vendors; all with the Seller at your side. Note, while we do our utmost to ensure a seamless transition, it is rare when a business transaction closes on the day everyone expected, so be ready that you may encounter some delays, whether caused by the bank, SBA, attorneys, seller or in some cases yourself. After all, buying a business is a complex procedure. We are here to make it as seamless and easy as possible, but it is not always possible to anticipate every issue or item that can arise and slow down or delay the process. But by being ready, having all documents prepared, understanding what needs to be done, you will succeed and we will be by your side to help you get this done. Having a business broker with experience and knowledge and familiarity with the process will make it go more smoothly. The Business Intermediaries at Rainmaker Business Alliance are dedicated to seeing the details through, and ready to help you realize your dream of business ownership.