Selling a Business Via a Business Brokerage Firm: The Five Big Questions

I’m concerned about confidentiality. Will the brokerage protect my privacy?

Experienced business brokers in reputable firms have systems in place to protect the confidentiality of clients and details about their businesses. To further protect seller interests, prospective buyers must complete binding non-disclosure and/or confidentiality agreements and provide financial statements and bank references before they are granted access to essential business information.

Isn’t a business broker just the same as a real estate broker?

It’s true that business brokerage began as simply a subset of real estate brokerage about four decades ago, but the two industries have diverged completely since then. While business brokers in Minnesota (and many other states) are licensed identically to real estate brokers, the business brokerage industry has such singular requirements and challenges that it doesn’t functionally overlap with either commercial or residential real estate brokerage. As with any specialization, expertise is the result of many years of experience focusing exclusively on the niche.

Can’t I can sell my business myself? How does a business broker add value?

Like a good accountant, lawyer or other professional, business brokers contribute value according to their experience, education, and knowledge of the requirements and best practices of their industry. Yes, you can sell your business yourself: likewise, you can also do your own taxes and represent yourself in court, but doing so successfully requires a huge investment in time and education. It also comes with potentially costly risks.

Thanks to our experience and training, we know:

  • how to value a business
  • current market conditions
  • where to find reliable data
  • the challenges and issues likely to arise
  • where to find money for business transactions
  • the crucial details and checklists to complete a transaction smoothly
  • how to comply with legal regulations

Further, we serve as a buffer between the seller and buyer, engaging both parties with effective negotiation skills based on extensive experience and industry knowledge.

But why are the fees so high? Is it worth it?

Fees are based on a percentage of the selling price and have remained constant for many years. Hiring a professional business broker has three concrete financial benefits for the seller:

  • We expose the business to many more potential buyers than an individual seller can, enabling a quicker sale at a higher price
  • We have the expertise to accurately evaluate the business and ensure the listing is priced right and attractively described
  • We handle the details of the transaction with expertise to protect both buyer and seller, preventing costly mistakes, misunderstandings or misrepresentations

My business is special — do you have experience selling businesses in my industry?

At Opportunities In Business, we’ve got over 35 years of experience and we have sold in every SIC code or industry. Browse our listings and you’ll see successful sales of businesses from wholesale manufacturing to laundromats to credit card processing to cafes. With every account, we dive deeply into the business and the industry. Our standard process involves gathering lots of information and asking essential questions to fill in any gaps. Selling the business relies on a different skill set than running the business. We’ve yet to encounter a business so unique and specialized we couldn’t adequately represent it.

Check-out some of the recent businesses we’ve sold! http://oibmn.com/listing_status/sold/

BUSINESS APPRAISALS

Opportunities in Business does Business Valuations, for a wide variety of reasons.  We do them every week-for all kinds of businesses.

Many valuations or “appraisals” are required because the owner or owners have decided to sell their business. Some are done for estate planning purposes, or because of divorce. We have completed hundreds of reports over the past 33 years.

There is an art to determining the “going concern” value of a business; there is as much art as there is science.

When we started valuing businesses over 33 years ago, there wasn’t many resources for appraisers to find data on sold businesses (small, closely held, private businesses). That has changed. Now there are sources of information on businesses that have actually sold-across the country. In fact we contribute data to these sources-like Pratt’s Stat’s, BizComps, Value Source etc., on the businesses we sell. In return, we have access to their data bases, which helps us help our clients.

It’s interesting-because we both sell businesses and do Business Valuations-to analyze the data from around the country and see the multiples of earnings, or “capitalization rates” (one factor in valuation of a business), by industry and by the size of the business sold.

Our experience is that a wide variety of factors influence the value of a business, beyond earnings (defined in a wide variety of ways by the way), and the assets included in a sale. Purchasers take a variety of factors into account beyond just the net income shown from historical financial statements.

We have an advantage-because we are part of the market-in knowing what influences value. We crunch the numbers, just like any appraiser should, but we also can analyze value in light of current market conditions and trends.

If you are considering selling your business, or need to have an appraisal done for any reason, contact us at info@oibmn.com  and a qualified representative from our company will contact you.

Replacement ink and toner cartridges

TYPE OF BUSINESS:  This business offers replacement ink cartridges and toner cartridges for all major brands of printers, copiers, fax and postage machines.  This includes HP, Epson, Canon, Brother, Lexmark, Dell and Samsung.  They carry a full line of black ink cartridges, color ink cartridges, black toner cartridges and color toner cartridges.  This business was established in 2006 by the current owners.  The business is located in a first ring suburb of Minneapolis.  The sales are about 50% business and 50% individuals.  The owner works 4-5 days per week with very flexible hours – responsible for the “office work”, ordering, marketing and some deliveries.  New owner needs to spend more time trying to get more business accounts.

EQUIPMENT:   The equipment is in good shape and is well maintained.

EMPLOYEES:  The business operates with 3 part time employees.  1 earns $13/hours and works about 35 hours/ week; 1 earns $10/hour and works about 14 hours/ week and 1 earns $5/ cartridge and works about 28 hours/week.

GROSS SALES/ CASH FLOW:  Gross sales for 2013 were $284,469; 2012 were $295,831, 2011 were $311,977, 2010 were $303,712 and $2009 were $326,696.  Cash flow to an owner operator based on 2013 sales was $80,000+. 

ASKING PRICE: The asking price for the business $175,000.00.  Included in the asking price is inventory of about $35,000.00 (at cost) and the equipment, which is valued at $5-$7,000.00.

REASON FOR SALE:  Personal reasons.  Caring for ill parents.

Autobody Shop

This body shop was established 34 years ago in a NW suburb of Minneapolis. The current owner has operated the business for 20 years. The company has established relationship with multiple insurance companies over the years as well as auto dealers and walk in customers. The owner offers collision repair, custom p

FACILITY: The business operates from a leased facility with 9,500 square feet. The lease payments are $6,400 per month which includes the CAM charges. Currently the seller is on a yearly contract, but the landlord will do a 3 or 5 year lease.

 

EMPLOYEES: The business operates with 4 full time employees, 1 part time employee, and the owner. One employee can manage the staff and do estimating. The owners primary duties includes estimating, insurance claims, and over all management of the business.

 

 

SALES PRICE: The seller is asking $99,000 for the business which includes all the equipment and inventory. The seller will stay forainting, mechanical services, glass repair, etc.

Commercial Cleaning – only work 6 hours a week

This is a commercial cleaning/janitorial business that was established since 1963 by the current owner. The business is selling fully equipped operating accounts to a buyer. This company provides nightly janitorial services that include trash removal, vacuuming, dusting and cleaning of the restrooms. They also provide the following specialty services: carpet cleaning, stripping and waxing floors. The buildings that are cleaned consist of both office and warehouse space. The accounts are fully staffed. This is a great way to get into business for yourself and keep your full time job.

 

A buyer would over oversee these accounts each week and works approximately 8 hours a week. The business has a time keeping system that monitors the employees time in each building.

Buys and Sells used “one of a kind” Architectural / Building / Antique items.

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TYPE OF BUSINESS: This well established salvage yard, which was established over 50 years ago by the current owner, buys and sells used “one of a kind” Architectural / Building / Antique items for residential and commercial properties. Samples of the products are lighting, fireplace mantels, buffets, lumber, hardware, doors and windows. The business is well known for their outstanding selection.  The owner’s responsibilities are to oversee the operation and purchase the used inventory.  Owner is willing to work with a new owner after the business has been sold to insure a smooth transition. Hours of operation are 8:00a.m. – 5:00p.m. Monday – Friday and Saturday 8:00a.m. – 1:00p.m. The potential to grow this business is tremendous.   A new owner would want to have all their products available through the internet. Currently, the business has a web site but needs a major upgrade.  This is the largest company of this type in Minnesota. There is a tremendous opportunity to sell these products over the internet.

 

FACILITY:  This business operates in a free standing 93,000 sq. ft. Seller willing to give new owner rent free (building only) for up to 2 years.  The business must re-locate.

 

EMPLOYEES: 6 full-time and 5 part-time employees.

 

GROSS SALES/CASH FLOW:  The gross sales for 2012 were approximately $800,000, 2011 were $792,500; 2010 were $1,008,350 and 2009 were $1,046,450. Based on 2012 sales, the owner reports that cash flow was approximately $118,000 ++.

 

ASKING PRICE: The asking price for the business is $250,000, which includes equipment, furniture and fixtures (estimated value $200,000).  The owner is willing to sell the inventory to the buyer on a consignment or floor plan basis.  The buyer will not have to pay for the inventory until it is sold.  The cost of the inventory to the buyer will be negotiated between buyer and owner.  The owner indicates that the cost of the inventory is in excess of $1,000,000.

 

REASON FOR SALE:  The owner is tired and wants to retire.

 

Important Notice:  The above information has been provided by the Seller.  Neither The 20/20 Group, Inc. (dba Opportunities In Business) nor its agents guarantee its accuracy or comprehensiveness.   7670  b.k.

Beautiful Clothing / Jewelry Boutique located in Stillwater.

scarf-shopping-woman[1]

TYPE OF BUSINESS: Beautiful Clothing / Jewelry Boutique; Prime location on Main Street in historical Stillwater that is surrounded by popular restaurants and retail businesses. The business was established in 2010 and offers a unique shopping experience. This beautiful store specializes in the sale of wide range of women’s apparel, jewelry, shoes, hats, accessories and more. This is a very easy business to operate and would be perfect for the first time buyer. Hours of operation are; Monday – Sunday 9:00 to 10:00 in summer and 10:00 to 5:00 in winter.  The owner does not work the business – however, his responsibilities include: Bookkeeping and Staffing.

 

FACILITY:  This business is located in a prime location on Main Street. The business operates in about 1,800 square feet. Monthly rent is $3,300.  The lease expires in 2014, and there is an option.

 

EMPLOYEES:  Again, the owner doesn’t work the store. Business operates with 2 full-time and 8 part-time employees.  Their hourly wages are between $8.00 and $10.00 per hour.

 

GROSS SALES/CASH FLOW:  The gross sales for 2012 were approximately $263,000; cash flow was approximately $70,000 for an owner operator based on 2012 sales.

 

ASKING PRICE: The asking price for the business is $70,000 plus inventory. This includes the furniture, fixtures, equipment, website, phone number, client and vendor list.  The value of these assets is approximately $30,000. Inventory is approximately $50,000 at cost.

 

REASON FOR SALE:  Owner is re-locating.

 

 

 

Important Notice:  The above information has been provided by the Seller.  Neither The 20/20 Group, Inc. (dba Opportunities In Business) nor its agents guarantee its accuracy or comprehensiveness.  7750 b.k.

Beautiful Car Wash was remodeled in 2008 from top to bottom.

OLYMPUS DIGITAL CAMERA

TYPE OF BUSINESS: This beautiful Car Wash was remodeled in 2008 from top to bottom. The owner of this carwash has done an excellent job maintaining the building, equipment and property. “New” Express Tunnel concept. High volume, low overhead, terrific location. Sale includes business, equipment, building / land. Major thoroughfare with 24,000 cars passing by daily. Business located 1 ½ hours South East of Metro.

 

FACILITY: 3,900 SF building located on 3/4 acres of land next to a major Grocery store. State of the art components complement this car wash. The Enduro Class 115 ft. length tunnel system is a versatile system delivering maximum cleaning power in a flexible soft cloth car wash system. The P.O.S. system and E-300 auto sales manager is a great fit for those who wish to add an additional profit center to an existing facility. Minimum maintenance and near zero downtime with the Belanger Wave Car Wash. Property tax is $10,522 for 2012.

 

EMPLOYEES: Business runs with minimum employees. Two people can run this automatic car wash. The owner has two part-time employees plus himself.

 

GROSS SALES: Gross sales for 2012 were $140,000. Cash Flow for 2012 was approx… $52,000 for owner operator. During peak times the Enduro system has the ability to averaged 50 to 80 cars per hour during peak times in the winter.

 

ASKING PRICE: The seller is asking $699,000. Included in sale is the Business, $7,000 in inventory, $250,000 in Equipment, Furniture, Fixtures and Building & Property valued at $350,000 (based on 2012 property taxes).

 

REASON FOR SELLING: Seller has two other businesses.

 

 

Important Notice: The above information has been provided by the seller, neither The 20/20 Group

(d.b.a. Opportunities In Business) nor it’s agents has verified it’s accuracy or comprehensiveness.

7743  b.k.

Automotive aftermarket parts and distribution business.

Mechanic working on car

TYPE OF BUSINESS:  Automotive aftermarket parts and distribution business, established over 40 years ago. This business is located in south metro area next to a major freeway for easy accessibility to the entire Twin Cities area. This business “specializes” in a few parts that give them the competitive advantages over typical parts distributors.  All of the product are high quality, meet dealer specifications and are covered by the manufacturer’s warranty.  This business requires a large amount of inventory to satisfy their long term customers.  The main customers are repair shops, auto dealerships and they do sales to consumers.  The business also sells on the internet thru its eBay store.  The business is known for its ability to source parts from multiple suppliers and to locate parts unavailable from other wholesalers allowing for competitive prices along with obtaining good margins.

 

FACILITY: The business operates from a 5,045 square foot facility that includes an office and a large warehouse with two docks and two drive-in bays. Lease expires in June 2013 with an option. This business could be re-located into a smaller warehouse; owner suggests a 3,500 square foot facility would be perfect.

 

EMPLOYEES: The business operates with the owner and 1 part- time employee. The business could use a full-time marketing / sales person. The Owner is willing to continue working in a warehouse management position.

 

GROSS SALES: 2012 sales were approximately $400,000; 2011 were approximately $420,000. Cash Flow was approximately $48,000 in 2012.

 

ASKING PRICE:  The owner is asking $80,000 plus inventory.  Included in the sale is about $25,000 of equipment.  Inventory is valued at $95,000.

 

REASON FOR SALE:  Lack of working capital.

 

 

IMPORTANT NOTICE: The above information has been provided by the Seller. Neither The 20/20 Group, Inc. (d.b.a. Opportunities In Business) nor it’s agents guarantee it’s accuracy or comprehensiveness.  7734 b. k.