Frequently Asked Questions
Q: How do I know my business is saleable?
Answer: In order to be saleable, a business must meet the following criteria:
- the business is profitable
- there is more than one person working in the business
- the owner is receiving a wage
- the business has tangible and measurable value outside of sweat equity and goodwill
We are able to help you determine whether your business is saleable by examining these and other criteria. If your business is not saleable in its current state, we will advise you of the changes that must be made and connect you with the resources and expertise that will allow you to position your business for sale.
Q: What are some of the obstacles to selling my business?
Answer: Financing presents the greatest challenge. Buyers are often lacking in capital, and even at the best of times, conventional lending institutions are cautious about financing the purchase of small- and medium-sized businesses.
More often than not, buyers will require other means of financing in addition to traditional lending sources. For this reason, those selling a business need to be aware that getting paid upfront in full rarely happens. Sellers should be prepared to explore flexible and creative terms of the sale transaction.
We are able to help you and your potential buyer explore financing options and connect you with a variety of alternative lending sources.
Q: How can you help me to avoid potential buyers who are either not serious or unqualified to buy my business?
Answer: Our process for qualifying the right buyer for your business is detailed, while numerous steps are also taken to ensure confidentiality. It includes reviewing the buyer’s capital resources and pre-qualifying their ability to borrow, and it considers their background, skills, experience and motivations for buying a business.
Our pre-qualification process requires potential buyers to sign a confidentiality agreement, and financial details are not disclosed without this agreement.
Q: What are the steps involved in selling my business?
Answer: Generally, selling a business involves a great deal of preparation, followed by marketing and negotiation. From there, the steps will depend upon the terms of your sale.
In every transaction, preparation is the largest and most important step. Without it, negotiation becomes difficult and stressful, and the sale almost always sees one party on the losing end of the transaction. For this reason, every company’s financial records must be analyzed, and operations must be thoroughly reviewed prior to going on the market, regardless of when the last internal review and audit took place.
An independent and objective business valuationwill extract the information and details needed to determine your asking price and deal structure, and it will lay this information out in a format that meets your buyer’s requirements. It will also allow us to accurately identify your ideal buyers and maximize the potential of that market.
Q: What can I expect from a business broker in handling the negotiating process?
Answer: A business broker is instrumental in assisting buyers and sellers through the process to ensure that nothing is overlooked and the transaction goes smoothly.
Both the buyer and seller will need to make compromises, but your broker is there to facilitate negotiations to find a win-win solution. Because our brokers’ commitment is to both the buyer and seller, you can rest assured that their recommendations will always be in the interest of benefiting both parties.
Q: How do I determine the value and selling price for my business?
Answer: To determine the price of a business, the owner will need a third-party business valuation. This considers current and historical data to establish an opinion of fair market value. Fair market value is the price a buyer could reasonably be expected to pay and the seller reasonably expected to accept when both have all necessary facts about the business and when neither party is under severe pressure to act.
We strongly urge any aspiring seller or buyer to consider a Certified Business Valuation as the criteria to establish a purchase or market price that is unbiased. This report considers reliable data, relevant facts and valuation approaches that are weighted in terms of significance. Because the valuation is impartial to both the buyer and seller, it allows both parties to proceed with confidence in the value of the business, thereby avoiding the problems that arise with valuations based on subjective assumptions.
Q: How long does it take to sell my business?
Answer: The average transaction takes anywhere from 9 to 12 months. Some business transactions happen quickly, while others take over a year. The following key factors can shorten the time-line:
- appropriate pricing
- targeted marketing
- access to many lending sources and buyers who are approved for funding
Your Alberta Business Sales Associate is a skilled business broker who will advise you in these and all other relevant matters.
Q: How do you find a buyer?
Answer: We have access to a large number of buyers, and we market our listings through various channels that we target to your best potential buyers. We work to engage as many qualified buyers as possible, and we ensure that only those who have a genuine interest, are willing and able to pay market value, and are motivated to purchase are considered.