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FAQ

Selling a Business

What are the benefits of using a business advisor?

There are many reasons to use a business advisor but the number one reason is they work for you! Business brokers provide experience and focus.  Selling a company can be a long and time-consuming process.  The best thing for an owner to do is to stay focused on the continued management of the business.  Your business advisor is able to navigate the buying and selling process while keeping your goals and needs in mind.  A business advisor will lay out a plan, provide guidance and support you through the process.

How long is the process of selling a company?

Selling your business takes time and easily becomes its own full time job. Some businesses sell quickly while typically it takes six to eleven months to sell a business.  There are many factors that can impact the time and success of an impact.  It takes patience, time, and the right advisor.  Your advisor will guide you through the process.  Some factors will be in your control while others may not. For those in your control it is important to find an advisor you can trust and partner to get the best deal for you!

How do I sell my business discreetly?

When selling your company, it is crucial for the health of the business and its future that the sale remains confidential.  These simple reminders will help in the success of the sale.

  • Start with a Non-Disclosure Agreement (NDA) between all parties involved.  Do not disclose the name of the company until an NDA is signed.
  • Use Blind Ads – Don't mention the name of the business in the listing
  • Prequalify Prospective Buyers.
  • Obtain a Signed Letter of Intent.
  • Never Hold Meetings at Your Place of Business.
  • Knowing when and how much information to provide. Can the information wait until the deal is complete?

How much is my business worth?

There are many factors that impact the value of your company.  To start to determine the value:  Add up the value of everything the business owns, including all equipment and inventory. Subtract any debts or liabilities. This is your starting point.  Other factors that will impact the value include:

  • EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) size.
  • Financial Prospects
  • Profit Margins.
  • Customer Concentration.
  • Industry Concentration.
  • Strength & Depth of the Management Team.
  • Competitive Advantages.
  • The timing of your sale.
  • Emotional Preparedness.

How can I prepare for the sale of my business?

Being prepared to sell your business will have a big impact on managing the process.  The goal here is to reduce the buyer’s perception of risk, anticipate the problems, and then solve them before going to market. Assemble an experienced team of trusted individuals.  The buyer will want access to financial and tax records.  The buyer might ask for sales projections, business plan, off balance assets such as intellectual property, contracts.  Make sure your documentation is readily available and organized.  If you were buying the business what would you want to see?  Curb appeal does not only to purchasing a home but also a business.  What is the buyer’s first impression when they pull in the parking lot?

CFO Services

What is fractional CFO or CFO services?

A fractional CFO is someone who lends their financial expertise on a contractual basis.  They are typically used for helping start up companies or interim work.  Fractional CFOs usually work remotely instead of a traditional brick-and-mortar office required for full-time hires. That means they only work when needed, allowing you to save money on salary and overhead costs.   Working with an experienced CFO on a fractional basis can improve the financial management of a growing small business to a lower middle-market company.  Fractional or part-time CFOs have extensive previous CFO-level experience, but generally help tide startups over on a temporary basis

Why use a fractional or CFO service?

A fractional CFO brings equivalent experience and expertise as a full-time CFO, but does not require the full-time salary, vacation, and benefits. Fractional CFO is ideal for growing companies who need the strategic, financial guidance of a CFO, but do not require 40 hours per week. Fractional CFO helps companies control cost by only using them when needed for specific tasks.   Fractional CFO services provide improved decision making, better financial information, and increased productivity.

What is the cost of a  fractional or CFO service?

Fractional CFOs are typically paid by the hour as per their contract. You can expect to pay between $175 to $350 an hour for fractional CFOs. For a finance professional who has experience in your business's vertical, you should expect to pay a CFO hourly rate of around $300. Most early-stage startups require 15-25 hours of CFO services each month, which equates to spending between $5,000 and $8,000 per month or $60,000 to  $144,000 on fractional CFO costs.

Buying a Business

Should I buy a business or start from scratch?

Buying an existing business is almost always more costly upfront than starting your own. However, it is also easier to get financing for buying a business vs starting one. Lenders and investors are much more comfortable working with a business that has a proven track record. An established business has existing customers, access to trained staff,  internal processes and established supply chains resulting in a greater likelihood of success.

How should I prepare for buying a business?

Ask yourself:  why do I want to own my own business?  Is this an investment, new job or perhaps retirement business?  Next do your homework:  Start with what type of business you want to invest in.  Consider something you know or are passionate about.  Next, determine how much money you want to invest.  Research and find the best business advisor for you!

How do I determine what size business I can buy?

Buying a business is exciting.  But the size of the business takes pre planning.  Setting realistic expectations will help prevent disappointment.  Start with an honest look at personal finances, borrowing options and the total costs of an acquisition.

List all your personal finances, values along with which ones you are willing to liquidate.  Examples include checking and savings accounts, retirement savings, money market assets.  Next check into your credit history.  Once you have an estimate of liquid assets you will want to know how much money you can borrow.