• What does a business broker or business intermediary do for me that I can’t do for myself?

Working with a business broker or business intermediary enables you, as Seller, to stay focused operating your business during the sales process. When you work with Touchstone Business Advisors’ business intermediaries you benefit from our vast experience; our extensive network of lenders, advisors, and financial planners; our proven marketing program and global advertising methods. In addition, you benefit from our deep pool of potential buyers – including financial buyers, strategic buyers, investors and private equity groups. We respect your wish to keep the sale ‘confidential’.

What do we do for you?

  • Take steps to protect your confidential decision to sell your business
  • Provide an Opinion of Value Report on your business
  • Establish a realistic sale price for your business
  • Conduct buyer searches
  • Prepare professional quality marketing materials
  • Aggressively market your business for sale to a global audience
  • Interview, screen and qualify serious potential buyers
  • Manage communication with each interested party
  • Represent you in the sales process as the Seller’s Agent
  • Coordinate Purchase Offer negotiations
  • Provide deal structuring advice
  • Skillfully craft the deal and negotiate the terms
  • Coordinate Due Diligence Investigation and data collection with your accountants and attorneys
  • Facilitate contingency removal to keep the transaction moving forward
  • Manage the final walkthrough and inventory report
  • Coordinate the closing
  • Ensure a smooth transition from Seller to Buyer
  • What does a business broker or intermediary do?

Business brokerage is a specialized niche in which business brokers or intermediaries educate buyers and sellers about the sales process. For sellers, intermediaries establish the value of the business for sale, prepare marketing materials and advertise the business for sale. They interview, screen and qualify potential buyers, negotiate offers to purchase on behalf of sellers, structure deals, facilitate due diligence and, finally, close transactions. For buyers, intermediaries seek out companies that meet specific search criteria determined by the buyer, negotiate terms, help structure deals, draft offers to purchase, identify financing options and, finally, close deals.

  • What does the selling process look like?

For the purposes of this explanation,

“Seller” – owner of the business

“Intermediary” – Seller’s Touchstone Business Advisors representative broker

“Buyer”- party who will purchase the business or commercial property

“Buyer’s Broker” – the buyer’s representative broker

The Seller and Touchstone Business Advisors’ Intermediary meet to establish rapport, share expectations, talk about the business for sale, its financial history, company structure, employees, strengths in the market and challenges faced. The industry, market served, competitors, and potential buyers are discussed and the Sales Process is described. This initial meeting provides the Intermediary a clear understanding of the business, its potential, and the Seller’s goals. The Seller gains an understanding of how Touchstone Business Advisors works and the services we provide. After this meeting, the Seller will have sufficient information to decide whether to wait or to move forward. To move forward, the Seller and Intermediary lay out a strategy for selling the business.

The Seller is presented with a list of items needed to determine the value of the business and to list it for sale. The list includes:

  • Last 3 years of financial statements (Profit & Loss and Balance Sheet)
  • Present year P&L and Balance Sheet current within 60 days
  • Market value of Inventory
  • Market value of receivables
  • Market value of patents, gift certificates and other tangibles
  • Copies of licenses, patents, loan documents, contracts, agreements
  • Last 3 years business tax returns
  • List of all equipment and other assets to be included in the sale
  • List of all equipment NOT included in the sale
  • Copy of any Environmental Reports
  • Copy of Survey of Property and Layout of Building
  • List of all employees – names, job descriptions, benefits
  • Copies of Agreements related to employee benefits
  • A recent Appraisal, if done in the last 3 years
  • Copy of Marketing-related materials
  • Copies of all other documents needed to present a fair and accurate description of the business to prospective Buyers
  • The Intermediary analyzes the data provided by the Seller and researches recent industry activity for similar businesses to prepare and present an educated business Valuation Report to the Seller. This is an honest assessment of the value of your business.

The Intermediary and the Seller agree on a Sale Price.  An Advisor Agreement (i.e. Engagement Agreement, Listing Agreement) is completed by the Intermediary and signed by the Seller.

A comprehensive and confidential Marketing Plan is developed by the Intermediary, discussed with and agreed upon by the Seller.

The Intermediary writes a narrative about the business for sale; produces Marketing Materials, including the Information Packet, Executive Summary, brochures and flyers; and begins Advertising the business for sale.

The Intermediary Introduces the Business for sale to the entire Touchstone Business Advisors’ team.

Company Databases are Searched for previously qualified Buyers, whose purchase criteria might match that of the business for sale.

The Executive Summary and Information Packet are sent to potential Buyers.

Potential Buyers are sent the Executive Summary about the business and asked to sign a Confidentiality Agreement (CA) before the identity of the business and its details are provided to them. The Information Packet is only sent after we have received a signed CA from potential Buyers.

The Intermediary Interviews, Screens and Qualifies potential Buyers.

The Buyer’s Broker Writes an Offer to Purchase, secures an Earnest Money deposit from the Buyer, and delivers them to the Intermediary.

The Intermediary Presents the Offer to the Seller. Together they discuss terms and decide whether to accept or counter the Offer, and discuss how best to Structure the Deal.

Representing the Seller, the Intermediary Negotiates the Offer with the Buyer’s Broker.

Upon Offer Acceptance, the Intermediary may arrange a Seller/Buyer meeting in which the Seller’s and Buyer’s Disclosure Statement is completed, questions are answered and the statement signed by both parties.

Due Diligence Investigation begins when an Offer has been accepted and the Disclosure Statement has been signed by both parties. The Intermediary facilitates the Due Diligence process.

If due diligence proves the business is as represented, the Buyer signs the Conditions Removal document.

If due diligence does not prove that the business is as represented, either the Offer will be renegotiated, or the Offer will be cancelled and the Buyer’s earnest money returned.

If due diligence proves the Buyer is as represented (capable of purchasing and managing the business that is for sale) the Seller signs the Conditions Removal document.

If due diligence does not prove the Buyer is as represented, the Offer will be cancelled and the Buyer’s earnest money returned.

After both the Seller’s and Buyer’s Conditions Removals have been signed, the Intermediary prepares the transaction for closing.

When the Due Diligence Investigation concludes, the Intermediary works closely with the Seller’s accountants and attorneys to ensure the best deal. Next step is Closing Preparation.

The Intermediary …

  • Estimates the closing date, the date of possession by the Buyer, investigates insurance (will buyer assume Seller’s insurance or acquire new?),
  • Secures, answers and/or provides copies of the following to ensure a timely close:
    • Listing Agreement
    • Purchase Agreement and Counter Offers
    • All Condition Removals
    • Liquor License, if applicable – Transferable?
    • State Sales Tax Number
    • Federal EIN – Employer Identification Number
    • Property Tax bill – for pro-ration
    • Seller(s) name, home address, Social Security Number, license (if applicable).
    • Buyer(s) name, home address, Social Security Number, license (if applicable).
    • Earnest money check
    • Leases – monthly rental, security deposit, assignment, etc.
    • If Buyer or Seller is a corporation, the EIN, names of the officer(s) authorized to sign and a copy of the         Corporate Resolution authorizing the sale of the assets or stock is provided.
  • A Closing Statement and additional Closing Documents are prepared.

The Sale Closes successfully, funds are disbursed and the celebration begins!

  • Why should I choose Touchstone Business Advisors?

We at Touchstone Business Advisors have been in the business of assisting buyers and sellers since 2003.  As the Seller’s Agent, we consult with sellers to understand the value of their business and their goals. We advise sellers on how to best maximize sale price and minimize tax burden. We increase the pool of potential buyer candidates; provide aggressive, confidential marketing; and interview, screen and qualify buyers for our seller clients. When we have identified a good match for a business, we negotiate terms and structure deals for the seller that minimize seller closing risks, thereby enabling sellers to achieve the best possible outcome.

As the Buyer’s Agent, we consult with buyers to thoroughly understand their search criteria and purchase goals. We comb our extensive seller database for possible matches for our buyer clients, and announce their specific purchase criteria to our network of professionals and colleagues in an effort to find the perfect match for our buyer clients.

  • How can I make my business for sale more attractive to buyers?

Generally, buyers want to know that a change in ownership will not adversely affect profitability. Strategies include facilitating an easy transition for the buyer and ‘transparency’.  To facilitate an easy transition from one owner to another, sellers must maintain the organization and systems that have made the business profitable to date. This can ensure continued profitability even after the closing. Facilitating an easy transition for a buyer may mean staying on for a transition period until the new owner is comfortable operating the business.  To approach the sales process with transparency means to put everything on the table upfront and throughout the entire process to keep surprises to a minimum. Every surprise can cause the buyer to question the sale.

  • How do I know I’m ready to sell my business?

When selling begins to seem like a possibility, owners want to consider their options. A business intermediary can help by explaining the sales process and discussing those options. An intermediary can guide sellers in how best to prepare a business for sale. Sellers should think about why they want to sell, their vision for the future of the business, things they might like to see happen with it after they have moved on, how they and their family feel about selling the business, and what they will do after the sale.

  • How do I maximize value for my business?

To maximize the value of a business, be able to provide as much documentation as possible to support the selling price.

  • How do I prepare my business for sale?

A business that is prepared for sale is much more likely to sell, and to sell in less time, and to sell for a better price and better terms. When preparing a business for sale, sellers are advised to make sure the books for the past 3 years are complete, well organized, and supportive. Sellers must be able to provide profit and loss statements, balance sheets and business tax returns for the past 3 years. Sellers should maintain good records of contracts, leases, licenses, etc., customer and supplier lists, and employee files. They should consider the equipment that might be included in the sale of the business. If selling commercial real estate with a business, sellers must provide copies of a survey of the property & layout of the building, copies of environmental reports, and a recent appraisal if one was done within the past 3 years.

  • How do I set the asking price for my business?

Using the information you provide, the intermediary analyzes the business for sale to determine its value to prospective buyers, and produces an opinion of value report, or informal, educated, comprehensive broker’s opinion of value. A number of factors influence sale price, such as the location of the business, its history, assets, cash flow, lease terms, the equipment included in the sale, and current sales performance. The intermediary will use a number of methods to analyze the business in order to suggest a realistic price. This analysis takes industry comparables, current market multiples and buyer expectations regarding return on investment, and terms into consideration. The result of the analysis is the opinion of value report. Through the analysis, the intermediary comes to understand the inherent value of the business for sale and is well able to communicate it to buyers. For larger businesses, we utilize the services of a 3rd party professional to prepare a valuation report.

  • How do you find buyers?

On a very confidential basis, we use our extensive ever-expanding network to reach the broadest possible audience for our clients. We formally present business offerings to our associates, colleagues, local and regional professionals, industry-specific buyer groups, and our database of individuals and organizations looking for add-on businesses to merge with or acquire, strategic buyers, and targeted private equity groups. We search our database of over 3,000 potential buyers for likely buyers for our clients.

As a member of the Colorado Association of Business Intermediaries and other professional organizations, we maintain active relationships with professional business brokers who represent clients looking to buy or sell businesses.  While maintaining confidentiality, we advertise businesses for sale in a variety of popular traditional and new media – including newspapers and trade journals, the Internet and social media such as FaceBook, Twitter and YouTube. Online we advertise businesses for sale on our proprietary websites, 3rd party membership-driven sites, and a number of fee-based subscription services.  We interview and screen each potential buyer, thus we limit the exposure of our seller clients’ businesses and introduce only serious and financially qualified buyers to our offerings.

  • How do you handle confidentiality?

Confidentiality can be key to the successful sale of a business. If sellers choose to keep the sale of their business confidential, we take steps to ensure that the potential sale is known to no one but the owner. We do whatever it takes to protect the privacy of our clients. We do not disclose the identity of “confidential” businesses for sale until interested parties have been qualified and have signed a Confidentiality Agreement with us.

  • How is price allocated?

Price is allocated to goodwill, fixtures and equipment, leasehold Improvements, covenant not to compete, liquor license, furniture, and inventory.

  • How long does it take to sell a business?

Before the financial crisis and recession of 2008, it took, on average, 180 days to sell a business. The average time from list to close increased to over 365 days during the recession.  We are now migrating back to the 180 day average. The time it takes to sell a business varies widely. Many factors such as the length of time it takes to build value into the business before the owner actually decides to sell, and the degree to which the business and the buyer are a good match influence the time it takes to sell it. More complex transactions can take several years to close. Sellers may reduce the time it takes to sell, by preparing the business well, remaining accessible throughout the marketing and sale process, keeping the process moving forward and making the transition smooth for a buyer.

  • If I engage Touchstone Business Advisors, how will you market my business for sale?

We provide comprehensive exposure for businesses for sale by advertising in a number of ways…. including direct contact with potential purchasers, print media and the Internet.  Online we use our proprietary websites, 3rd party membership-driven sites, and a number of fee-based subscription services to market businesses for sale for our clients. We advertise our listings in our monthly newsletter and announce them via email blasts and in new social media including Facebook, Twitter and YouTube. We regularly send email notices about businesses for sale to individuals and organizations in our extensive database of qualified buyers, professional VIP’s (attorneys, accountants, bankers, etc.) and fellow business brokers. Additionally, we advertise at relevant trade shows and industry events. All in all, our marketing program enables us to advertise our listings to hundreds of thousands of potential buyers, private equity groups and investors.

  • Should I finance the sale?

There are a number of financing options available to buyers and many ways to structure a deal. With many years of experience in this business, the Touchstone Business Advisors’ team is well-qualified to review all the options and the tax consequences of each with sellers. We will work with a seller client to configure a sale that provides the best value for the seller. If sellers are able to finance at least part of the sale, the buyer pool essentially widens and the seller may receive a higher price for the business. There is a tradeoff however – a higher price overall comes with a certain amount of risk, whereas immediate cash often accompanies a lower price.

  • What can a seller do to ensure a successful outcome?

The best defense is a strong offense…. Sellers should continue to operate their business as usual to ensure profitability, while preparing their business for sale. When working with an intermediary, sellers should provide all the necessary information and documents in a timely manner, and be accessible for the intermediary and qualified prospective buyers.

  • What do buyers look for when considering businesses for sale to purchase?

While most buyers prioritize cash flow and potential, the range of buyers is wide and their specific purchase criteria vary greatly.

  • When is the best time to sell my business?

Almost any business can be successfully sold. However, the best time to sell is when the business is thriving and sales are increasing. Potential buyers will easily see the value of a healthy business.