FAQs

Determining a business's worth depends on several factors, primarily its ability to generate future income for the buyer. Other considerations include the value of owned equipment, inventory, and profitability trends. Market comparables also play a role in understanding your business's potential selling price.

Accurate financial records not only help determine where the value lies but also make a business more valuable overall. A valuable business can accurately inform potential buyers about its past, present, and projected profitability.

While revenue is a good starting point, it doesn't paint the full picture. For example, a business with $500,000 in annual gross revenue but $495,000 in expenses only generates a $5,000 net profit, making it less valuable. Business brokers adjust profit and loss statements to understand true earnings and other valuation factors.

Once these elements are estimated, intangible assets such as location, economic conditions, competition, goodwill, lease terms, and customer loyalty can impact the market value positively or negatively.

In essence, a company valuation is a combination of its earnings and its standing in the community. While there's no simple answer to valuing a business, an advisor from Transworld Business Advisors Grapevine can help you understand your business's potential market value.

There are five simple, yet important, steps to consider when trying to sell business assets:

1. Organize Financial Documents: Organize your books, balance sheets, and assets before listing your business. This will simplify the valuation process and make your business more attractive to potential buyers.

2. Understand Market Value: Research what similar businesses have sold for and understand what makes your business unique and profitable. This information is crucial for determining your business's value and ensuring a successful sale.

3. Develop a Strategy: Develop an exit strategy, even if you don't plan to sell soon. Unexpected events can happen, and having a plan in place will make the selling process less stressful when the time comes.

4. Boost Revenue and Sales: The ideal time to sell is when your business is thriving. If you're considering selling, work on increasing sales and improving your marketing to attract more customers and boost your bottom line.

5. Partner With a Business Broker: Transworld Business Advisors Grapevine has the expertise, network, and tools to help you sell your business quickly and at the best price. They'll guide you through the process with professionalism and connect you with interested buyers.

Knowing your business's worth is the first step in preparing for a sale. Transworld Business Advisors Grapevine offers a free company valuation calculator to help you understand where your business stands.

Your business broker will assess the following factors to determine the value:

- Net profit

- Business model

- Growth trend

- Competitors

- Company assets

- Customer loyalty

- Age of business

Two common methods to calculate a business's worth are:

1. Comparing the sale price of similar businesses to your company's annual sales

2. Comparing the sale price to your annual recast profits, resulting in a multiple of earnings

To accurately value your business, it's essential to consider the current market, trends, and all assets, including trademarks, furniture, real estate, technology, and equipment. Even intangible assets like public perception and brand awareness play a role. A business broker can help you navigate these complexities.

Brokers at Transworld Business Advisors Grapevine not only help you determine your company's value but also work to maximize its worth. They understand what buyers are willing to pay, what they look for, and how they prefer information to be presented.

Selling your business to a competitor may seem daunting, but it's not uncommon or impossible. 

Here are six key tips for successfully navigating this process:

1. Protect confidential information: Use a nondisclosure agreement (NDA) to safeguard

trade secrets and confidential information until the appropriate time. When a competitor shows interest, have them sign an NDA and work through an intermediary.

2. Hire an intermediary: Engage an experienced business brokerage firm, like Transworld Business Advisors Grapevine, to guide you through this complex sale. Also, consult an attorney to ensure the proper structure and protections are in place.

3. Determine your business's value: Establish your business's worth to set a competitive and fair listing price. Keep in mind that competitors may have a good understanding of market standards, but they may not need all of your assets.

4. Keep emotions in check: Don't let instinctive distrust hinder a potentially successful deal. If the sale goes through, a former competitor could become a valuable business partner.

5. Ask questions: It's reasonable to inquire about their true interest, expansion plans, and intentions for your business. Before signing, ensure you understand their motivations and goals.

6. Stay focused on your business and employees: Negotiations can be time-consuming, but don't neglect your company and employees. Maintaining revenue is crucial, as a business is only as valuable as its latest earnings.

Contact us today to get started with the sale of your business!

Selling your small business is a significant decision, whether it comes easily or not. The reasons may range from the desire for new entrepreneurial opportunities to approaching retirement. There's no right or wrong reason to sell. Sometimes, the best thing you can do for yourself and your business is to let it go, allowing new management to take it to new heights while freeing up your time.

Consider these five main reasons why you should sell your business:

1. Retirement: If your business is successful and it's time for you to enjoy the fruits of your labor, selling allows your business to continue prospering and thriving even after you're gone.

2. Burnout: If you're no longer passionate about your business, selling provides an opportunity to embark on new endeavors and reignite your entrepreneurial fire.

3. New Opportunities: If new opportunities are knocking on your door, selling your current business can provide the financial means to pursue them and get a fresh start elsewhere.

4. Buyer's Market: When the economy is doing well and consumers have expendable cash to spend, investors are more interested in buying new businesses. If it appears to be a seller's market, it might be time to list your business for sale.

5. Fear of Risks: If you become more risk-averse, which can be detrimental to your business's growth and profit, it may be wise to sell. Your business may begin to decline due to your managerial decisions, and selling can be the best thing for your business.

If you're still unsure about selling your business, contact an expert from Transworld Business Advisors Grapevine, a top business brokerage firm, to help you reach the best decision by listening objectively as you discuss your reasons for considering a sale.

Buying or selling a business can be a complicated venture. While some businesses are sold without the help of accountants and attorneys, we strongly recommend that both the buyer and seller engage professionals from a business brokerage firm.

Yes! As an entrepreneur, you may romanticize the idea of being your own boss. In fact, according to the U.S. Small Business Association, self-employment is largely opportunity-driven, with 56% of business owners who employ others saying that launching a company was the best way to bring their own products to market. The question is, how do you get there?

The first thought is often starting your own business. Although it has numerous advantages, starting from scratch understandably comes with challenges. It's important to note that being an entrepreneur isn't limited to starting a business from the floor up; in fact, there are several advantages to buying an existing business.

Buying a business is considered less risky because it's already established. An established business has a vendor and supplier list, a customer base, and an entirely trained staff already in place. There are benefits to acquiring a company with a good financial history and immediate cash flow. With customer loyalty comes goodwill, which is one of the most important and incredibly valuable intangible assets when you buy an existing business. Meanwhile, a new start-up business must build the market for its goods and services, create a following, develop a financial history, etc., all while trying to create some cash flow.

An existing business may not only have a storefront but also probably comes with equipment and inventory, which can be a major upfront investment. Although you may think this is reflected in the listing price, it's important to note that the previous owner already had seasons of trial and error to establish which equipment worked best and which inventory is most popular among its customers. This information is priceless, as it will save you time and money.

Although every investment comes with ups and downs, purchasing a business is a good idea. This is especially true for someone who wants to invest and see a return quickly, rather than someone with the time, patience, and energy to dream up something new.

If you're thinking about buying a business, Transworld Business Advisors Grapevine has an experienced team of business brokers in our business brokerage firm offices across the country ready to help you find the right business to buy. If you haven't settled on a specific industry, our brokers can discuss the details of each with you as you narrow down your options.

Now that you have decided you would like to buy an existing small business, you're likely wondering what is next. Well, finding the right business to buy can be simple, but you'll need to be prepared, understand what is expected of you, and ensure you've the right kind of support on your team.

Step 1: Ask yourself: what kind of business would I like to buy?

You need to decide what industry you might like to enter. Does this industry align with not only your interests but also your skills? What kind of products or services do you feel confident you can market and sell successfully? All these questions are important before you make an offer on an existing business.

Step 2: Hire a business brokerage firm.

Before you begin your search, hire a business broker. Not only are they experts in negotiating, working with accountants and attorneys, solving problems, and ensuring deals cross the finish line, but they're also experts in both the selling and buying process. With a unique perspective from both sides of a sale, they provide invaluable advice during the process. Not to mention, they'll come in handy with checklists, strategies, and a network of sellers with businesses for you to choose from.

Step 3: Establish your goals.

Before your search, you'll need to establish your goals. For instance, what is your budget? What is the maximum amount you can spend? Other factors that you need to consider are what industry, company size, location, sales, and staff align with your investment goals. Without these goals, the search will be overwhelming and fruitless.

Step 4: Research! Search for businesses on sale.

Your Transworld Business Advisors Grapevine business broker has access to an extensive network of businesses for sale. With their guidance, you can punch in your preferred parameters (the goals you've established) and then begin your search!

Step: Make an offer!

Meet with business owners and tour the businesses. Visiting businesses you have interest in and meeting with the owners is crucial. Once you've reviewed the offering and met with the owner, at this point, you'll want to make a contingent offer on the business. If it's accepted, then you can start the next step.

Step 6: Do your due diligence!

Have a signed purchase and sale agreement or LOI? It's time to do your due diligence. For due diligence, you'll need to have a team of lawyers, accountants, and brokers in your corner. At this point, the experts need to do a deep dive into the business's financials to ensure everything they've said about their numbers is true. To help, use this checklist as a start.

* Business licenses and permits

* Organizational paperwork

* Environmental inspections

* Contracts and leases

* Status of inventory, equipment, furniture, and real estate

* Past financials and supporting documents like bank statements.

* Lein search

* Non-compete agreements or anti-solicitation agreements to protect your purchase

Step 7: Go to the closing.

Once all the supporting documents, leases, and contingencies are acceptable, you can move to get the deal closed and start the transition period! Congratulations!

To buy a small business, you'll need money on hand to make the purchase. But arguably, the most important thing you need is a trusted and experienced business broker. Your broker will walk with you through the entire process and serve as your eyes and ears to help ensure you purchase a business you love and that the process is smooth from beginning to end. With knowledgeable brokers across the world, you can count on Transworld Business Advisors Grapevine. Contact us today.

Our website, www.tworld.com, has a search page where you can look at thousands of businesses. There are a lot of other websites that have businesses for sale. If you find any business for sale, please call your business brokerage firm representative at Transworld Business Advisors Grapevine, and we can contact the seller or other broker on your behalf.

Transworld Business Advisors Grapevine is a business brokerage firm generally paid by the seller, not the buyer. However, there are other costs, such as legal and accounting fees and transition or startup costs that the buyer incurs.

Buying or selling a business can be a complicated venture. While some businesses are sold without the help of accountants and attorneys, we strongly recommend that both the buyer and seller engage professionals.

While the E-2 process is quite complex and we certainly recommend a consultant that specializes in obtaining visas, several of Transworld's agents have successfully completed E-2 transactions and can provide enough help to move you through the process.

Our website, www.tworld.com, has a search page where you can look at thousands of businesses. There are a lot of other websites that have businesses for sale. If you find any business for sale, please call your Transworld representative and we can contact the seller or other broker on your behalf.

Transworld is generally paid by the seller, not the buyer. However, there are other costs, such as legal and accounting fees, and transition or startup costs that the buyer incurs.

Depending on the complexities of the business, the former owner will offer varying levels of training. On most small businesses, the owner will offer training for two to four weeks at no cost to the new owner.

As part of the acquisition process, you will have to go through "due diligence." During this period the seller is required to present documents to verify his profit numbers.

No, while 100% of the purchase price is sometimes required, sellers will frequently provide some amount of owner financing. Additionally, a lender may be able to loan up to 80% of the purchase price through a loan sponsored by the Small Business Administration.

Businesses vary in price a great deal, however, it would be unlikely that one could buy a business with much less of a down payment than $20,000.

Yes! As an entrepreneur, you may romanticize the idea of being your own boss. The question is, how do you get there? The first thought is often starting your own business. Although it has numerous advantages, starting from scratch understandably comes with challenges. It is important to note that being an entrepreneur is not limited to starting a business from the floor up, in fact, there are several advantages to buying an existing business.

Now that you have decided you would like to buy an existing small business, you are likely wondering what is next. Well, finding the right business to buy can be simple but you will need to be prepared, understand what is expected of you, and ensure you have the right kind of support on your team.

Determining a business's worth depends on several factors, primarily its ability to generate future income for the buyer. Other considerations include the value of owned equipment, inventory and profitability trends. Market comparables also play a role in understanding your business's potential selling price.

Selling your business involves five essential steps that help ensure a smooth and successful transaction. First, organize your financial documents to present a clear picture of your business's performance. Next, understand your business's market value so you can set a realistic asking price. Then, develop a clear exit strategy that outlines your goals and timeline. Focus on boosting revenue and sales to make your business more attractive to buyers. Finally, partner with an experienced business broker who can guide you through the process and connect you with qualified buyers.

Knowing your business's worth is the first step in preparing for a sale. Transworld Business Advisors offers a free business valuation calculator to help you understand where your business stands.

Selling to a competitor can be a strategic move, but it requires careful planning. Start by protecting your business's sensitive information. Don't share confidential details too early. Hiring an intermediary, such as a business broker, can help maintain discretion and professionalism. It's also important to determine your business's value objectively and remove emotion from the equation. Don't hesitate to ask questions throughout the process and stay focused on running your business and supporting your employees to maintain stability during the transition.

Selling a restaurant follows many of the same steps as selling other small businesses, such as getting your financials in order, determining your restaurant's value, hiring a business broker and pre-qualifying buyers. However, there are some additional documents you'll need to gather and organize.

To sell your small business successfully, follow these seven steps. Begin by determining your company's value to set a fair price. Clean up your financials to make your business more appealing to buyers. Prepare an exit strategy that outlines your goals and timeline. Boost sales to demonstrate growth potential. Hire a business broker to help you navigate the sale. Pre-qualify potential buyers to ensure they're serious and financially capable. Finally, prepare a sales contract that clearly outlines the terms of the deal.

Selling your small business is a significant decision, whether it comes easily or not. The reasons may range from the desire for new entrepreneurial opportunities to approaching retirement. There's no right or wrong reason to sell. Sometimes, the best thing you can do for yourself and your business is to let it go, allowing new management to take it to new heights while freeing up your time.