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Miami Business Broker Advises How to Sell Your Business

business broker miami

My name is David Currea and I’m a Miami business broker with more than a decade of experience selling businesses. For questions on the business sales process or for an idea of how much your business can sell for, feel free to give me call me at (305) 331-9918 or you can reach me via email at dcurrea@capitalbbw.com. For more tips on how to sell your business fastest and for the highest price, please read on.

Throughout my 10+ years selling businesses and working along with other Miami business brokers, I’ve picked up quite a bit of knowledge that you can use to your advantage to sell your business for the highest price and with the least amount of hassle.

Heed the following advice, and you’ll be in good shape if thinking of selling your business.

 

Setting The Right Price For Your Business Is Important — Allow Your Business Broker to Provide You With a Proper Valuation

how much is my business worth

Early on in my career as a business broker in Miami, I took on any listing, however it came… even if the owner of the business was being unrealistic with their ask price.

And you know what happened? I spun my wheels and wasted quite a bit of time, because in the end, while there is a range most buyers will pay for a business, if beyond that range, a sale is highly unlikely.

In order to get a realistic valuation for your business, a business broker should examine your business’s financial performance, and use historical data of other businesses that have sold in similar industries, in order to find what multiple of EBITDA businesses such as yours are selling for. I myself generally try and go out to market at the higher end of this range.

If you go out to market far beyond the realistic range of what businesses such as yours sell for, you will more than likely turn away serious buyers and just end up wasting your time showing the business to tire kickers.

Pro Tip: Businesses where there is some seller-financing involved, even a small amount (e.g. 10%), have been shown to sell for a higher price and quicker than businesses without. Buyers trust these businesses more, as the seller has some “skin in the game”.

 

You Need at Least a Couple of Years P&Ls That Clearly Reflect Your Business’s Real Operation (All Is Confidential) – Your Broker Will Guide The Way

how to prepare business for sale

Ideally, you will have tax returns for the last three years readily available, where you declared every cent, and didn’t list any personal expenses as business expenses…

In a perfect world, all businesses would have this… If this is the case with your business’s tax returns, then that is fantastic. Best case scenario for a broker, seller and buyer.

Other than bank statements, tax returns are the most solid source of numbers you can provide a buyer. Pricing your business will be a breeze, as will showing the business to buyers. Your business will also most likely qualify for SBA approval should you want it, opening the opportunity up to a larger pool of buyers who can receive a loan directly from the Small Business Administration to purchase your business.

However, I understand not all business owners have the same philosophy when it comes to how much they declare on their returns, and therefore, many businesses’ tax returns fall short of showing what a business really makes.

If this rings true for you, there are other ways to show a buyer how your business operates, including:

  • Profit & loss statements
  • Bank statements
  • Verifiable invoices to customers for cash payments
  • Any other internal financial record-keeping system you may have in place

Your business broker will guide the way and show how to put all of this information into a clean, concise and understandable P&L that will reflect your business’s real cashflow… Business brokers help determine what “addbacks” are found in the numbers, such as personal / non-business and non-recurring expenses, that can be added back to the net profit so a prospective buyer will understand how much he’ll really be making if he purchases your business.

Note: You are safe sharing this information with a qualified buyer, as he will have to sign a non-disclosure agreement before receiving any confidential information.

 

Get Your Financial Documents In Order Before Presenting the Business to Buyers — You Don’t Want To Leave a Motivated Buyer Waiting

selling your business in miami

Here in South Florida we often joke about being on “Miami time” – but in the case of selling your business, you don’t want to keep a buyer waiting too long when they’re interested. 

The worst time to reach out to your accountant for financials is when you already have a motivated buyer interested in your business and looking to move forward. Making the buyer wait can (and will) cause them to lose interest or find another business in the meantime. As they say, “time kills all deals”, and unfortunately, this proves to be true too often.

Good business brokers will work with you and your accountant to gather all of the necessary info a buyer will be looking for. Your broker will need this information early on in the process anyway in order to provide a valuation of your business, so will help you know what is needed.

 

Being Transparent with an Interested Buyer is Important — Share the Good, the Bad, and the Ugly of Your Business — Don’t Worry, It’s To Your Benefit

No business is perfect.

Many business owners feel that they need to hide certain negative aspects of their business out of fear that these aspects may turn off a buyer.

Truth is, it’s best to lay your cards on the table. During due diligence, depending on how hard a buyer digs, the truth almost always comes out. And you don’t want a buyer knocking on your door after a business has sold because they discovered some skeletons in the closet.

It’s probably best to share all the pros up front, and once you have an interested buyer, share the cons in time. But don’t wait too long… appearing upfront about any downsides or issues with the business is much better than having them find out on their own, and asking about it later on in the process. Once this occurs, depending on what they discover, your credibility and the entire deal can be damaged beyond repair…

And if there’s a solution you can offer to fix these issues, either yourself before the sale or a recommendation they can take when running the business themselves, even better.

And if it’s a deal breaker for that buyer? You’ll find out early, thankfully before incurring professional expenses and wasting too much time.

 

Do Not Look at the Buyer as an Adversary or Negotiations as a Battle – Put Yourself in the Buyers Shoes, Compromise If Necessary, and Close Easier and with Less Stress

Miami business broker

Business sellers can sometimes take a standoffish attitude towards a buyer, just as buyers sometimes take a distrustful or standoffish attitude towards the seller… I have seen it quite a bit. There is nothing worse for a deal than either party taking this stance.

Putting yourself in the buyer’s shoes will help you understand why they may be asking for certain things. Generally buyers – just like sellers – are only trying to cover their bases. Once you understand the buyer’s concerns and why they may be asking for something, if you keep an open mind, a solution can generally come up that won’t hurt you in the negotiation.

Also, in some cases, there may have to be some compromise (from either or both parties) in order to reach the closing table. The seller gives a bit and/or the buyer gives a bit, and both parties can come to happy understanding and get what they were looking for.

 

Why Business Brokers – Not Regular Real Estate Agents (Including Commercial) – Are Who You Want Selling Your Business

miami business broker

If looking to sell your business, a regular real estate agent (residential, commercial) will have no better idea than you as to:

  • How to price your business
  • What financial information you should have ready for buyers (and how to prepare it if needed) will need
  • How and where to list the business opportunity (the regular MLS won’t cut it)
  • The importance of confidentiality in the business sales process, or
  • The vital steps needed to properly sell a business while covering all bases

If in the state of Florida, you want to make sure that the agent who’s selling your business is not only a licensed real estate agent, but also trained in the sale of businesses, a member of the Business Brokers of Florida, and have access to the BBFMLS, which is a separate and completely superior system when it comes to finding buyers of businesses than the regular real estate MLS. 

Choosing a business broker provides you many benefits when selling your business.

Besides all of the above-mentioned knowledge a business broker will have, they will also:

  • Qualify prospective buyers to ensure that they are financially capable before presenting them to you, saving you unnecessary time and stress.
  • Have access to all the most common legal documents used in a business sale such as NDAs, letters of internet and the standardized BBF business purchase contract.
  • Maintain contact with professional who can help facilitate the transaction, such as SBA lending agents and affordable closing attorneys who specialize in business sales.

One of the most important benefits an experienced business broker can bring to the table is the knowledge they’ve acquired over the years in the complex business of selling businesses.

This knowledge translates into an understanding of the concerns of both the buy and sell side in a transaction, allowing the broker to foresee and overcome any potential issues before they arise, as well as smoothly move the transaction along each step needed to reach the closing table.

 

About the Author – David Currea, BBF Member and Experienced Business Broker in Miami

Miami Business brokersDavid Currea is a Miami business broker, BBF member and commercial real estate agent with Capital Business Solutions. David has been working in business sales for more than a decade, and has brokered transactions ranging from tens of thousands of dollars up to a million+. If in the Miami-Dade County area and considering selling your business, you can reach David Currea for a free consultation at (305) 331-9918 or dcurrea@capitalbbw.com.