Miami Business Broker Advises How to Sell Your Business

David Currea is a Miami business broker with nearly 15 years of experience selling businesses in the area of Miami-Dade. If interested in selling a business in Miami, you can reach David for more more information at (305) 331-9918 or dcurrea@capitalbbw.com. For tips on selling your business, please read on.

 

Throughout my years of working as a Miami business broker, I’ve learned quite a bit about the the business sales process – including how to sell a business for the highest price, and how to eliminate the headache from the process.

Heed the following advice, and you’ll be in good shape when it comes to selling your business.

Get Your Financials In Order (If Not Already) Before Listing Your Business For Sale – Your Broker Will Help With This

Here in South Florida we often joke about being on “Miami time” (or Cuban time, or whatever nationality we may be) – but in the case of selling your business, you don’t want to keep a buyer waiting too long, especially when you have a motivated and interested fish on the hook. 

Make them them wait too long and you run the risk of them losing interest or moving onto another business in the meanwhile, especially if they are evaluating several deals at the same time. As they say, “time kills all deals”, and unfortunately, this proves to be true quite often.

A good business broker will work with you and your accountant to gather all the necessary info a buyer would like to see when evaluating a business opportunity. 

 

You Should Have at Least a Couple of Years of Numbers That Reflect Your Business’s Real Operation – If Not, Here’s What You Do

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

Ideally…

However, as a Miami business broker I know this doesn’t happen all the time, especially in South Florida.

If this may be your case, don’t worry, there are other ways to prove to a buyer your business’s real performance, 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

If working with a business broker, the broker should recast your financials by determining what “addbacks” are found in the numbers, such as personal / non-business expenses and one-time, non-recurring expenses, that can be added back to the bottom line so a prospective buyer will have a better understanding of the real profit they can see as the owner of the business.

Note: No need to worry about sharing this information. All information is kept completely confidential, and buyers must sign an NDA before being presented with any details on a business opportunity.

 

Setting the Right Price for Your Business Is Key – Too High and You Won’t Get Any Offers… Too Low and You’re Leaving Money on the Table

Early on in my career as a business broker in Miami, I took on any listing I would come across… even if the owner of the business was being unrealistic with their asking price.

And what happened was I spun my wheels and wasted a whole lot of time (mine and the business owner’s), because in the end, while there is a range most buyers are willing to pay for a business, anything beyond that range makes a sale much less likely.

In order to receive a proper valuation for your business, your business broker should first determine the business’s real bottom line – its EBITDA (they will have done this already in the previous step). With this number, they will then research industry standards and comparables for your particular industry, and find out what multiple of the EBITDA businesses such as yours have sold for. Inventory and assets in some cases are added to the multiple, depending on the type of business.

Pro Tip: While not necessary, businesses where there is at least some seller-financing (even as little as 10%) offered by the seller have been shown to sell faster and for a higher price than businesses without seller financing. Buyers trust these businesses more, as the seller has some “skin in the game”.

 

Do Not Look at the Buyer as an Adversary – Work With Them, and Be Willing to Give a Little In Order to Close (As Long as They’re Doing the Same!)

Both the buy and sell-side of a deal can sometimes take stubborn, “standoffish” attitudes towards each other. This adversarial attitude never helps (but happens quite often!).

Putting yourself in the buyer’s shoes will help you better understand their position. Generally, buyers – just like sellers – are only trying to cover their bases. Once you understand the buyer’s point of view, if you keep an open mind, a solution to almost any issue presented can be found that won’t hurt you in the negotiation.

Also, in many cases, there may be a need for a bit of compromise in order to reach the closing table. You give a little, they give a little, you find a happy middle, and you close.

 

Why You Want a Business Broker – And Not a Regular Real Estate Agent – Helping You Sell Your Business

If looking to sell your business, you want a licensed real estate agent trained in the sale of businesses (a business broker aka business intermediary) – not a residential or even commercial real estate agent – listing your business opportunity for sale. While business brokers are, regular real estate agents are not trained in:

• Business valuations
• Interpreting and working with the numbers to determine the real net profit of a business
• The importance of confidentiality when it comes to the sale of a business
• Knowing how to present a business’s actual financial performance to buyers
• Business and numbers in general – they won’t know how to answer the tougher financial questions from buyers
• The process that should be followed when selling a business

If you’re in the state of Florida, you want to ensure that the business broker you are working with is a member of the Business Brokers of Florida, and that they have access to the BBFMLS, which is a far superior system to the regular real estate MLS when it comes to confidentially listing businesses for sale and finding buyers of businesses.

Besides all of the above-mentioned key roles, business brokers will:

• Qualify buyers before presenting them – saving you time by ensuring a buyer is financially capable and has the right background for your business
• Have contacts with SBA lenders, and can get your business SBA-pre-approved, opening up your business to a much larger pool of buyers
• Have access to all of the most important documents used in the business sale process, such as NDAs and business purchase / sale contracts

However, the most important benefit an experienced business broker will bring to the table is the knowledge they’ve acquired in the complex business of selling businesses. This translates into an understanding of the concerns of both the buy and sell-side of a transaction, allowing the broker to avoid any potential issues before they arise, and to smoothly move the transaction along each necessary step in the business sales process to get to the closing table.

 

About the Author – David Currea, Miami Business Broker, Licensed Real Estate Agent and BBF Member

David Currea is a BBF member, licensed real estate agent and part of Capital Business Solutions’ team of Miami business brokers. David has been selling businesses since 2008, and has brokered transactions ranging from tens of thousands of dollars up into the millions. If in Miami-Dade and considering selling your business, you can reach David for more information at (305) 331-9918 or dcurrea@capitalbbw.com.