Chandler’s Leading Business Broker

Q:Which Documents Are Required To Sell Your Business?

A: When you are ready to sell your business and move along to your next step, it is vital to have the appropriate document and paperwork in place and readily available to assist with the sale. You will need to check back on all your financials to make sure everything checks out and is properly aligned. Gather your financials, customer records, vendor contracts, sales reports, expense reports, and tax returns. Any gray areas will be examined more closely by your business broker.

Q: How Long Does A Business Sale Usually Take?

A: The average timeline for completing a business sale is anywhere from six to eleven months. There are many factors in play that will affect the speed and success of the process, such as gathering the appropriate paperwork and information, reviewing the financials, and the buyer’s financing process. The purchase price, the type of business, its location and structure, among other things, will have an impact on the sale as well. Working with a professional broker will ensure that the process goes as smoothly and quickly as possible.

Q: How Is A Business Value Determined?

A: Before you can sell a business, you need to know exactly how much it is worth. There are several factors that will be used to determine the value of the business. These include weighted forecasts of growth in company revenue and margin, patterns of cash returned to shareholders, changes in the company’s debt to equity ratio, and the current economic conditions of the company’s industry. Your broker will also total the assets and liabilities of the business, its current earnings, and projected earnings.

Q: What Are The Steps To Put A Company For Sale?

A: When you are ready to sell your business, there are several steps that must be taken before the company can even be listed for sale. The first step is to determine the value of your company with the help of an experienced broker. You will need to clean up your finances and make sure everything is in place. Make your personal exit strategy to ensure a smooth transition, and boost your sales. Find a business broker to represent your sale, pre-qualify your buyers, and get all business contracts in order.

Q: Do you only advertise businesses sales locally?

A: When you choose a broker like Phil Reese, we do everything we can to facilitate a smooth, efficient business sale without prolonging the process unnecessarily. Not only is your business advertised locally, but we will also advertise it throughout the state and even more broadly if you prefer. Sometimes, depending on the specific industry of your business, it will need to be advertised in more places than just locally in order to generate enough interested buyers.

Q: Which Taxes Will I Have To Pay In Order To Buy Or Sell A Business?

A: Ultimately, the taxes you pay when selling or purchasing a business are dependent on a variety of factors. If the asset has been held for longer than 12 months, you will be required to pay long-term capital gains, which is typically 15% for most taxpayers. Any proceeds treated as ordinary income will be taxed at your individual rate. Be sure to report the business sale on your tax return through Form 4797: the sale or exchange of property.

Q: How Much Time Will I Have To Put Into The Business Selling Process?

A: During the sale of a business, you can typically expect to spend about one month to negotiate offers with a buyer, a month to complete your due diligence with paperwork, financials, and contracts, and another month to close your transactions. Working with a qualified business broker will allow you to be a little more hands off during the process so you can focus on your exit strategy and continuing to manage your business successfully until the sale has completed.