For Any Transaction (regardless of who we represent):
- We provide a list of requirements, such as profit & loss statements, balance sheets, and tax returns for the previous three years, franchise agreements (if applicable), lists of inventory, FF& E, and other assets, and all vendor and employee contracts involving the business, along with a Seller’s Disclosure.
- We conduct an extensive face-to-face marketing interview, thoroughly covering all aspects of the business and the competitive environment in which it operates.
- We do a comprehensive financial review and recast the financial statements to account for Seller’s discretionary earnings and to reflect the true earning capacity and value of the business. This often involves a phone interview with the accountant/bookkeeper. Seller(s) must sign the final recast statements certifying that the statements and footnotes are true and accurate to the best of their knowledge, assuming responsibility for such.
- We analyze the industry as whole, and the specific market for the business, and use industry guidelines for financial data and risk factors to determine a fair market value. Our goals is to set a value that withstands the certain-to-come scrutiny of buyers, lenders and CPAs. If commercial property is included, it will be included in the marketing efforts, but will be valued as a stand-alone item within the overall analysis of the business.
- We will then sign a listing agreement outlining specific terms of our engagement, and will prepare listing materials for presentation to buyers and listing sites.
- We will prepare a CBR (Confidential Business Review) that will serve as a summary of the business and will include history, SWOT analysis (Strengths, Weaknesses & Opportunities) and recast financials, among other items.
- An NDA (Non-Disclosure Agreement) will be required for all prospective buyers.
- We will work to obtain, if requested by Seller, the following documentation to determine the validity of the Buyer: Buyer’s Disclosure Statement, personal financial statement (often via use of an SBA Form 413), resume, personal/business references, verification of funds for down payment (e.g. bank statement), copy of driver’s license, credit report (at buyer’s expense) and/or lender approval.
- When a buyer is identified, a transaction timetable and closing checklist will be distributed to all parties on both sides of the transaction.
- We will prepare a Letter of Intent (LOI) or accept one from another Broker, if one is involved.
- We will advise that both Buyer and Seller have legal representation for the negotiation of the final contract, and will require that an escrow service be used to accept and disburse funds.
- We will work as facilitators with both parties during due diligence, to ensure timely completion of
review/verification of all paperwork, financials, contracts, and on-site inspection of physical assets, buildings, or improvements as warranted, along with business appraisals and plans, and a review of all rights to intangible property (trademarks, patents, copyrights, trade name, proprietary processes, intellectual property).