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    How to Buy, Sell or List a Small Business
    How to Buy, Sell or List a Small Business
    How to Buy, Sell or List a Small Business
    Ebook70 pages1 hour

    How to Buy, Sell or List a Small Business

    By Pat Sims

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    About this ebook

    For Business Owners who want to sell. For new and experienced Investors and Entrepreneurs. For Realtors who want to list a small business professionally and successfully.
    In easy-to-understand terms, here are just some of the things you will learn: how to speed up the process by ‘qualifying’ buyers; that you must determine why the seller is really selling; to prepare a professional sales brochure; and how to set minimum listing requirements.
    It shows you how appraisals are made using the ‘Return On Investment’ method and how to prepare the financial information.

    Here’s what you need to ask the professionals - is it a Sale of Assets or Sale of Shares? What are the tax implications for buyers and sellers? What is the professional opinion of market value? Should the financial statements be reconstructed for sale purposes; how do the Business Ratios look?

    The steps in the marketing process are explained and include: Disclosure of Financial Statements; Letter of Intent, Deposits; the Offer and the Agreement for Sale; Due diligence; Financing options; Confidentiality; and how to handle 'unreported cash sales'.

    This information will save you from going down many ‘blind alleys’ and from many heartaches. These are things you really need to know.

    Free forms for ‘buyer qualification’ and ‘entrepreneur’s questionnaire’.

    LanguageEnglish
    PublisherPat Sims
    Release dateNov 8, 2011
    ISBN9780987840929
    How to Buy, Sell or List a Small Business
    Author

    Pat Sims

    Pat Sims has been working in real estate nearly all his adult life in Europe, Australia and North America. He has worked as a leasing agent for residential and commercial investors, a real estate salesperson, an appraiser, a property inspector, a land surveyor, a property manager, a developer, and an investor. He has learned from some of the best and most successful minds in the business and has been an educator, author, course designer, and text-book editor for international real estate institutes, associations, and brokerages. He has owned a number of small businesses and was a co-creator of a weekly newspaper that morphed into a daily. His popular seminars have been attended by more than 20,000 people and have ranged across the entire real estate spectrum including residential marketing, commercial leasing and sales, and business brokerage. Today he is a full-time author and publisher of industry self-help eBooks and has dabbled in the uncertain world of fiction. He lives in Nova Scotia and travels widely.

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      Book preview

      How to Buy, Sell or List a Small Business - Pat Sims

      How to Buy, Sell or List a Small Business

      Pat Sims

      Smashwords Edition

      Copyright 2011 Pat Sims

      From A Distance Publishing, 2011

      http://www.fromadistance.com

      All rights reserved. No part of this publication may be reproduced either by hard copy or electronic methods in any form without the prior written permission of the author and publisher.

      Table of Contents

      Chapter One - Introduction

      Things you need to know; Small business definition; Business categories; Forms of Ownership; Confidentiality; Agency.

      Chapter Two - Preparing the Sale

      Why is the owner selling? Reasons they don’t want to talk about; Qualifying the buyers; Commissions; Assets or Shares? Taxes; Unreported Cash Sales.

      Chapter Three - The Sales Brochure

      The Shopping List; Compiling the Brochure; Contents.

      Chapter Four - Financial Statements

      Types of statements; Business ratios; Reconstructing statements.

      Chapter Five - How Small Businesses are valued

      Return on Investment method; Typical R.O.I.s; Other appraisal methods.

      Chapter Six - Financing

      The three sources; Sellers holding paper; Investors; Friends and Family; Banks; Government.

      Chapter Seven - The Final Chapter of a sale

      Letter of Intent; The Offer; The Deposit Due Diligence; Steps to a successful Negotiation and Sale; Conclusion.

      Forms

      A number of forms are freely available to you by downloading them from our web site. They include a ‘Confidentiality Agreement’; ‘Letter of Intent’; ‘Entrepreneur’s Questionnaire’; ‘Confidential Buyer’s Financing Questionnaire’.

      Chapter One

      ~ Introduction ~

      I am going to make an assumption - that all you really want to know is how to value a business because you already know everything else there is to know about buying, selling and listing a small business. I say this after doing hundreds of seminars on this topic and receiving feedback from my students which can be summarized as, Just give me the formula. I want to encourage you to read this entire eBook as it will give you much more than an explanation of values because it deals with the entire marketing process. Values shouldn’t be ‘plucked from the sky’ in ignorance of the factors that have developed them. Time spent here is very worthwhile.

      There is a strong need for everyone to be ethical in trading high-priced items and all parties to a contract should be aware that we live in an age of litigation and, in the event a person feels aggrieved, court action may become a real possibility. The seller can be considered a fraud if he/she lies about the business income or withholds some hidden defect. The agent can also be considered a fraud for making false statements and failing to protect the interest of his/her client. That same agent is also legally obliged to act honestly and fairly with everyone else in a transaction. The buyer is unlikely to be sued for being a smart negotiator but he/she is the most likely person to commence legal action if the financial statements turn out to be incomplete or inaccurate and the business just isn’t what he/she was promised or expected.

      The old saying is that, ‘a little knowledge is a dangerous thing’ and another is, ‘I know enough to be dangerous.’ This eBook cannot make you an overnight expert but it can help to introduce you to the world of business which I believe is the most exciting, frustrating, devastating, and satisfying of them all.

      Agents are most commonly realtors, business brokers and accountants who should be aware of their ethical and legal obligations but for those who are not, here are just a few which everyone could use in a business transaction.

      A REALTOR shall protect and promote the interest of his/her client…..

      A Member shall discover and verify the pertinent facts relating to a property …. that a reasonably prudent Member would discover.

      Do not rely solely on information provided by the seller if it can be independently verified.

      All financial information must be disclosed to the buyer.

      Do not provide an opinion of value unless you have the knowledge, skill and training and have completed the necessary research.

      If you can’t provide competent service either alone or with another qualified person, decline to act.

      Note to reader;

      No one should enter or be counselled to enter a contract for the sale of a business or real estate without seeking competent legal and financial advice.

      Things you should know before you begin

      In the course of listing, negotiation, and sale you will be faced with an array of business jargon which can be confusing unless you have some prior knowledge. It is not in your best interest to learn them from the opposing party to a contract and you may miss important points unless you are ‘up to speed’.

      Defining a ‘Small Business’

      There is no generally accepted standard description for small, medium, or large

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