WCI Brokers is the largest full-service business brokerage firm in Northern Arizona. As business intermediaries, we have facilitated more than 500 business acquisitions in Northern Arizona over the past 15 years. This article is part of a series of articles written by our professionals at WCI Brokers on topics important to business owners.
Business brokers act in a similar way that real estate brokers do as intermediaries between buyers and sellers. The major difference is that most sellers of businesses do not want anyone to know that their business is for sale for fear that they will lose customers or employees. So, you may ask, how does a business broker sell a business without anyone finding out? It is not simple. Below is an explanation of some of the issues associated with maintaining confidentiality and how we typically market a business opportunity with as much confidentiality as possible.
Seller or Broker:
It is virtually impossible for a seller to market their business for sale themselves without customers, suppliers, employees and competitors finding out that the business is for sale. Brokers have a distinct advantage in that they can advertise the business, attract interest, field inquiries and deal with prospective buyers on the seller’s behalf, without initially disclosing the identity of the business.
Buyers Confidentiality Agreements:
WCI Brokers requires all prospective buyers to sign a non-disclosure agreement prior to receiving the identity of the business or any propriety details about the business. The non-disclosure agreement states, among other things, that the buyer agrees not to disclosure the fact that the business is available for sale. It also states that the prospective buyer will not disclose any of the information that the buyer may become aware of while they are considering and investigating the business opportunity. In 2013, WCI attracted approximately 400 new prospective buyers who signed non-disclosure forms to pursue the purchase of businesses.
Discreet Exposure – Businesses are Never Advertised by Name:
As part of the listing process, WCI Brokers prepares a comprehensive marketing package of the subject business. Our advertising campaign utilizes the most effective tools available to our industry to discreetly yet effectively advertise business opportunities. These include our extensive network of referrals with other business brokers around the county, target marketing for a specific industry, Internet exposure on nine business opportunity marketing websites, trade publications and other sources as appropriate. We also market businesses for sale through our own database of more than 5,000 buyers through our monthly email newsletter. The business always is advertised on a no-name general description basis.
Business Showings:
WCI Brokers’ business opportunities are not marketed like a home for sale. Showings occur through various ways:
1) The prospective buyer starts by completing the non-disclosure form.
2) Then the prospective buyer reviews the business marketing package WCI prepares, which typically contains company history and background, a list of assets that would be included in a sale, overview of the general operations of the business, preliminary financial information and copies of any pertinent agreements that affect the business such as the business premises lease agreement, to name a few.
3) Assuming the buyer has a sincere interest in the business and meets the buying qualifications, we arrange a personal meeting with the seller. These meetings are usually after hours at the business’s premises. After the personal meeting, assuming the business is a good fit for the prospective buyer, the buying decision is close at hand. If the buyer and seller decide to proceed with the purchase and sale, the broker works to negotiate the basic terms of the sale, including any contingencies for due diligence, financing, lease assumption, third-party approvals, etc. Once a written contract is signed, we are typically 45 to 60 days from closing the transaction.
Conclusion:
Marketing a business confidentially requires a professional business broker with knowledge of all the relevant steps required to complete the process correctly while disclosing information about the business only as needed. The process is not simple and often has many components of the transaction that require cooperation and patience between the buyer and seller in order to be completed correctly. Ultimately, the seller receives the price they desire and the opportunity to retire or move on to a new career. For many buyers, owning their own business is a lifelong goal. They have the opportunity to work for themselves for the benefit of themselves and their family. QCBN
Peggy Marsh is a business broker with WCI BROKERS. WCI BROKERS believes that as dedicated business transition professionals, they can help make a difference in the lives of each of their clients. Whether it’s our buyers or sellers, we’ve been an integral part of the change they were seeking in their life.
Peggy can be reached at 928-699-1350 or Peggy@wcibusinessbrokers.com. Peggy is one of seven professional business brokers with WCI Brokers. For more information and a complimentary, confidential interview call WCI Brokers at 928-445-1144. Learn more about us on our website at www.wcibusinessbrokers.com
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