HOW LONG DOES IT USUALLY TAKE TO SELL MY COMPANY? Generally it takes from six to eight months from the time you enter into a listing agreement with Plutus Advisers to the actual consummation of a transaction.
HOW MUCH SHOULD I ASK FOR THE BUSINESS WHEN I PLACE IT ON THE MARKET? The initial asking price for your company should be close to what it will actually sell for, but as the same time leave some room for negotiating. When determining the price, Plutus Advisers uses a combination of an analysis of the profitability of the business, the total financial benefit that is accruing to the owners, and industry formulas and norms.
WHAT ABOUT CONFIDENTIALITY? I DO NOT WANT MY CUSTOMERS, EMPLOYEES AND VENDORS TO KNOW THAT THE BUSINESS IS FOR SALE. We do everything possible to reasonably ensure that the sale remains confidential. The name of the business or specific location is never mentioned in advertising, meetings at the business take place on nights or weekends, and correspondence is never mailed to the business. We also highly recommend that a separate email address is set up that only the owner of the company has access to. Last, every prospective buyer is required to sign a confidentiality agreement prior to the name of the business being divulged.
ONCE MY BUSINESS IS PLACED ON THE MARKET, HOW DO YOU QUALIFY POTENTIAL BUYERS? Generally buyers are questioned in depth with respect to what their financial resources are as well as what their business experience is. In some cases, we ask for proof of liquid funds prior to introducing the prospective buyer to the seller to ensure that the buyer has the financial wherewithal to consummate the transaction.
AS THE BUSINESS OWNER, WHAT ARE SOME OF MY RESPONSIBILITIES? You have an obligation to tell the entire truth concerning the actual financial and market status of the business. After a buyer is found and a contract of purchase and sale is executed, you will have an obligation to maintain and operate the business as you normally would. We recommend that you review your specific obligations and responsibilities with an attorney licensed to practice law in the jurisdiction in which your business is located.
WHAT IS THE ACTUAL BUSINESS SALES PROCESS? The actual sales process is quite involved. It entails listing the business, locating a buyer, negotiating the terms of the sale, managing the due diligence process, assisting the buyer with procuring financing, and consummating the transaction.
WILL I, AS THE SELLER, HAVE TO FINANCE A PORTION OF THE TRANSACTION? It is often beneficial to both the buyer and the seller for the seller to finance a portion of the transaction. From the buyer’s perspective, any amount financed by the seller is considered part of the buyer’s down payment by a financial institution. The buyer needs less of his or her own capital thereby making it easier to locate buyers. From the seller’s perspective, there are often tax advantages to financing a portion of the transaction since the entire capital gain is not recognized in one period. You should rely upon your out C.P.A for advice concerning this at the appropriate time.
WHAT IS PLUTUS ADVISERS’ SUCCESS FEE STRUCTURE? Since every assignment is unique, our success fee is determined by the nature of the assignment, the size of the business, the price and other variables. The fee, however, is contingent upon a successful consummation of the transaction.