Alliance Business Brokerage Course HM3

Welcome to : 

Welcome to Alliance Business Schools PowerPoint Presentation “Introduction to Business Brokerage” The lecture that accompanies each slide will be conducted by Neal Holland, founder of Alliance Business Schools and Howard Meuche, a Senior Associate with many years experience in Business Brokerage. Each slide is accompanied by a separate narration. To activate the sound, double click on the speaker icon or right click and on that menu click “Play Sound”. To stop the sound, click on the speaker icon.

Introduction to Business Brokerage : 

Introduction to Business Brokerage Alliance Business Schools

Introduction to Business Brokerage Outline : 

Introduction to Business Brokerage Outline I BACKGROUND History of Business Brokerage Size of the Market Number of Business Brokers VS number of real estate brokers Commissions & Commission Splits No weekends (Normally) Interesting, challenging and rewarding II IN BUSINESS BROKERAGE THERE ARE 2 WAYS TO MAKE MONEY; AS A SELLING BROKER OR AS A LISTING BROKER Why listings are the key to success Multiply your chances of being at the closing table III YOU ARE THE DIRECTOR Buyer and Seller are the main players Lawyer, accountant, advisors, Uncle Harry are important bit players

Business Brokerage Course Outline -continued : 

Business Brokerage Course Outline -continued IV WHERE DO SELLERS COME FROM Retirement Poor health or death Divorce/partnership dispute Relocation/wants to buy another business Burned out (tired of business) Business going south V WHERE DO BUYERS COME FROM Downsized (layoff) Inherited money Savings or retirement package (golden parachute) Sale of house or business Family or friends Home equity loan.

Business Brokerage Course Outline -continued : 

VI BUSINESS LISTING INFO – PART 1 Reason for selling Business description Business structure Business organization Assets Facilities VI BUSINESS LISTNG INFO – PART 2 Financial record review Cash Flow or Owner’s Benefit Establishing the selling price Asset vs. Stock sale VI BUSINESS LISTING INFO – PART 3 Goodwill Real estate (if included) Payment terms Listing Contract Commission Business Brokerage Course Outline -continued

Business Brokerage Course Outline -continued : 

Business Brokerage Course Outline -continued VII MARKETING THE BUSINESS –Part 1 Advertising must be discreet Listings Selling profitable businesses VII MARKETING THE BUSINESS –Part 2 Selling unprofitable businesses Buyers Buyer/Seller meetings VIII CONTRACT ACCEPTANCE AND CLOSING Buyer submits offer Seller acceptance Buyer due diligence Buyer contingency sign off Closing

Business Brokerage Course Outline -continued : 

Business Brokerage Course Outline -continued IX FORMS Seller Profiles Buyer profiles Listing information Sales contract Contingency Removal Non-disclosure form X Conclusion Form copies Thanks

Introduction to Business Brokerage : 

Introduction to Business Brokerage I     BACKGROUND History of Business Brokerage Another American Dream Economy Depends on businesses Entrepreneurs Size of the Market 14 Million Businesses Change over rate Look at the Yellow Pages Number of Business Brokers vs. number of real estate brokers 1,000,000 REALTORS (% Business Brokers) Commissions & Commission Splits 6% vs 10% Company Split No weekends (Normally) Weekend home shoppers/ Weekday business buyers Interesting, challenging and rewarding Helping people in career opportunity choices

Introduction to Business Brokerage : 

Introduction to Business Brokerage II        IN BUSINESS BROKERAGE THERE ARE 2 WAYS TO MAKE MONEY;            AS A SELLING BROKER OR AS A LISTING BROKER Why listings are the key to success Inventory variety demand by buyers and brokers Multiply your chances of being at the closing table   Qualifying buyers     Educating Sellers   III        YOU ARE THE DIRECTOR Buyer and Seller are the main players .      Buyer / Seller Meeting        Lawyer, accountant, advisors, Uncle Harry are important bit players Good attorney relationship Accountants can be detrimental Uncle Harry can be helpful

Introduction to Business Brokerage : 

Introduction to Business Brokerage IV WHERE DO SELLERS COME FROM ? Retirement Age or “Burn out” Poor health or death Divorce/partnership dispute Legal aspects – consult attorney Relocation- wants to buy another business Tired of business Business going south Under capitalized Advertising

Introduction to Business Brokerage : 

Introduction to Business Brokerage V WHERE DO BUYERS COME FROM ? Downsized (layoff) Same interest with previous employment Source of investment in new business Inherited money Savings or retirement package (golden parachute) Sale of house or business Family or friends “Uncle Harry” Possible partners Home equity loan.

Introduction to Business Brokerage : 

Introduction to Business Brokerage VI BUSINESS LISTING INFO – PART 1 OF 3 Reason for selling Poor health, burned out, etc. Business description Type of business and location Years established C- corp., S- corp., LLP, Proprietor Business organization Officers, Personnel lists Assets Equipment List with current value Copy of any equipment leases Inventory List - disregard items with no recent activity Facilities Type building, Area (sq. ft.) If leased – monthly payment Copy of lease

Introduction to Business Brokerage : 

Introduction to Business Brokerage VI BUSINESS LISTING INFO – PART 2 OF 3 Financial record review P&L statements and Tax returns – 3 years Cash flow or Owner’s Benefit Salaries Net Profit Depreciation Interest Fringe Benefits Other Establishing the selling price Owner estimate Comparable sales estimate Cash flow estimate Asset sale vs. stock sale Asset sale is to the buyer’s advantage Stock sale is to seller’s advantage

Introduction to Business Brokerage : 

Introduction to Business Brokerage VI BUSINESS LISTING INFO – PART 3 OF 3 Goodwill Goodwill is the difference between the selling price and the sum of inventory plus hard assets (typically furniture, fixtures, and the equipment, but not real estate} Real estate – if included Property description Property appraisal Payment terms Owner financing Bank financing Listing contract Simple FBBA Commission

Introduction to Business Brokerage : 

Introduction to Business Brokerage VII MARKETING THE BUSINESS – PART 1 OF 2 Advertising must be discreet! Publications and Media use of generic descriptions Internet broadcast Customers on file Similar businesses Listings Co-Broker other Business Brokers Keeping Seller informed as to activity Selling profitable businesses All Operating Statements, Balance Sheets and current business data available Corporate Resolution signed if an entity

Introduction to Business Brokerage : 

Introduction to Business Brokerage VII MARKETING THE BUSINESS – PART 2 OF 2 Selling non-profitable businesses Need to show Performa with future business possibilities Promotion of new ideas and products by new owner Expenses of opening a “new business” versus existing business Corporate Resolution signed if an entity Buyers Initial contact Need for Buyer/.Broker meeting Non-Disclosure Agreements to be signed Buyer/Seller meetings Time and location Information disclosed at this meeting Discussion of Due Diligence

Introduction to Business Brokerage : 

Introduction to Business Brokerage VIII CONTRACT ACCEPTANCE AND CLOSING Buyer submits Offer subject to contingencies Seller accepts or counter offers Offer is signed by both parties subject to contingencies Buyer performs due diligence Includes review of financial information Review of Equipment List and Inventory Buyer signs off on Contingencies Equipment, Inventory, financing Lease assignment or new lease Closing Attorney completes transaction

Introduction to Business Brokerage : 

Introduction to Business Brokerage IX FORMS Seller Profile form Buyer Profile Form Listing Information form Listing Contract Non – Disclosure form Contingency Removal form Asset Purchase Agreement (Not Included)

IX Forms – Potential Seller : 

IX Forms – Potential Seller

IX Forms – Potential Buyer : 

IX Forms – Potential Buyer

IX Forms – Business Listing Information : 

IX Forms – Business Listing Information

IX Forms – Listing Agreement : 

IX Forms – Listing Agreement

IX Forms – Non- Disclosure Form : 

IX Forms – Non- Disclosure Form

IX Forms – Contingency Removal Form : 

IX Forms – Contingency Removal Form

Introduction to Business Brokerage : 

Introduction to Business Brokerage X CONCLUSION For free editable copies of the forms in Word format, simply E-mail us at: Administrator@alliancewebinar.com Use these forms to advantage because they are helpful in recording information in a manner that’s organized and at the same time easily accessible. For any questions please contact us as well at: Administrator@alliancewebinar.com We thank you for this opportunity