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Tips to successfully buy or sell your next business
Written by:Article Overview: Whether you’re buying or selling a business it is never a neither simple nor straightforward process. Not only are there disclosures and laws to follow, but both parties are working with known other parties such as a lender, landlord, franchisor, accountant, financial planner or attorney to name a few and so it’s unknown how each of these parties will respond. The Golden Rule is to put your feet in the shoes of the other party. It won’t solve everything but hopefully it will allow you to understand “their view of the world.”
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Tips to successfully buy or sell your next business
Selling and buying a business is rarely a simple and straightforward process. When I sit down and try to categorize each of those experiences, be it from my own personal experience as a Business Broker in Sacramento or the experiences I've heard from the 14 Business Brokers that are part of my office, the different experiences tend to fit into one of the categories below.
The seller expects to:
- Receive all cash up front;
- Provide one week of training;
- Provide the buyer with one day to do their due diligence;
- Close the offer the day after the completion of due diligence;
- Be paid five to six times the business earnings or discretionary earnings.
- Buy a business with 10% down payment;
- Receive two months of training free of charge from the seller;
- Have four weeks to complete their due diligence;
- Work in the business for 30 days to "test drive" it;
- Pay no more than one year's worth of business earnings or discretionary earnings.
- The down payment from the buyer is about equal to the business earnings or discretionary earnings;
- Seller provides some financing;
- Seller provides two to three weeks of training;
- Buyer receives two weeks to complete their due diligence;
- It takes 45 to 60 days to close the transaction if things go smoothly;
- The business is sold between one to three times earnings with many factors affecting whether it's one or three times earnings or something in between.
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Article Tags: Andrew Rogerson, business, Business broker Sacramento, business escrow, business for sale, business opportunity, business plan, Buy a business, buy a franchise, due diligence, franchise, Murphy Business and Financial Sacramento, Sacramento business brokers, Sacramento business ownership, sell a business, start a business
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