Frequently Asked Questions

How long will it take to sell my business?

No one can look into the future and tell you when we will find the right buyer for your business or when they will decide to make an offer. Every business is different and every buyer is different. Some move quickly while others take time to think things over. Having your information ready shortens the time it will take to get and keep the ball moving.

How long does it take to arrange financing?

Most "preferred" SBA lenders will take 30 to 60 days to approve and fund a loan. Keep in mind that closing times will depend upon getting paperwork, appraisals, environmental impact studies, and other matters performed in a timely manner. It is also important to know that license transfers procedures, which can take 90 days or more themselves, often are not started until preliminary financing has been approved.

How do I value a business?

There are many formulas used by professionals in appraising a business, and many factors to be considered. Ultimately, value is determined by what a buyer is willing to pay and what a seller is willing to sell for. However, the acid test for valuation boils down to this: the income from the business must do three things. It must cover the debt service, it must compensate you for the time you invest in running the business, and it must compensate you for the money you invest in the business.

If this is a good business, why are they selling?

People sell businesses for many reasons including retirement, relocation, divorce, health problems, other opportunities they wish to pursue, or just general burnout. An owner’s desire to sell doesn’t indicate it is not a good business.

What are your fees?

The fees we charge depend on what work we will be doing for you. Our commission rates usually fall into a range between 2% and 8%. Each assignment is evaluated individually taking into account such factors as the size of the deal and how much work we will have to do to successfully reach your goal.

Does it cost me anything to meet with an agent?

No, there is no cost or obligation for you to meet with one of our agents. The purpose of meeting with an agent is to determine what, if anything, we can do to help you and to answer any questions you may have before we enter a business relationship together. Unfortunately we cannot help everyone and take on every assignment.

I plan to retire in 5 years. When should I put my business up for sale?

Many sellers fail to plan ahead when selling their business. It is better to have a buyer sooner than you would like than later than you need. You can always negotiate an employment contract with the buyer and stay on after the sale if you desire to keep working. It may be easier to sell this way as it offers the buyer an extended training and transition period. Don’t hesitate to put your business up for sale now even if you don’t need to sell for 5 years. It is better to sell when you want to rather than when you need to.

Who do you represent?

When a seller engages the services of IBEC that seller becomes our client. This means IBEC, and its subagents, represent you, the seller. We owe the seller undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. We put the seller’s interest first and negotiate for the best price and terms for our client, the seller.

Will I have to hold paper when I sell?

We have many sources of financing available to qualified buyers. However, occasionally a seller does hold some paper when selling a business. Holding paper will often make it easier for a buyer to get financing on a business. It also shows the buyer that you have faith in the future of the business and there are often tax advantages for a seller in holding paper. You should consider the tax, security and investment implications of holding paper. Generally our philosophy is to minimize the amount of paper our clients carry.

Can I save on taxes by doing a 1031 exchange?

A 1031 exchange is a transaction that allows sellers of investment or business real estate to completely defer the capital gains tax on the sale of their property by using the proceeds to buy a "like kind" replacement. In a 1031 exchange, sale proceeds are placed in an escrow account outside of your control. A replacement property must be identified with 45 days and purchased within 180 days of the closing of your property in order to qualify. You should seek the advice of a qualified 1031 specialist.