FAQs

Q: How come when I call a broker about a business I’ve seen listed on the internet, they give me the runaround instead of just sending me the information?

A: In a word, confidentiality. A Business can be damaged if the general public knows it's for sale. Employees become squirrelly, customers skittish, priority with vendors can be lost, and competition may take unfair advantage.

Q: I’ve been advertising my business for sale and have obtained a few interested buyers, but they all lose interest when they ask for the tax returns- even after I tell them that I bring home an additional $500 a week in cash. How do I get around this?

A: You don't. Stop doing it. To get highest value, report all income.

Q: I own a store, live in the apartments above it, and rent out a third floor apartment. Can you recommend a broker to handle this?

A: I see the challenge! Residential brokers sell homes and many small apartments. Commercial brokers sell mostly buildings with commercial and income use like the store front and the apartments. Business brokers mostly sell going concern businesses, but not free standing commercial or investment properties. Since in your situation the value is most likely not driven from it being a home, I would select a broker that does both commercial real estate and business brokerage.

Q: My business is stable, but it’s not longer challenging. Friends have suggested I should sell before it starts to decline. Your thoughts?

A: Perhaps selling now makes since. Business can decline, and decline fast, once an owner losses interest. However, there are other options. Perhaps you should acquire a similar business and grow through expansion. This could certainly add "challenge" back and perhaps increase the bottom line on both businesses. You might contact our Business Advisory Division to explore this and other options with you.

Q: When is the best time to sell my business?

A: When you're ready. Complex question. Simple answer. I think the question was implying personal issues aside. Even so, same answer. If you have a crystal ball that can predict the direction of; the economy, government regulation, interest rates, competition, your health, employee's loyalty, business cycles, industry cycles, and the like... Go ahead and sell your business. Now! Make a fortune in the 'forecasting business', or on Wall Street.

Q: I was looking to lease some office space. The ads in the paper, and the realtors were quoting a price. Yet, when I viewed the property sometimes the price was significantly higher then initially quoted. How do I find an honest broker, or tell the deceptive ads from the good ones?

A: Most likely, no one was trying to "scam" you, but there is some inside jargon that perhaps will help. All inclusive rents are called "Gross Rent". Rents where the base rent is stated, and then the taxes, property insurance, common area expenses, and utilities are added on are called "NNN", or triple net rents. Those somewhere in-between are called "Modified Gross Rents".

Q: I’ve looked at a few apartments, and the numbers just don’t seem to work. Yet, I see some of them selling. Why?

A: When you refer to "the numbers", I assume you are referring to the present or first year's operating numbers. Investors are looking at more than that. They look for ways to improve the rent through increases to market, or with improvement to the property that will increase the value of the apartment's rent. Beyond that, they are also looking at the tax benefits, equity build-up and appreciation of the building.

Q: I have a large down payment, but just a modest income. Will I be able to get financing to buy a business?

A: Unlike housing where your income helps determine how much a bank will lend, when buying a business, it is the income of the business that determines how much the bank will lend. Sounds like you are a good candidate to be looking for a business. Good chance you will increase your income too!

Q: The real estate market is down, why can’t I find a “steal”?

A: By now, most sellers have adjusted their prices to reflect the change in the market. So, to expect a big gap from asking price to a low-ball bid (steal) is just unrealistic. That would be counting for the drop in the market twice.

Q: I understand why I have to pay for the equipment, furniture, and inventory of a business, but why would I pay more?

A: The assets of a business is just a collection of "stuff", but an operating business is so much more. Name, trained staff, accounts, reputation, systems, etc., are often called "goodwill". All together it produces the "business", and the sum is greater than the parts.

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"How Do I..."

Q: How come when I call a broker about a business I’ve seen listed on the internet, they give me the runaround instead of just sending me the information?

See Answer »

Q: I’ve been advertising my business for sale and have obtained a few interested buyers, but they all lose interest when they ask for the tax returns- even after I tell them that I bring home an additional $500 a week in cash. How do I get around this?

See Answer »

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