Horizon Business Group

Seller’s FAQ

Q: How long will it take to sell my business?

A: The time needed for the sale depends on several factors, including the price of your business, type of business and your willingness to finance the buyer. In general, it takes about 60 to 180 days to find a buyer for a business. Your HBG professional can discuss with you how long it may or may not take to complete the sale.

Q: How will my business be marketed?

A: Whether drawing upon potential buyers from the pool of preregistered buyers or marketing a business to other industry sources, confidentiality is of primary concern. HBG’s strong ties to other brokerage and merger/acquisition professionals will allow your business to receive nationwide attention but yet in only in a non-specific manner so that the normal course of business operations is not disrupted. The quiet, marketing efforts of the HBG professionals allows you to continue normal business operations without being distracted by the marketing program.

Our primary source of advertising is through other broker-related web-sites and associations. We advertise aggressively over the internet, which gives your business exposure to thousands of internet users. We may send mailings to a targeted group of buyers, which complements our regular phone and personal contact with our group of listed buyers. Lastly, we may run “blind” advertisements, which do not include any specific information about your company but will attract those interested in your type of business.

Q: What types of offers should I expect to receive?

A: An astute buyer is going to structure the initial offer to ensure that they are getting the best possible price and terms from you. Therefore, you should expect to receive an initial offer below the asking price. Don’t be offended by this initial offer. The buyer typically does not expect you to take the initial offer, nor should you necessarily expect the buyer to accept your initial counter offer. Most offers will have some contingencies. These normally include a) obtaining suitable financing by the buyer, b) obtaining an acceptable lease agreement with the landlord, and c) reviewing detail financial information. The “due diligence” period occurs after the parties reach substantial agreement on the major components of the deal and allows the buyer to make sure that the representations about the business are materially correct.

Q: What is a non-compete agreement and will I have to sign one?

A: A non-compete agreement is an agreement by you not to compete with the business you just sold.  It covers the type of business you are currently engaged in and the area from which your current customers are generated.  The time period usually ranges from 3 years to 5 years.  This is simply a protection mechanism required by both buyers and their lenders.

Q: Will I have to finance the sale of my business?

A: You may be able to sell without any financing on your part; however, a small portion of most deals are financed by the seller.  The need for you to provide any financing will depend upon several factors: a) the ratio of goodwill in the sale to tangible assets, b) the quality and accuracy of your financial records, and c) the financial strength of the buyer.

Q: Will the buyer pledge any additional collateral for my loan?

A: Buyers do not pledge additional collateral for your loan. When a buyer buys your business, they do so based on the business being able to generate sufficient cash flow to pay the loan and provide them with cash flow. If the buyer needed additional collateral, it is a sign that the business is not doing well and they will be paying too much for it.

Q: How will I know that the buyer is financially qualified?

A: HBG talks with prospective buyers to determine their backgrounds and resources.  Once a buyer begins the process of securing financing for the transaction, the lender will examine their financial resources in detail and run credit checks.  Should you agree to finance a portion of the transaction, it will be your responsibility to do whatever you feel is appropriate regarding qualifying the buyer and their financial abilities.  You may wish to obtain their financial statements, tax returns, or whatever other information you need to decide if you wish to extend credit to the buyer. Generally, if the buyer has sufficient funds for the down payment and for working capital, then they should be adequately qualified.

Q: What can I do to help sell my business?

A: The first is to continue doing business as usual. Do not let inventory or profit levels drop below normal. Secondly, keep the business clean and in good repair. Third, provide us with required information in a timely matter. Fourth, remove equipment or furniture that is not part of the sale. Fifth, work directly with us, not the potential buyers. We can protect you and help ensure the deal is successful.