WORKING WITH BUSINESS BUYERSThe Most Challenging Globally Recognized Business Training & Certification Programs

WH

O ARE YO

UR BU

YERS?Who are your Buyers?

To be successful as a Business Broker you must understand working with buyers. It goes with out saying that you must have a buyer to sell a business. What we will discuss in this video will help to learn about small business buyers and how to work with them.

Who are They?•They are looking to replace income from a job

OR•They are looking for an investment to supplement their income

•They are fairly well educated (Associates Degree or Higher)•They have other advisors that will help them evaluate the business

•They want to be their own boss•Most fall into the 90% Rules of Buyers

THE “90%

RULES O

F BUYERS”

The “90% Rules of Buyers”

The majority of Buyers fall into what Edward Pendarvis calls the 90% Rules. I don’t know if the 90% figure is exactly right, but most fall into these categories. Understanding this gives you insight into their motivations and thinking.

• Most are first time buyers• Most will have to finance the purchase

• Most are not sure what type of business they want• Most are scared

• Most will need seller financing• Most will not buy the business they first inquired about

• Most have between $15,000 to $60,000 to put into a business• Most are comfortable with 10% down

• Most are between 35 to 55 years old, come out of middle management, and are used to making from $45,000 to $95,000 per year

STEPS IN TH

E BUYIN

G PRO

CESSSteps in the buying process

When working with buyers it is important to follow the correct steps in the correct order.

1.Initial contact with the buyer2.Get a signed confidentiality and non-disclosure agreement3.Collect buyer information4.Determine what businesses fit the buyers profile5.Disclose a couple of good fits6.Set up a confidential showing of the business7.Have a meeting with the buyer and seller8.Provide condensed financial information to the buyer9.Help the buyer to submit an offer to purchase10.Handle the negotiations of the offer until it is accepted11.Manage the due diligence process12.Get disclosures signed by buyer and seller13.Manage the closing process14.Close the transaction

FIRST STEPS Steps 1 through 5 Build Relationships and Cover the Bases

• Handle the initial contact

• Build Rapport with the Buyer

• Brief Explanation of the Process

• Explain and get signed Confidentiality Agreement

• Get Buyer information

• Ask open ended questions

• Present One or Two Businesses that fit

MID

DLE STEPS

Steps 6 through 10 Show and Sell the Business

• Confidential Showing

• Manage the Buyer/Seller Meeting

• Share the overview financials with the buyer

• Help the buyer draft the Offer or LOI

• Submit the Offer to the Seller

• Communicate all counter offers to both parties

• Work for the common ground

• At Contract!

FINAL STEPS

Steps 11 through 14 Do the hard work and Get Paid

• Manage the Due Diligence Process

• You are the Conduit of Information

• Get detailed financials to the Buyer

• Help the buyer with financing and other contingencies

• Work with the closing attorney to prepare the documents

• Get all disclosures and indemnifications signed

• Make sure everyone knows the time and place of closing

• Close and Get Paid!

WO

RKING

WITH

BUYERS SU

MM

ARYWorking with Buyers Summary

Two areas to remember when working with Buyers:

•The technical aspects

•The interpersonal aspects