In early 2014 I had opportunity of working with Tim Fawcett of EastWind Business Solutions when I led a team that purchased one of Tim’s clients. Tim’s experience was evident in our dealings. He negotiated well on his client’s behalf and worked to ensure that a good result was achieved by both parties. I look forward to the opportunity to work with him again at a future date.
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Why is Seller Financing So Important to the Sale of My Business?
Surveys have shown that a seller who asks for all cash, receives on average only 70 percent of his or her asking price, while sellers who accept terms receive on average 86 percent of their asking price. That’s a difference of 16 percent! In many cases, businesses that are listed as a “cash only” sale simply don’t sell. With reasonable terms, however, the chances of selling increase dramatically and the time period from listing to sale greatly decreases. Most sellers are unaware of how much interest they can receive by financing the sale of their business. In some cases it can greatly increase the amount received. And, again, it tells the buyer that the seller has enough confidence that the business can, indeed, pay for itself.
What Happens When There is a Buyer for My Business?
When a buyer is sufficiently interested in your business, he or she will, or should, submit an offer in writing. This offer or proposal may have one or more contingencies. Usually, the contingencies concern a detailed review of your financial records and may also include a review of your lease arrangements, franchise agreement (if there is one), or other pertinent details of the business. You may accept the terms of the offer or you may make a counter-proposal. You should understand, however, that if you do not accept the buyer’s proposal, the buyer can withdraw it at any time. At first review, you may not be pleased with a particular offer; however, it is important to look at it carefully. It may be lacking in some areas, but it might also have some pluses to seriously consider. There is an old adage that says, “The first offer is generally the best one the seller will receive.” This does not mean that you should accept the first, or any offer – just that all offers should be looked at carefully.
Once you and the buyer are in agreement, both of you should work to satisfy and remove the contingencies in the offer. It is important that you cooperate fully in this process. You don’t want the buyer to think that you are hiding anything. The buyer may, at this point, bring in outside advisors to help them review the information. When all the conditions have been met, final papers will be drawn and signed. Once the closing has been completed, money will be distributed and the new owner will take possession of the business.
What Can I Do to Help Sell My Business?
A buyer will want up-to-date financial information. If you use accountants, you can work with them on making current information available. If you are using a lawyer, make sure they are familiar with the business closing process and the laws of your particular province. You might also ask if their schedule will allow them to participate in the closing on very short notice. If you and the buyer want to close the sale quickly, usually within a few weeks, unless there is an alcohol or other license involved that might delay things, you don’t want to wait until the lawyer can make the time to prepare the documents or attend the closing. Time is of the essence in any business sale transaction. The failure to close on schedule permits the buyer to reconsider or make changes in the original proposal.
What Can Business Brokers Do – and, What Can’t They Do?
Business brokers are the professionals who will facilitate the successful sale of your business. It is important that you understand just what a professional business broker can do – as well as what they can’t. They can help you decide how to price your business and how to structure the sale so it makes sense for everyone – you and the buyer. They can find the right buyer for your business, work with you and the buyer in negotiating and along every other step of the way until the transaction is successfully closed. They can also help the buyer in all the details of the business buying process.
A business broker is not, however, a magician who can sell an overpriced business. Most businesses are saleable if priced and structured properly. You should understand that only the marketplace can determine what a business will sell for. The amount of the down payment you are willing to accept, along with the terms of the seller financing, can greatly influence not only the ultimate selling price, but also the success of the sale itself.
How Long Will it Take to Sell My Business?
It generally takes, on average, between five to eight months to sell most businesses. Keep in mind that an average is just that. Some businesses will take longer to sell, while others will sell in a shorter period of time. The sooner you have all the information needed to begin the marketing process, the shorter the time period should be. It is also important that the business be priced properly right from the start. Some sellers, operating under the premise that they can always come down in price, overprice their business. This theory often “backfires,” because buyers often will refuse to look at an overpriced business. It has been shown that the amount of the down payment may be the key ingredient to a quick sale. The lower the down payment, generally 40 percent of the asking price or less, the shorter the time to a successful sale. A reasonable down payment also tells a potential buyer that the seller has confidence in the business’s ability to make the payments.
- Tony Gogan, CA, CBV
- My experience with EastWind was positive. Tim works very hard to bring buyers and sellers together. It is not a easy task sell your business but it was good to have Tim look after our interests as the potential sale neared closing. I would recommend using EastWind Inc.Dwayne Williston
From the first meeting with Tim Fawcett at EastWind it was evident that Tim was very professional, knowledgeable, and trustworthy. Tim worked very hard making sure we got the best deal. He has the ability to keep both sides of the sale moving along smoothly. We are very happy with our dealings with EastWind. Selling our business was a big deal and Tim did not candy coat it; he told us from the beginning it would not be easy but it would sell and it did thanks to Tim’s dedication and positive outlook. I would highly recommend EastWind if you are looking to sell or buy a business.Philip Hunter (Arrow Fuel Company)
Tim Fawcett has made selling my business possible, by introducing us to acceptable buyer. When selling your business you want a buyer that has the best interest of the company and knowledge of the company’s history and functions of daily operations. Tim gave his time to us and provided us with details making this transaction easy and comfortable. It was a very successful experience in all aspects, would recommend him and his team for any reality adventures! Thank you Tim for all your hard work and thank you for making this a positive experience.Lori and Mike Maniex
Tim Fawcett’s work impressed me on multiple levels. “Awesome to work with. Incredibly organized, easy to communicate with, and terrific results.” I would have no hesitation in recommending Tim to anyone.Hilton Attis
My partner and I hired Tim Fawcett of EastWind to help us sell our Homecare business. We found him to be very knowledgable, timely, conveniently accessible, easy to talk to, very professional, and an all around nice and genuine person. We could not have asked for anyone any better than Tim to work with on this project. It was a great experience for us, and we would not hesitate to refer him to anyone thinking of selling their business.Mark Spears
We are very pleased with the sale process & approach that Tim Fawcett put in place to help increase the odds of selling our business. In less than 6 months our family business was sold.
We would recommend Tim to any business owner who is serious about selling their business.Joanne & David
- I’ve worked with Tim on a few transactions. He goes the extra mile to address the parties’ concerns, and he’s instrumental in keeping things moving ahead smoothly. He conducts his business honestly and openly, and he’s also a real pleasure to work with. If you’re thinking of buying or selling a business, I strongly urge you to call Tim.Bert H.L. Cyr LLC.
Tim Fawcett is an Honest and professional person to work with, he made selling our business the confidential and successful experience we had hoped for. While Tim was working to find interested buyers, we were able to continue to work our business undistracted.
Again Thank You Tim, it was an awesome experience.Brenda & Brian
The experience of selling a company by myself was stressful to say the least. Hiring Tim gave the process what it needed. His expertise and knowledge made the process so much easier. I highly recommend his services.Jim Costain