Tennessee Business Brokers Blog

What Is a Buy-Side Business Broker, and What Does It Cost?

Mon, 09 Mar 2026 07:56:18 GMT

What a Buy-Side Broker Actually Does

The role of a buy-side broker is part strategist, part advisor, and part project manager. As acquisitions average 6-12 months to close, the process often unfolds over months.

A buy-side broker works exclusively for the buyer, searching for businesses that match your criteria, evaluating opportunities, and negotiating on your behalf. It's a different role, a different relationship, and it comes with a cost that the buyer pays directly.

What a Buy-Side Broker Does

A buy-side broker starts by getting a clear picture of what you're looking for: industry, size, geography, budget, and how involved you want to be day-to-day. If you're searching for businesses for sale in Nashville, Franklin, or anywhere across Middle Tennessee, Georgia, Kentucky or Alabama, they map their search to your specific criteria.

From there, they search both listed and off-market businesses in Tennessee, make initial contact with sellers, and filter opportunities before they reach you. When something looks promising, your buy-side broker helps you dig into the financials, identify potential concerns, and structure an offer that makes sense.

Who Pays the Buy-Side Broker — and How Much

This is the part that surprises many first-time buyers: when you hire a buy-side broker, you pay their fee. That's the trade-off for having dedicated representation. Here's how the fee structure typically works:

Monthly retainer: Most buy-side brokers charge a monthly fee, typically in the range of $2,000 to $5,000 which covers their ongoing search and advisory work. This compensates the broker for their time regardless of whether a deal closes.
Success fee at closing: When you close on a business, a success fee applies, typically around 3% of the purchase price. On a $2 million acquisition, that's $60,000. Importantly, the monthly retainer payments you've made along the way are usually credited toward this final fee.
Hourly arrangements: Some buy-side brokers work on an hourly basis ($150-$400/hr), which may appeal to buyers who want specific guidance but plan to handle much of the legwork themselves.

The monthly retainer plus success fee structure is the most common and balanced arrangement. It ensures the broker is compensated for their search efforts while keeping their incentives aligned with helping you close on the right deal.

When Buy-Side Representation Makes Sense

A buy-side broker isn't necessary for every acquisition. But there are situations where having dedicated representation can make a real difference, especially in a competitive market like Nashville and Middle Tennessee:

You're buying a business in Tennessee for the first time and want an experienced guide through the process.
You're relocating to the Franklin or Nashville area and don't yet have established local market knowledge.
You're a busy professional who wants access to off-market businesses in Tennessee without doing all the legwork yourself.
You're targeting a specific niche, like healthcare, hospitality, or service businesses, and want a broker with deep connections in that space.

The Bottom Line

Hiring a buy-side broker means paying for dedicated representation through an important financial decision. For the right buyer in the right situation, especially in a growing market like Nashville, that investment can save time, prevent costly mistakes, and open doors to businesses for sale in Tennessee that wouldn't otherwise be on your radar.

Have questions about how the buying or selling process works in Tennessee? Tennessee Business Brokers is happy to point you in the right direction.

Understanding Sell-Side and Buy-Side Brokers

Mon, 09 Mar 2026 07:48:39 GMT

A Guide for Tennessee Buyers and Sellers

If you're thinking about selling your business in Tennessee, you are looking for a business broker. But what does that mean, and what should you expect?

A sell-side business broker represents you, the seller, through every stage of the transaction. From establishing an accurate value for your business to finding the right buyer and guiding the deal through closing, a good Tennessee Business Broker brings expertise, structure, and advocacy to what is often one of the most significant financial events of your life.

It Starts With Understanding Your Business

Before a business ever goes to market, a skilled sell-side broker does the work of truly understanding it. That means digging into the financials, operations, customer relationships, staffing, and competitive position. This isn't just background research, it's the foundation for everything that follows.

A well-prepared broker knows your business well enough to craft your story compellingly and accurately. They understand where the value is and how to present it to serious buyers, whether that buyer is local to the Nashville area, based elsewhere in Middle Tennessee, or coming from out of state.

Establishing an Accurate Business Valuation

One of the most important things a sell-side broker does is establish a realistic, defensible value for your business. Pricing too high discourages qualified buyers and can leave your listing sitting on the market. A Tennessee business broker draws on current market data, pulls comparables, and after a thorough review of your financials, is able to arrive at a price that attracts the right buyers and holds up through due diligence and through SBA scrutiny. From a legal and ethical standpoint, their job is to represent the seller’s interests.

That doesn’t mean seller’s brokers are not fair to buyers. They understand that transparency and fair dealing are necessary to get transactions across the finish line.

Bringing the Right Buyers to the Table

A good sell-side broker qualifies buyers carefully, evaluating their financial capacity, skills, experience, and genuine intent before they ever get access to your confidential information. We're not just looking for any buyer; we're looking for the right one. One who is financially capable, operationally prepared, and genuinely excited about what you've built. Eliminating tire kickers and curious competitors protects your business, your time, and your outcome.

Educating Buyers on the Process

A strong sell-side broker also plays an important educational role with buyers. They walk buyers through what to expect at each stage, help them understand the financial information being shared, and keep the process moving with transparency and professionalism.

This benefits everyone. When buyers understand the process, deals move faster, surprises are fewer, and both parties arrive at closing with confidence. In a market as active as Middle Tennessee, that efficiency matters.

Managing Your Confidential Business Sale Through Closing

Once a buyer is under LOI, the work is far from over. A sell-side broker coordinates with attorneys, accountants, lenders, and the buyer's team to keep the deal on track. They manage timelines, discusses sticking points, and help resolve issues before they become deal-breakers, all while maintaining the confidentiality your business sale requires.

Their compensation, typically a commission paid at closing, is directly tied to the success of the transaction.

The Bottom Line

Selling a business in Tennessee is an involved process. A skilled sell-side broker brings market knowledge, experience, and commitment to your outcome. When you work with a TBB business broker, you're not just listing a business, you're building a strategy to maximize its value and find the right buyer to carry it forward.

At Tennessee Business Brokers, we work exclusively with sellers who are ready to approach their exit with intention and care. If you're thinking about selling your business, we'd love to talk.

How Long Does It Take to Sell a Business in Middle Tennessee

Tue, 17 Feb 2026 05:36:26 GMT

In today’s dynamic business landscape, every company has unique attributes that can make it more appealing to buyers. While financials are crucial, savvy buyers look deeper. If two similar Tennessee businesses, a retail shop in Franklin or a service provider in Murfreesboro, have comparable numbers, what sets one apart? Unique, transferable features can significantly enhance desirability and value. Here’s what to consider as you prepare to sell.

Difficulty of Replication

Businesses that are hard to replicate are often more valuable. Not everyone can start a licensed professional service such as a CPA firm, medical practice, engineering firm, or regulated contractor. By comparison, many general retail businesses are easier for competitors to enter.

Additional value comes from built-in protections, such as:

Required state or professional licenses
Government, municipal, or school district contracts
Exclusive service areas (for example, a territory-based service business)
Long-standing referral relationships with hospitals, insurers, or institutions
Long-term leases in high-demand Middle Tennessee locations

These types of advantages take time, approvals, and relationships to build—making them difficult for a new competitor to duplicate and more attractive to serious buyers.

Intangible Assets

These are goldmines in 2026’s economy. A transferable long-term lease in a prime Nashville location? Invaluable. Well-maintained mailing or subscriber lists for newsletters or e-commerce can drive ongoing revenue. For instance, a local bookstore sending monthly reviews to customers and new TN residents keeps the business humming while providing assets a new owner can leverage immediately.

Reputation and Reputation

Tennessee businesses often shine through local charm. A restaurant famed for its signature dish (think BBQ with a twist) or a downtown Franklin store known for exceptional service and unique local goods who builds word-of-mouth loyalty. This "special something" transfers, but the buyer must nurture it. Locals and visitors alike appreciate state branding, like "Made in Tennessee," which symbolizes quality and boosts appeal.

Proprietary Products, Services, or Technology

Do exclusive processes set you apart? Like a custom fitting or engraving or a hardware store's specialized sharpening equipment. Secret recipes, patented items, or custom software for operations add premium value. When selling, highlight how these drive revenue.

Beyond numbers, owners should inventory these traits early. Tennessee's growing economy, with sectors like manufacturing and services booming, amplifies unique features potentially supporting your sale price.

Arriving at Most Probable Selling Price

For sellers, pricing a business starts with understanding two boundaries: the outcome you need to feel satisfied with a sale, and the price the market is willing to support. While valuation methods help establish a reasonable range, the ultimate sale price is determined by what qualified buyers are prepared to pay under market conditions.

One of the most important factors for buyers is how reliable and repeatable your profits are, often referred to as the quality of earnings.

When earnings are presented clearly and credibly, sellers are better positioned to attract serious buyers and achieve a price that the market can confidently support.

Quality of Earnings

Don't inflate with one-offs like equipment buys or legal fees that happen annually. Avoid adding non-operational gains, like real estate sales, to prevent overvaluing.

What's True

Valuation and financing are based on historical performance, typically the last 2–3 years of earnings (SDE or EBITDA), not projections.

Buyers absolutely assess future potential, but lenders and investors underwrite what is provable, not what is promised.
Businesses that show stable or growing earnings are viewed as lower risk and command better pricing and terms.
In competitive markets like Tennessee, buyers have options, so consistency and momentum matter even more.

Buyers don’t just look at the past — they look at the trajectory at the time of sale.

If earnings dip during the sale process:

Valuations get reduced
Deals get retraded
Financing can fall apart

That’s why “keeping your foot on the gas” before and through the transaction is critical.

Verification of Information

Transparency builds trust. Disclose receivables, payables, employee issues, or pending actions. Hidden problems can derail deals.

Some Key Questions

What's included? Real estate, inventory, receivables?
Fixtures/equipment: Owned or leased? Serviceable? Personal items excluded?
Owner dependency: Key employees under contract?
Inventory: Current or obsolete?
Cash flow: Sufficient, or needs extra capital?
Suppliers/customers: Who are they?

Defining Earnings

Use EBIT, EBITDA, or SDE (common for small TN businesses, adding owner salary to EBIT for "discretionary cash"). Clarify if figures are current, prior, or projected—apples-to-apples comparisons matter. Engage Tennessee Business Brokers early for accurate valuation.

The Timeline: How Long Does It Take?

Quick answer…12-18 months. Data driven answer…BizBuySell’s Q3 2025 Insight Report shows a median of 149 days on the market from LOI to close. That said, most sellers should plan for a longer overall timeline. When preparation, buyer diligence, financing, and closing are included, a realistic expectation for many businesses is closer to 12 to 18 months, depending on complexity and readiness.

What stalls deals?

Complex Deals: More paperwork, messy taxes, regulations, and Bank scrutiny, even for small TN sales.

Numbers Focus: Poor financials extend timelines. "Nickels and dimes" skimmed now cost thousands later.

Regional Economic Overview

Tennessee’s regional economy continues to provide a supportive backdrop for business sales demand. Steady job growth, a diverse industry base, Nashville’s healthcare hub, bustling professional services, ongoing construction, and in demand consumer services contribute to consistent buyer interest. While economic strength alone does not guarantee a faster sale, it can support demand for well-prepared businesses in the Middle Tennessee market.

Key Prep Items

Shorten your timeline by gathering:

3 years' P&Ls
Tax returns
Fixtures/equipment list
Lease/franchise docs
Loans/encumbrances
Inventory estimate
Advisor names
Marketing materials
Operations manual
Business history

Consult Tennessee Business Brokers early—we'll valuate, market and control buyer outreach. In Middle TN, our network speeds connections. Ready to sell? The process starts with a call—let's maximize your exit.

Tracy Scrima

Tennessee Business Owners: Your Exit Window Just Got a Little Brighter!

Tue, 17 Feb 2026 04:53:49 GMT

The latest IBBA + M&A Source Market Pulse (Q3 2025) dropped some eye-opening stats from 300 brokers who closed 247 deals this quarter. If you're thinking about selling (or even just curious), this is what matters most right now:

The Big Generational Shift is ON Baby Boomers still make up ~59% of sellers, Gen X ~27%. Younger buyers (30s/40s) love hard numbers, growth metrics, and acquisitions. Long-time owners? They care about legacy, relationships, and values. Translation: If you're a Boomer-era owner, buyers are hungry—but bridging that mindset gap is key to getting top dollar.
Seller Confidence is Holding Strong Most segments (especially $500K–$5M+) show stable-to-up sentiment. The market feels solid—no big red flags.
Your Business Could Be Worth More Than You Think Median multiples are steady or climbing in key ranges:

Under $500K: ~2–2.5x SDE
$500K–$1M: ~2.5–3x

Higher end ($5M–$50M): up to ~5.3x EBITDA in spots Clean books + real growth = strong offers.

4. Buyers Are Paying Mostly Cash 81–88% of deals closed with cash at closing. Seller financing or

earnouts? Rare (under 15%). Quality businesses are getting paid upfront.

Bottom line: The "great handoff" from Boomers to the next generation is picking up speed—and the market is active for well-run businesses.

If you're a long-time owner wondering " Is now the time? ", the data says: probably sooner rather than later.

Want a quick chat about what this means for your business?

Tracy Scrima

SBA Changes Effective June 2025

Fri, 25 Apr 2025 03:50:04 GMT

If you're thinking about getting an SBA loan—or already in the process—there are some important changes coming your way starting June 1, 2025.

The SBA just released a new set of guidelines (called SOP 50 10 8), and while some updates might feel like

“insider info,” we’re here to make it easy to understand. In fact, many of these changes are really just going back to the basics—bringing back tried-and-true rules that were in place before 2021.

Download a copy to learn the key things that could affect you.

Quarterly M&A & Economic Report-Private & Small Businesses Q2 Summer 2023

Mon, 02 Oct 2023 05:45:33 GMT

Compiled, edited, and written by Jim Shaub, Tennessee Business Brokers. Sources credited at end of Report.

Jim Shaub provides business brokerage services, pre-sale exit planning, consulting for small and family businesses, and is available for speaking, or Lunch & Learns for your group. Jim holds a degree in economics from Vanderbilt University, was a commercial banker at Bank of America, licensed, IBBA member, and started, bought, sold, and operated many businesses.

Jim Shaub

jim@tennbusinessbrokers.com

615-788-1006

Executive Summary for Q2 Summer, 2023 M&A Activity & the Economy

The M&A industry has been dramatically impacted by the rise in interest rates over the last 18 months which has had a meaningful impact on the reduction of business valuations. While sellers were slow to accept lower valuations in late 2022, that began to change in Q1 2023 and has continued into Q2 with business closings up 8% YOY. Business owners seem to have a slightly positive outlook, likely driven by a belief the Fed is nearing an end to interest rate increases. There is mixed sentiment in the market as consumers’ sentiment was improving in late spring but is showing signs of turning negative.

Consumers appear to remain cautious about job security, housing costs, and disposable income. Consumer credit card debt is soaring, indicating a shortage of disposable income, while personal interest expenses will further erode their buying power. Sentiment could turn negative if the consumer’s outlook and spending do not improve, or the Fed is ambiguous. The consumer is cash flow impaired and while there was optimism in early 2023, it is hard to see it remaining positive without external encouragement from the Fed’s actions.

The Fed expressed a more cautious tone this summer relative to the spring. At a recent speech, Chairman Powell indicated an ongoing willingness to continue raising rates in order to keep inflation in check, as evidenced in September. Even though inflation continues to come down, the consensus of a recession being less likely has changed this summer with more economists raising their predictions of recession now being likely. New job creation has slowed, and more job layoffs announced which do indicate the economy is slowing, however, having raised rates so quickly to high levels, and with one to two more increases predicted, it may be too much to avoid a recession. The upcoming Presidential elections will likely cause a pause in bold moves by companies wanting to digest Washington’s and the economy’s direction.

The Real Estate industry, both commercial and residential, will continue to be a drag on the economy, likely at an increasing pace. Commercial properties, particularly the office segment, continue to be burdened with overcapacity and increasing vacancy rates. Adding to their woes is the amount of short-term floating debt on these properties, as discussed last quarter. Owners are facing refinancing their short-term loans at much higher rates often when the building’s NOIs have declined. In the residential market, 30-year home mortgage rates hit 7.18% last week, their highest level since 2001 and significantly higher than the 2.8% level in 2021. The consumer is unable to purchase new homes. With average new home prices having risen greatly over the last three to five years, coupled with higher mortgage rates, first time home buyers are all but locked out of the market. Economists do not expect the construction and related real estate sectors to provide help stabilizing the economy.

Going forward, CAUTION is likely the watchword, driven either by prudence or necessity. There is still too much uncertainty regarding a recession and where the economy will level out after the Fed’s unprecedented interest rate actions. The next couple of months will determine whether or not the Fed can engineer a “soft landing” for the U.S. economy despite all the rate hikes. For a copy of the full ten-page report and charts, please call or email Jim at jim@tennbusinessbrokers.com .

Celebrating Excellence: Karen Schorkopf and the IBBA® Recognizes Top Performing Business Brokers

Mon, 12 Jun 2023 01:08:44 GMT

The International Business Brokers Association (IBBA®) recently announced its Member Excellence Awards for 2022, honoring outstanding business brokers who have demonstrated exceptional expertise and achievements in the industry.

The IBBA® Member Excellence Awards is an annual recognition program that celebrates the accomplishments of business brokers who have displayed remarkable proficiency, ethical conduct, and exceptional results in the industry. These awards acknowledge the contributions of individuals who have significantly impacted the field of business brokering and have consistently demonstrated professionalism and excellence in their work.

The IBBA® Member Excellence Awards recognize the exceptional achievements and contributions of business brokers who have demonstrated excellence in their field. Karen Schorkopf's well-deserved recognition as an award recipient is a testament to her expertise, dedication, and client-centric approach to business brokering.

“ Proud to post that I have been awarded the Chairman Circle Award for the 3rd year in a row at IBBA, the International Business Brokers Association. Only 2 members from TN achieved this recognition! I want to thank my clients, my team and my fabulous referral partners for supporting my successful sale of so many awesome privately owned companies in 2022! ” - Karen Schorkopf

To read more about the association and announcement-> IBBA Member Excellence Awards for 2022 Announced | IBBA.org

Catch Ed Legum’s Podcast Interview on Nashville Business Radio

Mon, 12 Sep 2022 02:27:46 GMT

Listen to Ed's Podcast Interview Hosted by Nashville's Business RadioX's John Ray

Ed Legum is a business broker and advisor with Tennessee Business Brokers. Catch his podcast interview hosted by John Ray to shed light on how a business seller and buyer engages on a business broker and asking prices are determined.

Topics included on the podcast are as follows:

What’s the big picture: Why do businesses need a business broker?
What do sellers want?
What is their business worth? How do you determine the asking price?
What are the top three things sellers can do to increase the perceived value of their businesses?
Who are business buyers and what do they want?
What does it take to sell a business?

We invite you to listen to Ed’s informative podcast interview here:

Nashville Business Radio is produced virtually from the Nashville studio of Business RadioX ®.

The International Business Brokers Association recognizes local Business Broker, Karen Schorkopf

Thu, 17 Jun 2021 03:35:17 GMT

Nashville, TN - The International Business Brokers Association (IBBA) has recognized Nashville Business Broker, Karen Schorkopf, with the Platinum Chairman's Circle Award as well as the Deal Maker Award for outstanding performance in 2020 as part of its Member Excellence Awards Program.

“Business Brokers support the health of small businesses and communities worldwide, and these award recipients are among our industry’s best,” stated IBBA Executive Director, Kylene Golubski. “2020 presented many unique challenges, yet these individuals rose to the occasion and delivered impressive results.”

“I am honored to be able to serve so many clients in the successful sale of their privately owned businesses.,” said Karen Schorkopf of TN Business Brokers Group, LLC. "These business owners are the American Dream. I am fortunate to also be surrounded by great business partners-- the bankers, attorneys and CPAs who help put these deals together."

More information about Karen Schorkopf and Tennessee Business Brokers Group, LLC can be found at www.tennbusinessbrokers.com , or by contacting Karen@TennBusinessBrokers.com or (615)519-5156.

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About the International Business Brokers Association (IBBA)

Formed in 1984 and with nearly 1,600 members, the International Business Brokers Association (IBBA) is the largest international not for profit association for Business Brokers. The association provides Business Brokers with education, free benefits, conferences, professional designations, support programs and networking opportunities, and award the Certified Business Intermediary (CBI) designation to qualifying Business Brokers. To learn more visit www.ibba.org .

About Tennessee Business Brokers

Tennessee Business Brokers is a professional Business Brokerage Firm with a long history and experience working with businesses spanning from International Investment Banking clients on Wall Street to serving Main Street businesses in the Mid-South market with special focus on Tennessee and also serving Kentucky, Alabama, Mississippi and Missouri. Contact them today at 629-245-0283 to learn more.

Tax Structures To Consider When Selling Or Buying A Business

maryn@viewsdigitalmarketing.com (Maryn Williams) — Mon, 23 Mar 2020 03:28:55 GMT

With all of the hard work that goes into running a business and bringing it to a state where it can be acquired, you do not want to miss out on potential profits by making an unfortunate mistake. To be specific, taxes matter when you are buying or selling a business and choosing the right tax structure can either mean more or less money for you when the deal is done. Since there are many different ways to go about it, finding the best tax structure to use when selling your business is an important consideration.

If you have purchased or sold a business in the past, then you may have some knowledge of how tax structures can change the outcomes of a deal. However, first-time buyers and sellers often have little guidance on the importance of these details. Whether you need a reminder or a comprehensive introduction to the subject, it is best to start with the basics.

Let’s look at how to choose the best tax structure when selling your business .

Business As Assets

When it comes to the taxes that you will have to pay when it is time to sell your business, the more of your business you can sell as an asset, the better. Assets are subject to capital gains taxes as opposed to standard income taxes, and the former are far lower. Based on the IRS rules for what counts as a tangible asset, consider whether you can fit components of your business into the nine categories that they outline. Profits from other sources will generally be taxed according to the rules of ordinary income tax.

Installment Sales

If you think it will be beneficial to pay the taxes of your business sale over a period of time rather than all at once, an installment sale is the best tax structure to use when selling your business . An Installment sale allows you to make tax payments as the payments for your business (from the sale) are paid to you over time.

Many corollaries apply when it comes to installment sales and only those components of your business subject to capital gains taxes are eligible for this form of tax structure. Payments for inventory and accounts receivable, among other significant components of your business, are not able to be paid with an installment structure. It is best to consult with our team of professional business brokers at Tennessee Business Brokers to determine if this is the best choice for your business.

Find The Best Tax Structure When Selling Your Business

This primer provides an introductory look at how tax structures affect the outcome of buying or selling a business. However, meeting with our team of trusted and experienced business brokers at Tennessee Business Brokers is a great way to determine the best tax structure to use when selling your business . By working closely with our team of dedicated professionals, you will be able to get detailed advice that addresses the particularities of your business. Important decisions like buying or selling a business will benefit from objective and informed guidance.

Special Note: Your Business Broker is neither a CPA or Tax Specialist. As always, when buying or selling a business, please be sure to consult with your own tax advisor before entering into or closing on the sale/purchase of any business!

Breaking Down the Most Common Components of an M&A Purchase Agreement

maryn@viewsdigitalmarketing.com (Maryn Williams) — Wed, 08 Jan 2020 04:57:31 GMT

When thinking about standard components of an M&A purchase agreement , it is best to start from the beginning. Since making the move on either side of an M&A agreement is a serious step, everything needs to be organized and clear if the transaction is to proceed smoothly.

Each M&A process is different. Every stage of the process will significantly depend on the two specific parties involved. If you are planning on selling your business in the near future, then it is imperative that you keep each of the most salient features of an M&A agreement in mind.

Let’s go through some of the things you need to include or expect in an M&A purchase agreement.

The Most Common Components Of An M&A Purchase Agreement

Definitions

While definitions might seem like a trivial yet necessary step, taking the time to carefully consider the definitions early on will save you headaches down the road. Depending on the background or position of the person reading the document, words can take on very different meanings. Make sure that all definitions are clear and agreed upon before signing anything!

Implementation Provisions

Of particular concern to the seller of a business, and one of the essential and most common components of an M&A purchase agreement is the implementation provisions. These refer to how the purchase is going to work and what the purchase price will be. Making sure that these conditions are to your liking and completed fairly is imperative before moving forward. Brush up on your negotiation skills to ensure that your interests are protected.

Verifications

As a seller, you need to be prepared to verify that the details you have provided about your business are accurate and complete. It is not only essential to be transparent about your assets and liabilities but also about the current condition of your books. Be sure to accurately reflect employee payroll and benefits, as well as taxes.

At this stage, you also need to sort out which party will be liable for various aspects of the business after the sale is completed and papers signed.

Closing Conditions

One of the final common components of an M&A purchase agreement is a detailed overview of what will happen after the signing of the document and the final sale date. During this time, your business must run smoothly to avoid any problems with the purchase.

If you have negotiated an agreement that is to your liking, then make sure that there is a penalty structure in place to discourage the buyer from backing out of the deal after the purchase agreement has been signed.

Moving Forward

Deciding to sell or restructure your business is a big decision. With this overview of the standard components of an M&A purchase agreement, you now have the knowledge you need to put your plans into action.Moving forward, consulting with our team at Tenn Business Brokers and let us help you to ensure that the deal goes smoothly and fairly.

How To Sell A Business – Step-By-Step

maryn@viewsdigitalmarketing.com (Maryn Williams) — Wed, 09 Oct 2019 06:07:13 GMT

Step-By-Step Process on How To Sell A Business

Your blood, sweat, tears, and emotions are part of your small business, and it can be difficult to let it go. You have worked for countless hours and made endless sacrifices, but now you are finally ready to turn it over to a new owner. If you are at the stage where you are starting to think about selling your small business and move on to bigger and better things, you probably need some expert advice.

Every single business purchase, regardless of scope and size, will generally follow the same necessary steps during a sale. While these steps can be of varying scope, have different names, or some may not apply to you, selling a business will generally follow the same process every time. As a business owner, you want to get the most out of your investment, so please take care to follow the proper procedures.

Step 1: Decide On Experts And Professionals

You will more than likely need help when selling your business , and you need to be careful when selecting who will help you. Depending on the situation, the expertise needed to sell a business may require a different set of professionals than those who have helped you operate your business. Take your time to interview and hire the right people for the job, such as accountants, lawyers, and brokers, as you want to make sure you can trust these people with your investment. Your broker can make some suggestions for CPAs and Attorneys who specialize in your industry.

During this step, your accounting professionals will go through all of your financial records and make sure the files and documents are as accurate and orderly as they should be. Generally, the Listing Broker will engage a closing attorney to draft the closing documents that align with the terms and conditions that you have agreed to with the Buyer in coordination with the Broker. The Buyer and Seller split the cost of the closing attorney. You will also want to have your own attorney review these documents.

Step 2: The Evaluation And Exit Plan

The role of your CPA/accountant and Broker differ. While a CPA or professional appraisal service can provide you with a full official appraisal of the value of your business, these can often be expensive and do not necessarily relate to the “market value” of your business when sold. A skilled Business Broker is selling businesses as their sole function and are going to provide you with the “Most Probably Selling Price Range” of your business when you take it to market. An experienced Broker will prepare a comprehensive pricing analysis on your business. This approach to the assessment includes both quantitative and qualitative analysis.

The quantitative piece of an assessment is the conclusion reached by driving financial data through a series of formulas and assumptions. To do this, the Broker will recast your business entity’s financial statements using the tax returns and other information you provide. The Broker will remove the non-cash expenses, adjust owner draw and wages, and sometimes adjusted other line items to closer align with market terms. He or she will then take the three-year weighted average of these financials.

If you own the real estate for your business, it is best to use a Business Broker who is also an experienced Commercial Realtor as he/she can also evaluate the real estate for sale or lease, depending on your plans and goals or which options make the most sense in the economic environment. After reviewing the financial information, you provided, the Broker derives some calculations of value based on Capitalization of Earnings, Debt Capacity, Liquidation, and the potential for a Strategic Buyer.

The qualitative assessment takes into consideration weighted risk factors such as -> Continued Earnings Risk, Company History Assessment, Growth Projection, Competition Analysis, Business Expansion Opportunity Assessment, Barriers to Entry for New Competition, Customer Base Sensitivity, Importance and Dependence on Current Owners, Business Location/Lease, Purchase Financing Likelihood by Sellers or Banks, Industry Strength, Demographics of Middle TN and Economy, New Owner Social Desirability, etc.

Timing! Ideally, a business owner will start connecting with these professionals 3 months to 3 years before they plan to sell or retire. This allows time to tweak the business to maximize the value and render a smooth transition. Often, the owner needs to start making plans to pull yourself out of the operations slowly by delegating pieces of the operation to other staff members or by cross training staff. Make sure you plan accordingly by getting advice from multiple experts. Your Broker can help you!

Step 3: The Offer, The Buyer, And The Closing

Once you have your valuation and legal requirements in order it is time to look for a buyer. A business broker will have ways of marketing the company. He or she will have an extensive network of potential buyers to connect with. They will also market the business very confidentially on multiple external “Business for Sale” websites and on social media and through direct mail and marketing. For most businesses, it is critical to market your business very confidentially so your staff, your clients and your customers are not aware of the business sale during this process. If word gets into the wrong hands, you risk an employee or client leaving. For this reason, choose a Broker with high integrity, a large network of buyers, and one that has a proven record for success!

Interested buyers will inquire on your business and sign a non-disclosure agreement and complete a personal financial statement before receiving any information on your company. Your broker will have prepared a Confidential Information Memorandum on the business sale opportunity which he/she will share with screened prospective Buyers. The broker will also likely interview the prospect and will bring you in on a meeting for the highest and best prospects. The right buyer will submit a qualifying offer, in the form of a Letter of Intent, and it is up to you and your advisors to negotiate a deal that makes both sides happy.

Once the Letter of Intent is negotiated and signed, the buyer will continue their due diligence to study the business in more detail. They will likely review all tax returns, P&L statements, contracts, vendor terms, lease terms etc. during this process which can take up to 60 or even 90 days. Once all due diligence has been signed off on and all contingencies met, you will sign paperwork for the transfer of assets or stock and then you have officially sold your small business. Following the sale, it is often expected that the sellers stay on for a negotiated period to train and transition the new owner. After that, you are free to move on to other adventures.

Onwards And Upwards

While there are many intricacies to selling your business that will come up during the sale, this basic process will give you a path to follow. While selling your business may seem as daunting as it did to get the company up and running, if you have the right team people behind you , you can walk away with a deal that will make all of your effort worth it.

The Process For Buying A Business

maryn@viewsdigitalmarketing.com (Maryn Williams) — Mon, 12 Aug 2019 03:27:52 GMT

The process for buying a business can be a daunting task for any investor; however, with the help of the right adviser, you can make the best decision for you. Before investing in a new business, it is best to understand the process of purchasing a business in detail, so that you know what to expect. As with any major purchase, it is best to have an expert to guide you, and it is crucial to pay attention to any legal and financial obligations that you would accept as a result of your purchase.

Even though every business purchase is unique, there are some standard steps in the process of buying a business. An experienced business broker can explain the actions and ensure the process goes smoothly. Your Broker will be available to you as the process evolves and be an advocate in helping you to make the right decision.

First Steps In The Process Of Buying A Business

Once you have set up a meeting with an experienced business broker (be sure to read their BIO), be prepared to educate them. Things they will ask include:

How much money do you have to put down on a business?
Bring your financial statement or complete one of their forms.
What are your geographic boundaries for the location of the company?
What skills or strengths do you have? Where will you need help?
What industries are attractive to you? What do you want to stay away from?
Will you have a partner in the business? Will other family members work in the business, now or in the future? What are their skills?
What is your timeframe?
Why do you want to buy a business?
Are you interested in franchises or private companies?

When you meet with your Broker, he/she will have you complete a nondisclosure form and a personal financial statement. These must be completed prior to their sharing any confidential information on a listing. Take a look at your Broker’s website for listings they have for sale. You can also look at a variety of other multiple listing websites to perform searches for businesses that match your interests.

These external ads provide “high level” information on the business and are intended to be teasers to attract your interest.

Once you find a listing that appeals to you, the Broker can provide you with a Confidential Information Memorandum about the listing. In this profile, you will learn more about the financials, staff, product or services, equipment, inventory, the competition, the opportunities to grow the business, and other pertinent summary information.

Usually, you can do some additional research on the business by looking over their website or doing some other internet searching on the industry. In some cases, it may be suitable to mystery shop the business. Take some time to shop like a regular customer would and get a feel for how the current owners run the business, and if you can see yourself involved in the business process. Do not talk with the staff or owners or take photos or anything! If this goes well, you can go one step further and ask your Broker to request a meeting with the Seller and a private tour to ask any relevant questions you might have.

Making An Offer And Due Diligence

The process for buying a business starts to become more focused once you have chosen a company. You must decide how much you are comfortable offering for this specific business and, with the help of your Broker, you will draft a proper offer. The initial offer, called a Letter of Intent, is non-binding, similar to an offer to buy a house. Your Broker will help you in negotiating the terms and conditions and can offer advice on any counteroffer. Every situation is going to be unique, and there are many ways to put a deal together depending on the Buyer’s and Seller’s goals and plans.

Once your offer is accepted, the business is considered to be under contract. Generally, it can take anywhere from 45 to 90 days to close the deal. Due diligence, the process of collecting all of the relevant information about the business, gathering the financials, tax returns, doing the math, applying for your bank loan, negotiating lease terms with the landlord, getting your business license, and making sure that everything is as it appears with both the firm and the Seller begins in earnest. It is wise to use a due diligence checklist to make sure you complete everything necessary during this stage of the purchase. Your Broker can suggest the names of bankers, CPAs, and attorneys they will engage in supporting your process. The Broker will help coordinate all communications with these partners and with the Sellers to keep everything on track.

Welcome To Your New Business

When you have finished the due diligence and are satisfied that everything is in order, you will sign off that you are happy with all due diligence and ready to engage the closing attorney. The Broker will engage the attorney who serves as a third party, preparing all closing documents. You will have your attorney review all closing documents but can ask the third-party attorney any questions you have as well. Then, it is time to sign on the dotted line! As soon as you and the Seller sign the contract and shake hands, you will be on your way to being the owner of your own business. Usually, during the due diligence time period, you have learned a great deal about the company. In any case, there is always a training and transition period after the closing when the current owners will continue to work with you helping you get to know the staff, switching over any vendor contracts, getting the first couple of payroll cycles down and introducing you to any critical clients. The fun begins!

Recommendations From A Business Broker On Acquiring A Business

maryn@viewsdigitalmarketing.com (Maryn Williams) — Tue, 28 May 2019 21:14:56 GMT

Starting a business can be a daunting process. It takes time to figure out the nuts and bolts of the industry, to fine-tune your business processes and to establish yourself in the market. However, to be a business owner, you don’t need to start your business from scratch. Instead, acquiring a business can be a much better avenue to take.

Acquiring an established business is a great way to skip over many of the challenging problems that startups often face. Having guided countless clients through the process of acquiring a business , we want to share our winning recommendations with you, so that you can make the right decision.

Continue reading for our top business acquisition tips to help you find that perfect business opportunity that you have been looking for.

Research Thoroughly

Purchasing a business is a big decision and one that you need to research thoroughly. You need to find a business that you have some knowledge of, that you think you can run effectively and ultimately improve over time. Many entrepreneurs will want to find a business that they can grow into something more substantial over time, while others might want to keep the business running as it is. Whichever path you take, the journey to acquisition begins with research.

Do Your Due Diligence

When you have found a business that meets your requirements, it’s important to step back and take time to do your due diligence. You need to investigate every aspect of the business from the financial records to physical assets to taxes, legal issues and more. As every business is different, it’s crucial that prospective buyers consult with their banker, CPA and attorney when compiling their due diligence checklist. Sellers will not have all information, but you can feel free to ask for what you need. Feel free to download our Due Diligence Checklist as a reference to ensure you cover everything and have all the information you need to make an informed decision.

Funding Your Business Acquisition

Purchasing a business is, typically, going to be a more expensive option than starting a business from scratch, at least initially. As part of the business buying process , you will need to make an offer and then submit a good faith escrow. It’s advisable to have these funds secured in advance so that you are ready to make an offer when the time comes. If you have the funds available yourself, then this should be very straightforward. You might consider reaching out to your banker to get an idea of what they might be able to prequalify you for before even looking at businesses to buy. Once under contract, you will have limited time to get your bank financing in place (typically 30 to 90 days). You may need to prepare a Business Plan and more.

Respect The Previous Business

Acquiring a business can be a delicate process and it’s important that you respect the business as it was before you acquired it. The employees, products, services, and customers all need to be approached sensitively, especially in the beginning. Remember, this business that you are acquiring has been operating a certain way until now and those involved may be resistant to change. To ensure that the acquisition goes as smoothly as possible, introduce changes gradually to avoid upsetting the existing customers and employees . You will learn about the systems, staff and processes during due diligence when you will be building a strong rapport with the current owner.

Acquiring A Business Successfully

Acquiring a business that is a great fit for you can take time. There are a lot of different tasks that must be completed to ensure that the sale is completed successfully. To make the entire process as easy as possible, contact Tennessee Business Brokers today and let us help you through the entire business acquisition process from start to finish. With more than 40 years of experience in business, you can be sure that we have the knowledge and expertise to help you acquire the business of your dreams.

Exit Planning to Maximize Value

maryn@viewsdigitalmarketing.com (Maryn Williams) — Tue, 12 Mar 2019 15:57:40 GMT

There is a saying among business strategist that you should run your company "as if you're going to sell it tomorrow". In other words, have all your customer, vendor, & employee contracts in place, train your employees so that the business is not overly dependent on you, streamline your systems and workflow and, most importantly, maximize your cash flow. If you have a facility, clean it up, get rid of waste, old equipment and unsellable inventory. Be sure your financials are clean and accurate. Update your operating manual or consider creating one from an online template if you don’t have one.

Using cash flow to fund growth in the early stage of a company may be the best option. But what if you've grown your company to the point where reaching the next plateau requires a huge cash infusion to obtain the necessary resources? What if you're reaching retirement age and you don't have the energy required? Or you're just getting burned out and you want to do something else?

This is where Exit Planning comes into play. I'm not talking about the type of Exit Planning that takes place about 5 years before you exit and requires a cadre of advisors. The Exit planning that I'm referencing should take place 1-2 years (preferably 2) before you exit the company and its sole purpose is maximizing the value of the business. The cardinal rule here is "don't invest any money in the business that a prospective buyer wouldn't". At this point your goal is to have cash flow as high as possible. Assuming that the other parameters mentioned above are in place, this should maximize the value of the business.

5 Reasons You Might Want to Sell Now

maryn@viewsdigitalmarketing.com (Maryn Williams) — Tue, 12 Mar 2019 15:56:26 GMT

You’ve heard about the baby boomers. They’ve started to retire in a big way. Some of them are business owners, which should mean that there will be a lot more businesses out there with “for sale” signs hanging on them. Simple supply and demand suggests that this might depress valuations.

You don’t want to “fight” again

I’ve spoken to a number of business owners who had to fight tooth and nail during the Great Recession. Through a combination of business smarts, hard work and sheer willpower, they’ve survived. They’re proud of their efforts, but they’re tired. They don’t relish the thought of going through another downturn. I think that’s a pretty good sign that it’s time for a graceful exit.

Selling Your Business? Start with a Buyer’s Mindset

maryn@viewsdigitalmarketing.com (Maryn Williams) — Thu, 03 Mar 2016 05:00:00 GMT

Before anything else, preparation is the key to success. Alexander Graham Bell

The first step in preparing your business for sale is to take yourself back to the days when you were a buyer. Jump back into the Buyer’s Mindset!

Having witnessed the birth, acquisition, merger, and sale of many businesses over a 30 year span, I can tell you we all get caught up in our own busyness and self interest and we often benefit from a little reminder to put ourselves in the other party’s shoes.

Let’s start by doing a little prep work.

These questions will come up . . . and will likely be researched and verified during due diligence process so let’s facilitate your marketing by answering these questions now, thereby improving your success in closing your deal on terms and conditions that align with your goals and plans.

As a buyer, I will want to know . . .

1. Why do you want to sell your business?

2. What was your background before entering this business?

3. What was your learning curve like and what training will I need and how will I get it?

4. What were your biggest challenges and why?

5. What has been the greatest reward?

6. Would you go back and do it over again?

7. If you were to stay in the business, what are the top three things you would do to improve performance?

8. Could the business be duplicated or franchised?

9. Are your financial records consistent, accurate and in line with tax returns and bank records? Can you explain and verify any differences?

10.Are your sales/revenues growing? Why or why not?

11.What percentage of your revenue stream is recurring and/or based on customer contracts?

12.Is your customer base diversified or concentrated?

13.Is your business geographically concentrated?

14.How are your margins on sales doing/trending? Cash flow? Costs?

15.What kinds of tracking mechanisms and metrics do you have in place to monitor performance?

16. Are there any trends in the industry that a buyer should know about?

17.Are there any regulatory issues or concerns that a buyer will need to be aware about?

18.Who are your competitors? Are there many barriers to entry in the industry? Threats?

19. How many of your employees are long time employees? How many employees work part time vs. full time? What benefits do you offer? Incentives? Any at risk employees? Any turnover issues? Are you willing to stay on for any period of time as an employee? Will the key management team stay on?

20. Can you provide a good list of your furniture, fixture and equipment? When was it acquired, what is the current value and what will need to be replaced and at what cost in the next three years?

21. What other assets will be sold with this deal and what would they be worth in a liquidation position?

22.What are the business expansion opportunities? What capital would be required to take advantage of such growth?

23.Talk about your location. Is it optimal? Do you own or rent? Will you sell the building? Is the landlord willing to continue or extend the lease? Would the business benefit from a different location? Is the facility in good condition or in need of repair?

24.Are there any environment risks in the business that will need to be assessed?

25.What has been your experience with lender’s willingness to finance the business in the past? Would your banker be eager to bank the new owner? Would you be willing to provide seller financing to your buyer?

26.Are there any other strategic acquisitions that might benefit from consideration alongside this sale?

27. HOW MOTIVATED ARE YOU TO SELL? WILL YOU DEVOTE THE TIME, ATTENTION AND FOCUS NEEDED TO WORK WITH YOUR BROKER AND THE BUYERS TO EXPEDITE A TIMELY TRANSITION?