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Acquisitions And Exits

Your Questions Answered

Acquisitions And Exits

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"The combined expertise of the RFA team is unmatched in the industry.
Alex 
(Orlando, FL)

Frequently Asked Questions

Frequently Asked Questions

For Sellers

How do I sell my business without anyone finding out?
The first contact RFA makes with the market of buyers for your business is via a blind (anonymous) profile of your company. Your location is described in general terms and so are the details of your company. Key financials are presented as well as a description of your products and services, along with its opportunities for growth. Your company is not identified in the profile. By hiring RFA, who is responsible for preparing the documentation and handling the marketing process, you can ensure that the process remains confidential. This also allows you the freedom to continue to focus on running your business throughout the sale process - a key aspect of maximizing your closing price. RFA's process maintains your confidentiality by only releasing information about your business to qualified buyers who work under our confidentiality agreement.

Can I engage your firm to sell my company without my having to pay for a valuation?
Yes. For most small businesses RFA does not charge upfront fees. We will do a free value assessment that will give you a value range that you could expect in the marketplace. We do this before we contract to list your business for sale to make sure your expectations are realistic. Call us or e-mail us and we will be happy to discuss value.

How long would it take to sell my business?
Historically, only about 20% to 25% of businesses that go to market actually sell. Even of firms that are considered mid-sized (businesses with sales of $10 to $50 million and 100 to 500 employees) only 50% will sell. National statistics indicate the average time on the market for around 82% of businesses is four to 12 months. Fewer than 10% of businesses sell more quickly, and about 8% are on the market for more than 12 months. Price and terms of the sale have the biggest impact on timing. Documentation and records are also a factor. However, working with a business broker on selling a business greatly increases your ability to sell your business.

How long should a business brokerage firm hold an exclusive listing of my company?
One year minimum. National statistics indicate that on an average, businesses are sold within four to 12 months.

What are the most common reasons that deals don't close?
There are many reasons, but here are a few dominant ones.
1) Overvaluation. Many sellers want to "test the waters" and overprice the business. Today's buyer is educated and usually business-savvy. There is so much pricing data available. Buyers know when a business is overpriced.
2) Sellers are not willing to finance a portion of the sale price . If the business does not qualify for SBA lending, most buyers are not willing or are unable to pay 100% cash to make the acquisition. In many cases the seller will be called upon to assist in the financing. Studies have shown that sellers who are willing to finance a portion of the purchase price will receive a higher price.
3) Declining business revenues
4) Sellers are not willing to negotiate
5) Inaccurate financial records that don't pass buyer's due diligence.
6) Sellers get cold feet and withdraw from the market.
7) Sellers, too often, listen to well-meaning outside relatives, friends or advisors who really don't have sufficient knowledge of the selling process. Sellers who don't use a professional business broker/intermediary are at a disadvantage. These outside professionals know the marketplace and greatly assist in finding the right buyer. They are a "value-added" service and will more than justify their fee. The seller who represents himself or herself will almost never get the price that a business broker professional will obtain.
8) Landlord issues - After a buyer and seller have “negotiated” a deal is that the landlord cannot come to terms with the seller and/or buyer.
9) Financing is not available

What company materials do you need for the valuation analysis?
Financial data we review includes the past three to five years of:
1) Income statements
2) Balance sheets
3) Tax returns
4) Equipment list and appraisals property/building appraisals

For BUyers

How much will the process of buying a business cost me?
RFA is generally paid by the seller not the buyer. However, other costs do come into play. Legal and accounting expenses may be incurred during due diligence should you employ professionals to assist you. Closing costs will be incurred at closing. It's important to note that using a business broker when buying a business will result in a better purchase price.

Will the current owners train me to run the business?
Depending on the complexities of the business, the former owner will offer varying levels of training. On most small businesses the owner will offer training for two to four weeks at no cost to the new owner.

How do I know that the profit figures that the sellers claim are true?
As part of the acquisition process you will have to go through “due diligence.” During this period the seller is required to present documents to verify his profit numbers as well as any other information you request.

Will I have to come up with the entire purchase price?
In most instances, no... While 100% of the purchase price is sometimes required, sellers will frequently provide owner financing to some extent. Additionally, a bank may be able to loan up to 80% of the purchase price through a loan sponsored the Small Business Administration (SBA). The business must meet certain criteria to qualify for SBA financing and the buyer must meet certain standards as well.

How much money will it take to buy a small business?
Businesses vary a great deal in price. The higher the amount of down payment, the more likely you will be in finding a business that meets your needs.

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We sell all types of gas stations including:

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We sell all types of gas stations including:

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