American Business Brokers & Advisors
Founder & President

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Professional Intermediary & Market Maker for Privately Held Companies

Advisor • Consultant • Speaker • Market Valuations Involved in Closing 500+ Business Transactions & Over $500 MIL

Author of "The Art of Buying and Selling a Convenience Store"

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Questions

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Do you have questions about any of the following?


We like to say that it is a combination of both art & science. The ‘science’ part of the equation is the numbers. By that I mean the profit and loss statements of the business and the cash flow. The ‘art’ portion of determining the value of a business takes into consideration the quality of the assets. Are they worn out? Will a new buyer need to invest in capital improvements? What about the location of the business? For more information, check out chapter 4 of my book, “A Seller’s View of Valuation”.


By making sure that you are marketing to the right buyers and knowing where to find the right buyers. You could have the best deal on the planet to sell, but without using the correct process you will not be completely successful. Chapter 7 of my book “Finding & Qualifying Buyers” will explain in more detail.


This is sort of a trick question, because no two sellers are alike. First one must be motivated to sell, but be sure it is the correct motivation. Sometimes I suggest a seller to wait and not sell yet. Chapter 5 of my book delves into this question with more detail.


Ah the million dollar question. Finding a buyer is not hard to do. But finding the right buyer who can perform and get the job done and the transaction closed is another story. Read chapter 7 of my book to learn the right questions to ask before it is too late.


Believe it or not there is a process. And there is a check list for this to ensure you don’t miss anything. Even pilots who fly every day and know what they are doing use a checklist every time they get in their plane so they don’t miss anything. To ensure you don’t miss anything we have included a comprehensive list of everything that will need to be reviewed before selling in the back of my book.


This is a double edged sword question. One side of the question is what are the actual out of pocket costs are going to be for the selling of the business going to be and the edge of the question is what is going to cost you if you are not prepared with the correct information before you take your business to market. Typical out of pocket costs will include title work, attorney fee, broker’s fee, survey, environmental updated status report and miscellaneous recording fees. The other side of the question is if you are not prepared and there is where I go into detail in chapter 6 to make sure you don’t get blindsided with additional taxes or recapture of taxes you were not aware of.


We like to say between 6 to 12 months, but a lot of this depends what kind of shape the sellers books are in and if they are not in good shape the process could take much longer. Again for details regarding this issue chapter 6 of my book explains this issue in more detail.


Most people think the game is over with after the closing has occurred and a lot of the times it is, but very often there are several issues that still need to addressed. There will always be some housekeeping issues, but did we do any financing? What about the termination of all of the environmental? A lot of the time we still have to address the environmental side of the business regarding clean ups or testing. A good due diligence list will make sure you won’t miss anything and a couple of comprehensive due diligence lists are in the back of my book.


To begin with we start with the why you are selling and then we go to how to sell making sure you don’t miss anything in the process, because if we miss anything it could cost us money and time. In both chapter 5 & 6 of my book I make a point to address both of these questions.


Confidentiality is extremely important if you are wanting to sell a thriving business and not have any interruptions from the loss of key employees or line employees, which could cost you not only many dollars in today dollars, but a slip of confidentiality could disrupt your operations and have your business trending in the wrong direction. Which could be down. Be proactive and either have an attorney prepare a confidentiality agreement or use one of the several templates we offer in the back of my book.


EBITDA is an accounting term used to help determine the net cash flow of a business. EBITDA is: Earnings Before Interest Taxes Depreciation Amortization.


Some of the most common things a buyer may try to do to a seller might be the following:

  1. Claw Backs (offer one price then change later
  2. Hold Backs (money for environmental or maintenance
  3. Holdovers (seller to insure for 12-18 months for liabilities
  4. Non-Competes (restrictive to future earnings)
  5. Slicing & Dicing (cherry-pick good stores, leave weak stores)
  6. Due Diligence (not having good books and records, prove numbers)

Terry Monroe Has Helped More Than 100 Convenience Store Owners Sell Their Business!

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