Among the many services offered to sellers by Sunbelt Business Brokers-Midwest are Business Pricing Reports to be used in a private third-party sale.
These sales typically do not make use of a broker to facilitate finding a buyer, since the business owner has someone in mind – either a non-related buyer, partnership dissolution, or an inter-generational buyer.
Sunbelt prepares a report that provides the seller with a written evaluation of the company along with information on how a sale can be accomplished, including a review by a lender as to how much financing capability the business has by itself.
Henry Votel, a certified Sunbelt Business Broker in Minnesota and Wisconsin, said a Business Pricing Report is used by owners who have a third-party buyer in mind to understand the valuation, tax implications and mortgage opportunities for the buyer.
Henry Votel, Sunbelt Business Broker-Midwest
“This helps the seller to get the buyer to take the next step toward a sale,” Votel said. “But this is not an appraisal. It is a pricing report that sets a potential sale price based on the value of assets and inventory and a financing plan for the buyer.”
The analyst will evaluate financial records of the business, typically the last three years of financials and corresponding tax returns, along with current year financial statements. They will also study contracts the business currently has for services, work in progress, licensing and franchise agreements and other information which may bring revenues and expenses to the business.
The completed Business Pricing Report includes a summary of the business property, general history, services, a business overview and industry comments, outlook and history. It provides a buyer with cash, terms, financing, and staging values with consideration of what sales terms might increase the business value in the future. It also includes a summary of financial statements; positive and negative selling marketability advice and a confidential review of financials by a bonafide lender assessing financing support and transaction terms.
There is a fee for this service, paid up front by the seller, which allows the analyst to work without the influence of a fee being withheld for a favorable report. Once the report is complete, the client (seller) is provided with it and can share the report with third-parties, attorneys, accounting professionals and lenders, all in an effort to secure a sale with the private buyer.
Votel added that this service will occasionally lead a seller to turn to Sunbelt for full brokerage services, which include tapping into our vast database of fully vetted buyers.
For more information on Business Pricing Report services, contact the Sunbelt Business Brokers office in your community.
