How to Ensure Confidentiality During your Sale
Selling a business is a process that depends upon professionalism and confidentiality. Selecting a business broker who understands the critical role that confidentiality plays is simply a must. Unfortunately, countless sellers have in fact dealt with a situation where a breach in confidentiality has caused a deal to fall apart.
A failure to maintain confidentiality can lead to a slew of negative reactions from a range of parties. Everyone from supplies and vendors to creditors could react in a way that could harm your business, for example, vendors could change their terms and this could in turn negatively impact your cash flow.
A breach of confidentiality could also lead to negative reactions amongst both employees and customers. The reason is that employees may begin to worry about the security of their jobs and may also become nervous about the change in management. These fears could prompt employees to find a new job and leave you with a position that needs to be filled. Potentially more significant is the fact that the loss of key personnel could cause your buyer to have cold feet.
As if all of these factors were not enough of a concern there is also the issue of the competition. If your competition gets wind that you may be looking to sell they may take advantage of the situation and start attempting to steal your customers.
Finally, a breach in confidentiality could send potential buyers running. The headaches that are often associated with a breach in confidentiality are such that potential buyers may simply drop the deal.
The best way to protect your confidentiality is to opt for a great business broker. A business broker is an expert in prompting a business without notifying the competition, your employees, vendors or anyone else. The process is both an art and a science.
When attempting to sell on your own there are many and diverse pitfalls. Sellers are much more likely to accidentally reveal who you are; after all, a seller has to provide phone numbers, email addresses, physical addresses and other critical and identifying information. Even your home phone number could be traced back to your identity and ultimately your business.
A seasoned business broker can help you bypass these potentially damaging issues, by not just shielding your business’s identify but also by ensuring that all interested parties sign confidentiality agreements and are pre-qualified. In this way you only reveal what is absolutely necessary. In short, it is best to work with a business broker and maintain your confidentiality at all costs.
Copyright: Business Brokerage Press, Inc.
Read MoreGABB Million Dollar Club Application for 2016 Opens
The GABB is now accepting applications for the 2016 Million Dollar Club, recognizing members who have sold businesses worth at least $1 million in the previous year. The deadline for submitting applications is Nov. 7, 2016.
Awardees will be honored at the annual GABB Holiday Gala on Dec. 6 at Maggiano’s Perimeter Center.
GABB members are eligible for the:
- Million Dollar Club if they have eligible sales from Nov. 1, 2015 to Oct. 31, 2016 of $1,000,000 to $1,999,999.
- Multi-Million Dollar Club members will have eligible sales generated totaling $2,000,000 or more during the same period.
- Life Members of the Million Dollar Club have been elected to the Million Dollar Club for three consecutive years or any 5 years.
- Phoenix Award Member is anyone who has been elected to the Million Dollar Club for any 10 years.
- Silver Phoenix honors a person who has been elected to the Million Dollar Club for any 25 years.
To be eligible for the award, an applicant must be a current member in good standing of the Georgia Association of Business Brokers and only
transactions closed after the effective date of membership in GABB will count as Million Dollar Club volume. All transactions must be submitted to Pratt’s Stats to be eligible.
The online application, along with detailed rules about the club, can be found at the GABB website.
Please contact Diane Loupe at georgiabusinessbrokers@gmail.
Oct. 25 GABB Meeting for Broker and Affiliate Members Only
The Georgia Association of Business Brokers will hold a members only meeting on Oct. 25, in contrast to meetings that are normally open to the public.
That means that only current broker or affiliate members will be eligible to attend the Oct. 25 meeting.
At this meeting, members of the GABB board will be making a presentation about a significant proposal related to the future of the organization. Also, nominations for the 2017 GABB board will be taken at this meeting.
GABB Affiliate Germaine Curtin of Curtin Law is the meeting sponsor.
Germaine Curtin was born and raised in Westchester County, NY. She obtained her BA from the State Univ. of NY at Albany in 1980 and graduated from Albany Law School. After graduating, she worked as a financial consultant, where she learned to prepare tax returns and advised clients with respect to investments. She earned her FINRA Series 7 securities license.
Germaine is licensed to practice law in California, Georgia, New York and North Carolina, and now shares her time between New York and Georgia.
With a long-time interest in tax, and understanding the importance of tax issues in every business transaction as well as the obligation of every resident to file income tax returns, Germaine obtained her LL.M. in Tax at the Univ. of Alabama in 2010, graduating with honors. Germaine analyzes the tax issues as well as the business issues in every transaction, saving the client time and money.
Germaine is a member of the Georgia Association of Business Brokers, is a certified instructor for the International Business Brokers Association as well as a member of the Saratoga Chamber of Commerce and the Capital Region Chamber of Commerce.
Read MoreSeller Financing
The majority of business sales include some form of seller financing. Typically, seller financing is when the seller provides a loan to cover part of the purchase price. The rest of the purchase price is covered by the down payment or often other financing sources are used as well. Summed up another way, the seller is essentially acting as a bank for the buyer.
When sellers offer financing, it often also helps them achieve a higher final sale price. Sellers who are not open to seller financing will likely limit their possibilities.
Performing Due Diligence
When a seller opts for seller financing, it is necessary to do much of the work that a bank would usually perform, for example, checking a potential buyer’s credit report, financial statements and other key financial information. After all, if you opt to offer seller financing, then you’ll want to ensure that your buyer will not default.
Usually contracts allow for the seller to take back a business in 30 to 60 days if financing fails. In this way, the buyer can avoid a potentially serious business problem.
There are often other contractual stipulations as well. A common clause for businesses involving inventory is that new owners need to maintain a certain level of supplies during the payment period.
Providing Benefits for Both Parties
It should also be noted that seller financing is of considerable interest to buyers. Sellers looking to attract as much attention to their business as possible will want to consider this route. Offering this type of financing sends a very clear message. When a business owner is open to seller financing, he or she is stating that he or she has great confidence that the business will generate both short term and long term revenue. That level of confidence speaks volumes to buyers about the health of the business.
What Due Terms Typically Look Like?
In terms of the length of seller financing, 5 to 7 years is typical. The issue of how much a seller is expected to finance is another issue that draws considerable attention. While there are no steadfast rules as to what percentage seller’s typically finance, it is common for sellers to finance up to 60% of the total purchase price.
Finally, seller financing does have a good deal of paperwork and points to consider. Opting to work with an attorney or business broker is absolutely essential to protect all parties involved.
Copyright: Business Brokerage Press, Inc.
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Read MoreGABB Broker Lara Van Pletzen Is New U.S. Citizen
One of the the United States’ newest citizens is GABB broker Lara Van Pletzen. Van Pletzen, who was born in Bulawayo, Zimbabwe, became a U.S. citizen in a ceremony on Friday, Aug. 26. She is the ROI Business Development Manager for the Southeast of ROI Business Brokers.
GABB asked Lara about her road to becoming a U.S. citizen. She says she left her home country “in the 70’s just before Mugabe came into power.” She grew up with terrorism in the Rhodesian Bush war, and when her family traveled to South Africa for vacation, they were escorted by military convoys. Raised in South Africa, she left for Canada in 2002 and lived there until November 2003.
“I left Africa because of the high frequency of violent crime,” she said. “Yes, there is crime everywhere, but we lived behind electric fencing and burglar bars, home invasions were all too common and extremely violent. Although a tough decision to make, we decided to leave after my husband was held up at gunpoint at work. I personally didn’t want to raise my kids there, and I got tired of looking over my shoulder everywhere I went.
“Obviously some people don’t like to hear this point of view, but it was my view and it does not mean that I am not proud of my roots. I guess I just see the world as a smaller place with things that are humanly common to all people in a variety of lands. Everyone does what they think is best for their children, and there is no one right answer. For us this was the right thing and it was an act of our Christian faith.”
While living in Canada, her husband Andries was offered a wonderful work opportunity in the USA. Lara moved to Appleton, Wisconsin, with her family on an H1B/H4 visa in 2003 and lived there from 2003 until 2008. “I was allowed to live here but I was not allowed to work; only my husband was allowed to work.”
“I arrived on Thanksgiving 2003 and it felt wonderful,” she remembers. “I had grown up watching American TV–especially Dallas–and believed the entire USA was like Texas: cowboy hats, Texan accents.
“I also watched Full House as a kid and always found it strange that there were multiple V’s and phones and was amazed that kids had their own TV’s. I didn’t really believe it was true until I came here; our homes had one TV and one phone.
“For the first few Christmases, my husband thought I was being an extravagant Santa (we called him Father Christmas) when I bought what were small Santa gifts. He thought they cost more as a Santa gift here would be a main gift in South Africa.”
“In 2008 the company who sponsored my husband for his H1B visa told us their attempts to keep us here and get us green cards failed, and since the H visa was only a 6-year temporary visa, we left in 2008. We didn’t want to go back to South Africa; fortunately my husband was offered a job in Australia.”
“I moved there in 2008 on 457 visas, temporary 2-year visas that could then be converted to permanent status. We never got that far as we had only been there a year when, in 2009, with the global recession, the international company my husband worked for in Australia decided to close that unit. Since we had not been there two years, it once again meant having to leave the country.
“Today we are really happy with the way things worked out as our hearts were always in the USA anyway. We never imagined at this time there would ever be a way to come back, but at that time it just felt like our world was falling apart. Before the opportunity to come back here came about, we had to leave Australia, so we moved to New Zealand and I obtained student visas for my kids. I lived there on a guardian visa while we tried to figure out what to do.
“It was two unexpected major moves in two years. Our furniture was still in USA storage, finances tight with us both of us having had temporary work loss. We had been sleeping on air mattresses. Shortly after I arrived in New Zealand, my husband’s Australian company offered my husband a transfer to the USA unit on a L visa.”
“We came back to the USA in 2009 and moved to Atlanta, this time to be near the airport as my husband was expected to travel extensively, and Hartsfield had many flight options. I found Georgia a little harder to move to Wisconsin, but am settled with no plans to move again. My husband, on the other hand, has traveled more than we expected, and he uses that airport more than we had hoped.”
“During the past seven years I have been here, he has worked in South Africa, Botswana, Ghana, Zambia, Chili and now Mongolia. With 21 happy years of marriage behind us, cynics say it is because he isn’t here most of the time that we are happy. Sometimes they ask, ‘How do you do it?’ The truth is, we are a team, and every day and night apart has been worth it to give us and our kids the opportunity to live here. I remind them more than they like that I expect great things from them.
“We are not here to take but to give and make a difference. I have no regrets, and it would feel wrong to complain, we have achieved something we never thought possible.”
“I wanted to become a citizen because this is my country and I want to participate and embrace everything about it. I want to vote but most of all I want to feel secure that I will never have to leave. I also wanted to get it done before my son turned 18 to save him the trouble of converting his green card to citizenship,” she said. “My kids were very young when we moved here, they don’t feel foreign, they were 3 and 3 months when we first moved here. In their minds this is home, and I wanted to make it official.”
“I like the checks and balances that were designed in the constitution that prevent this country from ever becoming a dictatorship. I’m glad people here are free to disagree and don’t all think alike. It keeps the balance and protection; we should see it as a positive and not a negative.”
“I love the patriotism American’ feel for their country, the freedoms this country represents. Technically, I came here for the same reasons the first immigrants did: freedom of religion, freedom of speech, opportunity, life, liberty and the pursuit of happiness.”
GABB congratulates our new U.S. citizen. You can contact Lara at lvanpletzen@roibusinessbrokers.com, Office: 404-445-8322 ext 26, Cell:770-876-8162
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