The Georgia Association of Business Brokers, GABB, is a not-for-profit membership organization committed to establishing and maintaining an environment and support structure for success and professionalism in the business brokerage industry. GABB actively encourages each member to achieve his or her highest potential by promoting education, integrity, community responsibility, leadership, professionalism, and productivity. Learn more.
GABB Brokers are the experts in business transfers. Be sure to choose a GABB Broker for the most successful outcome in buying or selling a business.
If you are interested as a professional in membership, please visit our Membership Page.
Very briefly, (not comprehensively) a GABB brokering member needs to be a practicing professional in business brokerage. One needs to have a current active Georgia Real Estate License, as is required under Georgia Law to sell businesses with any real estate or leases. One needs to have some demonstrated experience in business brokerage. Learn more about membership.
You may also contact the membership committee OR any officer.
In addition, you are welcome to attend the next monthly meeting and ask about membership in person.
If you are a professional in some field RELATED to business brokerage, such as an attorney, an accountant or CPA, a lender, a financial planner, etc. you are also more than welcome as an affiliate member of GABB. You will have lots of opportunities for networking, marketing and exposure. Please visit us at the next meeting or contact the membership committee OR any officer.
Monthly meetings are usually held the last Tuesday of each month (except December) at the conference room of the Georgia Association of Realtors at 6065 Barfield Road, Sandy Springs, GA, 30328 Free Parking. Members gather at 10:00 a.m. to 10:30 a.m. for networking, followed by a business meeting and speaker, with adjournment at 12:00 p.m. Guests are encouraged. If you are thinking about a membership, please attend and meet some of the members!
Thinking about Buying a Business? You can View Listings of Businesses for sale through our proprietary multi-list service.
A GABB Broker can provide more details than those you will see from the public viewing portion of the site. Be sure to BROWSE the listings and contact the Broker about any listings that interest you. You may not know that a GABB Broker can help you to save time and money in your business search. A broker may represent you as your agent, or not, depending upon your preferences. A broker can help you assess your needs and resources, background and experience, and determine what types of businesses should be a good fit.
An experienced GABB business broker can then help you to locate and evaluate options until you find the one that is just right for you. The broker can then expedite the handling of the many aspects of the transaction, including obtaining financing. Professional assistance can be very valuable in negotiating the price and the terms of the acquisition, and working with the seller’s broker and advisors. Consider contacting a Broker directly to discuss your business search, or click through to the contact agent while viewing the Business Listings for Sale.
Thinking about selling your business? We can help with that.
Consider the valued added by a professional business broker. Brokers are the EXPERTS in the confidential business marketing and transfer process, just as YOU are the expert in your industry. Why not let the experts help you:
- Determine the market value, possible strategic value and appropriate listing price
- Advise you as to terms and deal structures to help you keep more profit on the sale
- Execute the marketing and advertising plan designed for your particular business
- Avoid the disruptive impact of your plans becoming common knowledge
- Find, Screen and Qualify prospective buyers
- Work with professional advisors on your team and from GABB
- Assist the buyer in obtaining financing
- Negotiate profitable sale terms and deal structure
- Assist with all the complex details of a business closing?
Ask An Expert Section
Every year, billions of dollars worth of decisions are made on the “values” of businesses or business interests as determined by the owners, buyers, financial intermediaries, regulatory agencies such as the IRS, and the courts. Up until the 1980’s, business appraisal was in most respects a neglected discipline until the establishment of The Appraisal Foundation (founded 1986), a non-for-profit organization authorized by the US Congress to establish formal appraisal ethical standards and standards of practice, or the Universal Standards of Professional Appraisal Practice (USPAP) for all appraisal disciplines (i.e., real estate and personal property, as well as, for business).
This was followed, or in some cases, preceded by the establishment of professional associations devoted specifically for the business appraisal discipline such as The Institute of Business Appraisers (IBA-established 1978), the American Society of Appraisers (ASA-established separate business valuation discipline in 1981) and others including the National Association of Certified Valuation Analysts (NACVA-1991), and the AICPA in more recent years.
Courtesy of Gary Fodor, Financial Assets Advisory
Typically, a formal business appraisal is needed when there is a statutory requirement for a “qualified” appraisal by an independent third party, as in the case of an IRS action for estate and gift tax purposes. Qualified typically means the appraiser has met specific educational and Professional accreditation requirements as established by one or more of the above Professional associations.
Other such statutory requirements include when a business establishes an Employee Stock Ownership Plan (ESOP) as per the Federal Employment Retirement and Income Security Act (ERISA) and the Department of Labor regulations. Additionally, certain litigation actions under State law such as dissident shareholder suits, divorce, eminent domain and other legal procedures will typically require a business appraisal by an independent, qualified appraiser.
Other non-statutory requirements for a business appraisal may involve the sale of the business to an outside party, the acquisition of another business (or part thereof), financing, or to meet other strategic planning needs of the owner(s).
Courtesy of Gary Fodor, Financial Assets Advisory
Specifically, if a Business Broker, or an Affiliate of GABB such as an attorney or a CPA, who has a client who is in need of a statutory business appraisal in order to meet estate and/or gift tax needs, or for an ESOP, or for some litigation purpose such as a divorce or eminent domain, a qualified, certified business appraiser can assist in these matters.
Additionally, a business appraiser can provide support in the case of a business sale if there is a need for an independent third party to verify or confirm the transaction. However, it is emphasized that a business appraiser is NOT intended to be a replacement for the Business Broker – only to provide support if needed.
Furthermore, the fundamental value of a business or a business interest is very different for statutory purposes as the definition or standard of value is usually specified by some government regulation, law or by the courts, as opposed to the case of a business sale at arms-length between two specific parties as negotiated through a financial intermediary.
Finally, a business appraiser can be of assistance to lenders who are seeking an opinion of value from an independent third party qualified business appraiser to document the value of a business with regard to lending requirements.
Courtesy of Gary Fodor, Financial Assets Advisory
On Pricing VS Value
Why is the Asking/Listing Price above what would appear to be a "fair market value" using general pricing methodologies, such as Comps, and Rules of Thumb?
Fair market value is not indicative of a real world sale price because it is based upon a theoretical buyer and seller operating with full knowledge, not under compulsion to make a deal, and negotiating for their own best self-interest to arrive at a cash (cash equivalent) price.
Sellers know the true value of the cash flow, which may not be disclosed on financial statements or tax returns, and almost always add a “going concern” premium to their price expectations. Also, if the seller does not receive all cash, then the actual selling price tends to be higher to reward the added risk for the seller by holding a note.
Finally, a seller always asks for more than is expected to provide room for negotiation, since the seller knows the buyer is unlikely to make a best offer first.
Courtesy Jim Town
A seller wants the business appraised to establish a range of value before agreeing to the listed price. What standard of value should the appraiser be asked to find?
If the seller wants to know what the business is worth to him/her, then the appraiser must consider any synergistic contributions by the seller that a theoretical seller might not have and the “going concern” value of the future income reasonably expected, so the standard of value would be “investment” rather than “fair market value”.
If the seller wants to know what a potential buyer might pay for the business on a cash basis and a buyer could be expected to operate the business in the same manner as the seller, then “fair market value” might be appropriate, EXCEPT in today’s financing market the lenders are almost always requiring the seller to participate in financing and are reluctant to loan money to people without industry experience, so if the appraiser must consider a sale price not based upon cash or cash equivalents at close and possible synergies from an industry experience buyer, then “investment” value is more correct.
Courtesy Jim Town
Yes and no. Yes, you will need an attorney to represent you in the closing process as well as an accountant, to advise you in financial due diligence. You may also have an agent to represent you who is acting as the Selling Broker, or you can hire an advisor or an agent to represent you at your expense, or you can be a customer of the listing broker. If there is only one Broker, the Listing Broker’s obligation under GA Real Estate Rule and Regulations is to treat you fairly, honestly, with reasonable skill and care and to make you aware of pertinent facts. The final decisions about your extent of representation is yours as the buyer to make.
What is the difference between owner’s discretionary cash flow, owner benefit, seller’s discretionary cash flow, adjusted EBITDA, normalized earnings and other similar descriptions used as representing the earnings of a business?
All of the above are terms typically used in small business sales, sometimes interchangeably. These representations, most often referred to as ODCF or owner’s discretionary cash flow are made up of the following taken from the income statement or the tax return:
The Pre-Tax NET income of the business plus 1) the owner’s salary, 2) the payroll taxes for the owner’s salary, 3) an adjustment for any family employees to make their salary equal to a fair market wage that one would replace them with, 4) the payroll taxes for this amount for the family employee, if any, 5) any personal benefits that the owner is expensing through the business, 6) adjustments for obvious expenses that are out of the norm for an industry, 7) one time or extraordinary or non-recurring expenses, 8) interest expense to bring it back to a cash basis, 9) depreciation and amortization, non-cash expenses. As you see this amount represents what an owner/operator working full time in the business will have available to pay any debt that they incur in purchasing the business and what they would have available to take out of the business in salary and/or benefits as well as any return on investment for the down payment and capital expenditures.
The asking price may not represent an actual valuation. There are numerous ways to price and to value businesses from simple formulas and rules of thumb to complex calculations and computer programs.
Of course there are the three classic approaches to value: cost, market and replacement values. It would be fair to say that businesses listed for sale would likely mirror the same strategy as those of any real estate agent or broker and varies by the broker’s mode of operation for listing business. Many times the seller’s desire or demand for a specific asking price is a predominant factor in the asking price on a small business. Many businesses are priced by using a market approach, using similar businesses with comparable data that have previously sold, to arrive at a price that seems logical and that the seller will agree to.
Yes. If you will share information with the broker in the following areas, they will be able to help you narrow down the businesses that are in an affordable price range and from there you can continue to narrow your choices. The minimal information that is needed is contained in our Buyer Profile and Confidential Financial Statement. By answering the questions and filling out these forms completely and honestly your broker will be able to search and define the businesses that most closely fit your criteria.
Why do I need to fill out a Confidential Financial Statement and Buyer Profile just to find out about the business?
The listing broker has a responsibility to the seller to make sure all potential buyers are qualified to buy the subject business. By carefully analyzing the information you provide, a broker can determine if a potential buyer has the liquidity and net worth to potentially buy the business.
Furthermore the broker can take this information and search to see if there are other businesses available that could also be a potential fit based on your criteria.
Businesses, unlike residential and commercial real estate sales, are handled on a confidential basis, in a highly discrete manner to protect the seller’s business and livelihood. Generally, the employees of the business, the customers, suppliers and the lenders do not know the business is for sale.
Awareness of a pending sale of the business that would create a possible change in these relationships, such as a key employee leaving the business because they felt that they no longer had job security or a supplier deciding to change their channel of distribution or terms, could affect the value of the business and even seriously disrupt the operation. Furthermore, in regard to information flowing through the broker, the broker is obliged by their contract with the seller to retain control so that confidentiality is not breached. Financial and other information provided to you as a prospective buyer is of a private nature and is not to be distributed to anyone other than your financial advisor, accountant and legal advisors. These advisors must be made aware that you are under a confidentiality agreement and must agree to abide by the terms of non-disclosure as well.