IBA - Business Brokerage in Seattle, WA

IBA - Business Brokerage in Seattle, WA - Buy a Business, Sell a Business

Selling Your Business

The sale of a privately held company or family owned business is a complicated multiple step process conducted in an environment of confidentiality that requires expertise in valuation, marketing, information provision, negotiations, due diligence facilitation, legal documentation preparation, and administrative planning for succession of ownership.

This process can be attempted without professional representation. However, statistics have shown that professionally represented companies typically achieve sale prices more in line with their highest possible market value and spend less time on the market than ones sold directly by ownership. In addition, sellers of professionally represented companies typically experience a smoother sale process with more clearly defined transaction steps and have less post transactional administrative and legal issues to address.

International Business Associates, IBA, is a full service business brokerage company that offers its clients complete and comprehensive representation in the sale of their businesses. Our representation starts with a complimentary introductory consultation and "fair market" value evaluation of the business. The goal of the introductory meeting is to exchange information regarding the subject company, the sale process, and our representation. This meeting can occur at your location, our preference since one component of our "fair market" value evaluation is a visual inspection of the operations, equipment, and facilities, our office, or a mutually agreed location.

One of the topics that will be discussed at the introductory meeting is confidentiality.

We treat this issue very seriously and consider it a privilege to have been brought into your confidence regarding the fact that you are considering the sale of your business. We promise not to betray that trust regardless of whether you select us for representation or not.

In this environment of confidentiality and trust, it is our hope that business ownership will release the necessary information to IBA for us to complete a "fair market" value evaluation of the business and share the likely range of prices the business will sell at in the market given different buyer acquisition criteria. The "fair market" value evaluation serves two purposes. The primary purpose is to give business owners an opportunity to evaluate our superior market knowledge and customer service prior to making a decision on representation. The secondary purpose of the evaluation is to allow IBA to determine whether we are interested in representing the business and ownership.

If mutual agreement exists to continue the process, a business relationship will be contractually established with a representation agreement. If no relationship is established, the business owner will have no obligation or financial liability to IBA.

Once a representation agreement is signed, the marketing of the business commences. IBA’s first step in marketing a business involves the assemblage and preparation of presentation materials for potential buyers. This preparatory step is followed by a direct marketing effort to the buyers in our internal database whose search criteria in terms of type of business, industry, price, and geography match the new business on the market.

This initial marketing effort has historically been very fruitful for our clients because the buyers in our internal database are motivated individuals and companies that have proactively contacted IBA to put themselves in position to look at new opportunities as they enter the market . Amazingly, agreement has been reached for the sale to individuals and companies in this database in as short as a week after the company has entered the market, however, no IBA professional will ever promise that we have a buyer for your company or that we can complete a fast sale. No one can predict that information given the many variables that make up a business sale transaction. However, we do know that each year many of our clients are pleasantly surprised at how quickly they are meeting potential buyers and have completed the sale of their business once their business enters the market because of the existence of this database.

The second phase of marketing of an IBA represented business occurs in the print media, at our expense. It is our philosophy that a wide advertising net should be established to catch the maximum number of potential buyers for a business while maintaining confidentiality relating to which company is for sale. In accordance with this philosophy, IBA develops a print media marketing strategy for each company we represent based on its location, target buyer market, industry, and the amount of freedom our client’s provide us in the use of descriptive language related to their business. This strategy can include the use of local newspapers (Seattle Times, Tacoma-News Tribune, Everett Herald, Etc.), business publications (Puget Sound Business Journal, Wall Street Journal, Etc.), and trade publications. The goal of this program is to generate telephone conversations and face to face meetings where we can make a professional presentation of the company.

The first two components of our advertising program are highly effective for our clients; however, we also have three other marketing options with various degrees of risk. The first of these options is a strategic marketing effort. This marketing program involves the direct contact of vertical and horizontal acquisition candidates for the business. This type of marketing program can be very effective and generate a competitive environment for the purchase of the business. However, there is risk. That risk is that the marketing program can inadvertently cause the confidential nature of the seller’s plans to become known to a competitor, customer, or supplier through their use of deductive reasoning or the process of elimination when contacted by IBA. This information if made public can damage certain types of businesses and it is strongly recommended that a business owner weigh the advantages and disadvantages of this type of marketing effort before authorizing IBA to start that activity.

Another marketing option available to our clients involves the marketing of the business to the wide network of attorneys, accounting professionals, bankers, affiliates, and other members of the business community who interact with our office on a daily basis. The positive side to this marketing effort is that word will travel regarding the company for sale to a large number of people and companies and increase the possibility of locating a buyer. The negative is that confidentiality will be difficult to maintain and the potential sale of the company may become public knowledge. We recommend that our clients consider the impact of this marketing technique before authorizing us to commence network marketing of their business.

The final marketing option available to our clients is the commercial real estate multiple listing service which our firm participates in as a member office. This is an excellent venue for advertising commercial real estate, businesses that sell commodity products where relationships have a limited impact on revenues, companies who operate in niche markets with limited competition, or businesses with limited risk of an employee exodus if the sale becomes public knowledge. However for all other types of businesses there is substantial risk related to the maintenance of confidentiality if this venue is utilized for marketing a company. The reason for this risk is the same reason that this venue is beneficial. A large number of individuals can access information through this service. This venue is always available to our clients; however we recommend that they weigh the advantages and disadvantages of using this service prior to instructing IBA to put their business in the multiple listing service.

The underlying goal of our marketing program is to generate face to face meetings for our associates with potential buyers. However, the progression from telephone call or email inquiry to an actual meeting is a delicate process that requires an experienced business broker who can balance the conflicting goals of providing enough information to create interest while maintaining confidentiality. Achieving results in this challenging environment requires strong communication skills, knowledge, and experience. Excellence in this environment is one characteristic of IBA representation with our firm having an established track record for identification of actual buyers in a group of inquirers that includes a large number of tire kickers, entrepreneurial dreamers, and confidential information seekers.

Professional business sale negotiations are very similar to athletic competitions. Success is generally achieved by individuals or teams with experience who have prepared properly. IBA professionals understand this reality, so prior to our games, meetings or negotiations with potential buyers; we make great efforts to understand the details relating to the businesses we represent, their market niche, and industry, in addition to having the supporting documentation assembled to support our presentation. This emphasis on preparation has been and continues to be an important characteristic of our nearly thirty years of transactional success.

Properly prepared, IBA is now ready to meet with potential business buyers. The first activity performed at each of these meetings involves the signing of a confidential disclosure agreement by the buyer. This legally binding agreement allows IBA to release confidential information relating to the business for sale to the buyer in exchange for the assurance that that information will be held in strict confidence and be used only for purposes of evaluating the business for potential purchase. This administrative step completed, IBA now is free to begin the professional sale of the business.

The sale process starts with a meeting between the buyer and the seller’s professional IBA representative. This meeting will provide the buyer with an overview of the company, its market niche, and industry. IBA’s primary goal during this meeting is to answer questions and generate interest in the company; however we also have a secondary goal. That goal is to screen potential buyers for the seller in terms of financial ability and vocational inclination, so that if a meeting is held between a buyer and seller it has a reasonable possibility of leading to an offer and negotiations.

The second step for an interested buyer is to generally meet with the business owner to discuss operations and tour the facilities. It is our goal during this meeting to facilitate the free exchange of information between the parties while maintaining control of the discussion to ensure that all key issues are covered and the time is used to its maximum productivity. This first meeting is generally where business sales are made or lost, so preparation and proper presentation of information by the seller is important at this point. IBA recognizes this transactional variable and will provide the support necessary, so our clients can take the baton from IBA and return it without breaking the stride of the transaction’s momentum.

A transaction can go in one of three directions after the first buyer/seller meeting. The worst case scenario is that the buyer will determine that the business is not a fit for them and eliminate it from consideration. This action, although negative in terms of a sale, is positive in terms of the fact that if the presentation of the company has been complete no additional time will be expended by IBA or the seller working with an individual or company that is not going to complete a transaction. The second scenario can be a precursor to the first or third scenarios. In the second possible scenario the buyer remains interested in the company, but has not reached a decision regarding whether to enter into negotiations. In this scenario, IBA will facilitate additional meetings and the provision of information in an effort to use our professional sales skills to tip the scale toward a business acquisition in the buyer’s mind. The final possible scenario involves a buyer who has decided to enter into negotiations for the purchase of the business. This decision when generated in the environment of full disclosure established by IBA for its clients typically sets the stage for a business sale to be completed. A deal is not done at this point, however in our highly skilled negotiating hands the probability of a sale being able to be negotiated is very high.

The negotiation of an agreement between a business buyer and seller occurs on multiple levels. The first level of negotiations generally involves the sale price and financial terms for the transaction. These negotiations are typically a straightforward, short duration activity in transactions facilitated by IBA due to the fact that our businesses are priced at "fair market" terms when they enter the market rather than at an arbitrary value. IBA prides itself in its ability to achieve its client’s goals on this level of negotiations. However, we believe our negotiating skills and transactional knowledge also greatly benefit our clients in our ability to negotiate favorable secondary transaction components like transition period training, post transaction consulting and/or employment contracts, non competition agreements, tax allocation, etc.

A successfully negotiated agreement is documented with the signatures of the buyer and seller. This achievement is a major step toward completing the sale of a business. However, IBA’s representation does not stop with that achievement. We are a complete representation company and will continue to provide administrative support and transactional expertise from the point agreement is reached until the close of escrow as issues ranging from due diligence to document preparation and lease assignment or negotiations to the counting of inventory are addressed by the parties.

Please contact our office if you have any questions regarding the representation we provide our clients or if you would like to schedule a time to meet with an IBA professional.

	"Business is never so healthy as when like a chicken, it must do a certain amount of scratching for what it gets"
	Henry Ford