MYTH # 1- there are no buyers out there - the economy has affected the business for sale environment as much as any other.

• The reality is that a down economy creates a positive business for sale environment because business buyers flood the market needing to (or have been removed from) the corporate world. The business for sale market is economy proof.

MYTH # 2- I have to sell my real estate with the business.

• No you don't and most business owners do not once they realize this. They prefer to keep the real estate as both an ongoing revenue stream by leasing to the new business owner but also to save paying capital gains tax.

MYTH # 3- I have to hold the loan because lenders are not lending for small business acquisitions.

• We don't deny that the small business lending environment suffered in the last couple of years. But it is recovering and contrary to this thought - lending is still going on - so you do not need to hold a note.

MYTH # 4- it takes between 15 months - 2 years to sell a business.

• This stat is out there but refers to selling publicly held companies. For privately held companies the average is 7 months and we sell some much sooner and some do not sell at all - there are no guarantees.

MYTH # 5- using comps is the best way to determine my business value.

• Actually it is the worst way. Unlike real estate where comps do play a part - each business is unique with a unique value. A business value is a combination of cash flow and assets which is reflected in our Business Market Valuation.

MYTH # 6- the most common way of determining my business value is by gross sales multipliers.

• This statement is true as we see more values determined by gross sales rules than other formulas. However gross sales tells us - and buyers - nothing about the actual value. That is because the value should be based on cash flow + assets as we do on our Business Market Valuations. Not long ago we valued two different machine shops doing basically the same thing. One had annual sales of 2 million and the other $800,000. But the shop with lower sales had a greater value because of a better cash flow - the larger company had more expenses.

MYTH # 7- attorneys are not needed in the sales process.

• This statement really bothers us and generally comes from unethical business brokers to the seller worried about being discovered as the frauds they are (not all business brokers mind you). You need to have an attorney representing you. You can do it yourself but as the saying goes - then you have a fool for a client. And we will not provide you legal advice. Just make sure that it is a good attorney experienced in business or real estate transactions. We advise buyers of the same. .

MYTH # 8- confidentiality may seem important but I want everyone knowing I am selling to increase my prospects.

• This statement is not common but we have heard it - most owners understand the importance of confidentiality. But if you don't - just imagine - we put a FOR SALE sign on your front door. Your employees start looking - customers go elsewhere - suppliers & creditors grow concerned - landlord feels blindsided - YEAH then imagine what the competition will do. You are hiring us to sell without the FOR SALE sign - nobody knows until you close the sale

MYTH # 9- business owners should ask for at least 5 references from the broker of past businesses sold.

• Beware - this statement is being used by a certain segment of brokers who use this catalyst to secure retainer fees and listings. Here is an insider's secret - their references are fakes and since there is no way the owner can prove it they are taking as truth. We practice confidentiality before - during - after the sale. We reject past seller's offering as reference for this reason. We not only protect the former owner's confidentiality but we also respect the new owner's confidentiality as well.

MYTH # 10- insisting on non-exclusive listing agreements allows me to have all brokers selling my business.

• This works in real estate but can be deadly in business brokering. You could end up having to pay two or more commissions at closing. Don't laugh - a good business broker retains the rights to buyers on a disclosed business for up to 2 years. This protects the broker from having a buyer go behind the broker's back. If you have multiple agreements you will likely have multiple brokers working with the same buyer. And since it is an open agreement - each broker could lay claim to the buyer. THE ANSWER is to sign an exclusive agreement with a broker willing to co-broker with other business brokers. This assures just one commission to pay that the co-brokering business brokers will split. AND YES WE CO-BROKER!

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