What are some of the reasons a VBA would sell their Business?
The first questions buyers will ask is; Why you are selling your VBA Business if it is such a good business? You may be asking yourself the same questions right now so I have listed some of the reasons why people sell good VBA Businesses:
- Owner wants to Retire
- There are Health Issues
- Partnership Disputes
- The Owner can’t handle the business or the business growth
- The Owner is ready for a change
What is my VBA Business worth?
To keep it simple your VBA Business is most likely worth 1.5 to 2 times your adjusted net profit. Adjusted Net Profit will be slightly lower than Gross Income for most VBA businesses since most VBA Businesses have very few actual business expenses. The common exception to this would be a larger VBA Business with additional expenses such as rent, payroll and insurance etc….
So if you make $100,000 a year with your VBA Business you should be able to sell your VBA Business for $150,000 to $200,000.
How long do I need to own my VBA Business before I sell it?
Having two or more calendar years of business operations and financials is ideal in order to sell your VBA Business. This is enough of a track record for buyers to make an educated decision on the business and will also allow for a buyer to get an SBA loan on the businesses if needed.
Although two years is ideal many VBA Businesses sell with less than two years history and if the business is valued at under $100,000 then length of operation is less significant.
What are some of the factors that will affect the value of my VBA Business?
- Size-Businesses with higher Sales Volume usually sell for a higher multiple.
- Income Trends-Declining sales trends decrease value, whereas trends of sales growth increase value.
- Provable Books and Records-If income is hard to prove it decreases what buyers are willing to pay for the business.
- Terms-Being flexible and offering terms to qualified buyers will typically increase the amount a business will pay.
How long will it take to sell my Business?
This may vary greatly as some VBA Businesses will sell in a couple of months and some will take over a year however, 5 to 6 months seems to be the average time it takes to sell a VBA Business.
In general, smaller VBA Businesses tend to sell quicker than large ones since there are more buyers with the financial ability to acquire them and often buyers do not need SBA loans on smaller businesses.
What are some things buyers look for when buying a VBA Business?
- Provable Books and Records
- Established Website
- Standardized Forms and Documents
- Solid base of attorneys (ideally no one attorney makes up the majority of your case load)
- Reasonable Price
- Leverage and Terms
- No Big Surprises
How will I get paid when I sell my VBA Business?
A Typical VBA Business acquisition consists of the following elements:
- Buyer’s Cash
- Institutional Financing (SBA, home equity or other institutional loan)
- Seller Financing (typically 20% to 50% of the purchase price)
This means that you will most likely get the majority of your money at closing and that you will be financing the remaining portion of the purchase price for the buyer, although in some cases you may get cashed out at closing. The good thing about seller financing is that you may defer or save taxes, you will make interest on the seller financing and you will have a UCCU filing on the business which may allow you to take the business back if the buyer defaults on the loan.
How do I sell my VBA Business?
Selling a business is not the easiest thing to do but the good news is that we can help you.
Many of the 713Training Team have sold their businesses including one VBA Business for 1.2 million dollars. 713Training has several qualified buyers that are waiting to find an existing VBA Business so if you want to sell your VBA Business or have any questions call or email and we can assist you.
If you are not a VBA yet then you need to call or email 713Training today so that we can help you Get Started on becoming a VBA and then we can help you sell your VBA Business when you are ready.
*This article was written by Scott Simons who is the Operations Manager at 713Training, a VBA, and a Certified Business Intermediary who has sold over 100 businesses. We hope that this article was informative and if you have any questions regarding this article or about any of the products or services offered on www.713Training.com make sure to call or email us.