Presentation by Joe Saad, Business Broker and Yacht Broker

As a business broker in San Diego, some of the things I encounter on every transactions are fears when people buy or sell a business! To-day, I will tackle the fears when one and share with you how, after 25 years experience, I have come to handle and deal with fears when someone is going to sell a small business.

There are 3 major fears for Business Sellers:

The first and most important one is: Confidentiality.

When considering listing their business for sale, sellers are apprehensive about two major issues:

1. Their employees finding out about their intention to sell, and leaving them
2. The public handling of their financial information

For A, I have adopted these two suggestions:

1. Introduce me as an Insurance agent, thus getting the employees to accept my presence and inspections of the premises
2. Coordinating with the owners as to the best time to show their business to potential buyers.

For B, I assure them that before handing out their financial information to a potential buyers, I ALWAYS have them sign an Confidentiality & Non-Disclosure agreement

The second Fear that they have is: Being stuck with a contract for a long period of time.

Here I try to explain to them that in order to allow me to do my job properly, I do need the time (3, 6 or 12 months, depending on the kind of business it is and how easy to find a potential buyer).

On the other hand, I promise them a regular periodic review of the situation and market condition, in order to adjust our aim and obtain better results.

I also assure them that if they are not happy with my performance at any time, we can always sit down and work things out, even if it may lead to cancelling the contract by mutual consent. I am not going to waste my time and efforts on a listing when I know that the owner is not going to cooperate with me in the sale of his/her business.

The third and last Fear is the Commission.

Yes, unfortunately almost all sellers are apprehensive about paying a commission to the brokers.

I give them assurances as follows:

One we have agreed on Price and Terms of their business sale, and firmed the commission at certain percentage (usually 10%), I ask them the following question: If I get you a full Price and Terms offer from a qualified buyer, would you pay me 10%? The answer is always: But of course I will. I follow this by telling them that if and when I bring you any offer that is different from the agreed Price and Terms, EVERYTHING is negotiable, including my commission, and that as a good and successful business broker, I do not have the habit of screwing up a deal by insisting on my full commission no matter what.

I point out to them that they are and will always remain in control of the situation and that the most important thing for me to do is to find them an Able and Willing Buyer. The rest is always workable between us. This seems to work for them.

To conclude, small business sellers have to understand that they are hiring a professional business broker in San Diego who has a lot to offer towards assisting them in realizing their goals in the best and easiest way possible.