The more time passes and the longer I am in this business the more I come back to the basics. Here are some tips for buyers and sellers that hold true, have held true and will hold true.
1. Sellers your not gonna get all cash. Banks dont lend money and until the housing market returns there is little equity to be pulled from homes.
2. How much it sells for isnt always gonna indicate how much you walk with…deal strucuture makes all the difference.
3. Buyers dont be surprised if sellers ask for financial statements…99% percent of you will never do a thing.
4. Dont expect sellers to give you all their financials and tax returns until you make an offer…that is personal and proprietary stuff and you gotta put some skin in the game.
5. Use a business broker that does this business full time…remember expercience matters and they know how to get deals done.
6. How do you know if you got a good business broker? a) how often do they co broker – should have 50% at least b) do they have thier own web sites (i.e. if they dont have the capital for that how do you expect them to be good marketers c) How Many deals do they do a year…it better be more than 10 a year or dont bother.
d) buyers understand that business owners sometimes are creative in how they do thier books e) have a basic understanding of financial statements and how important working capital is e)