Buyer Frequently Asked Questions

What does a business broker or intermediary do?

Business brokerage is a specialized niche in which business brokers or intermediaries educate buyers and sellers about the sales process. For buyers, intermediaries seek out companies that meet specific acquisition criteria determined by the buyer; they negotiate terms, help structure deals, write offers to purchase, identify financing options and, finally, close deals for purchasers.

What does a business broker or intermediary do for me that I can’t do for myself?

Since its founding in 1979, Creative has accumulated transaction experience that benefits buyers and sellers alike. Our buyer clients benefit from the broad list of companies we are actively marketing for sale and our extensive network of lenders, professional advisors, and financial planners who regularly refer potential business sellers to us.

What we do for our buyer clients:

  • Respectfully take steps to honor the CONFIDEDNTIAL nature of their decision to purchase a business
  • Conduct seller searches
  • Manage communication with each potential seller
  • Interview, screen and qualify serious sellers
  • Represent the buyer in the purchase process as the Buyer‘s Agent
  • Coordinate Purchase Offer negotiations
  • Provide deal structuring advice
  • Skillfully craft the deal and negotiate the terms that benefit the acquiring party
  • Work with the buyer’s accountant and attorney to coordinate Due Diligence Investigation and data collection
  • Facilitate contingency removal to keep the transaction moving forward
  • Manage the final walkthrough and inventory report
  • Coordinate the closing
  • Ensure a smooth transition from Seller to Buyer.

Why should I choose Creative Business Services?

At Creative, we offer sellers and purchasers the benefit of our many years experience in this profession.  We consult with buyers to thoroughly understand their search criteria and purchase goals. We search our extensive seller database and current listings for possible matches for our buyer clients. We conduct extensive research to identify and screen companies for sale that meet our buyer client’s criteria and present them to our clients. We announce the acquisition criteria to our network of professionals and colleagues in an effort to find the perfect match for our buyer clients.

How do you handle confidentiality?

Confidentiality can be key to the successful sale or acquisition of a business. If our buyer clients prefer to keep the acquisition search CONFIDENTIAL, we take steps to honor their intent. We do whatever it takes to protect the privacy of our clients, be they buyers or sellers.

How do you find sellers?

We maintain a dynamic list of companies for sale. And on a very confidential basis, we use our extensive ever-expanding network to reach the broadest possible audience for our buyer clients. We formally present business acquisition searches to our associates, colleagues, local and regional professionals, industry-specific buyer groups, and our database of individuals and organizations looking to sell or merge with another company.

As a member of the Midwest Business Brokers Association, the International Business Brokers Association, M&A Source, and other professional organizations, we maintain active relationships with professional business brokers who represent clients all over the world looking to buy or sell businesses.  We interview and screen each potential seller, thus we limit the exposure of our buyer clients and introduce only appropriate possible acquisition targets to our buyer clients.

How is price allocated?

Price is allocated to goodwill, fixtures and equipment, leasehold Improvements, covenant not to compete, liquor license, furniture, and inventory.

What does the selling process look like?

For the purposes of this explanation,

“Seller” – owner of the business for sale

” Intermediary” – Seller’s Creative representative broker

“Buyer”- party who will purchase the business or commercial property

“Buyer’s Broker” – the buyer’s representative broker.

  1. The Seller and Creative Intermediary meet to establish rapport, share expectations, talk about the business for sale, its financial history, company structure, employees, strengths in the market and challenges faced. The industry, market served, competitors, and potential buyers are discussed and the Sales Process is described. This initial meeting provides the Intermediary a clear understanding of the business, its potential, and the Seller’s goals. The Seller gains an understanding of how Creative works and the services we provide. After this meeting, the Seller will have sufficient information to decide whether to wait or to move forward. To move forward, the Seller and Intermediary lay out a strategy for selling the business.
  2. An Employment Contract (i.e. Representation Agreement, Engagement Agreement, Listing Agreement) is completed by the Intermediary and signed by the Seller.
  3. The Seller is presented with a list of items needed to determine the value of the business and to list it for sale. The list includes:
    1. Last 3 years of financial statements (Profit & Loss and Balance Sheet)
    2. Present year P&L and Balance Sheet current within 60 days
    3. Market value of Inventory
    4. Market value of receivables
    5. Market value of patents, gift certificates and other tangibles
    6. Copies of licenses, patents, loan documents, contracts, agreements
    7. Last 3 years business tax returns
    8. List of all equipment and other assets to be included in the sale
    9. List of all equipment NOT included in the sale
    10. Copy of any Environmental Reports
    11. Copy of Survey of Property and Layout of Building
    12. List of all employees – names, job descriptions, benefits, rated
    13. Copies of Agreements related to employee benefits
    14. A recent Appraisal, if done in the last 3 years
    15. Copy of Marketing-related Materials
    16. Copies of all other documents needed to present a fair and accurate description of the business to prospective Buyers.
  4. The Intermediary analyzes the data provided by the Seller and researches recent industry activity for similar businesses to prepare and present an educated business Valuation Report to the Seller. This is an honest assessment of the value of your business.
  5. The Intermediary and the Seller agree on a Sale Price.
  6. A comprehensive and confidential Marketing Plan is developed by the Intermediary, discussed with and agreed upon by the Seller.
  7. The Intermediary writes a narrative about the business for sale; produces Marketing Materials including the Information Packet, Executive Summary, brochures and flyers; and begins Advertising the business for sale.
  8. The Intermediary Introduces the Business for sale to the entire Creative team.
  9. Company Databases are Searched for previously qualified Buyers whose purchase criteria might match that of the business for sale.
  10. The Executive Summary and Information Packet are sent to potential Buyers.
    1. If the business for sale is a Confidential Offering, potential Buyers are sent the Executive Summary about the business and asked to sign a Confidentiality Agreement (CA) before the identity of the business and its details are provided to them. The Information Packet is only sent after we have received a signed CA from potential Buyers.
    2. If business for sale is a non-confidential offering, the Information Packet is set to interested parties.
  11. The Intermediary Interviews, Screens and Qualifies potential Buyers.
  12. The Buyer’s Broker Writes an Offer to Purchase, secures an Earnest Money deposit from the Buyer, and delivers them to the Intermediary.
  13. The Intermediary Presents the Offer to the Seller. Together they discuss terms and decide whether to accept or counter the Offer, and discuss how best to Structure the Deal.
  14. Representing the Seller, the Intermediary Negotiates the Offer with the Buyer’s Broker.
  15. Upon Offer Acceptance, the Intermediary may arrange a Seller/Buyer meeting in which the Seller’s and Buyer’s Disclosure Statement is completed, questions are answered and the statement signed by both parties.
  16. Due Diligence Investigation begins when an Offer has been accepted and the Disclosure Statement has been signed by both parties. The Intermediary facilitates the Due Diligence process.
    1. If due diligence proves the business is as represented, the Buyer signs the Conditions Removal document.
    2. If due diligence does not prove that the business is as represented, either the Offer will be renegotiated, or the Offer will be cancelled and the Buyer’s earnest money returned.
    3. If due diligence proves the Buyer is as represented (capable of purchasing and managing the business that is for sale) the Seller signs the Conditions Removal document.
    4. If due diligence does not prove the Buyer is as represented, the Offer will be cancelled and the Buyer’s earnest money returned.
    5. After both the Seller’s and Buyer’s Conditions Removals have been signed, the Intermediary prepares the transaction for closing.
  17. When the Due Diligence Investigation concludes, the Intermediary works closely with the Seller’s accountants and attorneys to ensure the best deal. Next step is Closing Preparation. The Intermediary …
    1. Estimates the closing date, the date of possession by the Buyer, investigates insurance (will buyer assume Seller’s insurance or acquire new?),
    2. Secures, answers and/or provides copies of the following to ensure a timely close:
      1. Listing Agreement
      2. Purchase Agreement and Counter Offers
      3. Both Condition Removals
      4. Liquor License, if applicable – Transferable?
      5. State Sales Tax Number
      6. Federal EIN – Employer Identification Number
      7. Property Tax bill – for pro-ration
      8. Seller(s) name, home address, Social Security Number, license (if applicable).
      9. Buyer(s) name, home address, Social Security Number, license (if applicable).
      10. Earnest money check
      11. Leases – monthly rental, security deposit, assignment, etc.
      12. If Buyer or Seller is a corporation, the EIN, names of the officer(s) authorized to sign and a copy of the Corporate Resolution authorizing the sale of the assets or stock is provided.
  18. A Closing Statement and additional Closing Documents are prepared.
  19. The Sale Closes successfully, funds are disbursed and the celebration begins!