1.
How you can determine the asset value or enterprise value; a typical buyers
offering price.
BTF We Bring Buyers and Sellers Together
Ken Roys 866 385-1900
or Ken.Roys@BTFmanagement.com
A
business is ONLY worth whatever a buyer is willing to pay for it. The big
question is how is that price determined. There is a reason why each year more
than 4 million profitable businesses are closed and not sold. Some owners will
simply rather close their doors and sell the assets than turn over their life’s
work to what they may term a thief and a rapist pretending to be a buyer. Why
do some people have a pleasant experience and for others it seems to be an
excursion through Dante’s multi leveled Hell? Why are most businesses that are
sold merely sold for the assets? The main reason is when a buyer is usually
found locally it is either a bargain hunter looking for a deal or a competitor
looking for the same thing. Either way the results are disatrous for the
selling owner.
Of
the business that are sold why are so many sold to foreigners? I know of
Solicitors (Lawyers) in
When
over 80% of all businesses sold are sold to buyers that are more than 500 miles
from the location of the business. Granted this includes 30% of that number who
are foreiners that emigrate into the
How
does a buyer and seller find each other. With much difficulty normally…That is
why BTF was created over fifteen years ago. The BTF model has been very
successful for both the seller and buyer for more than fifteen years. Assuming
you want us to find the right buyers from whom you will choose your buyer, how
do you know at what price you should sell your business?
So
now how do YOU price your business? The price of all business fall into three
main categories:
You
have the two basic formulas for Asset Value and Enterprise Value. Your business
is just that…YOURS! We do not dictate
any
price for you to sell your business. Some owners are desparate, such as those
with medical emergencies like terminal illness for example and will sell at a
low Asset Value, others will sell for the top of the Enterprise Value range.
Still others wish to sell for full Fair Market Value. We do not require any
documentation other than a tax reurn or if and only if you so choose to sell at
a higher value justified with some sort of third party documentation. The
business must be a viable business as determined by me, Ken Roys, the BTF
Certified Field Representative. Which is why I must visit your place of
business before you can become a client!
|
SIC Code |
Common
Multiples Chart |
Low |
Medium |
High |
|
15 |
Building Construction, General Contractors, Builders |
2.00 |
3.50 |
4.50 |
|
17 |
Construction Special Trade Contractors |
2.50 |
4.50 |
5.50 |
|
20 |
Food, Kindred Food Products - Meat, Dairy Food
Processing & Packaging |
3.75 |
7.00 |
9.00 |
|
21 |
Tobacco Products |
3.75 |
7.00 |
9.00 |
|
22 |
Textile Mills |
3.50 |
6.00 |
7.00 |
|
23 |
Apparel & Other Finished Fabric & Similar
Materials Products |
3.50 |
6.00 |
7.00 |
|
24 |
Lumber & Fixtures |
3.00 |
5.00 |
6.50 |
|
25 |
Furniture & Fixtures |
2.50 |
4.50 |
5.00 |
|
26 |
Paper and Allied Products |
4.50 |
6.00 |
8.00 |
|
27 |
Printing, Publishing & Allied Industries Manufacturing |
4.75 |
7.00 |
8.75 |
|
28 |
Chemicals & Allied Products Manufacturing |
3.25 |
6.00 |
7.50 |
|
29 |
Petroleum, Refining & Related Industries |
8.50 |
9.50 |
10.25 |
|
30 |
Rubber & Miscellaneous Plastics Products |
4.25 |
6.75 |
9.25 |
|
31 |
Leather & Leather Products |
5.00 |
6.00 |
7.00 |
|
32 |
Stone, Clay Glass & Concrete Products |
3.25 |
5.50 |
6.00 |
|
33 |
Primary Metal Industries |
3.50 |
5.75 |
8.00 |
|
34 |
Fabricated Metal Products |
4.00 |
6.50 |
8.25 |
|
35 |
Industrial & Commercial Machinery & Computer
Equipment |
4.50 |
8.25 |
10.50 |
|
50 |
Wholesale Trade - Durable Goods |
2.00 |
4.00 |
5.25 |
|
52 |
Building Material, Hardware, Garden Supply &
Mobile Home Dealers |
1.75 |
3.25 |
4.25 |
|
53 |
General Merchandise - Retail |
1.00 |
2.00 |
3.00 |
|
54 |
Food Stores - Retail |
2.00 |
3.50 |
4.50 |
|
55 |
Automotive Dealers & Gas Service Stations |
1.00 |
2.00 |
2.50 |
|
56 |
Apparel & Accessory Stores - Specialties |
2.00 |
3.50 |
4.50 |
|
57 |
Home Furniture, Furnishings & Equipment Store |
2.00 |
3.50 |
4.00 |
|
58 |
Eating & Drinking Places |
3.00 |
5.00 |
5.50 |
|
72 |
Personal Services |
4.50 |
7.00 |
9.00 |
|
73 |
Business Services |
3.50 |
6.00 |
7.50 |
|
75 |
Automotive Repairs, Services & Parking |
3.50 |
5.50 |
6.50 |
|
76 |
Miscellaneous Repair Services |
5.00 |
6.00 |
7.00 |
2.
Meeting Agenda if and when we meet. Duration: one or two hours.
BTF We Bring Buyers and Sellers Together
Ken Roys 866 385-1900 or Ken.Roys@BTFmanagement.com
I will gladly
schedule an appointment with the business owners that meet these three simple
parameters:
1.
VIABLE BUSINESS: It
doesn't matter if you are losing money, will a buyer believe
he/she can make it profitable. The business is only a portion of the sale. The
Buyer is also buying a business defined by who you are and
what you had done. If you do not like the buyer
or visa-versa then no deal will be effected.
2.
DECISIVE: Are
you really ready to sell in your mind! A buyer / investor will not make a
serious offer if they believe you may change your mind and back out of the sale
during the process. If you are not capable or able to decide and commit to
sell, then wait until you are capable and able to make that decision.
3.
NOW: The
buyer has money and will buy / invest in a business now, if not yours then some
other business. Buyers / Investors have choices. The process will take some
time but YOU must be committed to the process now knowing it could take
a few weeks to a few years before you decide on the right buyer.
Introduction
Brief
introduction of all decision makers of the two parties:
1. The Owners or Directors of
the Shareholders and all germane decision makers and / or mentors representing
your business.
2. Ken Roys, a Certified Field
Consultant who has an extensive background of experiences in the M&A
Industry
Paperwork Signed
We
will quickly review the questionnaire that you received in the e-mail/fax and
filled out prior to our meeting. I will sign the Confidentiality Agreement and
any Non-Disclosure Agreements that you may have.
Facilities Tour & Photos
Another
thing on the agenda is a tour of your business. If I am to be introduced any
employees it is simply as a consultant. I will take photos of your business with
my camera. I am also interested in any copies of brochures or company
advertising that you might have for your portfolio.
Private Meeting, Options &
Alternatives
From
this point on, the meeting must be conducted and discussed in total privacy. If
your place of business is not private enough then you are best served to
continue at your home. All options and alternatives that are available to you
will be discussed.
Review Your Collection of Data for a
Business Valuation Analysis
Next,
we review what your Business is worth to a buyer / investor using several
different methods for a realistic but general ball park figure. The basics are
done by you prior to our meeting. We review the options by you to the basic
methods that a buyer may use. A Credentialed Valuation and Pro-Forma Future
Business Analysis would require more data, time and a credentialed professional
analyst and Appraiser.
BTF
What
BTF does and how they do it and have done so for fifteen plus years. BTF
Advertising costs for 36 months versus your other options. BTF Valuation
options versus competition versus not going that route
Decision Commitment
A
decision will be made as to what you wish to do about the disposition of your
business. If you cannot make a decision then it is made for you as buyers will
only deal with a decisive seller. Since I only meet with owners who are
committed to effect a sale of their business either completely or partially, if
what BTF does makes sense then we sign an agreement. If it doesn’t make sense
today it will not make sense tomorrow. We either have a match to do business or
we do not.
3.
Basic info on: BTF exactly what we do for our clients and how we do it
BTF We Bring Buyers and Sellers Together
Ken Roys 866 385-1900
or Ken.Roys@BTFmanagement.com
Business owners
know how to negotiate or they would not survive in their business. There are
only three major components for a business owner to sell their business once
they have committed themselves to.actually sell
BTF Management
Consultants Inc. represents a large group of qualified buyers and investors. In
addition to our base of of qualified
buyers / investors currently looking to invest in a business, we qualify
hundreds of new buyers / investors. This is done through an aggressive,
confidential, Internet advertising campaign. My role is to meet with serious
minded and motivated business owners such as yourself and to physically inspect
their business on behalf of our buyers / investors.
We advertise
globally in the internet for 36 months. In the past we have averaged over 80% success
ratio at matching buyers and sellers During just a three month period our database of businesses that
are for sale, we:
The results of any
of those searches we will typically show up on page one in the first
five paid advertising results in anywhere from 50 to over 200 million possible
results for "buy a business".
If you require we
will help you with an American Society of Appraisers Professional Valuation,
and/or a professional pro-forma enhancement on your business' potential growth
for a potentially higher sales price justification.
Basic Statistics on Businesses for
Please note: BTF does not tell
the seller at what price their business sould be sold.. Notwithstanding,
whatever price you do come up with will have to be justified in the eyes and
mind of a buyer or they will not pay your price. Price can easily be justified
by a tax return.. However if the business is to be sold a a greater price than
what a tax return justifies i.e. start-up businesses have no tax returns
normally. They are justified in other ways that show and verify future cash
flow potential. Example: In
1997 Star Furniture was bought by billionaire Warren Buffett's Berkshire
Hathaway. Founded in 1912, furniture retailer Star Furniture NOW
operates 10 stores in the state of
BTF’s buyers are
pre-qualified to meet the above listed characteristics prior to ANY
introductions to any of our sellers.
Therefore, you as the seller of your business would only be negotiating
with qualified buyers who are looking for the type of business you have, in the
location you have your business, who are willing to purchase a business under
the terms and conditions you want to sell, and these buyers have the money with
which to purchase your business.
Guarantee
We guarantee in
our agreement:
1. To advertise for buyers in Electronic / Digital Non-Print Media i.e.
Internet Search Engine Priority Placement Advertising.
2. Forward your professionally designed portfolios to interested parties and
provide follow-up with qualified buyers
3. Notify you of every buyer receiving your portfolio
And,
we will do so until……your business is SOLD!... Or for up to 3 years, whichever
comes first!... Or if you withdraw your business from the market… Or if you
sell your business to anyone... your buyer or ours…
Contact: Ken
Roys , Office &
4. Business For
A 2001 study found that the more successful
the company, the more likely its owner wants a valuation. While only 39% of
firms with 1 - 4 employees planned to get an appraisal, 70% of firms with 50 -
99 employees planned to. Does this statistic prove why 3 out of 4 small
businesses sell at a liquidated value?
If you
were to sell your business today, how much would it bring? Understandably,
that’s not a simple question in today’s dynamic market. Every business is
unique. Which means it’s not enough to rely on comparisons with other
businesses in your area. And clearly pricing your business is a tricky matter.
For example, according to a well-known source for business transaction data, Pratt’s Stats, recent revenue
multiples for firms in the auto parts industry ranged from a low of .98 to a
high of 83 with a median of 2.9. If you were valuing your firm for sale and
your annual revenue were $100,000, then the value of your business could be as
low as $98,000, as high as $830,000, or somewhere in between. Where your firm
lies along this continuum is obviously of the utmost importance and can only be
determined by a valuation approach that incorporates academically validated
methods with industry-specific valuation factors. The first step for any seller
is to have a third party business valuation completed on the business. Make
sure you are dealing with a credible individual or firm that is accredited
through The American Society of Appraisers.
THIRD PARTY VALUATIONS -
Preparing the business for financial negotiations
Many
small to medium size business owners don’t know where to begin. There may be
too many assets to value, too many changes within their industry during years
of operation, or their emotional attachment may bring a distorted view. That’s
where an independent business appraiser is a necessity. There are numerous
certified public accountants, valuation firms, and investment banking companies
that specialize in this area. The cost: Between $3,500 - $45,000 depending on your business. Time to
complete: one to two months. The American Society of Appraisers, based
in
CHALLENGES
Confidentiality -
Confidentiality should be considered when preparing your business for the
market. If the general public knows you are for sale you can lose value
overnight. Do you think your local competitors will take advantage of the
situation? Of course they will. Clients might start looking at taking their
business elsewhere. Employees might not feel secure and start exploring other
employment opportunities. If you have operating lines of credit, a banker’s
mentality can change very quickly if they know you are for sale. The list goes
on and on. Confidentiality should be very important through this process.
Exposure to Qualified Buyers - How
do you get exposure to qualified buyers while maintaining confidentiality? Is
there a qualified buyer in your local market? Don’t limit your search for a
buyer to your local market. There may be a buyer(s) several states away that
are willing to pay you more. If you called your local competitor, do you think
they would pay you a fair price? They are very likely to not put any goodwill
value on your business. Define how and where to confidentially advertise to
find that right synergistic buyer. Is your buyer an individual, corporation or
investor?
FINDING BUYERS &
SELLERS - What are the industry options?
DO
NOTHING -This can be one of the most expensive ways to go. How
many times has a potential buyer just walked in to your business with checkbook
in hand? It is very unlikely for this to happen...
LIQUIDATE -Shut
your doors and sell off your assets. This will typically net you pennies on the
dollar and will not pay you anything for the goodwill value of the business.
This is usually a desperate last resort...
SELL THE
BUSINESS ON YOUR OWN -Preparation, documentation, valuation, advertising,
confidentiality, screening buyers, legal contracts, etc. These should all be
considered along with the most important component, negotiating the deal...
INTERMEDIARIES
-Business opportunity intermediaries are usually the best source of information
both on companies for sale and on buyers seeking acquisition opportunities.
Intermediaries come with varying levels of skill and experience. Generally,
they can be classified into four groups: (1) Business Brokers, (2) Investment
Bankers, (3) Merger & Acquisition Specialists and (4) Buyer/Seller Network
Consulting Firms. The lines of distinction between these groups may
blur, but in generally their specialties are:
Business Brokers -
Business Brokers primarily handle small businesses, such as Laundromats and dry
cleaning stores. The broker need not have extensive knowledge about the
business being sold or have creative techniques for financing the transaction.
Seller financing is prevalent with small business transactions. Confidentiality
can be a factor due to the focus for a buyer is usually within the local
market. Brokers fees can range between 10% -19% and are usually contingent on
the sale of the business although the seller will be responsible for paying for
their business valuation and any outside advertising if they want to seek a
buyer outside their local market. Brokers typically look for the buyer in the
sellers local market.
Investment Bankers -
Investment Bankers handle the largest transactions, such as megabuck turnovers
or mergers of large public corporations. They have their own sources of
financing, but generally do not have expertise in specific industries. These
firms usually focus worldwide for the right buyer, not just in the local
market. They are dealing in the multi-million dollar range.
Merger & Acquisition Specialists -
M&A firms typically handle in-between companies, those with sales of $150
million. These firms services are similar to those of investment bankers except
they help obtain outside financing rather than provide the financing
themselves. A good M&A specialist will have a proprietary database of
potential buyers for most companies. These firms usually focus worldwide for
the right buyer, not just in the local market.
Buyer / Seller Network Consulting Firms -
Growing in popularity are consulting firms that specialize in helping “business
for sale by owner” find the right buyer. Typically, an exclusive network is
created to help buyers find viable, synergistic acquisitions. Most of these
networks focus on small to medium size businesses. Although these firms act as
Business Brokers, they take more of the Investment Banker and Merger &
Acquisition firm’s role. Typically, these are non-broker entities that provide
an array of services from business consulting, strategic planning, business
analysis, business valuations, advertising & marketing, qualifying both
buyer and seller and then matching buyers and seller together. The larger firms
even help the buyer with financing, if needed through outside finance sources. These
firms usually focus worldwide for the right buyer, not just in the local
market. Most have a large existing buyer base with new buyers contracting with
them everyday due to the extensive advertising placed seeking buyers.
Most
business opportunity intermediaries are compensated for their services with
contingent fees that range from 1 percent of the purchase price on very large
deals to 12% or more on smaller deals. Investment Bankers, Merger &
Acquisition Firms & Network Consulting Firms often will receive a small
portion of the fee as a retainer, paid on either a flat or hourly basis. In
exchange, the intermediary performs very tangible services, such as
aggressively seeking synergistic buyers through direct contact and/or
advertising, preparing an offering document and contracting a credible third
party valuation company to perform an independent business valuation. Business
brokers typically receive no retainer but only the success fee when the
acquisition is completed but they are not obligated to perform an accredited
business valuation or perform any search work for the buyer.
A good
intermediary performs a number of functions, including (1) establishing a range
of values for the company, (2) helping the owner set the financial terms and
other conditions, (3) contracting and conducting a third party valuation, (4)
compiling a comprehensive offering document, (5) professionally marketing the
company, (6) screening of potential buyers, (7) assisting the seller with other
professional services such as attorneys, accountants & accredited valuation
firms, (8) maintaining confidentiality by preventing customers, competitors,
suppliers, employees and others from knowing the company is for sale. Above
all, a good intermediary can save a client a great deal of time and effort,
whether buying or selling a business. Only experienced intermediaries should be
selected.
SUMMARY
Selling
a business is not an event, it's a process. There is no right or wrong
direction to take. The first step is to prepare the business for sale,
documenting the past and future performance of the company. Your business is
worth what a qualified buyer is willing to pay and the only way to present it
in the best possible light is with a credible third party valuation. A
valuation should be completed before any other step unless you are only
interested in liquidating your assets and are not interested in the fair market
value of your business.
Footnotes:
(Certain statistics and information pertaining to this article were compiled
from):
ü U.S. Small Business
Association (SBA) -HOW TO BUY OR SELL A BUSINESS -The SBA does not necessarily
constitute an endorsement of the views and opinions of the authors or the
products and services of the companies with which they are affiliated.
ü The Five
Myths of Valuing a Private Business- Dr. Stanley J. Feldman, Associate
Professor of Finance,
Contact: Ken
Roys , Office &
5. BTFmanagement.com:
What should a business valuation really cost?
The price should
be driven by the purpose of the appraisal, the appraiser’s professional
standards, and the appraiser's overhead.
Like any other
professional service, such as legal services, medical care, financial advisory
services, or accounting services, the price of appraisal services to the
ultimate user should always be one consideration in selecting the
professional or professional firm. However, it's usually not appropriate
to shop for the lowest priced vendor, or to use competitive bidding to obtain
the lowest price. The heart patient, whose life may depend on the skill and
judgment of his surgeon, wouldn't be smart to put his surgery out to bid.
Similarly, the client whose financial fortunes may rely on the quality of work
or the effectiveness of testimony by his valuation expert should probably not
make a decision on hiring an appraiser based primarily on lowest fees.
Beware of Low-Cost, Low- Wisdom Appraisals -Your Financial
Life May Depend on It!
In business
appraisal, the low-end software-driven product should be approached with
caution. In general these products are designed to give quick, and not
necessarily accurate answers to price shoppers, and by design deny the client
the expertise of the appraiser's many years of valuation wisdom. Often these
are done by part-time appraisers, or are loss-leaders intended to lure clients
into more expensive consulting agreements. Users should beware of any appraiser
who is willing to render an opinion of value without a site visit, personal
interview, and hands-on inspection of the company's financial and
administrative records.
That said, the
relationship between quality of services and fees is not linear: there are
factors unrelated to the quality of the services that affect the fees demanded
for them. For example, the basic amount of work the appraiser has to perform
for an appraisal is driven by the professional standards he must follow in
conducting the appraisal. The emergence of the Uniform Standards of
Professional Appraisal Practice (USP AP) as the controlling rules for appraisal
engagements has increased the amount of work appraisers must do, even for
simple appraisal assignments.
The largest single
driver of appraisal cost though, is the purpose to which the client desires to
put the appraisal result. Appraisals for use as informal pricing guides for
sellers or buyers require the least amount of work on the continuum of effort,
and appraisals done for use in contentious litigation probably require the most
effort. In between these extremes are appraisals for other purposes, such as
buy/sell agreements, partnership agreements, estate planning, asset allocation,
etc.
Preliminary Analyses, Value Studies -$3,000 to $10,000.
These kinds of
less-than-comprehensive valuation efforts can be well-suited for situations
where a client needs a ball-park estimate of value, perhaps as a starting point
for sales negotiations, or to achieve a better understanding of the value drivers
in his company. Often this type of assignment is begun with a Value Study to
identify the value drivers of the subject business entity, and followed-on with
consulting over a period of time to prepare the business and the owner for
subsequent sale. Where we are involved in negotiation, packaging, or
presentation of the business entity there may also be a success fee payable to
our firm.
Limited Partnership Appraisals -Value ill Real
Property Assets Only -Discount Study -$3,000 to $10,000.
The typical
setting for this kind of appraisal is a Family Partnership forn1ed to protect
real property assets from estate taxation. Usually the partnership has no
income distributions to the limited partners, and all of the profit is paid to
the General Partner. The value of the entity is based on its assets, and the
values of the real property assets are provided to us by the real estate
appraiser. Our assignment is to estimate the value of small minority limited
partnership holdings in the entity, and to assign marketability and minority
discounts from the enterprise value, if applicable. These projects typically
involve only a summary report.
Comprehensive
Appraisal -Summary Report -$7,500- $35,000.
This is the most
common type of assignment, and calls for the application of a full complement
of appraisal procedures. This is the type of engagement suitable for most kinds
of litigation, including family law, partnership disputes, shareholder
oppression litigation, forced buy-outs, business torts, contract disputes, etc.
The chief reason that appraisal engagements for litigation cost more is because
the analysis and reporting must be performed to a standard of thoroughness that
will allow them to survive rigorous cross-examination by opposing counsel. This
takes time and costs money, just as all of the other components of litigation.
The appraisal is not the place to cut corners.
All of these
pricing guidelines are predicated on the availability of good bookkeeping and
accounting records. Generally, the appraiser cannot commence the engagement
until there are good financial statements (income statements and balance
sheets) available. These need not be uncontested, of course, but where the
income of the entity or the values of the assets are in question, the appraiser
must be given an instruction as to what assumptions to use in his appraisal.
Contact: Ken
Roys , Office &
6. Questionnaire
BTF New Client Questionnaire
In an effort to help
us better understand your business please answer the following questions with
honesty and candour. Copy and print
pages 9-13, Fax or Email to BTF at 713-983-7904 /
Business Name: _____________________________________________________________________
Address: ____________________________________________________________________________
City:
1.
Are you the only owner(s) of this business? Yes:
______ No: _____
2.
How many employees does the business currently have? Full Time: _______ Part Time:
______
3.
You are going to make some decisions today regarding the
direction to take to attract a qualified buyer to your business. Do you want to
include anyone else in these discussions to help you make a decision about what
you are going to do with your business? Yes:
_____ No: _____
4.
Do you sincerely desire to sell/attract investors for the
business now? Yes: _____ No: _____
5.
On a scale of 1 to 10 with a 1 being low & 10 high, what
is your priority at the right price? __________
6.
What is the primary reason(s) why you want to sell the
business now? Retirement: _____ Health: ____ Burn-Out: ____ Family: _____ Expansion: _____ Other: _____
7.
In the plan for marketing your business, what type of
sale/price are you seeking? Liquidation / Asset Value: ______ Enterprise Value (Asset and Cash Flow):
______ Fair Market Value (includes
Goodwill): _____
8.
Here is the seriousness question again, and let me tell you
why that is so important. If you are not serious about selling your business, BTF
does not need to be spending any money on you, in fact, if you are not totally
dedicated to selling your business or finding investors neither party need to
be spending money. Now, if you had a buyer/investor right now who was willing
to give you the money you needed, is there any reason that could stop you from
moving forward and closing the transaction? Yes:
_____ No: _____
9.
Does the business generate a sufficient cash flow to handle
any unforeseen expenses not planned for?
Yes:
_____ No: _____
10. How long ago did you
decide to attract a buyer/investor? __________________
11. Would you consider
financing any part of the sale of the business? Yes: _____ No: _____
12. What have you done to
attract potential investors to come look at the business? Ran ads: __ listed with realtor/broker: __ talked locally: __ discussed in industry: __ other: __
13. Is it important to keep
this offer confidential from local people to prevent rumours and curiosity
seekers? Yes:
_____ No: _____
I certify the above answers are an
accurate representation of my desire and I am signing this document in the
presence of a certified representative of Great Western Business Services, LLC.
In addition, I understand that my name and business information will not be
used in conjunction with obtaining new clients for Great Western Business
Services, LLC.
________________________ BTF Field Consultant ____________________
Ken Roys, Title Date
________________________ ____________________ ____________________
Client Title Date
7. Confidentiality Agreement
BTF
Confidentiality Agreement
AGREEMENT and acknowledgement between BTF Management Consultants Inc. (BTF) and
_______________________________________________________________________________
(the Client)
Whereas, the Client agrees to furnish BTF with certain
confidential information relating to the affairs of the Client business
operations for purposes of:
Business
Valuation and/or Marketing Plan, and
Whereas, BTF agrees to review, examine, inspect or obtain such
information only for the purposes described above, and to otherwise hold such
information, including client identity, confidential pursuant to the terms of
this agreement,
BE IT KNOWN, that
the Client has or shall furnish to BTF certain confidential information and may
further allow BTF the right to inspect the financial records of the Client
business operations, all on the following conditions:
__________________________________________________ _______________________
Ken
Roys, BTF Field Consultant Date
__________________________________________________ _______________________
Client Title
__________________________________________________ _______________________
Business Date
Contact: Ken
Roys , Office &
8. Client
Summary – Copy from which our editors compile the synopsis of your business in
the database on the Internet. The better
this is filled out the better the data on your business in the database. The
resulting database summary may be altered at any time.
CLIENT SUMMARY
CONTACT INFORMATION
Please PRINT the exact information, as it should appear on
the portfolio. The purpose of this information is to prepare a summary on your
business. Do not list
confidential addresses or phone numbers.
Business Name: ___________________________________________________________________________
Owner(s) Name:
Mr/Mrs/Ms__________________________Mr/Mrs/Ms____________________________
Mailing Address:
__________________________________________________________________________
City:
__________________________________________________State:__________Zip:________________
Contact Phone: (_____) ____________________________Email Address: ___________________________
Confidential
Cell: (_____) __________________________
Fax # ___________________________________
PRIMARY BUSINESS ACTIVITY
Please
describe Products and/or Services by Percentage of Revenue % of Sales
1.
____________________________________________________________________________________________
2. ____________________________________________________________________________________________
3. ____________________________________________________________________________________________
4.
____________________________________________________________________________________________
Is the business
primarily in retail, wholesale or both: _____Retail _____Wholesale _____Both
Primary business Code on
Tax Returns: _____________________________________________
Primary SIC Codes (if
applicable): ___________________________________________
GENERAL INFORMATION
Founded:
______________________________Current Ownership Started: ________________________
Incorporation:
_______C-Corporation _______S-Corporation _______LLC/LLP _______Sole Proprietor
State Incorporated:
________________________________ Is Corp. in Good Standing _____Yes _____No
Owner-Operated Business?
_____Yes _____No Number of Employees: _____Full-time _____Part-time
Days of Operation:
_____________________________________________________________________
Specific Reason for
Selling: ______________________________________________________________
Is the business
currently listed with a Business Broker and/or Real Estate Agent? _____Yes
_____No
Is a license required to
operate the business? _____Yes _____No (If yes, describe license
needed)
Do you or the company
hold any special patents, trademarks or copyrights? _____Yes _____No
(If yes, please describe and attach a copy.)
Are you an authorized
dealer of any of the products you sell or service? _____Yes _____No
(If yes, please
describe____________________________________________________________________________________
Is the business a “hands
on” operation or can an absentee owner run the business?
_____ “Hands On”
_____Absentee
Are you willing to stay
on after the sale through a reasonable transition period? _____Yes _____No
Is there any Pending
Litigation: _____Yes _____No (If yes, please describe)
Would you consider some
owner financing? _____Yes _____No
Do you have a website?
http://____________________________________________________________
Is the business a
Franchise and/or License? _____Yes _____No
MANAGEMENT TEAM
Do you have a management
team in place?______YES ______No Will They stay On?_____Yes______No
Who are your key
managers?___________,___________,__________,___________,____________,_________
Are your key managers
replaceable? Individually rate them on a scale of 1-5 with a 5 being not
replaceable
Key manager
#1______________________ functional
responsibilities:_________________________________,
Length of tenure in the
industry_____ Years, Key
Managers title____________________.
Key manager
#2______________________ functional
responsibilities:_________________________________,
Length of tenure in the
industry_____ Years, Key
Managers title____________________.
Key manager
#3______________________ functional
responsibilities:_________________________________,
Length of tenure in the
industry_____ Years, Key
Managers title____________________.
Key
manager#4______________________ functional
responsibilities:_________________________________,
Length of tenure in the
industry_____ Years, Key
Managers title____________________.
Key manager
#5______________________ functional
responsibilities:_________________________________,
Length of tenure in the
industry_____ Years, Key
Managers title____________________.
BUILDING & LAND
The building and land
is: _____Owned/Included in the sale _____Leased _____Owned with option to be
leased or sold _____Home Based Business (If leased, describe
remaining term of lease and transferability)
How many buildings are
included? _____
The building(s) is:
_____1 level _____2 levels _____3 levels _____More than 3 levels
Approximate acreage
and/or square footage of your lot? ____________________________________________
If home based, is the
residence included in the sale? _____Yes _____No (If yes, give
description of residence)
How many locations do
you operate? _____ (Please list additional locations)
What year was your
building built? __________The overall condition of my facility is: _____New
_____Recently remodeled _____In good overall condition _____Needs some work
Can the building be
expanded at the current site? _____Yes _____No
Can this business be
relocated? _____Yes _____No
Please describe
additional features about property and improvements: _________________________________
_________________________________________________________________________________________
Street Location:
__Interstate; __State Hwy.;
__County Rd.; __City Street; __Downtown;
__Residential
Are you in a high traffic
location with good visibility? _____Yes _____No _____Somewhat
AREA REPORT
City:
______________________________________State
_____County_______________________________
Population of City:
_________________________Population of County: ______________________________
Which region of the
State is the city located? (Circle One) NE
N NW S
W SW SE E Central
The City is located
___________miles from _______________________which is the nearest major city.
The city provides the
following schools: _____Preschool ______Elementary
The Economy in this area
is based mostly on: (Check all that apply)
_____Agriculture
_____Manufacturing _____Tourism ______Other _________________________________
Area Features and Points
of Interest: ___________________________________________________________
BUSINESS SUMMARY List all relevant
information that would be an interest to a potential buyer:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
Expansion or growth
could be obtained by:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
Describe possible diversification and/or additional profit centers
that could be developed within the business:
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
Competition
Local Competition:
_____None _____Very Little _____Some _____Very Competitive
Is this a “Niche
Business”? _____Yes _____No
Are your products and
services competitively priced? _____Yes _____No _____
I understand that the
Company Profile is not intended to sell my business but to reveal key selling
points to a potential buyer without revealing proprietary information or making
full disclosure of this offering. I have reviewed this material and attest the
information provided herein to be accurate and complete to the best of my
knowledge.
_____________________________________________________________________________________________
Signature Date
Title
_______________________________________ ____________
Ken Roys BTF Certified Field Consultant Date Agent
#
9. Remember
the bulk of our fees are only due after you have accomplished your transactional
goal and only when accomplished with a buyer / investor we supplied and you are
100% satisfied with the results.
10. ASA - American Society of Appraisers – A
white paper
The ASA Appraiser-
Your Choice for
Valuation Expertise
For more
than half a century, the American Society of Appraisers (ASA) has served the
international public as a non-profit, independent appraisal organization that
teaches, tests and accredits appraisers. It is the nation's oldest
multidisciplinary appraisal society.
U .S. and International Membership
ASA's members, numbering more than 6,000, are located in the
United States, Argentina, Australia, Brazil, Canada, China, Columbia, the Czech
Republic, Ecuador, Germany, Guam, Hong Kong, Hungary, India, Indonesia,
Ireland, Italy, Jamaica, Japan, Kazakhstan, Mexico, the Netherlands, New
Zealand, the Northern Marianas, the Philippines, Poland, Portugal, Puerto Rico,
Romania, Russia, Saudi Arabia, Singapore, Slovenia, South Africa, Spain,
Switzerland, Taiwan, Thailand, Uganda, the United Arab Emirates, the United
Kingdom, and the Virgin Islands.
The Appraisal Foundation
The American Society of Appraisers is one of eight major appraisal
societies in the
Don't Hesitate To
Ask for Credentials
The appraiser you select should possess relevant
experience, education, skill and integrity. The professional will be pleased to
answer the questions listed in this booklet and to place his or her
qualifications before you.
In reviewing an appraiser's credentials, remember
that an accreditation in appraising issued by a major
teaching/testing/accrediting appraisal society is a strong indicator of
ability. It is important to note that a major appraisal organization such as
the American Society of Appraisers requires strict adherence to its Principles of Appraisal Practice and Code of Ethics and to USPAP.
ASA's Principles of
Appraisal Practice and Code of Ethics are closely monitored;
all members of ASA are required to conduct their appraisal practice in
conformance with the highest ethical and professional criteria defined therein.
Additionally, to ensure that competent, relevant,
current valuation counsel is available to the public, ASA requires Accredited
Senior Appraisers to reaccredit. This mandatory program emphasizes professional
participation in a continuing education process. The program interfaces with
the society's Principles of Valuation courses, the Valuation Sciences Degree
Programs, and ASA's examination procedures.
Are you aware of
the impact that appraisers have on your life?
For example:
a. Appraisers are involved in the taxes you pay on
your home.
b.
Appraisers determine the value of property for insurance purposes and supply
information to assist in the settlement of damage claims.
c.
Appraisers work with banks to determine the advisability of bank loans (for
mortgages, improvement loans, etc.).
d.
Appraisers are involved in prices paid for homes, businesses, farms and land
required for public works projects.
e.
Appraisers determine the value of property at the time it is donated to a
tax-exempt institution or charity (information used in the preparation of tax
returns and in the analysis of these returns by the IRS).
Real estate appraisers involved in any federally
related transaction must be state licensed or certified. The only
testing/accreditation process available to appraisers of other properties (fine
arts, antiques, gems/ jewelry, machinery, equipment, businesses, aircraft,
yachts, etc.) is membership in a professional, nonprofit appraisal society that
demands adherence to ethical principles and procedures. And, in the case of the
American Society of Appraisers, all members are required to conform to the
Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by
the Appraisal Foundation. The foundation is recognized by the
Questions and Answers about the Appraisal Profession
1. What is appraising?
The art and science of estimating the value, at any
given time, of any sort of property is called "appraising."
Appraising also involves cost estimation and the forecasting of monetary
earning power.
2. Are there specialized fields of appraising?
Yes. The six major classifications of appraising
recognized by and represented in the American Society of Appraisers are:
Appraisal Review and Management; Business Valuation; Gems and Jewelry;
Machinery and Technical Specialties (Agricultural Chattels, Aircraft,
Arboriculture, Computers and High-Tech Personal Property, Cost Surveys,
Industrials, Machinery and Equipment, Marine Survey-Commercial, Marine Survey-
Yachts, Mines and Quarries, Oil and Gas and Public Utilities); Personal
Property (Antiques and Decorative Arts, Fine Arts, Residential Contents-General
and other specialties); Real Property (Ad Valorem tax appraising, Residential,
Rural, Timber/Timberland and Urban). ASA tests and accredits professionals in
all of these specialties.
3. Where do I find an appraiser?
There are numerous appraisal organizations in the
nation; but of the eight major testing/ accrediting societies, only the
American Society of Appraisers teaches, tests and accredits appraisers in all
the disciplines described above. The American Society of Appraisers publishes a
directory of accredited appraisers that consumers can use to select an
appraiser. In addition, you can use ASA's toll-free telephone number to find an
appraiser in your area, (800) ASA-VALU, or visit ASA's Web site at
www.appraisers.org.
You may find appraisers listed in your local Yellow
Pages. Some will show designations after their names. Even so, it's important
to ask about the appraiser's credentials.
4. How can I judge an appraiser's qualifications?
An appraiser's qualifications can be judged by
studying and evaluating information from several sources:
a. Documented
accomplishments such as the appraiser's personal "qualifications
statement" or job-history resume.
b.
Professional accreditation by the American Society of Appraisers or another
teaching/testing/accrediting organization. The ASA specifically designates
appraisers in two categories: Accredited Member (AM) and Accredited Senior
Appraiser (ASA). Two years of full-time appraisal experience (or the
equivalent) are required before a Candidate may apply to be tested as an
Accredited Member; those who become accredited will use the designation AM
after their names. Five year of full-time appraisal experience (or the
equivalent) are required for the Accredited Senior Appraiser designation; those
who become accredited will use the designation ASA after their names.
Membership in either category requires a college degree, other education and
experience, and passing of intensive written and oral examinations covering
areas of general valuation theory, technical expertise and principles and
ethics of appraising.
c.
Reputation, including recommendations/ references by insurance companies, banks
and related financial institutions, the Internal Revenue Service, museums, and
government bodies at city, state, federal levels, etc., for which the appraiser
has performed appraisal services; also recognition received for professional
activities.
d.
Personal interview, which you should conduct to determine how the appraiser's
experience and knowledge or expertise relates to the particular assignment that
you are proposing.
5. What ethical considerations are involved in an appraisal?
a. All
principles of appraisal ethics stem from the following central fact: the
primary goal of a monetary appraisal is the determination of a numerical result
that is objective and unrelated to the desires, wishes or needs of the client
who engages the appraiser to perform the work.
b. The
American Society of Appraisers takes the position that it is unprofessional and
unethical for an appraiser to contract to do work for a fixed percentage of the
amount of value or of the estimated cost (as the case may be) that he or she
determines at the) conclusion of the assignment.
c.
Further, ASA declares that it is unethical and professional for an appraiser to
accept and to appraise a property in which he or interest or a contemplated
future interest appraiser has disclosed this interest to prospective client. If
the client still wishes to retain the appraiser, the appraiser may properly
accept the assignment provided disclosure of the extent of that interest is
contained in the report.
6.
What are the key points for me to understand in an appraisal
report?
a. The appraisal should clearly
state the kind of value being determined, such as (I) fair market; (2)
Liquidation; (3) replacement reproduction, etc.
b. It should describe the
properties being valued.
c. It should detail the
procedures used to estimate such as: (I) analysis of comparable sales; (2)
estimation and analysis of income (if applicable); (3) relation of the
appraisal values to a specific point in time (e.g., fair market value of the
real estate as of January 1, 2001).
d. It should be signed by the
individual who made the appraisal and who is responsible for its validity (to
you and to third parties).
e. It should contain the
personal qualifications data of the appraiser.
In summary, it is important for you to remember that
the appraisal you are paying for should answer the value questions you have
asked in a manner that you can understand and at you can see is objective, descriptive and documented.
7. How long is an appraisal considered "up to date"?
Because of fluctuating market conditions that affect
different properties differently, no precise answer can be given to thin
question. Generally, "updating" an appraisal requires a change only
in the value conclusion of a report; no change need be made in the descriptive
port unless, of course, there are additions or deletions involved. Whether an
appraisal need to be updated, then, depends on whether there are changes and
whether the value as reported at the time of is still pertinent.
Many appraisers recommend an “update” at least every
three years, preferably every two. Several decades ago appraisals were
considered “current” for at least ten years.
Current market conditions have drastically reduced
this estimate. A professional appraiser can provide an informed and helpful
recommendation as to the necessity and frequency of appraisal “updates.”
8. Does the ASA have tested accredited experts in all types of
property?
Yes. ASA represents approximately 3,000
tested/accredited appraisal experts in all areas of appraising, including real
estate, personal property, machinery and technical specialties, large and small
businesses, gems and jewelry and so forth. These experts are located in all
parts of the
9. What questions should I ask when interviewing an appraiser?
a. What is your general
appraisal and educational background?
b. What specific experience do
you have with the kind of property I wish to have appraised?
c. Are you a member of a
professional appraisal society? Does that society teach, test and accredit?
d. Do you hold a special
designation issued by an appraisal society?
e. Is that designation based on
successfully completing written examinations?
f. How long ago did you take the
examinations?
g. What continuing education
have you undertaken to keep up-to-date in the field?
h. Has the appraisal society you
belong to adopted a mandatory reaccredidation program to ensure that your
education and knowledge are current?
i. What do you charge for your
services, and how do you base your fee?
j. Are you required by your
appraisal society to adhere to the Uniform Standards of Professional Appraisal
Practice (USPAP)?
For More Information…
Write: American Society of Appraisers
Phone: (800) ASA-VALU
(703) 478-2228
Fax: (703) 742-8471
E-mail: asainfo@appraisers.org
Web: http://www.appraisers.org
BTF Analysis Overview
Proven talents in Sales & Marketing, Finance, Administration,
Operations, and Risk Management.
Executive with over 30 years experience on three continents in
multi-lingual, cross-cultural environments with corporate executives,
government officials and military management. Excellent verbal, written,
and presentation skills. Comfortable communicating with technical and administrative staff, high-level clients and
executive management in all levels of corporate structure and life cycle. An empiricist with
diverse expertise in direct oversight and business consulting from conception,
start-up, emerging markets to mature enterprise re-organization. Established
ability to build and enhance shareholder value. An
aggressive analyst capable of deciphering complex, arduous issues into
coherent, achievable goals. Interested in national or international endeavours.
A problem solver using contrarian,
outside-the-box thinking. Extensive global experience in Mergers and Acquisitions.
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