Below are explanations for the various fields you will be filling out when creating your for-sale ad.
CONFIDENTIALITY: Assuming you wish not to disclose the identity of this business until time is right, we caution a business owner that the Valu4Sale Ad format has been designed primarily, but not exclusively, for use by Business Brokers, or seller’s agents or intermediaries.
The Reason: Valu4Sale is designed to present a great deal of confidential information; more information than most business owners would want published were it identifiable to their business. So, keeping in mind, this information will actually be confidential ONLY until the identity of the business becomes known;
- A Business Broker, agent or intermediary can take an inquiry and answer questions without “their identity” disclosing identity of the business or the business owner.
- It is more difficult, however not impossible, for a business owner to take the same inquiry and answer the questions, because “owner’s identity” if disclosed purposefully or inadvertently, might very well identify the business, particularly to an inquirer from within the business owner’s own industry.
However Not Impossible: If the business owner is selling the business without representation, the business owner would be advised to be very prepared to take inquiries from wherever they may come, with non-identifiable contact information; such as email and telephone, and with selling presentation material that does not identify the business, and with a mindset to be very careful with the answers to the inquirer’s questions.
*Required Field Ad Name WILL NOT be displayed in the Ad Posted.
In 30 characters or less in length, enter a short description or phase or name that you will remember and/or recognize. It will not be visible in the Ad or to anyone else but you and is meant for your convenience. Choose easy to remember key word or key words to search the website for your own Ad.
*Required Field The Headline WILL be displayed in the Ad Posted.
In 100 characters or less, enter a Headline Introduction to your Business-for-Sale. A search for a certain type of business will often produce a list of businesses introduced by Headliner only.
Example: Mechanical Contractor: $5,187,000 price includes $3,325,000 working capital and 33% seller financing
You may not have the detail right now to create the right Headliner. In such case, for now just Enter a place holder (such as the words “Place Holder” for example), then after you’ve completed your ad and have the info you want in your Headliner, just come back to this point and complete the Headliner.
*Required Field Advertiser Information WILL NOT be displayed in the Ad Posted.
The User’s/Member’s/Advertiser’s Profile has already been entered in User Registrations and will auto-populate this section. Otherwise, simply enter Advertiser’s Contact Information here now.
This information is necessary for site administrative purposes only and WILL NOT appear anywhere in the Ad you post.
*Optional Field – If Entered (or Copied) Broker Detail WILL appear in the Ad Posted.
If you are an Independent Seller; a business owner selling your own business, simply leave Broker detail BLANK.
If you are a Business Broker or Agent for the Seller, and if your Agency or Brokerage Contact information has already been entered during the Registration process, just click “Copy Profile” and the Broker Detail will auto-populate. Otherwise, enter the Brokerage or Agency contact information here now. You may overwrite any detail in this section.
*Required Field – Lead Contact information WILL appear in the Ad Posted.
If Lead Contact information has already been entered during the Registration process, just click “Copy Profile” and Lead Contact will auto-populate. Otherwise, enter Lead Contact Information here now. You may overwrite any detail in this section.
IMPORTANT Lead Contact info WILL be displayed in the Ad. If you are a Business Broker or other Selling Agent, we suspect that you will want your Contact Information disclosed. BUT, if you are the business owner/seller of the business, you probably DO NOT.
In order to sell your business however, you need to find a buyer and the buyer needs to be able to make contact. In such case, we suggest that you complete the Lead Contact section as follows:
- Name: Rather than your name, Enter “Business Owner”
- Email: Obtain and Enter an email account just for this purpose, such as a new gmail.com account, or yahoo.com, etc., that will not be recognized by anyone and will not identify you or the company or the business.
- Phone: Provide a telephone(s) number no one will recognize; a new cell phone perhaps, just for this purpose.
If Alternate Contact information has already been entered during the Registration process, just click “Copy Profile” and Alternate Contact will auto-populate. Otherwise, enter Alternate Contact Information now and you may overwrite whatever may be here now.
If you do not intend to provide an Alternate Contact, simply leave Alternate Contact BLANK, or cause it to be BLANK.
IMPORTANT If entered or copied, Alternate Contact info will be displayed in the Ad. If you are a Business Broker or other Selling Agent, we suspect that you will want your Contact Information disclosed. BUT, if your Alternate is associated with the business, you probably DO NOT want the alternate’s name to appear.
To preserve CONFIDENTIALITY, we suggest that you complete the Alternate Contact section as follows:
- Name: Rather than the alternate’s name, Enter “Business Owner”
- Email: We suggest that you obtain a new email account that will not be recognized by anyone and will not identify the alternate, the company or the business; an “@gmail.com” account or an “@yahoo.com” account perhaps, just for this purpose.
- Phone: Provide a telephone(s) number no one will recognize; a new cell phone perhaps, just for this purpose.
Optional Field – If Entered, List ID Extension WILL appear in the Ad Posted.
Business-Trader.com identifies each business-for-sale listings with an ID such as S-41000123, as an example.
If you are a business owner who has listed your own business-for-sale on Business-Trade.com, when you receive response you will know “what business” assuming you not have more than one business listed. Thus, you will probably have no need to enter anything here.
HOWEVER, if you do decide to enter something here, make I a code that only you will understand.
On the other hand, if you are a broker or other selling agent, you could have several businesses-for-sale at any given time. When you receive response you may not know “which business” unless it is identified. And as a broker/agent, you make have your own unique ID system that will be to you a more readily recognizable ID than Business-Trader’s S-41000123, for example. In such case, this is the place to enter your own unique ID for this business.
Example: If your own unique ID for this business is 1234abc, then, the extended ID will become S-41000123-1234abc
Optional Field – If Entered, Sale Structure WILL appear in the Ad Posted.
There are two business sale structure options; Asset Sale or Share Sale. If you already know which of the two is right for you, simply make that selection here now.
Otherwise … If you don’t know which to select, or if you’d prefer not to specify which, then don’t select either. Simply leave the selector on “select one.”
Briefly however, for your information …
In a Share Sale you will actually “Sell the Shares of Capital Stock of a Corporation.” If the business HAS NOT been legally incorporated, then it is not a corporation, and therefore there will be no such Shares to sell and the sale will by default be an Asset Sale.
So, whether it is to be a Share Sale or an Asset Sale is really only a question when the business is a Corporation.
Share Sale means to sell the corporate entity itself complete with its balance sheet, which will account for every tangible thing the corporation owns and owes or will own and owe at the time of the sale. The owners of the corporation are the shareholders and in a Share Sale the buyer is simply buying out the shareholder(s) while the corporation remains intact and in position to continue its business activities without change, except under new shareholder ownership.
In an Asset Sale, the corporation, or the entity, or person(s) who own the assets, will be selling the assets of the business to the buyer, but not the corporation itself.
There can be good reason behind either structure; generally tax reasons, and if you are unfamiliar with the issues surrounding this decision, we suggest that you make no decision at this time and that you seek advice of a qualified tax accountant and/or lawyer.
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Optional Field – If Entered, Business Founded WILL appear in the Ad Posted.
If you know what year the business was founded, enter that year here now. If you don’t know the exact year, but do know approximately, then we suggest that you enter the year you think it was and that you clarify the “approximation” later in this entry process, in a text entry field you will find called “Ownership and Reason(s) for the Sale.”
If you have no good idea when the business was founded, then just leave founding year blank, and we suggest that you address that later in the “Ownership and Reason(s) for the Sale” entry field.
Optional Field – If Entered, Current Ownership WILL appear in the Ad Posted.
If the current owner(s) are also the founders, then enter the same year in both ownership fields. Otherwise, enter the year that current ownership came into ownership of the business.
*Country and *State/Province are Required – Others are Optional – If Entered, Business Locations WILL appear in the Ad Posted.
Select the Country and State or Province in which the business is located. Those two selections are required, but thereafter, neither City nor Region nor Relocatability are required.
IMPORTANT It is generally preferred that you provide the reader with as descriptive a location as will be SAFE to provide. BUT, take care that you don’t define the location so that the combination of information you provide might lead one to the identity of the business.
Relocatability Your business might be one that a buyer may wish to relocate to his/her place of business and/or residence. We suggest that you tell a buyer if you think your business could be reasonably and successfully relocated.
*Primary Business Sector is a Required Field – Others are Optional
Primary and other Business Sectors and sub-sectors selected WILL appear in the Ad Posted.
Many businesses will be engaged in activities within more than one business sector.
In such case, we suggest that you select the business sectors and sub-sectors that have been and are currently material to business sales and earnings, but suggest also that you limit selections to just those that have been material to the business so as to not overstate and over complicate the business.
IMPORTANT This is the point at which the Business-Trader “Valu4Sale” Ad format differs from other business-for-sale formats on Business-Trader as well as other business buy/sell websites.
In completing this section, you will actually be posting a summary of your company’s last five years financial statements; in numerical form, and at the bottom of screen 4 and then in screen 5, summarizing suggested aspects of the business in narrative text form; all great information for a Buyer, providing a look at the financial and business type fit right from the outset, and showing Buyer the basis on which you justify the value placed on the Business.
The value of the business will be described as that equal to the sum of “1) the net value of its balance sheet, plus 2) the value of its goodwill.”
- So, this Valu4Sale format provides a form in which to enter the component values of your company’s full balance sheet, and then specifically provides for you to EXCLUDE any component values or sub-component values that are NOT to be included in the Sale, and calculates NET BALANCE SHEET of all that is to be INCLUDED in the Sale.
- And then, this Valu4Sale format provides for the entry of Sales Revenue and Earnings; ebitda: earnings before interest, taxes, depreciation, amortization, for the past 5 years, … or last 4 years plus current year-to-date, and in such case, for the annualization of current year-to-date. And then it provides for the entry of the Average or Weighted Average of all such Sales and Earnings … arguably, the realistic basis for the calculation of Goodwill Value.
Now, in order to complete this section of the entry process, you will need to gather your Company’s Financial Statements for the past 5 years (or for as many years as possible, if not 5 years), and if the most recent fiscal year-end was more than five or six months ago, we suggest that you gather your internally generated month-end income statements and balance sheets since that most recent year-end as well.
And as you continue to read this HELP file, we will walk you through the process of entering your financial data, step by step.
Creating a Valu4Sale Ad may require a greater commitment of time and effort than will most business-for-sale Ad formats. But, if this is all about selling the business for its full Fair Market Value, we are betting that presenting the business at its full Fair Market Value will be well worth the effort.
Year-End and Year-to-Date selections are NOT required fields. If selected, such dates WILL appear in the Ad Posted.
The purpose of these two dates is to provide date context to the Balance Sheet and the Sales and Earnings Summary.
Most Recent Year-End:
- Simply select the date of your most recent Fiscal Year-End.
- If you DO NOT select a Fiscal Year-End date, there will be no date context to any of the entries in this financial section of ad form or in the Ad itself.
- If you DO NOT select a year-to-date month-end, the form will assume there will be no year-to-date entries and that all entries for all years will be Fiscal Year-End entries.
- Otherwise, if there are to be year-to-date entries, select the date of most recent Year-to-Date Month-End completed, and for which you both Balance Sheet and Income Statement (or Profit & Loss statement), since your last Fiscal Year End.
Optional Field but REQUIRED if you want to incorporate the Sales and Earnings table and the associated graphic in the Ad posting.
Select the date of your most recent Fiscal Year-End.
If you select NO DATE the Sales and Earnings table and graph WILL NOT appear in the Ad posted.
Optional Field, but REQUIRED if you want to incorporate the Sales and Earnings table and the associated graphic in the Ad posting.
If you DO intend to incorporate year-to-date Sales and Earnings into this Ad, select the date of the most recent Month-End Year-to-Date.
If you DO NOT intend to incorporate year-to-date Sales and Earnings into this Ad, select the date again of your most recent Fiscal Year-End.
These two date selections will automatically provide the dating to the Sales and Earnings table and graphic.
If you select NO DATE the Sales and Earnings table and graph WILL NOT appear in the Ad posted.
Balance Sheet entries are NOT required. – Entries made to the Balance Sheet will appear in the Ad.
If the balance sheet is not completed, you substantially negate the purpose of the Valu4Sale Ad.
First, enter your entries to the “TOTAL BALANCE SHEET” column:
- If Year-End Balance Sheet: Balance Sheet Asset and Liability entries should be those taken from your most recent fiscal year-end balance sheet.
- If Year-to-Date Balance Sheet: Balance Sheet Asset and Liability entries should be those taken from the year-to-date month-end balance sheet.
The balance sheet categories in this entry form may not match your balance sheet and two or more of your balance sheet categories may have to be combined into one of the form categories.
Second, the “EXCLUDED FROM THE SALE” column: Often, certain Assets and/or Liabilities will NOT be included in the Sale, but specifically EXCLUDED from the Sale of the Business and retained by the Seller.
- Excluded Asset examples: The Seller may retain decide to retain some or all of the Cash on deposit. Or, maybe the business owner will decide to retain a vehicle. Or, the company may have loaned money to the owner and the owner may decide to settle that outside of the sale. Or, there could be some other asset that the owner will want to retain and thereby EXCLUDE from the Sale of the Business.
- Excluded Liability examples: The Seller may retain decide to EXCLUDE bank debt and to pay it off at the Close of Sale. Or, maybe the business owner will decide to retain personally the lease of a vehicle. Or, the owner may have loaned money to the company and the owner may decide to settle that outside of the sale. Or, there could be some other liability that an owner may decide to EXCLUDE from the Sale of the Business.
- Balance Sheet Value: INCLUDED Balance Sheet Value is the value that is equal to the Net Total of Assets INCLUDED in the Sale minus Liabilities INCLUDED in the Sale.
Sales & Earnings entries are NOT required. Entries made to Sale & Earnings will appear in the Ad.
If Sales & Earnings are not completed, you substantially negate the purpose of the Valu4Sale Ad.
5 years of information is request. Your business might be only 3 years old. In such case, simply enter the 3 years.
- If all year’s are to be entered as at Fiscal Year-End: Enter the company’s total Annual Sales number for each of the 5 years ending on dates above each sales entry field.
- If the latest Sales entry is to be a Year-to-Date entry: Enter the company’s total Annual Sales volume for each of the 4 years ending on dates above each Sales entry field and for the 5th year, enter Total Year-to-Date Sales as at the date indicated above the 5th (far right) Sales entry field.
- If all year’s are to be entered as at Fiscal Year-End: Enter the company’s total Annual ebitda for each of the 5 years ending on dates above each ebitda entry field.
- If the latest Earnings entry is to be a Year-to-Date entry: Enter the company’s total Annual ebitda for each of the 4 years ending on dates above each ebitda entry field and for the 5th year, enter the Total Year-to-Date ebitda for the date indicated above the 5th (far right) ebitda entry field.
EBITDA means earnings before interest, taxes, depreciation and amortization. When you look at your Annual Income Statements, also called Profit & Loss statement, there will be a bottom line Profit (or Loss) number. Profit (or Loss) can also be called the Earnings.
- Interest: Somewhere in amongst the Operating Expenses, you might see one or more Interest category(s), and/or Bank Charges/Fees category containing interest. Whatever Interest Expense(s) you find amongst these categories should now be totaled and added to that Profit/Earnings number.
- Taxes: Also, you should find Corporate Taxes somewhere on the year-end Income Statements. That too should be added to the Profit/Earnings number.
- Depreciation and/or Amortization: Again, you should find a Depreciation and/or an Amortization expense category. Those too should be added to the Profit/Earnings number.
- ebitda: Profits/Earnings plus Interest plus Taxes plus Depreciation plus Amortization … equals ebitda.
- …. And, there may be one more add back ….
- Perks and Benefits: Amongst the Costs and Expenses of some companies, there may be costs and/or expenses that are non-essential and/or non-business related, sometimes there might be owner perks and/or other private benefits, etc., that are not actual business expenses, and in such case, they should also be added to the Profit/Earnings number. .
- Normalized ebitda: Profits/Earnings plus Interest plus Taxes plus Depreciation plus Amortization plus non-essential plus non-business plus perks, benefits, etc., equals normalized ebitda. … all simply referred to as ebitda.
If you are reporting year-to-date sales and earnings, then in these two annualization fields, you are being asked to estimate from you year-to-date sales and earnings numbers, what Sales and Earnings are apt to be at the end of 12 months.
Some businesses would estimate this on the basis of their historic average annual sales cycle; such as, what percentage of total year’s sales and earnings are typically generated in “year-to-date number of months” and what percentage over the remaining months of the year.
Others may estimate on the basis of outstanding contracts. And still others may just have a good feel for where the year will end based on the way the year has been developing so far, or based on other industry or market based knowledge.
Whatever is your way, enter your estimated annualized Sale and ebitda accordingly. … and, remember, your estimate will be tested over time even as you advertise, respond to potential buyers, and as you negotiate and develop the sale of your business. So, during the process, if you determine that your estimate is too high or too low, we suggest that you come back and make the appropriate corrections.
Remember also, at the bottom of this entry screen, we have provided a text field where you might want to explain anything about your annualization method that might not be otherwise apparent.
- If you are NOT reporting Year-to-Date, then you have nothing to do with respect to these annualization entry fields.
And now, as you look back at the sales and earnings levels over the last few years that brought you here, what do your think would be a reasonable and defensible forecast of what Sales and Earnings (ebitda) will be annually, on average, over the next few years?
In addition to your sales and earnings history, all sorts of considerations might enter into this forecast estimate or judgment, depending on the nature of the business itself; industry trends, market trends, changing completion, traffic pattern changes, lease changes, and other considerations that, based on your knowledge of your business, will presumably come to your mind, not the least of which might be what affect will come out of the intended change of ownership.
Whatever may be your considerations, enter your Average Sustainable Sales and Earnings (ebitda) level for the next few years accordingly. … and again, remember, your estimate will be tested over time even as you advertise, respond to potential buyers, and as you negotiate and develop the sale of your business. So, during the process, if you determine that your estimate is too high or too low, we suggest that you come back and make the appropriate corrections.
Remember also, at the bottom of this entry screen, we have provided a text field where you might want to explain anything about your method of estimating the sustainable average, that might not be otherwise apparent.
As said previously, there are two components to the Selling Price, to combination of which are the Sale Price:
- Balance Sheet Value (to be included in the sale), and
- Goodwill Value.
In this case, Balance Sheet Value is provided automatically from balance sheet entries made earlier, and Selling Price is auto calculated as the sum of Balance Sheet plus Goodwill. So now, we just need to figure out the Goodwill Value, and enter it.
If you have a Sale Price in mind, let’s try it.
If you completed your Balance Sheet entries, you now know your Balance Sheet Value. It’s the number now in the Balance Sheet Value field. And you have a Sale Price in mind. “Sale Price minus Balance Sheet Value” equals Goodwill Value. Simply enter that amount into the Goodwill Value entry field.
Check the “earnings multiples” with respect to the Selling Price.
Now, we are not going to tell you what your business is worth here today, but there are some generally acceptable rules of thumb. Generally speaking, a multiple between 4 and 5 times ebitda is a good place to start. But, there will be circumstances where higher multiple might be acceptable, and where lower multiples will be expected.
But, we are not trying to value your business today, but how to present your valuation in a Valu4Sale Ad.
For assistance with a Business Valuation, please contact us at firstname.lastname@example.org
Terms of Sale are Optional
If you DO intend to offer Seller Financed payment terms (or Vendor Take Back) ) to a qualifying Buyer for some portion of the Selling Price, and if you DO wish to make the terms offered part of your Ad presentation, enter the amount of the proposed Seller Financing here.
If you DO NOT intend to offer Seller Financed payment terms for any portion of the Selling Price, or if you DO NOT wish to disclose the terms you are prepared to provide, leave this field BLANK.
If you leave the Seller Financing field BLANK, the Terms of Sale fields will NOT be present in the Ad you Post.
The final 6 entry fields; 1 on the current screen and 5 on the next, are each optional, open text fields where you will have pretty much free reign to introduce the business and/or the activities of the business to potential buyers, in your own words and to the extent you think appropriate,
You can make your comments in sentence/paragraph form or in point-by-point form, or in any combination, unrestricted by number of characters or by other pre-set size constraint, but we suggest you keep your comments brief and to the point and REMEMBER, if you want to maintain confidentiality, take care not to say something that would disclose the identity of the business.
If you enter nothing into this section, “Financial Comment” will not appear at all in the Ad posted.
Now, if you wish to add comment with respect to the financial aspects of the business, such as about is sale history or future sales projections, or about the company’s earnings or about the Selling Price or Terms of Sale, this section provides you pretty much free reign to write what you would like the reader to know and understand.
Business Description is an Optional Field. If you enter nothing into this section, “Business Description” will not appear at all in the Ad posted.
In this section you may want to introduce the business to its potential buyers. If keeping the identity of the business CONFIDENTIAL is important to you (and we believe it usually should be kept confidential), take care not to say what might inadvertently identify the business.
Included & Excluded is an Optional Field. If you enter nothing into this section, “Included & Excluded” will not appear at all in the Ad posted.
This is where you can enter (to the extent appropriate) the specifics about the Assets to be included with the Purchase at the Selling Price, as well as the Liabilities (if any) to be assumed with the Purchase at the Selling Price.
This is also where you might also want to describe certain Assets and/or Liabilities, (if any) that are to be excluded from the proposed Purchase and Sale transaction.
Ownership & Reason(s) for the Sale is an Optional Field. It is two-part.
Ownership: If you answered ‘Business Founded’ and ‘Current Ownership’ questions earlier, that information will now appear in this section.
Firstly in this section, add anything that you may need to clarify the ‘founding date’ or ‘current ownership date’ you provided earlier.
Reason(s) for the Sale: Secondly in this section, simply tell why current owner(s) is now seeking to sell the business, – such as retirement or illness or burnout or disinterest or whatever the reason(s).
But it’s Optional, and you may choose to say nothing.
Market Description is an Optional Field. If you enter nothing into this section, “Market Description” will not appear at all in the Ad posted.
In this section you may want to describe where and how, in general terms, the products and/or services of the business are marketed. If keeping the identity of the business CONFIDENTIAL is important to you (and we believe it usually should be kept confidential), take care not to say what might inadvertently identify the business.
Other Comment is an Optional Field.
If you enter nothing into this section, “Other Comment” will not appear at all in the Ad posted.
When you are done with the Entries, please REVIEW your Ad carefully before posting it.
Of course, you may come back and edit your Ad at anytime during the period it is posted, to correct and modify. And in fact we recommend that you do keep your Ad updated and current.
At all times, IF YOU DO NOT wish the Ad posted to either directly or indirectly or inadvertently disclose the identity of your business, TAKE CARE that something you say or that the combination of things you say do not do so.