Recources

Summit Business Brokers, Inc. has unparalleled resources to: (1) properly value a business so that it is priced right for today’s market; (2) find a buyer for a listed business; (3) find a business for a qualified buyer; and, (4) finance a transaction.

Valuing the Business: As agent for the seller, Summit Business Brokers, Inc. is responsible for properly valuing the businesses it represents. If the valuation is too low, the seller suffers financially. If the valuation is too high, the business will likely languish on the market, as buyers will focus on other, more properly priced opportunities.

In order to properly advise potential sellers on the correct selling price, John Schmid is continually involved in the Los Angeles area business transactions marketplace. He is an active participant in the California Association of Business Brokers (“CABB”), a professional organization of over 650 active business brokers in California who have agreed to share information on market data as well as cooperate with each other in co-brokerage arrangements. CABB members meet several times a year to share recent market experiences and to promote best professional practices.

John Schmid and Summit are also members of the International Business Brokers Association (“IBBA”). As the name implies this is a national and international organization of the top business brokers. It meets semi-annually to conduct professional education courses and to exchange information. Through the IBBA, John obtained the Certified Business Intermediary (“CBI”) designation which is awarded after successfully completing over 60 hours of graduate level education in all aspects of business brokerage and then passing a rigorous final examination. In the course work, heavy emphasis is placed on both common sense and sophisticated valuation techniques, such as the Income Approach and the Comparable Sale Approach, and these are applied in all of the valuations done by Summit.

In addition, Summit belongs to the Mergers and Acquisitions Source, an affiliate of the IBBA. It is composed of seasoned business brokers who specialize in larger transactions and the organization provides, among other services, company and industry profiles and summaries of recent transactions. Members communicate amongst each other to share information on transactions, market pricing and deal structures in the current marketplace.

Summit also subscribes to Biz Comps and Mid-Market Comps which are data bases that describe thousands of business sales in all industries. From this data, relevant benchmarks such as price-to-earnings and price-to-sales ratos can be established to assist in valuing Summit’s clients.

Finding Buyers:

Summit lists the businesses it represents on a variety of websites purposely designed for business sales. Among these sites are: BusinessesforSale.com; www.bizquest.com; www.businessbroker.net; www.cabb.org; www.ibba.org; and www.bizben.com. Serious buyers regularly search the listings on these pages.

In addition, Summit compiles lists of competitors, suppliers or vendors who might be potentially interested in an acquisition candidate. Letters are mailed to the CEOs alerting them that the company in their industry is for sale and that specific information will be made available upon signing a confidentiality agreement. Also, Summit has access to the major private equity groups through its membership in the Mergers and Acquisitions Source.

Finally, though many years in the business, John has a private data base of buyers who have told him their specific requirements for a business acquisition. These buyers, coupled with other buyers known to associate business brokers, provide a ready resource.

Finding Sellers:

Summit finds business for sale through prospecting, advertising and participation in industry and community organizations. For example, John regularly participates in business organizations such as the Los Angeles Venture Association (“LAVA”) which is a group of Southern California business and finance leaders that meets monthly to discuss current transactions and share information. Also, the International Business Brokers Association and the Mergers and Acquisitions Source provide lists of business for sale and many of these are potential acquisitions for Summit’s clients.

Financing the Transaction:

Few buyers had adequate cash on hand to finance the transaction. Summit is knowledgeable about the details of Seller Financing, and can counsel the parties in that regard. Summit is also familiar with bank lenders whose loans are guaranteed by the Small Business Administration, and can make the appropriate introductions. Likewise, for larger transactions, Summit can also facilitate conventional bank financing. However, if the transaction requires more sophisticated financing, such as mezzanine or real estate loan, Summit can introduce the parties to international hedge funds through its relationship with such intermediaries as The TerraCotta Group.