Frequently Asked Questions

Why use an Intermediary?

The business owner is an expert at running the business but may not be as knowledgeable about the selling/buying process. An intermediary/business broker can assist the business owner to reach their goal of a successful transaction.

What can a business broker do and what can’t they do?

If you’ve ever bought or sold a home, then chances are you’ve worked with a real estate agent. You can think of a broker’s role being very similar to a real estate agent, however, the broker is helping you buy or sell a business, a more complex endeavor.

Brokers can play a very valuable role in the process as they provide guidance, advice, and other resources that can save you precious time and money in making the transaction happen.        Brokers are well connected with finance professionals, accountants, attorneys, and other professionals who may be needed to facilitate the sale.

For sellers, business brokers can put together the marketing package, help determine the appropriate price for the business, and do all the leg work necessary to market the business for sale. However, a business broker is not a magician who can sell an overpriced business. Most businesses are saleable if priced and structured properly.

For buyers, a broker can present to them motivated sellers and opportunities that meet their particular skills set, passions, and financial objectives or goals.

When should I develop an exit strategy?

Now is really when the process should start. Sometimes, we don’t get to exit on our own terms and things can happen unexpectedly. People become disabled, the economy changes, and people die. Even if your business is in growth mode and you have no thoughts of retirement, you still need to deal with the contingencies of a forced exit. Peace of mind and security for you, your family and employees – these are all reasons to think about your exit plan well before you determine your exit date.

What is exclusive representation?

Exclusive representation means you agree not to work with a number of brokers at the same time. The exclusive broker has sole rights to your sale for so long as the listing agreement lasts, which is typically not less than six months.

Geographical representation of TMVBG

Our primary focus is businesses in Texas and more specifically in the Austin MSA / San Antonio MSA corridor.

Do I really need a business plan?

If you run a business, then it’s probably safe to say yes. In fact, you may require more than one business plan: one for raising capital and one for running your business. The former is a compact, easily digested strategic document that is designed to persuade potential investors to show interest in your business. The latter is a more detailed document serving as a day-to-day roadmap, detailing the tactics supporting your overall strategy. The former needs to be an attractive document that sells; the latter can be a collection of spreadsheets, lists, research summaries, and other documents stuffed in a binder that you refer to and update on a regular basis.

What industries do you work with?

You’ve worked in your industries for years so we’re not going to pretend to know about your industry than you do. However, we take pride in our ability to learn the fundamentals of virtually any industry or technology quickly. Some of the markets we’ve worked with include retail, technology, manufacturing, healthcare, aviation, insurance, and professional services. Having said that, we believe that the value we bring to the table is not industry expertise — which you already possess in abundance — but rather an understanding of what grows businesses and what investors like to see in a potential opportunity.

When should I develop an exit strategy?

The sooner the better. The ideal time to develop an Exit Strategy for your business is when you start or purchase a business. However, industry statistics indicate that 85% of all business owners do not have a defined exit strategy although, on average 75% of their net worth is tied up in their business.

How is my score calculated?

TEVO® Score measures approximately 55 components within 5 key areas of business: Financial Analysis, Business Systems & Processes, Base Business, Management Team and Growth & Opportunities.  Each of the 55 components and the 5 areas is weighted, giving you a true customized value for YOUR company. InfoVera uses a proprietary algorithm that customized this predictive analytical tool. By using your company’s NAICS code(s) and the size of your company, the TEVO® Score platform alters the weighting of each of the components (and therefore the 5 areas) to create a true fit to more precisely value your business.

Why does my score matter?

The most important factor in knowing and tracking your TEVO® Score is that it is a direct indicator of your company’s multiple. By improving your TEVO® Score, you are also, by definition, improving your company’s worth. By making such improvements in your business, you also make your company more efficient, more viable and more self-sustaining. 

What is EBITDA?

EBITDA is a measure that represents a company’s total Earnings Before Interest Taxes Depreciation and Amortization are subtracted out. It is a performance measure widely used in buying, selling or otherwise valuing a small- and mid-market company. 

What is TEVO®?

TEVO® (Total Enterprise Value Opportunity) Score measures a company’s ‘going concern’ and is a direct indicator of the multiple used to value that company. Similar to how FICO measures a person’s credit worthiness, the TEVO® Score measures a company’s viability. Your company’s TEVO® Score directly indicates your company’s multiple and therefore determines your current company’s value. And TEVO® Score is the best benchmarking tool for growing company value. TEVO Score spans 5 key performance indicators: Financial Analysis, Business Systems & Processes, Base Business, Management Team and Growth & Opportunities. Most other scoring platforms only score based on the financial analysis, but with TEVO® Score, that leaves a lot of a company’s value story out of the picture. Scores are issued by InfoVera, a market value reporting agency.

How do I find my NAICS Code?

There are two easy ways to find your NAICS code. You can find your code in the upper left hand corner of the first page of your company’s tax return or visit https://www.naics.com/naics-search-results. Here you will be able to put in keywords to help you find your Industry code. Some companies may have more than one NAICS code. In this case, it is necessary to know what percentage of your business revenue represents. For example, a restaurant with a bakery inside of the same location could be: Restaurant 722511 for 75% and Bakery 311812 for 25%.

What should I be looking for in a business?

You want to consider only those businesses for sale that you would feel comfortable owning and operating. The business you buy must be able to supply you with enough income – after making payments on it – to pay your bills. However, you should look at a business for sale with an eye toward what you can do with it – how you can improve it and make it more productive and profitable. There is an old adage advising that you shouldn’t buy a business unless you feel you can do better than the present owner.

When should I get started looking for a business?

You should start looking for a business as soon as you are positive that becoming a business owner is what you want to do. There are several factors that are involved in being able to buy a business including your personal financial statement, cash available for a down payment, personal credit history, work history and experience and overall motivation. But if you are confident that this is a step you are ready to take and have the ability to execute once you find a business, then now is the best time to start.

How long will it take to find a business?

Every business search is different. No one can tell you exactly how long it will take to find a business, but it can take anywhere from a few months to a few years. A lot depends on the search criteria, industry, and geography that you are searching. Also having the ability to quickly analyze a deal and act plays a major part in how long it takes. Solid businesses don’t last on the market long. And more experienced investors often have the resources to move on a deal quickly. 

Why do I have to sign a confidential agreement?

Sellers are very concerned about confidentiality because of fear of losing customers, losing employees, general uncertainty and actions taken by competitors. Therefore, as a potential buyer, you must treat confidentiality seriously. Buyers should not talk to employees, clients, suppliers, or competitors without written approval from the seller. Maintaining confidentiality is also advantageous to the buyer because a smooth transition without problems is good for business

Does TMVBG have buyers for my business?

Possibly. Unlike many firms in the business brokerage field, TMV Business Group works with individuals and businesses interested in acquiring businesses. Additionally, TMV Business Group has an extensive network of high net worth individuals, corporations, and private equity groups. TMV Business Group will also perform a customized marketing plan to target qualified buyers for your company.

How long will it take to sell my business?

It generally takes, on average, between six to nine months to sell most businesses. Keep in mind that an average is just that. Some businesses will take longer to sell, while others will sell in a shorter period of time. The sooner we have all the information needed to begin the marketing process, the shorter the time period should be. It is also important that the business be priced properly right from the start. Some sellers, operating under the premise that they can always come down in price, overprice their business. This theory often “backfires,” because buyers often will refuse to look at an overpriced business.

Who will buy my business?

That will vary by industry and size of the business. 70% of the buyers for small businesses are first-time buyers. Other pools of buyers are: Competitors, Vendors, Existing Employees, Investment Groups, Relatives, and Public Companies.

What if I already have a buyer?

We recognize that in some instances, a business owner may have their own prospective buyer. Most of the time, these prospects do not move forward because the buyer and seller are unaware of the process and ultimately a deal never materializes.

TMV Business Group can work with the seller and the buyer to facilitate the sale of the business. The process will vary depending on the situation. We are available, at your convenience, to speak with you by phone to determine the level of service required to accomplish your goals and objectives.

How do I maintain confidentiality in the marketing process?

Confidentiality in dealing with internal personnel and external sources is highly encouraged and is critical to achieve a successful transaction. For the Seller’s protection, TMV Business Group requires a Buyer’s Non-Disclosure Agreement (NDA) to be signed by the potential buyer before the release of the Confidential Business Review (CBR).

What if I’m not ready to sell my business now?

You should sell your business when you are ready and when the time is right. The following list of items will not only add value to a business but will also increase its marketability. If you are not ready, contact us today to learn how our Advisory Services can increase the value of your business.

  1. Increase sales annually
  2. Remove yourself from the business
  3. Develop a strong management team
  4. Replace family members that work in the business
  5. Reduce the amount of owner perks
  6. Sell unnecessary assets
  7. Reduce inventory to a manageable level
  8. Develop a strong sales force
  9. Diversify the customer base
  10. Develop an organizational chart
  11. Reduce unnecessary large purchases
  12. Additional steps used to prepare for a later sale

• Eliminate unproductive employees
• Develop and/or improve company website
• Have written procedures for operations (i.e. employee manuals)
• Keep you’re A/R higher than A/P
• Keep A/R within 30-60 days

What can I do to help sell my business?

You can cooperate fully with TMVBG and any other professionals that you are using. A buyer will want up-to-date financial information. If you use accountants, you can work with them on making current information available. If you are using an attorney, make sure they are familiar with the business closing process and the laws of your particular state. You might also ask if their schedule will allow them to participate in the closing on very short notice. Time is of the essence in any business sale transaction. The failure to close on schedule permits the buyer to reconsider or make changes in the original proposal.

And, finally, your team of advisors must all be working towards the common goal of selling your business for the best price and terms available in the marketplace, and closing the sale as quickly as possible! Remember that, as your professional Business Intermediary we are on your side. Only by being as cooperative as possible with us can we best handle your business interests.

What sectors does TMVBG focus on?

TMVBG engages with companies across a very wide range of industries. Because of our broad network of lenders and investors, our focus is not sector-specific.

What is revenue-based funding?

Revenue-based funding is a way for companies to secure growth capital similar to an equity investment but without any dilution or loss of control. Companies use revenue-based funding to support their growth while maintaining control of the business and keeping the value they create.

Do you provide venture capital or equity investment?

We do not make any investments of any type.  Our goal is to assist you in preparing your business for presenting your capital needs to lenders and investors.  We have close relationships with traditional and non-traditional lenders as well as many high net worth individuals, private equity groups and venture capital firms and would be happy to make an introduction.

What factors impact value?

The value of a business is in the eye of the beholder.  So, the factors that impact a specific business’ value can vary.

The value of the business consists of not just the Price (i.e., the amount to be paid for the business) but also the associated Terms and the Deal Structure.

Different values for a business can exist because of different operating assumptions, deal structures, payment terms, etc., not due to use of different valuation methods.

A few of the value drivers are:

1) Future Performance

2) Deal Structure

3) Financial Leverage

4) Asset Type

5) Financial Return Expectation

6) Exit Strategy

7) Cash Flow, Not Profits

8) Leadership Team

These value drivers impact business value in many different ways

Attention:

Business Owners

Are you looking to sell your business for Top Market Value?

Contact us at 512.256.4141 and discover how receiving professional, confidential advisory services can increase the selling price of your business.

Request a complimentary and confidential Market Valuation Analysis of your business.

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