Depending on what State you operate in and whether you act as a transaction broker or have a fiduciary duty to the seller, your goal is to complete business transactions in order to receive your commission.

In a business transfer transaction, both the buyer and seller need to come to an agreement of acceptable valuation and terms, normally based on assets and a projected cash flow over a set period of time. When the broker can provide the buyer a reasonable explanation by the seller for a determined valuation and documentation to support it, a transaction is more feasible. FMS will identify the valid reasons you and the seller need to justify the determined value for the business. Keep in mind that that if the business valuation does not match industry norms or is determined to be too high, such as a 3% return on a buyer managed investment with above average risk, your justification may not be determined reasonable by the buyer, and it may not be enough to facilitate any sale near the asking price.

Financial Modeling Service Provides a Complete Multi-Year Financial Model of Free Cash Flows and Valuation in an Easy to Read, Easy to Understand Format. 

A buyer can always walk away from a transaction after using up much of your time, therefore you need to be concerned about the buyer’s perception as you need them to complete the transaction. FMS will give you the tools you need to get the highest price possible for the listed business.

After much invested time, internet business listing expenses, multiple executed non-disclosure agreements over 6 months to a year, and potential strife with the business owner with nothing to show for the effort, how do you convince the owner that their asking price may be too high verses your capabilities to perform too low?

FMS will work with you or the seller to analysis the listed business. FMS will categorize and organize the business P&Ls into controllable and non-controllable costs and fixed and variable expenses. FMS will create a projected P&L with you or the seller, based on specific business variables. Each expense item will be assigned a value or a “goal” that will need to be held constant by the buyer in order to meet the determined net income at set revenues. The contribution margin is then calculated that would be used to project the impact of any needed reinvestment or change in revenues. A net present value (NPV) of business cash flows for any given period up to 30 years is created. The NPV prices future dollars as today's dollars. The NPV is an initial valuation of the business as determined by the discount rate. The discount rate factors in the required rate of return, risk, inflation expectations, and cost of capital. All of this is shown in any easy to read, easy to understand format. Multiple independent variables can be changed to run different financial scenarios where the effect on all dependent variables and net cash flow can be understood. At a later point, FMS can tailor these calculations to a specific potential buyer, based on down payment or financing. Your potential buyer can incorporate the financial model into their business plan or provide it to any lender to lower lending risk and justify financing approvals at higher amounts or lower rates.

Many times, the seller cannot provide the documentation to support their business valuation. FMS will work with the seller and their team, including accountants, book keepers, attorney etc., or assist them in putting together the necessary documents to create a financial model of the listed business you list so you do not have to.

Financial Modeling Services is experienced in creating financial models for all types of business, including start ups; we specialize in franchising financial modeling.

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Many brokers do not provide an adequate information memorandum to potential sellers. FMS can help you create a professional and complete business offering information memorandum that you can provide to potential buyers which conveys all necessary information about the business you are listing.

Financial Modeling Services offers business brokers a turnkey package with a cost that can be passed onto the seller. FMS will help you sell your business listings as quickly as possible, at the highest price possible, so you can move onto your next deal.

As a broker, leverage your network and focus on advertising the business listing to complete the sale, not back office items that will slow you down, that you may not have the expertise to perform, or have to rely on inadequate administrative staff to do.