Frequently Asked Questions

Oftentimes there is more “art” than science in deal-making. There are other parties involved and each will have differing thoughts, perspectives, personalities, goals, objectives, agendas, and temperaments. The “art of dealmaking” must encompass the knowledge of all the science needed for the assignment while also employing the soft-skills and deal-experience to coach, guide, and lead everyone toward the goal of closing. Having a professional who knows when and how best to execute on all the necessary steps and has the dedicated time to do so, can be critical.

Packaging, marketing, screening buyers, soliciting multiple offers, negotiating terms, preparing documents, schedules, agreements, contracts, constant communication and interacting with all the various advisors, and navigating the due diligence process becomes all-consuming. Having a professional allows the business owner to focus on operating the business while the sale process is underway. If the owner’s focus is diverted the performance of the business can decline and that will reduce buyers’ and lender’s interest and lower the offers being made (if any).

An ole’ adage is especially true for business sale transactions. “You don’t know, what you don’t know. And what you think you know, may not be so.” In other words, value is lost or gained at every step along the way. Without the professional you may still complete a transaction, but you may have given up a great deal in value or in terms or conditions without realizing it until after the sale, or perhaps never. In such a case then the other adage may prove true. “Ignorance is bliss.”

Without knowing specifically what is being compared it would be unfair to speculate. However, you should be aware that many FREE (or “Napkin” style valuations) are based upon “for sale” listings or on “sold” comps – and they are predominantly irrelevant and untrustworthy. There are many elements to properly developing a business valuation., and it is rarely deemed credible by trained and skilled valuation analysts to use a database of “listings for sale”. Why? Because people (including uncredible or misleading representatives) will “list” their business with unrealistic and overly inflated value and result in never being sold. If you get a “valuation” based on flawed information (although you may like the value presented) it will not serve you well in getting your business sold. Flawed information produces flawed results. The “sold” comps can also have elements that are misleading and askew. Some online “valuation calculators” only ask for your most recent year of financials, and that is highly inappropriate and incorrect. Why? Because no Buyer will purchase or value a business based on one year of financial information, nor will a lender provide funding to a Buyer based on just one year. Each level or type of our value ranges are based upon industry valuation approaches, methods, and techniques and coupled with what Buyers in the market will pay and what Lenders will loan to Buyers to purchase a business. Our valuations and value ranges are more of a “Practical” approach than a philosophical one – this helps you actually sell your business.

Yes, we have access to market database details. We even utilize the same database and screens most commonly used by lenders who provide funding for buyers to purchase businesses.

Our founder has been performing business valuations for over 35 years and has earned credentials. He has performed valuations for the purposes found on this site, and for legal and litigation purposes as an expert witness. Oftentimes he will perform USPAP valuations, that is, in accordance with Uniform Standards of Professional Appraisal Practices (the Appraisal Foundation).

There are only three industry recognized Approaches (Asset, Income, and Market), and various Methods of calculation within each approach. OCA does not employ a boilerplate method (or madness) when performing various type of valuations. All of our valuations (for whatever purpose) are customized for each project – this assures the Client that the value is in line with market conditions and based upon the specific attributes and dynamics of the business. We do not perform, nor do we recommend the use of valuations based upon “listings”, or cocktail discussions of “multiples”, or a quick meeting with a “napkin approach”, or a one-year online calculator.

“Sellable ranges of value” are usually based upon certain industry accepted valuation methods that produce a range of business values that are embraced by buyers and the lenders who are needed to fund the business purchase. Regardless of what value a Seller may want or what a Buyer is willing to pay, ordinarily it’s a matter of what a lender will fund for the purchase (after the Buyer invests capital). After decades of experience in the market of helping people value and buy and sell businesses, we have seen a lot of online “Free Valuations” being offered that oftentimes deliver inflated values and unrealistic expectations to those wanting to sell their business. This is done because it promotes what sellers want to hear and it entices them to “list” their business with a representative who will unlikely be able to deliver the value or they will get the seller “listed” and then try to gradually work the expectations of the seller downward (bait and switch). We believe this is inherently wrong and is a disservice to sellers. The question you must ask yourself is: “Do I want to get an inflated value to make me feel good, or do I want a value that will help me get my business sold?”

We’ve been representing clients from a wide range of industries for over 35 years. We are recognized regionally and nationally. We have experience working with “mainstreet” businesses and lower middle-market companies (M&A – mergers & acquisitions). We’ve negotiated and navigated transactions with various types of buyers (individuals, entrepreneurs, partners, investors, net-worth buyers, and private equity groups). We’ve worked with various types of lending (senior, junior, and mezzanine). We’re not the new kids on the block, and we have both educational and experience-based credentialing specifically related to the sale of businesses.

Oftentimes there is more “art” than science in deal-making. There are other parties involved and each will have differing thoughts, perspectives, personalities, goals, objectives, agendas, and temperaments. The “art of dealmaking” must encompass the knowledge of all the science needed for the assignment while also employing the soft-skills and deal-experience to coach, guide, and lead everyone toward the goal of closing. Having a professional who knows when and how best to execute on all the necessary steps and has the dedicated time to do so, can be critical.

Packaging, marketing, screening buyers, soliciting multiple offers, negotiating terms, preparing documents, schedules, agreements, contracts, constant communication and interacting with all the various advisors, and navigating the due diligence process becomes all-consuming. Having a professional allows the business owner to focus on operating the business while the sale process is underway. If the owner’s focus is diverted the performance of the business can decline and that will reduce buyers’ and lender’s interest and lower the offers being made (if any).

An ole’ adage is especially true for business sale transactions. “You don’t know, what you don’t know. And what you think you know, may not be so.” In other words, value is lost or gained at every step along the way. Without the professional you may still complete a transaction, but you may have given up a great deal in value or in terms or conditions without realizing it until after the sale, or perhaps never. In such a case then the other adage may prove true. “Ignorance is bliss.”

Most “mainstreet” businesses will take six months to a year, if they sell. There are no two businesses or sales that are the same. Just a few of the variables include: motivations of the parties, lending environment, price, terms, conditions, approvals, lease arrangements, SBA approvals, real estate issues, environmental concerns, employee retention issues, quality of the assets and the financials, what is included and excluded in the sale, etc.
For larger or more complex transactions it also varies. There are a few critical elements to expediting a sale: use a professional to navigate the process, have the appropriate sellable ranges of value, properly prepare the business in advance for marketing and due diligence, and be open-minded and negotiable.

NO! We do not post information about our Client’s business that will help people to identify your business (no photos of your business or the surroundings). We’ve seen those who do such things – it’s brainless and reckless! Confidentiality is extremely important to OCA and our Clients. We require Confidentiality and Non-Disclosure Agreements before releasing any information. The amount of information or discussions will be aligned with the Buyer’s capability of consummating a transaction, and other factors determined by OCA’s interaction with the Buyer and OCA’s decades of experience.

National brokers (franchises) sell business owners on the concept that they have access to a national and broad market to locate buyers among their many offices. The truth (especially for “mainstreet” businesses): the actual buyer is almost always going to come from the same region the business is located in (there are occasional exceptions), so doesn’t it make sense to use someone who knows your market. Also, most credible brokers / intermediaries (certainly us) has the same national market exposure through subscription websites where buyers tend to look. Many of the national (franchise) brokers come and go over time (their models often focus on recruiting “new blood” who tend to grow disenfranchised and leave , i.e, high turnover) and therefore many have little deal experience (especially true of businesses that are of higher value or more complex). Fee structures are generally the same for independent firms.

Selling a business is NOTHING like selling real estate. Real estate is based upon a stationary asset that usually has a fairly rigid range of value relative to the area in which it is located and its condition. Commercial and rental properties will require some common practice calculations for income and expenses. A business is a dynamic asset that is continually adjusting to market requirements and influences, and therefore the value also changes based upon a multitude of elements. Imagine how a buyer’s or lender’s interest and perception of value might shift with only a few of the continually changing elements: Customer concentration, competitive concerns, positive or negative cash flow, condition of the assets, employee tenure, salaries and benefits, inventory, leases, orders or work in process, accounts receivable and payable, quality of financial statements, branding, vendor and supplier agreements, increasing or decreasing market demand for the product or service, achievable growth opportunities, etc. . . OCA is trained, skilled, educated and experienced in all the elements of a business sale transaction and the fluid dynamics of businesses, and OCA will serve you best (not a Realtor).

We’ve been helping Buyers and Sellers for over thirty-five years. We have seen and heard the multitude of unfortunate stories about Buyers searching endlessly – literally for years! Most never buy a business while some are successful and live the American Dream of business ownership. OCA will help you avoid the most common and critical mistakes Buyers acting on their own make that contribute to their failure in buying a business.

YOCA will help you narrow your focus for businesses to target and proactively reach out to prospective Sellers and our OCA database of advisors, and ancillary professionals who represent and interact with such businesses. OCA can provide Early Stage Screening of target businesses, Letter of Intent or Offer To Purchase, Disclosures, navigate through the Due Diligence and Worklist Items, Contract Documents, recommended areas to investigate for concern of issues, interact with attorneys, CPAs and all the ancillary professionals. OCA is accustomed to locating funding for acquisitions and guiding you through the lending process.

You should be asking yourself, “If so many try to buy a business and are not successful, then what is it they (or I) don’t know that causes the failure?” And further, “If I really want success in buying a business, shouldn’t I be willing to increase my probability of success and gain the insight of thirty-five years of experience?” “Do I really have the available time and resources to stay focused on all the transactional details and micro-manage the process?”

This is difficult to answer with any certainty because there are so many variables that impact the timeline. However, once the Buyer and Seller are engaged in meaningful discussions, generally speaking, and assuming all is well-prepared, and the stars align, most “mainstreet” businesses will close on the sale in three to six months. For larger or more complex transactions, it also varies. There are no two sale transactions that are the same. Just a few of the variables include: motivations of the parties, lending environment, price, terms, conditions, approvals, lease arrangements, SBA approvals, real estate issues, environmental concerns, employee retention issues, quality of the assets and the financials, what is included and excluded in the sale, the results of due diligence, the need to adjust any of the price or terms or conditions, the availability and access to the professionals involved, etc. . . Generally speaking, if you have OCA’s professional expertise at your side it will likely be six to twelve months (but no assurances due to so many unknown variables).

Yes! First, there is a business overview that will assist with determining a value that you might want to consider offering on the business and how that value can be accepted and funded by the Seller and the lenders. Then it’s a matter of outlining all of the critical elements and aspects that will need to be addressed moving forward and articulating that in a written instrument – that is, the Letter of Intent or Offer To Purchase. More often than not, we find that most Buyers (and many of their advisors) do not cover all the necessary elements or it is not clearly written so as to avoid misinterpretation by others. OCA has depths of experience in drafting very clear offers that help to avoid problems as the deal moves forward.

Yes! OCA will provide customized worklists of items that you as a Buyer will need to investigate and execute on so you are prepared for the purchase, and the operation of the business going forward. The due diligence should provide verification of all that has been represented up to the time of due diligence, and unveil or reveal other areas that are or should be of interest.

Getting approved funding for a business acquisition is unlike other lending people are more accustomed to. So, yes! OCA can help you prepare for introduction to Lenders, and all the information the Lenders will need to make a decision about funding. It is vitally important that the first presentation to Lenders is well prepared. It is unusual for Lenders to adjust from their original impression of a transaction – do it right, the first time. Equally important is that you approach the right Lenders with the funding opportunity. The appetite for funding an acquisition is contingent upon many factors and variables. Over the years we’ve had many transactions that Buyers and Sellers couldn’t get funded on their own and later came to OCA for help – and we got their deals done and the Buyer funded (so the Seller could walk with cash and the Buyer could be the proud owner of the business).