Frequently Asked Questions

PacificBusinessAdvisors.net

Serving Southern California Since 1987

How long has PacificBusinessAdvisors.com been in business?

The firm started doing business in 1987, but the broker for the firm, Michael Chulak, has been licensed to sell businesses since 1971.

 

I would like to join your business brokerage firm, but I live far from your corporate office in Agoura Hills. Can I work from my home in Northern California if I join Pacific Business Advisors?

Yes. It is not necessary to work from Agoura Hills. Today, most business brokers and agents work primarily from their homes. Pacific Business Advisors represents sellers and buyers of businesses throughout in California so there is no disadvantage to working outside of Agoura Hills or Los Angeles County.

 

Is it possible for me to earn commissions by simply referring potential buyers and sellers to a full time, experienced business broker or agent?

You can become a referral agent, and earn thousands of dollars consistently each year by limiting your activating to making referrals.

 

Does your firm have someone who has experience with commercial leases and subleases for both office and retail spaces?

Yes. When we represent a seller and/or buyer, we can definitely assist with negotiating lease terms so that the cost of a legal review is minimized.

 

Are business brokerage commissions set by law in California? It seems that every firm is charging 10% to sell a business.

Commissions are not set by law. Every business brokerage firm establishes what it will charge to market and sell a given business. Commissions and levels of service vary from firm to firm. Pacific Business Advisors generally charger from 8% to 10% depending upon several factors including the size of the business.

 

Does your firm ever joint venture the purchase of a business with others?

Yes. We will consider the joint venture acquisition of certain types of businesses. Call Michael Chulak to discuss a potential joint acquisition of any business.

 

Can a non-citizen own a business in the United States?

Absolutely. Whether you are a citizen or a non-citizen, we would be pleased to help you purchase a business anywhere in California.

 

Is 100% cash required to purchase most businesses?

No. The Small Business Administration will lend up to 80% to qualified purchasers and some sellers choose to offer financing because they understand that providing financing makes their business far more saleable.

 

Should I consult with a CPA before buying an existing business

Yes. How a purchase is structured can have both short-term and long-term effects on your tax liability. In addition, a CPA can assist in the business acquisition due diligence process by reviewing the tax returns and financial statements of the business being considered for purchase. If you do not have CPA and need a referral, please call us.

 

When buying an existing business, can I expect the seller to provide any training?

This is an important term to be negotiated between the buyer and seller where we can be of great assistance. A degree of training is expected, but must be carefully described in detail in the purchase agreement. This provision can make or break a new business if the buyer does not already have extensive experience with the type of business being acquired. 

 

If we engage your firm to sell our business, how will you advertise it? 

There are several websites that are multiple listing services for business brokers. We will select those that we believe would be the most effective for your business. Also, most importantly, while maintaining struct confidentiality, we will send an Offering Memorandum to an extensive list of cooperating business brokers and agents, and to the people who have expressed a desire to acquire a business like yours through our website and through other sources. 

 

If we list our business for sale with Pacific Business Advisors, will you cooperate with other business brokers?

Yes. We will always do what is in the best interest of our clients.

 

Does your firm require exclusive right to sell business listings?

Yes. Any experienced business brokerage firm will require an exclusive right to sell listing agreement before investing its marketing dollars and the time of its agents and support staff before representing an owner in the sale of his or her business.

 

When marketing a local business, do you target potential foreign buyers?

Absolutely. In California foreign buyers and immigrants make up a large percentage of the buyers of small and medium sized businesses. While these buyers come from all nations, in our experience, most are Chinese, Korean, Japanese, Mexican, Persian, and Indian (Republic of India). We also target private equity groups, and many others.

 

Does your firm provide business appraisals?

No. While we will estimate the value of any business where we are representing a buyer or seller, our valuation is not the same as a full appraisal prepared by a licensed appraiser that specializes in business appraisals. Only a third party appraiser can be totally objective because he or she will not earn a commission upon the sale of the business.

 

Is the primary factor in valuating a business the net income before taxes?

Yes, but there are other important factors to be considered such as:

  • Is the net income trend increasing or decreasing, and if so, why?
  • Is the industry growing or shrinking?
  • Is the business location improving or deteriorating?
  • Is the income of the business diversified, or is it generated by only a few sources?

 

My business partner wants to buy my interest in our jointly owned business. Do you handle this type of transaction?

Yes. It is common for one business partner to buy out the interest of another business partner. Our firm can definitely represent you in this type of transaction.

 

Does Pacific Business Advisors have a minimum size transaction when representing the sellers of a business?

We do not have a minimum sales price size, but we do have a $15,000 minimum commission when representing the seller of a business.

 

If I sell my business, how long will I be expected to remain with the business to assist the buyer?

There is no perfect answer except that agreeing to stay with the business long enough to satisfy the buyer will always result in a higher sales price and/or additional compensation. Buyers are always concerned about the transition, so to the extent that a seller is able to reduce the buyer's perceived risks, the more most buyers will agree to pay.

 

I own a business that is earning me a good salary but not a profit. Can you help me sell it?

Yes. The price you will receive will be dependent upon its earnings potential to a buyer, as well as its ability to enhance the value of a buyers existing business. For example, a real estate brokerage firm that is earning very little money, may be very valuable to a real estate broker that wants to expand into the seller's local area. After an evaluation, we can better advise you.

 

I do not want to sell my business but would like to franchise it. Can Pacific Business Advisors help me to franchise my business?

In most cases the answer is yes. After a discussion and the review of your company's financial information, if we conclude that your business can be successfully franchised, we will provide you with two options. One option would be a joint venture with us; the other option would consist of our working on a consulting basis. In either case, you pay no money for us to review your financials and make a proposal. Please call Michael Chulak if you would like to discuss the possibility of franchising your existing business. The content of our discussion will be maintained strictly confidential.

PacificBusinessAdvisors.net
818-991-9019