When it comes to selling your business, the process can be slightly overwhelming which is why many turn to professionals for help. Let’s take a specific look at VR Business Brokers in this in-depth VR Business Brokers review as they have been in the game for more than five decades.
Overview Of VR Business Brokers
VR Business Brokers has been serving privately-held businesses since 1979. They assist both small and family-owned businesses through different processes. Whether it be the sale of the business, a merger, or acquisitions, VR Business Brokers have dealt with it all.
With offices in 23 states and two international locations (Chile and Canada), VR has been successful in selling more than 80% of their clients’ businesses for over 95% asking price.
The Faces of VR Business Brokers
The faces behind the company are Peter King, CEO, and JoAnn Lombardi, President. King started by working on Bay Street in Canada at a merger and acquisition firm before making his way to Wall Street in 1994 to work in investment banking. Just five years later King made his move to pursue VR in Fort Lauderdale.
Lombardi has served with VR Business Brokers for over 21 years alongside Peter King. She stresses the importance of Valued Representation which is both the main concept and title name behind the company.
VR Business Brokers Mergers and Acquisitions
VR Business Brokers is not just a company that sells businesses. They are also known as VR Mergers and Acquisitions because they serve several different sectors in the small business community.
By partnering with alliances in the small/medium business niche, VR Business Brokers/ Mergers & Acquisitions has been able to keep up with today’s market, securing the needs of their clients.
Due to their success, VR was able to snatch up multiple awards in 2018.
VR Business Brokers Awards and Recognitions
2018 Most Outstanding in Business Selling Services – Corporate Live Wire
2018 Leading Business Advisor, USA – Wealth and Finance International Magazine
2018 Most Client-Focused Business Brokerage – North America” Award
They also recognize hard work within their company by promoting many employees into the VR Hall of Fame for outstanding work and accomplishments.
Types Of Businesses VR Business Brokers Sells
VR Business Brokers typically focuses on privately-held small to medium-sized businesses with a particular appreciation for family-owned companies. As they believe family-owned businesses are the backbone of America, they want to help families take advantage of their assets by serving this community.
There aren’t many limitations to what industry VR Business Brokers can assist with. With 130 offices all around the world, they have specialty brokers in different fields to properly evaluate your business.
These are examples of the industries VR Business Brokers typically works in but is not limited to.
- Retail: From boutique shops to sporting good stores. Anything in the realm of retail both online e-commerce and storefront businesses.
- Oil Fields: Selling the business value of the oil field which crosses into property.
- Hospitality & Tourism: Online tourism blogs to restaurant and hotel businesses all cover the tourism industry.
- Technology: From physical products to software, anything involved in tech can be evaluated with VR Business Brokers.
- Manufacturing: Sometimes can be a crossover into retail depending on product manufacturing.
- Health and Wellness: This includes in-person gyms, online health platforms, written guides, and practices.
VR Business Brokers Valuation Process
Regardless of which office you choose to work with, VR Business Brokers puts a major emphasis on no two businesses being alike. Their overall method in evaluating a business remains consistent with the factors that they consider making the impact on price.
- Your company’s history and longevity.
- Future economic outlook and possibilities.
- Tangible asset value.
- Intangible asset value.
- Industry ratios.
- Net cash flow.
- Ease of ownership transition.
- Technology impacts.
- Any consulting agreements or non-competes.
- Working capital requirements.
These are the main factors evaluated along with industry-specific factors that a specialized VR broker will assess.
Criteria for Valuing Your Business
VR Business Brokers will do a free market analysis of your business! A Valued Representative Consultant will come up with the owner’s benefit or discretionary earnings by using one of their methodologies.
By using previous market data and assessing the current sales trends, a VR consultant will pair that information with one of the following to accurately assess the earnings.
Methodologies include but are not limited to:
- Multiples of seller discretionary incomes.
- Gross sales.
- Net profit
- Inventory costs.
You can expect to provide your company’s financial information to the VR broker and consultant so they can get ready to sell your business. However, there is still no commitment at this stage in the process.
- Three previous years of income tax returns, balance sheets, and financial statements.
- Any assets that will be transferred with the company such as furniture, patents, inventory, equipment, etc.
- Any equipment or current leases.
- Valued information that affects the operation of the company.
VR Business Brokers also emphasizes transparency so customers don’t have to worry about any tricks in the process. That;s why they don’t only offer to evaluate businesses on their own but are willing to work with a third-party evaluator to ensure their customers that they are providing a fair market value.
Types of Sales Evaluation
Once a business has decided to work with VR Business Brokers they are likely to fall into one of their two standard evaluations before starting the sales process. These categories separate businesses with sales revenue under $1,000,000 and revenue between $1,000,000- $7,000,000 annually.
Merger and Acquisition Evaluation
Mergers and acquisitions fall into their own category as they are valued like a stock rather than their annual earnings. These are for middle-sized businesses with annual earnings exceeding $5,000,0000.
VR Business Brokers Sales Process for Sellers
VR Business Brokers follows a 20-step sales process so that their clients can be informed in every decision along the way. While the evaluation takes up a good portion of this process we can find the detailed sales path below.
This is just the introductory stage where the client learns about VR Business Brokers and what they do in terms of services for selling and buying businesses.
This is the entire process listed above where VR Business Brokers collects the financial information and properly assesses your business at market value. This includes reworking financial statements to deduct recurring payments that will end once the business is transferred.
VR presents the market-value analysis on the business and presents a commitment to their client. If both parties agree a contract is signed and the sales process officially begins.
The seller will provide necessary documents to VR in order for them to create a business profile and prep the sale of your company. .No information will be shared with prospective buyers until the Non-Disclosure-Agreement is made and signed by said buyer.
Advertising and Marketing
The advertising and marketing of your business begins. Your business will have its own website showcasing the sale as well as be featured on several business sale websites and other mediums.
Eliminate Unqualified Buyers
Aside from signing the NDA, all potential buyers must make a buyers profile with a VR office. They will be vetted to ensure they are a qualified buyer.
Valued Representation then will create presentations to qualified and interested buyers detailing the components of the business.
When a qualified buyer becomes a serious contender in buying the business a buyer & seller meeting is set up for the current owner, VR Business Brokers, and the potential buyer.
Your VR representative will encourage buyers to make an offer with an earnest deposit.
Much like the sale of a house, an offer is presented with contingencies, background info on the buyer, etc.
Counter or Acceptance
nce an offer has been made the seller and VR will discuss whether it is a good deal to accept or counter the price or contingencies.
Once both parties have agreed to the financial offer and terms the deal is ready to sign and finalize the Purchase Agreement.
Depending on the type of deal brokered, VR will offer several financing options that work best for both parties.
All deals are typically contingent on a final sweep-through of the company to make sure there are no hidden or underlying problems that would break the deal.
Once everything is all set the contingencies are removed and the “Binding Offer for Purchase and Sale” is set up.
All paperwork is then sent over to the escrow specialist. Escrow is immediately opened upon the documents being signed by the seller and buyer.
VR will take care of the transition of property by working with the landlord to assign the new lease owner.
Transfer Any Remaining Leases
If there are any remaining leases, loans, or liens, on the business, VR works to transfer those to the owner of the business by working with the financial lender.
VR arranges for the inventory to be counted by the buyer and seller if applicable to the business.
Closing can be done in person or not depending on the seller’s and buyer’s wishes.
VR Business Brokers notes that on average it takes 182 days to sell a business but the process can be tied up much longer depending on the industry the business is in.
VR Business Brokers The Buying Process for Buyers
When it comes to the buying process of a business, clients of VR can follow the exact process mentioned above for the sale. This 20-step process works for both parties. What buyers can look forward to is the process is simplified by creating a search engine for the type of business a client wants to buy.
VR Business Brokers provides the opportunity to specify searches by allowing their customers with profiles to view their inventory. Select industry-specific businesses to narrow the search or even look at companies by their annual earnings.
As explained above in the sales process, potential buyers will be vetted in order to make profiles to avoid wasting sellers’ time with unqualified buyers. This includes signing the non-disclosure agreement to have access to business-specific information.
VR Business Brokers Success Rates
One of the taglines VR Business Brokers commonly uses is that they are the business broker that has sold more businesses around the world than anyone. With 80% of their businesses obtaining a 95% over asking price, clients have left great reviews.
They also have served over 100,000 businesses across over 4,000 worldwide franchises and have seen a 110% increase in their average sale price.
Fees Charged By VR Business Brokers To Sell A Business
When it comes to buying a business through Valued Representation Business Brokers there are no fees associated with that process. As mentioned, there are also no fees with the initial valuation of the business when looking to sell.
However, there are Seller’s Fees that are dependent on a few things. The overall price of the business being sold for is one of them. There may be additional fees brought in because of unique situations and the arrangement made.
This will be discussed upfront with a VR representative so there are no surprises.
Pros And Cons Of Using VR Business Brokers
Overall in this VR Business Brokers review, we see there are a lot of positives but what about the drawbacks? Here are the summarized pros and cons to consider when using this business broker compared to others.
- Partnered with many other brands in the sector increasing visibility for selling.
- Long-lasting company with clear processes for buying and selling businesses.
- Free valuation of your company with no commitment or fees.
- No buyers fees.
- Vetted buyers process to cut out unqualified buyers and maintain efficiency.
- Multiple services offered outside selling such as Mergers and Acquisitions.
- Strong confidentiality policies while selling and buying that protect both parties.
- Operations may be growing so fast that there is a loss in quality representation throughout the company.
- Some customers prefer a more localized approach where VR has turned into an international brand.
- Customer service at times has been reported hard to get a hold of.