Buying & Selling A Business in Omaha, NE – 2018


Buying & Selling A Business in Omaha, NE – 2018

When a business changes hands, it’s a big deal for both the buyer and the seller. With the substantial nature of this type of transaction, no matter which side you fall on, you’ll want to have a team of experts to guide you through it. The typical professionals to have actively involved and working on your behalf would include a business broker, an accountant, a banker, a lawyer, and consultants.


Jethro Hopkins
No Coast Business Advisors

“I can’t emphasize enough the importance of working with someone who specializes in the sale of businesses and has that education and experience to offer,” emphasizes Jethro Hopkins with No Coast Business Advisors. “Keep in mind that a professional selling commercial real estate property and a professional selling the actual business, although obviously related in most cases, will have different training and working knowledge as well as different tools and resources at their disposal. You’ve probably all heard the advice that you don’t need to be good at many things, you just need to be great at one, and this is an excellent example of expert vs. generalist. If there’s ever real estate involved, I call my real estate contact and vice versa. Similarly, it’s to your advantage to work with a professional who has a solid network of professional contacts in the related specialty areas that encompass every aspect of the transaction. You can get solid referrals in this way too.”

When looking to hire a business broker to buy or sell, in the initial meeting Hopkins advises to get the answers to the following questions in order to make the best decision:

  • When do they get paid and what do they get paid? (For obvious reasons.)
  • Who handles closing and is responsible for preparing the closing documents? (This could be a lawyer, broker or title company – there are different ways it’s handled.)
  • How are they going to market/advertise the business? (A proactive approach and one that has a reach bigger than just Lincoln and Omaha is advised. Just putting up a listing on a website and waiting for someone to bite isn’t enough.)
  • How long have they been doing it? (Speaks to experience.)
  • Is your broker an owner, employee, or subcontractor? (An owner will almost always be the most invested in the outcome and how business is conducted throughout because it’s his/her reputation on the line. That’s not to say the others won’t do an excellent job, but it’s something to consider. Also, point of contact is important, such as if you’ll be regularly communicating with the owner or his/her secretary or assistant.)
  • How will they protect confidentiality? (Example: Any broker who takes pictures of your business for the listing, regardless if any signage is present, is not doing everything possible to protect the confidentiality of the sale. Particularly with the worldwide web, it’s very easy to connect the dots when you have the type of business and city in the listing.)
  • What references can you provide? (Be sure to ask for references from the specific broker, not just the brokerage. Individual performance is important. If they can’t provide you with references for any reason, whatever the case may be, it’s a big red flag and you can surely do better. Also, don’t just be satisfied with the fact that they provided references, follow up on them.)

Chris Reiner
American National Bank

In agreement on the importance of working with those who have the proper expertise to advise and assist throughout the process of buying or selling, Chris Reiner with American National Bank also notes, “An advantage to working with an experienced professional is that it provides for an efficient and smooth transaction process.”

Specific to his area of expertise, Reiner advises, “Our core service is to provide financing and depository services for the company acquiring the business. We also become a sounding board and information resource for the customer.

When evaluating any potential opportunity, buyers should identify the strengths they would bring to the acquired company, identify underperforming areas that may be a future drag on earnings, and stress test financials for potential future outcomes.  Buyers should be prepared for post-acquisition setbacks with viable alternatives or capital needs to succeed long term.

With interest rates being projected to rise, managing debt levels while not having an overleveraged balance sheet will allow the company to navigate industry and economic downturns.”

He concludes, “Above all, be willing to walk away if the deal isn’t right.  Be willing to listen to advice of their banker, accountant, attorney and other resources. Not all deals are the same, so the advice I would offer is to be patient and find the one that makes the most sense for you and your company. Do your due diligence.  Also, maintain working capital and sufficient resources to be prepared for a transitional period.”

With the experts knowing the right questions to ask and documents to request or draft for a successful transaction, among other things determined in each unique situation, by having one or more involved in the purchase or sale transaction from start to finish, the buyer or seller can reap numerous benefits.

Buying or selling a business is often an emotional decision. With all of the emotions involved, it is equally important to have an accountant or tax advisor provide an objective, yet expert opinion to the purchaser or seller of a business. Doing so will ease the process, provide more accurate information, and ultimately result in a better decision. Purchasing or selling a business is a complex process, and an accountant can often provide advice regarding the business’s worth, the best structure for a given transaction, and the tax consequences of the sale.

In fact, with the last one, many clients forget about the tax consequences of selling a business and can be surprised by their income tax liability in the year of sale. Planning with a tax advisor can help to minimize the taxes owed or at least be prepared to pay them once April comes around. Oftentimes, an installment sale can be used to spread the proceeds of the sale over several years. This spreads the capital gain taxes from the sale over several years rather than a huge lump sum in one single tax year.

In any case, it is best to plan the process of a purchase or sale over the span of a couple of years. Doing so can reduce the likelihood of rushing into or making uninformed decisions. Planning can also help the buyer or seller clean up the bookkeeping, take action to get the most out of the transaction, or even take advantage of certain conditions in the market. Knowing whether it is a sellers’ or buyers’ market or what tax legislation will be in place for the upcoming year can affect the decisions that go into a purchase or sale of a business. It’s not uncommon to begin planning to sell a business years in advance; having an exit strategy at any point is a wise move. This way the owner(s) has/have a full understanding of the steps to take to make sure they are ready to sell when the right time and buyer comes along. For buyers, it can be a lengthy process or a relatively short one depending on the specifics of the business being purchased.

Buying or selling a business is an exciting time for both parties. However, the complexity of these transactions can often leave business owners feeling overwhelmed. Finding a trustworthy accountant with expertise in buying/selling a business can make all the difference when making these life-changing decisions.

At the same time, the legal advice from your lawyer will be invaluable for a number of different reasons as well.

Susan Napolitano
Berry Law Firm

“Having handled the legal aspects of hundreds of business transitions, I’ve learned that the smoothest sales involve an attorney from the beginning to the end,” says Susan Napolitano with Berry Law Firm. “Ideally, a seller should visit his or her attorney (and accountant) at least one tax year before listing the business for sale to prepare for a succession. It can be helpful when seller’s attorney understands the seller’s day-to-day business, but it is imperative that the seller’s attorney understands the unique legal aspects of seller’s business transition.  I don’t need to know how to perform a root canal to sell a dental practice, but I better know the federal and state laws that govern the transfer of medical records.

Preparing your business for sale by visiting your lawyer and your accountant well in advance of listing the business will help a seller get the best valuation and clean up any legal loose ends. It also puts your trusted advisors on notice that you are going to need them to protect your best interest and be your advocate throughout the sale transaction.

As for advice, as was previously mentioned, beware of unqualified ‘consultants’ who want to broker the sale of your business. They feed on your fear of lawyer fees; they play up their knowledge of your industry to gain your trust, then they take 8-10% of your purchase price for themselves. I have seen very sophisticated professionals be taken by shady consultants and ultimately end up with final documents that were negotiated and drafted by a non-lawyer at a price much higher than a lawyer would have charged.

The most common and dangerous misconception I’ve heard related to lawyer involvement in business sale transitions is that lawyers are only necessary at the end of a transaction to memorialize the agreement between the parties.  If that is all your lawyer is able to do for you in a business sale transaction, you need a different lawyer. A good business lawyer prepares you for the journey, informs your choices along the way, and fights for your best interest throughout the entire process.  One unfortunate mistake that seems to arise from this misconception is mistrust, hostility, and blurred boundaries between advocates who should be working together for the client’s best interest. I’ve seen this occur most often between accountants and lawyers. Instead of respecting each other’s areas of expertise, they try to be a one-stop shop for the client.  It should be a red flag if one of your advocates, without good reason, refuses to coordinate with another of your advocates.

Also, do not ever hire a business broker who represents both sides of a transaction. Your advocate should be YOUR advocate—no one else’s.”

Similarly, he also cautions, “Baby Boomers are retiring.  For sellers, this means selling before peak inventory saturation.  For buyers, this means a lot more due diligence in sorting good business investments from bad ones.  Cultural shifts often create a temporary bath of market chaos that will be bliss for some and disastrous for others.  When either buyers or sellers get overwhelmed or desperate, predators of all kinds come in and offer to lift the burden.  Whether your sale or purchase outcome yields bliss or disaster is often determined by who you trust. Choose wisely.

Finally, do things right the first time.  Never rush through something, especially if you don’t understand it. Don’t allow anyone to rush you. Trust your gut.”

There are many instances when a consultant can come alongside to assist with the process of buying and selling a business. As a prime example, if it’s a franchise, you’ll benefit greatly from working with a franchise consultant who specializes in this type of business structure and transaction.

Shawn Williams
Summit Franchise Advisors

“As a franchise consultant, my role is to help a potential business owner identify which franchises fit them best and then support their research and analysis,” says Shawn Williams with Summit Franchise Advisors. “Franchises are appealing because they offer strong support, predictability, and a high success rate. Particularly beneficial to my clients is the fact that I have direct access to hundreds of reputable and successful franchise companies. The franchise companies pay us to recruit for them, so our clients do not pay anything additional to work with us. We guarantee they walk away with added value whether they buy a franchise or not. During the selection process, we examine a client’s goals and match them with franchise companies that meet those goals. It’s a systematic process that takes out the sales rhetoric to help them make informed, competent decisions.

Going more in depth on the benefits of franchising, these have been well documented over the years. It isn’t hard to see the impact that franchising has had on the business landscape and even our everyday lives – we live in a franchised world.  Buying a franchise often gives you a turn-key business model that has been refined and has ‘all of the kinks worked out.’  It gives you the ability to ‘scale out’ the franchised model by owning multiple units. No matter what your reason for exploring franchise opportunities, you owe it to yourself to get some advice and help with your search.

He also sheds light on some of the more common mistakes he has seen people make.

“Number one, they began their search for the wrong franchise. Often they start with a franchise that they love patronizing only to find out that their love of drinking coffee doesn’t translate to being a good coffee franchise owner.

Number two, they aren’t realistic about their own skills sets and in many cases, don’t even know what they are truly good at and what franchises would be right for them.

Finally, number three – having never bought a franchise before or never having owned their own business, they really don’t feel confident in addressing the key areas that they should be focusing on.

There are many other reasons why someone decides to ‘stay put’ or ‘wait and see’ and many likely successful business owners don’t pursue their dreams for these reasons.”

Securing financing for a franchise has its idiosyncrasies, and to that end, Williams offers the following advice: “Financing a business purchase can be interesting, particularly if it’s a franchise. You can visit your local loan officer at your bank, but very often they are limited in their franchise knowledge and in some cases, they don’t really understand the business model of franchising at all, which will definitely impact your loan application. We work with lenders who specialize in franchise funding. You’ll be able to quickly get an honest and direct assessment of your ability to attain financing for your upcoming franchise purchase—and you’d be amazed about the flexibility and options at your disposal.  We can help you to review your financing options and get you connected with lenders who LOVE to lend for franchise startups!”

He concludes, “At Summit Franchise Advisors, we have extensive experience in franchising and both buying and selling businesses. We brought a brand new franchise, BounceU, to Omaha many years ago and it’s still going strong.  We sold that franchise profitably.  We reinvested into a different franchise, Cold Stone Creamery, and have grown it into multiple locations that dominate the industry in Omaha.  When working with others who hope to do the same, we are leveraging a dozen years in franchising and a quarter-century of business experience.  We’ve been there, and we’re happy to share that experience with our clients.”

The bottom line is that if you’re considering buying or selling a business, the team of seasoned experts you entrust with every aspect will determine the outcome. Choose wisely, indeed.