Let me introduce NBB to you. It all started as a Scandinavian concept in the beginning of the 70's. In 2001 a joint venture between EBB Eurobusiness Brokers and Onebiz Group gave birth to the European expansion activities. Today we are dozens of professionals, working with an impressive network of business intermediaries throughout Europe and the Americas.

We understand what "selling your business" means to you, having been there ourselves. Since many of us were business owners in our earlier lives, and mainly because all of us are daily involved in business transactions, we certainly understand and empathise with the concerns that you as a business owner may have in a transition of this sort.

We will strive to work with you in a confidential manner, subject to your needs, at a pace that is comfortable for you to present your business in its best light, uncovering hidden values and working only with potential merger or acquisition partners approved by you the business owner.

Thank you for interest in NBB.

Sincerely yours,

Helder Beça
Network Manager

Managing the Selling Process

1. Planning

· Compiling information on selling process
· NBB listing agreement (Mandate)
· Interview with Owner(s), collecting data
· Recast financial statements
· Prepare valuation report
· Prepare CBR (Confidential Business Report)

2. Search

· Activate buyer search plan
· Screen responses
· Qualify buyers financially
· Obtain confidentiality agreement
· Get non-disclosure agreement
· Present CBR (Confidential Business Report)
· Determine buyer interest

3.  Deal Making

· First meeting, Buyer's visit
· Probe buyer interest
· Motivate buyer to act
· Purchase proposal
· Facilitate negotiations
· Agreement in principle

3. Closing

· Coordinate due diligence
· Loan request package
· Lender introductions
· Assisting in resolving all issues
· Definitive purchase agreement (draft)
· Review final documents
· Close

Business owners are advised to make bona fide enquiries on any potential purchaser (including credit rating) before commencing binding negotiations. Sellers should also note that certain potential buyers may either be known to NBB or have provided supporting documentation as to their bona fide status.

How much is a business worth?

The value of a business depends on the needs and perspective of each individual buyer. Value is related to risk and the ability of the business to generate an income stream that is acceptable to the buyer.

It is important to start with the basics:

- Review fixed assets
- Recast, normalise, confirm, and review earning trends
- Review factors that can influence future earnings
- Select the appropriate valuation approach
- Calculate and apply external discount factors

The many different valuation methods can be grouped into one of the following categories:

- A sset approach
- Income/earnings method
- Market/comparable sales approach

In many cases there are some common averages. T he business value can be calculated:

- At about two to five times the annual discretionary cash flow
- At f air market value of equipment and inventory plus one year's discretionary cash flow

Discretionary cash flow is defined as owner's total compensation. This includes owner's salary, net profit, deducted interest, deducted depreciation plus other benefits, such as luxury automobiles, excess insurance and other allowances charged as business expenses, such as private travel expenditures or bonuses to children.

Normally the value of equipment is much less important than the amount of discretionary cash flow a business is generating.

In the final analysis, the final price of a business must pass the sanity test. It must:

- Cover the debt service
- Provide a reasonable income for the buyer
- Allow for working capital fluctuations

Turnaround Opportunities

Businesses with a negative cash flow may not pass the sanity test but may be a good acquisition candidate for some buyers.

While NBB assists the seller in finding the best method to price a business, the final price and terms are determined by the seller. Conversely, although NBB assists the buyer in calculating a range of values for a business, the actual amount of the purchase proposal rests solely with the buyer.