SperryCGA-Griffin Partners
Business Brokerage Division
Our Story –
Thanks for taking a moment to view this post. We hope that this will provide some insight into the complex and specialized field of business brokerage. Business brokerage complements our full range of commercial real estate services well in that many of our commercial real estate clients and investors also own businesses. Many of them own businesses with real estate, which can further complicate the sale of a business. Our story in business brokerage began over a decade ago when President Mark Griffin, CCIM/CBB, determined that this needed service would benefit his existing clients. Mr. Griffin, working in Atlanta at the time, attended a 6 month certified business brokerage training program in which he learned the processes and methodologies used in reviewing, valuing, and marketing businesses of all types and sizes and the rest is history. When Mr. Griffin moved back to his hometown of Greenville, South Carolina in 2010 he went to work for a local commercial firm building a business brokerage division. Mr. Griffin also went on to start his own firm, Griffin Property Solutions, in 2012 which is now Sperry Commercial Global Affiliates-Griffin Partners. Combining commercial real estate brokerage and investment sales with business brokerage allows Griffin Partners to uniquely assist many different types of clients across the board. People sell businesses for a variety of reasons. Frequently, it is simply for retirement, but at other times, business owners liquidate to move on to new ventures.
Our Growth-
Mr. Griffin works out of Griffin Partners’ Greer, South Carolina office serving clients through the States of North and South Carolina. In 2018, Mr. Griffin brought on now Senior Vice President Chris Springfield to further grow the business brokerage division and the rest is history. Chris has significant experience owning, operating, and selling many of his own businesses over the years bringing an owner’s perspective to every deal. Chris is Principal of Griffin Partners Atlanta office where we serve commercial real estate and business brokerage clients throughout the State of Georgia. Chris currently has sold or represented professional, automotive, restaurant, retail, and manufacturing businesses and is responsible for considerable growth within the division. In 2019, Griffin Partners added Clemson University Finance graduate John Kawalchuk as an Associate to assist in business brokerage and investment sales division. John has significant experience and knowledge in finance, analysis, corporate structure, and also holds a series 7 license. Our team approach backed by the Sperry Global national footprint of affiliates and tools pays dividends to all of our clients.
How Business Brokerage Works-
Generally we will provide free valuations of businesses anytime. This gives the business owner an idea of what their business is worth. The process of listing and marketing businesses is very different from that of commercial real estate. Business are marketed on a national level, but are done so confidentially without revealing the specific name or location of the business. “Blind” ads are created giving enough basic information about the business to attract buyers. Once buyers are interested they are pre-qualified to assure the liquidity is there to make an acquisition. We fully market business on the Sperry Global platform and on national websites such as BizBuySell for maximum exposure. Once a qualified buyer is in the picture, generally there is a review period of general books and records. When the books and records have been reviewed, typically this is followed by a letter of intent or business purchase agreement to begin the due diligence process. Due diligence for a buyer in the purchase of a business can range from 10 days to upwards of 120 days, depending on the size and complexity of the business. Most of the time the seller will provide an observation period for the purchaser so the purchaser can see the seller and the business in action for a period of time. The seller may also provide a transition period as part of the sale of the business, which again, can vary based on the size and complexity of the business being acquired. All of these are factors to consider when you are thinking of selling your business. As demonstrated, business brokerage takes a certain level of attention to detail and confidentiality which is why this service is not readily offered through traditional commercial real estate firms. It is necessary to further address the sale of a business with real estate. Sometimes the business owner will maintain ownership of the real estate and essentially lease it back to the new business owner. This typically occurs when there is no debt on the real estate. If the Owner sells the real estate as part of the business, we assist many with conducting 1031 tax deferred exchanges to replacement property for additional income down the road and to defer the full amount of taxes on the gain of the real estate. It must be noted that Griffin Partners nor Sperry Global provide tax or legal advice.
How Businesses are Valued-
We get this question all the time. What is my business worth? Valuing businesses, much like valuation of income commercial property, is very complex. In the State of South Carolina, business brokerage is unregulated. When you interview brokers to sell your business, which should be one of our greatest assets, make sure you are working with a broker with a track record not just in the sale of businesses, but also commercial real estate even if the business does not have real estate as part of the sale. Licensed real estate broker professionals are held to a higher standard of practice across the board and if real estate is involved, will ensure that all applicable state laws are adhered to in the sale of real estate. Our firm is currently licensed in the states of South Carolina, North Carolina, and Georgia. The valuation method for a specific business may include a percentage of gross sales (with our without fixture and equipment and inventory), and multiple of EBITDA (Earnings Before Interest Taxes Depreciation and Amortization), a multiple of SDE (Seller’s Discretionary Earnings) or a combination of the above. It really depends on the industry. We have access to business comparables across the country to further ensure that your business is properly valued. For larger businesses (+/-$8-10 million of annual gross sales), sometimes it is necessary to have a CPA certified in business valuations to perform a formal “book” valuation of the business and assets. Assets most of the time are valued through an asset appraisal and inventory is usually counted and evaluated by inventory specialists. Once again our job is to orchestrate the process from letter of intent to contract through due diligence and on to financing and closing of the transaction. We price businesses using very specific criteria, giving buyers little range to re-negotiate after the business is under contract. It takes years of experience and financial knowledge to understand how each individual business should be evaluated.
Contact Us –
In closing, if you own a business and are thinking about selling now or down the road, please reach out. The earlier that you get into the planning phase of an exit, the lighter the load will be when the sale occurs. It is very important to assemble the right team early in the process including your CPA, Attorney or Tax Attorney, Broker, and many times Inventory Audit professional. As part of our valued commitment to developing relationships with business owners, we will provide a confidential review and valuation of your business anytime. Contact President Mark Griffin at [email protected] or Senior Vice President Chris Springfield, PMP at [email protected] to schedule a meeting. We look forward to working for you!