Name for the arrangement where an agent intermediates between buyers and sellers and charges a commission for his participation.

A formal document which outlines the details of the business listing including all fees as well as full terms and conditions.

An expression of the intent or willingness of two or more parties to bind to terms determined by negotiation.

An individual or firm authorised to act on behalf of another (called the principal), such as by executing a transaction or selling on their behalf. (See “Business Broker”)

A brokers opinion as to the "sale value" of a business within the current market.

The classification of a business with respect to its worth. In business this is reliant on many different factors.

An identifying symbol, words, or mark that distinguishes a product or company from its competitors. Usually brands are registered (trademarked) with a regulatory authority and so cannot be used freely by other parties. For many products and companies, branding is an essential part of marketing.

The Business Brokers in-house records and files. Contains information relating to specific businesses for sale and parties who have displayed an interest in purchasing specific businesses.

An individual or firm which acts as an intermediary between a buyer and seller, usually charging a commission. For business sales as with most other products, a license is required.

A special code that the Business Broking firm uses to identify specific businesses it has listed for sale.

A summary of a specific business listed for sale. It contains preliminary information that most buyers would deem necessary to know before beginning their own in-depth research into a company's background. It is prepared by the broker with information provided by the vendor.

Also known as a ‘CA”. A standard document that must be completed and signed by anyone requiring information on a business. It’s purpose is to protect the privacy of the business for sale and ensure the information provided is not circulated without authorisation.

A fee charged by a broker or agent for his/her service in facilitating a transaction, such as the buying or selling of a business or real estate.

Abbreviation of 'Earnings before interest and tax'. This measures a company's performance and is often used in preference to net profit as it excludes the effects of borrowings and tax benefits and adjustments.

Abbreviation of 'Earnings Before Interest, Taxes, Depreciation and Amortization'. An approximate measure of a company's operating cash flow based on data from the company's income statement. Calculated by looking at  earnings before the deduction of interest expenses, taxes, depreciation, and amortization. This earnings measure is of particular interest in cases where companies have large amounts of fixed assets which are subject to heavy depreciation charges (such as manufacturing companies) or in the case where a company has a large amount of  acquired intangible assets on its books and is thus subject to large amortization charges (such as a company that has purchased a brand or a company that has recently made a large acquisition). Since the distortionary accounting and financing effects on company earnings do not factor into EBITDA, it is a good way of comparing companies within and across industries. This measure is also of interest to a company's creditors, since EBITDA is essentially the income that a company has free for interest payments. In general, EBITDA is a useful measure only for large companies with significant assets, and/or for companies with a significant amount of debt financing. It is rarely a useful measure for evaluating a small company with no significant loans. Sometimes also called operational cash flow.

The penultimate stage when buying a business. The exchange of contracts is a formal agreement between buyer and seller where each sign off on all the agreed terms of the sale. It is followed by the 'settlement period' which can give the buyer time to finalise finance if that is needed. The settlement period is also sometimes dependant on searches and other formalities.

Condition within the "Agency Agreement" (see above) which states that the Business Broker will have the sole right to sell the business for a specific period - usually three months. The agreement allows that the Vendor will not make arrangements with other brokers or sell the business privately during this time. If the business is sold during the period of exclusivity, by whatever means, the broker is entitled to the agreed commission stated in the Agency Agreement.

The value attaching to the reputation of a company, individual or product; the intangible asset constituted by the tendency of the customers or clients of a business or professional practice to deal with that business or practice despite a change of personnel operating it.

Abbreviation of 'Heads of Agreement' also known as a 'Memorandum of Understanding'. Heads of Agreement are sometimes used during the process of negotiating a contract where some specific items have been discussed and agreed, subject to the agreement of further terms in the future.

See Business Profile (above)

Any intangible asset that consists of human knowledge and ideas. Some examples are patents, copyrights, trademarks and software. Most such assets cannot be recognised on a balance sheet when internally generated, since it is very difficult to objectively value intellectual property assets (slightly different rules apply in the case of software). They can, however, be included in a balance sheet if acquired, which allows a more accurate valuation for the asset (that is, the acquisition cost)

Abbreviation of 'Letter of Intent'.

Letter of hypothecation - A letter, for example between a broker and client, pledging securities as collateral for loans made to buy shares. Such a pledge does not transfer title of the securities, but it gives the broker the right, should the client default, to sell the securities detailed in the letter of hypothecation.

The term for when a broker has accepted the role of selling a business and has begun to actively market it.

The act of advertising a business for sale after agreement has been reached with the vendor.

A fee charged by the broker to the vendor to 'list' their business. 

A fee charged by the broker to the vendor to cover any agreed marketing and advertising of the business including Newspaper, Magazine, Radio advertising etc as well as Direct Mail campaigns and Internet advertisements.

Gross profit less all expenses such as cost of goods sold, selling expenses, tax and interest on borrowings.

To express a desire to enter into an arrangement or contract with another party.

The exclusive right, granted by the government, to make use of an invention or process for a specific period of time.

The standard method of agreement regarding the sale of a business, where the prospective purchaser will make a written offer for the business to the vendor through the business broker. A successful sale will only said to be reached when both parties are in full agreement on all terms and conditions.

Describes a technology or product that is owned exclusively by a single company, who carefully guard the knowledge and distribution of that product.

An individual or organisation actively seeking to purchase a business.

Has met all criteria required by the broker to be listed for sale.

A contract prepared by the vendor's solicitor for the sale of the business. To be signed by both parties at the exchange of contracts'.

Abbreviation of 'Stock at Value'. Gives a monetary value to the amount of stock that will change hands with the sale of the business.

An account to accommodate funds entrusted by clients to lawyers, accountants and other professionals such as Business Brokers. In Business Broking, the account is maintained by the broker to hold funds received from clients for deposits on the sale. Funds are held in the trust account until the broker has been instructed by the vendors solicitor that the sale has been finalised. The purpose of the trust account is to protect clients' funds against potential defalcation (misappropriation of funds).

The owner of the business that is for sale.

Abbreviation of 'Written Down Value'. The net value of an asset, i.e. its original cost (its book value) minus depreciation and amortization. Also called net book value.