Share This Info:  

Should Sellers And Buyers Start The Training Before Or After Close Of Escrow?

See All Discussions   •   See All Contributors   •   All New Discussions & Comments

Comments & Replies: 5     Views: 6555     Posted By: Joe Ranieri  Joe Ranieri, Business Broker: LA, Orange County Areas

When should the training of the new buyer of the business actually begin? Before escrow, during escrow, or only after the keys of the business are handed over to the new owner of the business. Joe Ranieri (Orange County Business Broker - Restaurant Specialist at 714-292-5448) starts this Discussion.

Topics: Business Brokerage, Buying A Business, Escrow Closing Issues, Selling A Business     Tags: buying a business, escrow bulk sales, selling a business



Typically, as the close of escrow gets closer, the bond between the buyer and seller gets stronger. There becomes a point in the transaction when the due diligence is done, the checks with various government agencies is complete, and lease is being finalized, and so the buyer and seller begin to anticipate their new lives: one, selling the business and enjoying a short break, and the other being a business owner. With most restaurant sales, the standard amount of training period is 2 weeks or 80 hours.

Although, it seems like a good idea for the seller and buyer to begin training before the close of escrow, because (a) the seller wants to be out of that store as soon as possible, and (b) the buyer wants to learn as much as possible to successfully run their new endeavor - it's simply not a good idea. Many things can go wrong. It's possible the buyer is in the store on a slow business day, and gets nervous, and feels the average monthly gross sales have been misrepresented or feels overwhelmed running the store, and thinks it's simply not for them.

The longer the buyer and seller are together, the higher percentage of possibility a conflict of personalities could occur. It's possible that the seller introduces the new buyer to the employees, because at one point they will realize the store is being sold, especially if there is a liquor license and the posting has gone up in the window.

Itís simply best to follow procedure and have training after escrow has closed, because the deal is never done until all the money is in escrow and final escrow papers have been signed.

Contributor: Broker/Consultant: Elderly Care Services

In the Elderly Care Home industry my suggestion is that yes, start the training as soon as possible.

Elderly Folks love and thrive on consistency, a familiar face, the same cup of coffee every morning and knowing with confidence that their Care Giver will always be available. As well, the Children or Guardians of the Elderly Residents want and need that consistency as well.

Last thing you want to see in a Care Home transfer is for the new business Owner to arrive to work on day one and not know where a Resident keeps her favorite coffee cup or who his or her Doctor is. So introduce the new business Owners as soon as possible, follow Title 22 regulations on when and how to send out notices and make communication a top priority.


I would have to say, it depends on the nature of the business and the personalities of the principals. I prefer to do training prior to closing, whenever possible. This gives the Buyer a better shot at maintaining continuity in the operation until the new owner is ready to implement their own personal improvements.
We have also been in situations where one party or the other, or both just don't seem to communicate. In this case, we provide as much operational preparation as possible without the Sellers help. Sourcing the info with the Buyer will open up research that will prove to be very valuable. Once the transaction is complete the contract terms will determine the Sellers obligation.


I once had a deal in escrow and the buyer and seller wanted to begin training before closing, against my advice. The seller was leaving town and the buyer was anxious to learn how to run the business while the seller was still in the area in case he had any questions.

Unfortunately, during the training, a key piece of equipment broke down, and a portion of the business operations came to a halt. The seller then called his brother to come fix the machine, who fixed the matching fairly easily but then complained about how often he had to come out and fix this machine, "for free, since it was family" and the flood gates broker from there. Questions arised, how much in machine repair, did you not show on the P&L's that a new owner will have to spend to maintain equipment? How much is the replacement of this machine going to cost? We need to deduct the cost of this machine from the purchase price, or have it replaced before escrow closed, etc. The deal eventually fell through. The seller couldn't move now, because the business didn't sell so his family had to move without him.

The buyer missed out on a great business, that just had 4 or 5 hundred dollars in annual repairs, which was negligible compared to the annual net of the business.


Simple: it depends. It can be a very delicate balancing act that could be disastrous for a business seller. Heed all the advice in this thread; but, before making the decision to start training before the business changes hands, have a very frank and thorough discussion with your business broker and attorney. Every transaction is different, every buyer and seller is unique, and every business seller should recognize that he is not in this transaction alone -- it is always a strength to reach out to those with more experience and say "Help, I need your advice." I have seen more than a few deals "go south" because the seller, unbeknownst to me, has started the training process before the closing, in the wrong way, at the wrong time, for the wrong reasons.


  Helpful Resources To Assist In Selling And Buying California Businesses
Steve Zimmerman: Restaurant Broker Specialist

Steve founded Restaurant Realty in 1996. He has personally sold/leased over 900 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker - An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.

Mike Brewer: Liquor License Brokers, ABC Consulting Services

Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.

Lee Petsas, Business Broker - Orange, San Diego Counties, Inland Empire

UBI Business Brokers has been successfully selling businesses in Southern California since 1965. Our Agents have over 100 years of experience in selling small to medium size businesses throughout Southern California. We service Orange County, Inland Empire, San Diego. Phone Lee at 714-363-0440.

Peter Siegel, MBA - SBA Loans, Non SBA Financing Assistance

For over 25 years I have provided niche business purchase financial advisory and loan placement services with SBA and Non-SBA Loans, Retirement Plan Conversions, Private Investors, etc. Financing amounts available: $20K to $7MM. Call today to get pre-qualified or receive financing: 866-270-6278.

Ryan Clark, Business Broker, Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan at 310-652-8353.

George Lanza, Business Broker, At Plethora Business Sales

Plethora Businesses, a division of A Premier In Services, Inc., is a Business Intermediary Consulting Firm headquartered in Orange, California. Plethora specializes in the listing and sale of small and medium sized private businesses.

Michael Davidson, Business Broker - Southern California

Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.

Bob Baumgarten, Business Broker: Orange, LA Counties

National Business Brokerage is a full service brokerage company that has been serving buyers and sellers of Southern California businesses since 1994. We are dedicated to providing the highest standards of professional service for our clients. Phone Bob direct at 949-588-8727.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Tips For Restaurant Buyers: How To Change A Restaurant Concept Successfully

Joe Ranieri, (Orange County Business Broker) discusses how to convert restaurants: buy an existing inexpensive restaurant and then converting it to another concept. He discusses finding the right location, working with the landlord, notifying existing clients, and observing restaurant trends.

Upgrading Liquor License: An Increase In Price When I Sell My Restaurant?

My restaurant recently upgraded its beer with wine license to a full-service liquor license, and if I sell, how much can that increase my selling price? Joe Ranieri, Southern California restaurant broker specialist initiates this discussion and other advisors, business brokers, agents weigh in.

Buyer Asks: Is Buying A Service Based Business A Good Choice These Days?

I've been selling businesses a long time & I get many calls from buyers who are open to buying something but aren't sure what would be a good investment. I'll get asked what I would buy if I was them and my answer is always the same, "a service business". Business broker Chris Lazurik explains.

Interview: Joe Ranieri, Restaurant Specialist - Tips On Buying Restaurants

Joe Ranieri, long time Orange County Business Broker and restaurant specialist chats with Peter Siegel on the BizBen Podcast & Vlog about the nuances of buying and selling restaurants in the Orange County, California area. Joe gives listeners some great perspective on how to buy a restaurant.

What Are Some Tips In Ensuring A Smooth Transition When Buying A Business?

Changing hands of ownership can seem both exciting & daunting to all parties involved, but it's important that a smooth transition occurs to maintain or achieve success of the business. Joe Ranieri (Orange And LA County Business Broker - Restaurant Specialist) shares some tips with business buyers.

What Are Some Possible Reasons Why My Broker Didn't Sell My Small Business?

What are some reasons a business that was previously on the market with another broker didn't sell? Every broker or agent understands that not every business they list will result in a sale. Joe Ranieri (Orange County Business Broker) and others explain why some brokers fail at selling a listing.

What Are Some Tips For Buying A Billiards, Pool Hall Small Business?

Pool Halls/Billiards in America, currently is seeing a resurgence, mainly due to pool hall owners catering to a millennial crowd who is growing up with playing pool and other games on their phones and later mingling with others and playing the sport for real. Read about the best tips for buying one

Buying A Restaurant With Financing: 5 Options For Restaurant Business Buyers

In this Discussion, Peter Siegel MBA (Business Purchase Financing Advisor at 866-270-6278) discusses financing of purchasing a small to mid-sized restaurant business (with or without real estate). When it comes to financing a restaurant, potential restaurant buyers have many options to choose from.

See All News, Tips And Events

Joe Ranieri Orange County Business Broker
Chuck Post Laundromat Industry Expert
Tim Cunha Business Brokerage
Rob Harman Business Broker SF Bay Area
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million




BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2018, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Interview: Joe Ranieri, Restaurant Specialist - Tips On Buying Restauran...
Read More News
Upgrading Liquor License: An Increase In Price When I Sell My Restauran...
Read More News