GLOSSARY OF TERMS

Asking Price - The total amount for which a business or an ownership interest is offered for sale. Asset Sale - This term has two definitions. The proper definition depends on its usage: The means by which a business owner transfers ownership of tangible and intangible assets to another owner without transferring the ownership structure. The sale of a business enterprise at a price based solely upon the value of the tangible assets. Blue-Sky That portion of a requested price that cannot be supported through the application of established valuation methodology and which generates no economic benefit. Business Broker - A Business Broker is an intermediary dedicated to serving clients and customers who desire to sell or acquire businesses. A business broker is committed to providing professional services in a knowledgeable, ethical and timely fashion. Typically, a Business Broker provides information and business advice to sellers and buyers, maintains communications between the parties and coordinates the negotiations and closing processes to complete desired transactions. Client - An entity with whom a Business Broker has a fiduciary relationship. Co-Brokerage - An agreement between two or more Business Brokers for sharing services, responsibility and compensation on behalf of a client. Co-Business Broker -A Business Broker who shares services, responsibility, and compensation on behalf of a client. Cooperating Business Brokers -Business Brokers who share their knowledge, expertise, and skills for the benefit of the business brokerage profession, clients, customers and the public good. Customer - An entity to a transaction who receive services and benefits, but has no fiduciary relationship with the Business Broker. Discretionary Earnings - The earnings of a business enterprise prior to the following items: Income taxes Nonoperating income and expenses Nonrecurring income and expenses Depreciation and amortization Interest expense or income Owner's total compensation for those services which could be provided by a sole owner/manager. Finders Fee - An amount paid to another party for locating and referring a client or customer. Nonoperating\Noncontributing Asset - An asset unnecessary to the operation of a business enterprise and the generation of its revenues. Owner - A generic term used in business brokerage to represent the proprietor, general partner or controlling shareholder (singular or plural as appropriate) of a business enterprise. Owner's Salary - The salary or wages paid to the owner, including related payroll burden. Owner's Total Compensation -Total of an owner's salary and perquisites, after the compensation of all other owners has been adjusted to market value. Perquisites - Expenses incurred at the discretion of the owner which are unnecessary to the continued operation of the business. Referring Business Broker - A Business Broker who provides introductory information which leads to a client relationship. Transaction Value - The total of all consideration passed at any time between the Buyer and Seller for an ownership interest in a business enterprise and may include, but not limited to, all remuneration for tangible and intangible assets such as furniture, equipment, supplies, inventory, working capital, noncompetition agreements, employment and/or consultation agreements, licenses, customer lists, franchise fees, assumed liabilities, stock options, stock or stock redemptions, real estate, leases, royalties, earn-outs and future considerations. Sell A Business | Buy A Business | Businesses For Sale | Contact Us | Home