The Serious Buyer
A serious buyer should have the answers to the following questions: Why are you considering the purchase of a business at this time? What is your time-frame to find a suitable business? Are you open-minded about different opportunities, or are you looking for a specific business? Have you set aside an amount of capital that you are willing to invest? Do you really want to be in business for yourself. Are you currently employed or unemployed? Are you the decision maker or a...
A serious buyer should have the answers to the following questions: Why are you considering the purchase of a business at this time? What is your time-frame to find a suitable business? Are you open-minded about different opportunities, or are you looking for a specific business? Have you set aside an amount of capital that you are willing to invest? Do you really want to be in business for yourself. Are you currently employed or unemployed? Are you the decision maker or a...
Financing the Business Sale -- Some Questions to Answer!
Structuring the purchase of a business is an issue that should be faced early in the selling decision. Ultimately, the final structure of the sale will be determined by actual negotiations between buyer and seller, but the seller must still answer the following questions: What is the lowest amount of cash acceptable from the sale? Has consideration been given to paying off all unsecured creditors and a portion of the closing costs? (Both are, in most cases, the seller's responsibility.) I...
Structuring the purchase of a business is an issue that should be faced early in the selling decision. Ultimately, the final structure of the sale will be determined by actual negotiations between buyer and seller, but the seller must still answer the following questions: What is the lowest amount of cash acceptable from the sale? Has consideration been given to paying off all unsecured creditors and a portion of the closing costs? (Both are, in most cases, the seller's responsibility.) I...
Looking at the Numbers
What Should You Look For When Considering a Business to Purchase? Unfortunately, too many prospective buyers want to know the asking price first, and then they ask how much money can they make. These are the wrong questions to ask initially. Buyers need to know how much cash the seller requires as a down payment. There is no point in looking at a business, no matter how good the numbers are, if the seller wants three times as much cash as you are willing to invest. Remember, the a...
What Should You Look For When Considering a Business to Purchase? Unfortunately, too many prospective buyers want to know the asking price first, and then they ask how much money can they make. These are the wrong questions to ask initially. Buyers need to know how much cash the seller requires as a down payment. There is no point in looking at a business, no matter how good the numbers are, if the seller wants three times as much cash as you are willing to invest. Remember, the a...
Business Brokerage and Mergers & Acquisitions
We are often asked -- what is the difference between business brokers and intermediaries? Or, what is the difference between business brokerage and mergers and acquisitions? Others ask - where is the dividing line between the two? Is the mid-market size business the same as mergers and acquisitions? We think the battle is really one of semantics. Many successful practitioners who handle the sale of the larger business feel that they are business brokers because that's exactly what they do. Other...
We are often asked -- what is the difference between business brokers and intermediaries? Or, what is the difference between business brokerage and mergers and acquisitions? Others ask - where is the dividing line between the two? Is the mid-market size business the same as mergers and acquisitions? We think the battle is really one of semantics. Many successful practitioners who handle the sale of the larger business feel that they are business brokers because that's exactly what they do. Other...
Women Business Owners: Coming on Strong
If there were any doubt that women owners are an ever-growing force on the independent business scene, new studies of leading female entrepreneurs around the world supplies incontrovertible proof. The National Foundation for Women Business Owners (NFWBO) has been hard at work, researching the small business climate for women and identifying strong trends. Fifty Top Women Show TrendsIn one study done jointly with IBM, the NFWBO used as its subjects 50 top women business owners (plus 10 more up-an...
If there were any doubt that women owners are an ever-growing force on the independent business scene, new studies of leading female entrepreneurs around the world supplies incontrovertible proof. The National Foundation for Women Business Owners (NFWBO) has been hard at work, researching the small business climate for women and identifying strong trends. Fifty Top Women Show TrendsIn one study done jointly with IBM, the NFWBO used as its subjects 50 top women business owners (plus 10 more up-an...
Buyers and Sellers: What to Expect from a Business Broker
Anyone who is considering selling (or buying) a business wants to know the advantages of using the services of a business broker. They also want to know what to expect from using their services. From the Seller's ViewpointLet's look at these questions from the seller side first. In most cases, the business broker is listing the business for sale. In most cases the business broker is representing the seller and is duty-bound to represent the seller honestly and fairly. A business broker ...
Anyone who is considering selling (or buying) a business wants to know the advantages of using the services of a business broker. They also want to know what to expect from using their services. From the Seller's ViewpointLet's look at these questions from the seller side first. In most cases, the business broker is listing the business for sale. In most cases the business broker is representing the seller and is duty-bound to represent the seller honestly and fairly. A business broker ...
Ten Questions to Ask a Professional Business Broker
How will you market my business? How much do you think I should ask for my business? How will you show my business? Do you cooperate with other business brokers? Will you display my business on any Internet sites? How often will you contact me about what is going on? Can you provide any references? Are you affiliated with any business brokerage associations or trade groups? May I have a sample copy of your listing agr...
How will you market my business? How much do you think I should ask for my business? How will you show my business? Do you cooperate with other business brokers? Will you display my business on any Internet sites? How often will you contact me about what is going on? Can you provide any references? Are you affiliated with any business brokerage associations or trade groups? May I have a sample copy of your listing agr...
Selling - What Does an Intermediary Expect From You?
If you are seriously considering selling your company, you have no doubt considered using the services of an intermediary. You probably have wondered what you could expect from him or her. It works both ways. To do their job, which is selling your company, maximizing the selling price, terms and net proceeds, plus handling the details effectively, there are some things intermediaries will expect from you. By understanding these expectations, you will greatly improve the chances of a successful s...
If you are seriously considering selling your company, you have no doubt considered using the services of an intermediary. You probably have wondered what you could expect from him or her. It works both ways. To do their job, which is selling your company, maximizing the selling price, terms and net proceeds, plus handling the details effectively, there are some things intermediaries will expect from you. By understanding these expectations, you will greatly improve the chances of a successful s...
When Buying or Selling: Attorneys Should Be Deal-Friendly and Sale-Wise
Whether you are buying or selling a business, your legal counsel can make or break the deal. It is important that you emphasize to your attorney that you want the sale to go through. In many instances, the sale of the business fails to close because the attorney for one side or the other makes too many demands of the other side. Certainly, you want your attorney to protect your interests, but not to the point where the demands are so strenuous that the other party or his or her counsel balks. If...
Whether you are buying or selling a business, your legal counsel can make or break the deal. It is important that you emphasize to your attorney that you want the sale to go through. In many instances, the sale of the business fails to close because the attorney for one side or the other makes too many demands of the other side. Certainly, you want your attorney to protect your interests, but not to the point where the demands are so strenuous that the other party or his or her counsel balks. If...
Learn the Dynamics and Save the Deal
Many business owners are unfamiliar with the dynamics of selling a company, because they have never done so. There are numerous possible “deal breakers.” Being aware of the following pitfalls and their remedies should help prevent the possibility of an aborted transaction. Neglecting the Running of Your BusinessA major reason companies with sales under $20 million become derailed during the selling process is that the owner becomes consumed with the pending trans...
Many business owners are unfamiliar with the dynamics of selling a company, because they have never done so. There are numerous possible “deal breakers.” Being aware of the following pitfalls and their remedies should help prevent the possibility of an aborted transaction. Neglecting the Running of Your BusinessA major reason companies with sales under $20 million become derailed during the selling process is that the owner becomes consumed with the pending trans...
Fairness Opinions
Since one often hears the term “fair value” or “fair market value,” it would be easy to assume that “fairness opinion” means the same thing. A fairness opinion may be based to some degree on fair market value, but there the similarities end. Assume that you are president of a family business and the other members are not active in the business, but are stockholders; or you are president of a privately held company that has several investors/stockho...
Since one often hears the term “fair value” or “fair market value,” it would be easy to assume that “fairness opinion” means the same thing. A fairness opinion may be based to some degree on fair market value, but there the similarities end. Assume that you are president of a family business and the other members are not active in the business, but are stockholders; or you are president of a privately held company that has several investors/stockho...
How Does Your Company Rate?
Valuation of private companies is much more subjective than public companies because there is no free trading marketplace for the private companies’ stock. Just like a champion Olympic figure skater, the performance has to be flawless. Take a look at the following check list – see if the target company rates near perfect (on a scale of 1 to 10 – 10 being best): • Stable Market• Stability of Earnings Historically• Realized Cost ...
Valuation of private companies is much more subjective than public companies because there is no free trading marketplace for the private companies’ stock. Just like a champion Olympic figure skater, the performance has to be flawless. Take a look at the following check list – see if the target company rates near perfect (on a scale of 1 to 10 – 10 being best): • Stable Market• Stability of Earnings Historically• Realized Cost ...
When Is A Company In Trouble?
Companies can be in trouble or headed for it for many reasons. However, most of them can be linked to one or more of the following: • Lack of proper focus• Poor management• Poor financial controls• Loss of key employee(s)• Loss of important customer(s)/client(s)• Not keeping up with technology• Quality control or other operating issues• Legal or governmental issues• Target market change or sh...
Companies can be in trouble or headed for it for many reasons. However, most of them can be linked to one or more of the following: • Lack of proper focus• Poor management• Poor financial controls• Loss of key employee(s)• Loss of important customer(s)/client(s)• Not keeping up with technology• Quality control or other operating issues• Legal or governmental issues• Target market change or sh...
Keys to Improving the Value of Your Company
The first key is to have your accountant take a look at your accounting procedures and make recommendations on how to improve them. He or she may also help in preparing financial projections for the coming year(s). Getting your company’s financial house in order is very important in establishing the value of your firm. The second key is to review the reputation, image, and marketing materials of your company. Certainly, the quality of your product or service is p...
The first key is to have your accountant take a look at your accounting procedures and make recommendations on how to improve them. He or she may also help in preparing financial projections for the coming year(s). Getting your company’s financial house in order is very important in establishing the value of your firm. The second key is to review the reputation, image, and marketing materials of your company. Certainly, the quality of your product or service is p...
Due Diligence -- Do It Now!
Due diligence is generally considered an activity that takes place as part of the selling process. It might be wise to take a look at the business from a buyer’s perspective in performing due diligence as part of an annual review of the business. Performing due diligence does two things: (1) It provides a valuable assessment of the business by company management, and (2) It offers the company an accurate profile of itself, just in case the decision is made to sell, or an acquirer sud...
Due diligence is generally considered an activity that takes place as part of the selling process. It might be wise to take a look at the business from a buyer’s perspective in performing due diligence as part of an annual review of the business. Performing due diligence does two things: (1) It provides a valuable assessment of the business by company management, and (2) It offers the company an accurate profile of itself, just in case the decision is made to sell, or an acquirer sud...
Key Factors to a Successful Closing
Experienced intermediaries list several key factors from the buyer’s side, most of which are necessary for a successful closing. Sufficient financial resources to complete the deal as specified. Sufficient staff to run the business and to continue working on an acquisition at the same time. Realistic approach to the type, size, and geographic location of target companies. The willingness to pay for acquisitions and, if necessary, to pay all-cash. The willingness to go six to...
Experienced intermediaries list several key factors from the buyer’s side, most of which are necessary for a successful closing. Sufficient financial resources to complete the deal as specified. Sufficient staff to run the business and to continue working on an acquisition at the same time. Realistic approach to the type, size, and geographic location of target companies. The willingness to pay for acquisitions and, if necessary, to pay all-cash. The willingness to go six to...
What Do the Following Companies Have in Common?
This is just a partial list: Church’s Chicken, Uno Chicago Grill, Charlie Brown’s, Domino’s Pizza, Burger King, Cinnabon, Sizzler. The first response would be that they are all in the food business, and that’s correct. Now name the second thing that they all have in common? Give up? Well, they (and many others) have been purchased by private equity firms. And, apparently, this is just the beginning. The huge Dunkin Donuts chain is being...
This is just a partial list: Church’s Chicken, Uno Chicago Grill, Charlie Brown’s, Domino’s Pizza, Burger King, Cinnabon, Sizzler. The first response would be that they are all in the food business, and that’s correct. Now name the second thing that they all have in common? Give up? Well, they (and many others) have been purchased by private equity firms. And, apparently, this is just the beginning. The huge Dunkin Donuts chain is being...
A Different Look at Valuing Your Company
Is there pricing elasticity?What's proprietary?What's the company's competitive advantage?Status of employment agreements and non-competes? Post-Acquisition:Are there cost savings after purchase?Are there significant capital expenditures pending?Is there synergy with the seller?Is it perceived the integration will go smoothly?Are there substantial cross-selling possibilities?Will the cultures blend? The Financials: By training and education, many business appraisers emphasize the...
Is there pricing elasticity?What's proprietary?What's the company's competitive advantage?Status of employment agreements and non-competes? Post-Acquisition:Are there cost savings after purchase?Are there significant capital expenditures pending?Is there synergy with the seller?Is it perceived the integration will go smoothly?Are there substantial cross-selling possibilities?Will the cultures blend? The Financials: By training and education, many business appraisers emphasize the...
12 Ways to Increase the Value of Your Company
1. Build a solid management team. A business with sales of $5 million and up needs a full complement of officers and directors. Such a team might include: a COO, a CFO, a sales manager and, depending on the type business, an IT director. It is also beneficial to create a Board of Directors with at least two outside members. This professionalizing of management can remove the stigma of “the one man band.” Not only will this build a stronger company, it will increase the value to ...
1. Build a solid management team. A business with sales of $5 million and up needs a full complement of officers and directors. Such a team might include: a COO, a CFO, a sales manager and, depending on the type business, an IT director. It is also beneficial to create a Board of Directors with at least two outside members. This professionalizing of management can remove the stigma of “the one man band.” Not only will this build a stronger company, it will increase the value to ...
How Do Valuation Experts Look at Your Company?
Providing a business valuation is more than just analyzing financial statements and records. Although the process is complex, the first step is to gather the necessary information. Business owners can make this a lot easier by maintaining good records on an ongoing basis. Although audited statements are certainly preferable, most appraisers and business intermediaries are accustomed to working with the company’s own financial records. Company officials should understand that the peop...
Providing a business valuation is more than just analyzing financial statements and records. Although the process is complex, the first step is to gather the necessary information. Business owners can make this a lot easier by maintaining good records on an ongoing basis. Although audited statements are certainly preferable, most appraisers and business intermediaries are accustomed to working with the company’s own financial records. Company officials should understand that the peop...
Is Your Company Tired?
It can be easy for successful company owners, especially founders, to rest on their laurels. The sales keep coming in, so the owner buys a bigger house, takes a lot of expensive vacations and devotes time to charities and/or civic activities. All well and good, but ignoring the business can create problems that may not surface immediately. Here are some examples: The owner, who used to call on the large and important customers or clients, turns them over to the sales manager....
It can be easy for successful company owners, especially founders, to rest on their laurels. The sales keep coming in, so the owner buys a bigger house, takes a lot of expensive vacations and devotes time to charities and/or civic activities. All well and good, but ignoring the business can create problems that may not surface immediately. Here are some examples: The owner, who used to call on the large and important customers or clients, turns them over to the sales manager....
Four Potential Mistakes Sellers Make When Selling Their Companies
1. Poor Timing: As the saying goes, “Timing is everything.” Selling one’s business at the proverbial top of the game is almost impossible, but selling on the upside is certainly better than selling on the downside. There is another side of timing. The owner is 63 years old and says he doesn’t plan on retiring until he is 65. Besides, business is really good right now, so why sell now? Because timing is everything, and since the business is better than ever,...
1. Poor Timing: As the saying goes, “Timing is everything.” Selling one’s business at the proverbial top of the game is almost impossible, but selling on the upside is certainly better than selling on the downside. There is another side of timing. The owner is 63 years old and says he doesn’t plan on retiring until he is 65. Besides, business is really good right now, so why sell now? Because timing is everything, and since the business is better than ever,...
Is the Business Sustainable?
One of the important issues in valuing a company is the sustainability of sales and income. It is a major issue in the due diligence process. It is also one of the most difficult to assess since many of the factors are so subjective. To bring things into focus, here are some of the factors that should be considered in looking at the sustainability of sales and profits: proprietary products and/or services market share customer concentration/broad distribution quality of financial systems ...
One of the important issues in valuing a company is the sustainability of sales and income. It is a major issue in the due diligence process. It is also one of the most difficult to assess since many of the factors are so subjective. To bring things into focus, here are some of the factors that should be considered in looking at the sustainability of sales and profits: proprietary products and/or services market share customer concentration/broad distribution quality of financial systems ...
The Role of a Professional Business Intermediary
Many sellers think the sole role of the business intermediary is to find a buyer for their company. Business intermediaries do a lot more than just finding buyers, as the following will demonstrate. Here are just a few of the valuable services they provide to a seller: 1. Work with the seller to arrive at a value for the companyAn intermediary will work with the financial officer of the company to look at the historical numbers and assist in the recasting of the statements. Realis...
Many sellers think the sole role of the business intermediary is to find a buyer for their company. Business intermediaries do a lot more than just finding buyers, as the following will demonstrate. Here are just a few of the valuable services they provide to a seller: 1. Work with the seller to arrive at a value for the companyAn intermediary will work with the financial officer of the company to look at the historical numbers and assist in the recasting of the statements. Realis...
How's Your Corporate Social Responsibility (CSR)?
Your first question may be, “Just what is Corporate Social Responsibility (CSR)?” We see CSR demonstrated in a variety of ways in areas such as: THE COMMUNITY: o Contributing to local community programs through financial support and personal involvement THE ENVIRONMENT: o Using packaging and containers that are environmentally-friendlyo Recycling o Using low-emission and high mileage vehicles where possible o Seeking more efficient manufactu...
Your first question may be, “Just what is Corporate Social Responsibility (CSR)?” We see CSR demonstrated in a variety of ways in areas such as: THE COMMUNITY: o Contributing to local community programs through financial support and personal involvement THE ENVIRONMENT: o Using packaging and containers that are environmentally-friendlyo Recycling o Using low-emission and high mileage vehicles where possible o Seeking more efficient manufactu...
Thinking of Selling?
Thinking of selling now or in the not-too-distant future? Here are a few things to do that will definitely help – and, if you decide not to sell, they are items you should do anyway. o Develop an Operations Manual and an Organizational Chart.o Remove personal assets and expenses from the business.o Resolve any pending litigation or regulatory issues.o Finalize any copyrights, patents or trademark issues.o Sell off any non-producing assets or equipment.o&nb...
Thinking of selling now or in the not-too-distant future? Here are a few things to do that will definitely help – and, if you decide not to sell, they are items you should do anyway. o Develop an Operations Manual and an Organizational Chart.o Remove personal assets and expenses from the business.o Resolve any pending litigation or regulatory issues.o Finalize any copyrights, patents or trademark issues.o Sell off any non-producing assets or equipment.o&nb...
Selling a Business: How Long Does It Take?
A recent survey revealed the following about the length of time that selling a business requires: Average time from putting the business on the market to time of sale: Time Period % of Businesses Sold in This Time Period 1 to 3 Months 9.7 % 4 to 6 Months 28.3% 7 to 9 Months 38.0% 10 to 12 Months 15.9% 13 to 18 Mon...
A recent survey revealed the following about the length of time that selling a business requires: Average time from putting the business on the market to time of sale: Time Period % of Businesses Sold in This Time Period 1 to 3 Months 9.7 % 4 to 6 Months 28.3% 7 to 9 Months 38.0% 10 to 12 Months 15.9% 13 to 18 Mon...
Selling Your Business? Expect the Unexpected!
According to the experts, a business owner should lay the groundwork for selling at about the same time as he or she first opens the door for business. Great advice, but it rarely happens. Most sales of businesses are event-driven; i.e., an event or circumstance such as partnership problems, divorce, health, or just plain burn-out pushes the business owner into selling. The business owner now becomes a seller without considering the unexpected issues that almost always occur.&n...
According to the experts, a business owner should lay the groundwork for selling at about the same time as he or she first opens the door for business. Great advice, but it rarely happens. Most sales of businesses are event-driven; i.e., an event or circumstance such as partnership problems, divorce, health, or just plain burn-out pushes the business owner into selling. The business owner now becomes a seller without considering the unexpected issues that almost always occur.&n...
The Term Sheet
Buyers, sellers, intermediaries and advisors often mention the use of a term sheet prior to the creation of an actual purchase and sale agreement. However, very rarely do you ever hear this document explained. It sounds good but what is it specifically? Very few books about the M&A process even mention term sheet. Russ Robb's book Streetwise Selling Your Business defines term sheet as follows: "A term sheet merely states a price range with a basic structure of the deal and w...
Buyers, sellers, intermediaries and advisors often mention the use of a term sheet prior to the creation of an actual purchase and sale agreement. However, very rarely do you ever hear this document explained. It sounds good but what is it specifically? Very few books about the M&A process even mention term sheet. Russ Robb's book Streetwise Selling Your Business defines term sheet as follows: "A term sheet merely states a price range with a basic structure of the deal and w...
What Makes Your Company Unique?
There are unique attributes of a company that make it more attractive to a possible acquirer and/or more valuable. Certainly, the numbers are important, but potential buyers will also look beyond them. Factors that make your company special or unique can often not only make the difference in a possible sale or merger, but also can dramatically increase value. Review the following to see if any of them apply to your company and if they are transferable to new ownership. Brand name or ide...
There are unique attributes of a company that make it more attractive to a possible acquirer and/or more valuable. Certainly, the numbers are important, but potential buyers will also look beyond them. Factors that make your company special or unique can often not only make the difference in a possible sale or merger, but also can dramatically increase value. Review the following to see if any of them apply to your company and if they are transferable to new ownership. Brand name or ide...
10 Tips for a Successful Sale
1.Sellers should find out the loan value of the fixtures, equipment and machinery prior to a sale. Many buyers will count on using it for loan or collateral purposes. No one wants to find out at the last minute that the value of the machinery won't support the debt needed to put the deal together. 2.Sellers should resolve all litigation and environmental issues before putting the company on the market. 3.Sellers should be flexible about any real estate involved. Most buyers wan...
1.Sellers should find out the loan value of the fixtures, equipment and machinery prior to a sale. Many buyers will count on using it for loan or collateral purposes. No one wants to find out at the last minute that the value of the machinery won't support the debt needed to put the deal together. 2.Sellers should resolve all litigation and environmental issues before putting the company on the market. 3.Sellers should be flexible about any real estate involved. Most buyers wan...
Seize the Moment -- Tips for Sellers (Option A)
Those business owners who decide to take advantage of a favorable market should act quickly to launch the selling process. There are vital steps to take--and crucial realizations to face--in preparing for this all-important transaction. 1. Resolve current problems as soon and as thoroughly as possible. If the business is a partnership, both parties should be agreed about the major decisions to be made in the selling process. Hopefully, in cases where the business is a partnership, a buy...
Those business owners who decide to take advantage of a favorable market should act quickly to launch the selling process. There are vital steps to take--and crucial realizations to face--in preparing for this all-important transaction. 1. Resolve current problems as soon and as thoroughly as possible. If the business is a partnership, both parties should be agreed about the major decisions to be made in the selling process. Hopefully, in cases where the business is a partnership, a buy...
Seize the Moment -- Tips for Sellers (Option B)
If you have made the decision to sell your business, the wisest first move is to contact a qualified business broker professional, who can . . . Advise you on pricing and structuring the sale of your business. Prepare the marketing strategy, using professional resources. Determine the right buyer for your particular business. Educate buyers in the business-buying process. Keep you informed about market reaction. Present offers and point out strengths and weaknesses. When...
If you have made the decision to sell your business, the wisest first move is to contact a qualified business broker professional, who can . . . Advise you on pricing and structuring the sale of your business. Prepare the marketing strategy, using professional resources. Determine the right buyer for your particular business. Educate buyers in the business-buying process. Keep you informed about market reaction. Present offers and point out strengths and weaknesses. When...
Adding Value to Your Business
If you are considering selling your business, remember that there are positive factors that influence value and those that detract from it. Looking at your business from a buyer's perspective is important since a prudent buyer will be adding and subtracting these various factors when arriving at an asking price. It is perhaps more important to recognize when the buyer arrives at a price at which he or she will leave the negotiations. Buyers naturally try to buy the business at the lowest possibl...
If you are considering selling your business, remember that there are positive factors that influence value and those that detract from it. Looking at your business from a buyer's perspective is important since a prudent buyer will be adding and subtracting these various factors when arriving at an asking price. It is perhaps more important to recognize when the buyer arrives at a price at which he or she will leave the negotiations. Buyers naturally try to buy the business at the lowest possibl...
A Seller's Checklist of Dos and Don'ts
Do have all of your business documentation ready. Everything starts with it. Don't underestimate the value of your business. Owners of privately held businesses usually minimize profits to lower taxes. The financial statements may not reflect the real value of the business. Don't overprice your business. The right buyer who is willing to pay the right price may not even want to consider your business because the price is way out of line. Do offer as favorable terms as ...
Do have all of your business documentation ready. Everything starts with it. Don't underestimate the value of your business. Owners of privately held businesses usually minimize profits to lower taxes. The financial statements may not reflect the real value of the business. Don't overprice your business. The right buyer who is willing to pay the right price may not even want to consider your business because the price is way out of line. Do offer as favorable terms as ...
A Seller's Major Concerns
For many owners, selling their business is a new experience, and there is always the fear of the unknown. Selling a business is a not only a major economic decision, but it can also be an emotional one. After all, many business owners have spent many years, and a lot of hard work building the business. When the decision to sell is made, there will inevitably be accompanying concerns. However, when faced head-on, these concerns can usually be addressed and resolved. Here are some of the major con...
For many owners, selling their business is a new experience, and there is always the fear of the unknown. Selling a business is a not only a major economic decision, but it can also be an emotional one. After all, many business owners have spent many years, and a lot of hard work building the business. When the decision to sell is made, there will inevitably be accompanying concerns. However, when faced head-on, these concerns can usually be addressed and resolved. Here are some of the major con...
Price and Value: Any Difference?
The question most often asked by those considering placing their businesses for sale is: “What is my business worth?” The question that should be asked is: “How much can I get for my business?” Worth and value are words that in many cases are interchangeable. Leading business appraiser Shannon Pratt, in his book Business Valuation Body of Knowledge, states that “Price is the face value at which a specific transaction occurred. It may have been arrived at arbitrarily...
The question most often asked by those considering placing their businesses for sale is: “What is my business worth?” The question that should be asked is: “How much can I get for my business?” Worth and value are words that in many cases are interchangeable. Leading business appraiser Shannon Pratt, in his book Business Valuation Body of Knowledge, states that “Price is the face value at which a specific transaction occurred. It may have been arrived at arbitrarily...
Increasing the Value of Your Business
Considering selling your business? Just want to increase the value of your business? Here are some areas to look at that can fairly quickly increase profits, which are, after all, a main building block in creating value. • PRICING: Are the prices of the products or services set too low? Owners too often continue with the same prices year after year without revisiting their pricing structure. • CUSTOMER SERVICE: Despite all of ...
Considering selling your business? Just want to increase the value of your business? Here are some areas to look at that can fairly quickly increase profits, which are, after all, a main building block in creating value. • PRICING: Are the prices of the products or services set too low? Owners too often continue with the same prices year after year without revisiting their pricing structure. • CUSTOMER SERVICE: Despite all of ...
Selling Price Defined
When the time comes to sell your business, what makes up the selling price. What is it that you are selling and the buyer is buying? It is important that the selling price be defined in such a way to avoid any confusion. Below you will find some sample wording used by business intermediaries to define the selling price. Keep in mind that this is sample wording only and is presented here merely for informational purposes. The term “selling price” shall include (a) the...
When the time comes to sell your business, what makes up the selling price. What is it that you are selling and the buyer is buying? It is important that the selling price be defined in such a way to avoid any confusion. Below you will find some sample wording used by business intermediaries to define the selling price. Keep in mind that this is sample wording only and is presented here merely for informational purposes. The term “selling price” shall include (a) the...
You Want How Much for Your Business?
This is often a prospective buyer’s first response when given the price of a seller’s business. This is especially true today when many excellent and profitable businesses have few hard or physical assets. For years, buyers, and even business appraisers, have called the difference between the actual physical assets and the asking price as “blue sky.” Goodwill has often been a prime force behind the blue sky concept, and it is one of the reasons a potential buyer might fee...
This is often a prospective buyer’s first response when given the price of a seller’s business. This is especially true today when many excellent and profitable businesses have few hard or physical assets. For years, buyers, and even business appraisers, have called the difference between the actual physical assets and the asking price as “blue sky.” Goodwill has often been a prime force behind the blue sky concept, and it is one of the reasons a potential buyer might fee...
Is Your Business Saleable?
Many business owners probably have asked themselves this question. There are many unique and different types of business. Some fill very small niches while others have carved out a unique product or service while still others require a unique or very specialized talent, knowledge or experience. An owner of a “unique” or at least unusual business may feel that there is no one out there who would buy it. Almost all businesses are saleable, but the big question is: Is the selle...
Many business owners probably have asked themselves this question. There are many unique and different types of business. Some fill very small niches while others have carved out a unique product or service while still others require a unique or very specialized talent, knowledge or experience. An owner of a “unique” or at least unusual business may feel that there is no one out there who would buy it. Almost all businesses are saleable, but the big question is: Is the selle...
Price or Terms: The Structure of the Deal
An old saying in negotiating the sale of a business goes like this: The buyer says to the seller, “You name the price, and I get to name the terms.” Another saying used to explain the actual value of the term full price: “If we could find you a business that nets you $250,000 a year after debt service, and you could buy it for $100 down, would you really care what the full price was?” It seems that everyone is concerned only about full price. And yet, f...
An old saying in negotiating the sale of a business goes like this: The buyer says to the seller, “You name the price, and I get to name the terms.” Another saying used to explain the actual value of the term full price: “If we could find you a business that nets you $250,000 a year after debt service, and you could buy it for $100 down, would you really care what the full price was?” It seems that everyone is concerned only about full price. And yet, f...
Personal Goodwill: Who Owns It?
Personal Goodwill has always been a fascinating subject, impacting the sale of many small to medium-sized businesses – and possibly even some larger companies. How is personal goodwill developed? An individual starts a business and during the process builds one or more of the following: • A positive personal reputation• A personal relationship with many of the largest customers and/or suppliers• Company pro...
Personal Goodwill has always been a fascinating subject, impacting the sale of many small to medium-sized businesses – and possibly even some larger companies. How is personal goodwill developed? An individual starts a business and during the process builds one or more of the following: • A positive personal reputation• A personal relationship with many of the largest customers and/or suppliers• Company pro...
LISITEN ASSOCIATES BROKERS A GROUP OF HAAGEN-DAZS LOCATIONS
You Scream, I Scream...For a New Career In business school, owning my own business really was not on my radar. I wasn't against it, but some people in B-school are totally focused on the idea: "I will own my own business at some point," they say. That wasn't me. In the summer between business-school years, I met Minoo Taheri, and later we ended up in the same training class of the private banking division at JP Morgan. Within the first year, we started joking about owning a b...
You Scream, I Scream...For a New Career In business school, owning my own business really was not on my radar. I wasn't against it, but some people in B-school are totally focused on the idea: "I will own my own business at some point," they say. That wasn't me. In the summer between business-school years, I met Minoo Taheri, and later we ended up in the same training class of the private banking division at JP Morgan. Within the first year, we started joking about owning a b...
VALUING A BUSINESS
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