Featured Articles
Today's Business Buyer: A Profile
Today's independent business marketplace attracts a wide variety of buyers eager for a piece of owne...
read more>Why Do People Go Into Business?
41% joined the family business 36% wanted more control over their future 27% tired...
read more>Articles On Selling A Business
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...
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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...
read more
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...
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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...
read more
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 ...
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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 ...
read more
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...
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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...
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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....
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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....
read more
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,...
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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,...
read more
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...
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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...
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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...
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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...
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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...
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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...
read more
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...
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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...
read more
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...
read more
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...
read more
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...
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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...
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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...
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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...
read more
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...
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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...
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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...
read more
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...
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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...
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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...
read more
