Certified Business Brokers (CBB)'s Articles

Houston -- #3 Business-Friendly City in the Nation

Business is thriving in Houston........and No Wonder! Houston is the fourth-largest city in the United States, located in a culturally diverse metropolitan region of 4.8 million residents – and growing at more than twice the national pace. It has a low cost of living, a well trained and educated workforce, has one of the largest ports in the nation for the expansion into the international marketplace, has no state income tax, and is one of the top business-friendly states in the nation. Houston is booming and is ranked #3 best Metro Area for doing business by Texas has the #6 best Business Tax Climate in the nation according to the Tax Foundation's 2007 State Business Tax Climate Index. The Tax Foundation, established in 1937 in Washington, D.C., provides unbiased tax information and presents facts and figures to educate the public about America's tax burdens and its impact on our economy. As reported by the Texas Workforce Commission (3/8/07), Houston's job growth rate was double t ...

The Landlord and Lease Contingency in Selling a Business

Clear A New Lease With The Landlord Before You Sell Your Business.

A lease is a contract that represents the right to operate a business from rented premises. It is a legally binding contract between the landlord and the tenant. It sets out the terms, conditions and rights as well as the obligations of both parties in relation to the occupancy.

The Buyer Remorse Stage of Buying a Business

Getting Cold Feet? Closing the deal can be the most challenging part of buying or selling an operating business. Valuations, investigations, and negotiations are complete and now it's a matter of getting everything into writing in a form that satisfies everyone so that the transfer of ownership of the business can take place. However, you can definitely count on someone getting cold feet just before the closing. Be prepared for this! Anticipate it happening and then work through it logically, reasonably and unemotionally. Many Buyers, particularly first-time Buyers, experience a pre-closing nervousness known as “Buyer’s Remorse.” It generally occurs during the Due Diligence phase. During this period the Buyer may begin to have second thoughts about the wisdom of buying the business. The train of thought may go something like, “Am I doing the right thing?” “Do I really want to get into this venture?” “Is this the right time?” “What if the curren ...

Buying A Business - The Sequence of Events

6 Steps in the Buying Process Step 1: Self Assessment When you meet with a Business Broker, be prepared to discuss your background, work experience and financial ability to purchase a business. A Business Broker cannot adequately help you find a company that meets your needs without this knowledge. A personal resume and financial statement will also be required by lenders, landlords and others who will be a party to your business acquisition. The following are examples of the questions you may be asked by a Business Broker: Why do you want to buy a business? What are your special skills and educational background? What is your work and/or business ownership experience? What are your hobbies and areas of special interests? Assuming suitable sources of financing are available, what is the maximum amount of your personal funds you can invest as a down payment to purchase a business? If you plan on including an equity partner/investor, how much do you expect them t ...

Generational Small Business Transfer

Center for Rural Entrepreneurship BUSINESS TRANSFER-A Development Strategy for Rural Communities-By: Craig A. Schroeder, Senior AssociateSustaining established family-owned businesses into the next generation is an important issue for rural community leaders. Many small rural businesses are family-owned, but statistics show that few survive beyond retirement of the current owner. According to the U.S. Small Business Administration, only 30% of all family businesses succeed to the second generation. And of these, only 15% survive into the third generation. These facts combined with the realization that many new businesses fail in the first five years demonstrates that losing established small businesses can severely impact economic sustainability.Many small town leaders are particularly concerned about retaining businesses considered essential to the community such as a grocery store, ph ...

Buying or Selling a Business -- Closing the Deal Checklist

A Simplified Checklist When Selling A Business & Closing A Deal - Adjust purchase price This would take care of prorated items such as rent, utilities and inventory up to the time of closing. - Review documents required to be provided by the seller This would be a corporate resolution approving the sale, evidence that a corporation is in good standing, any tax releases that may be been promised by the seller. Check with your local department of corporations or secretary of state. - Sign promissory Note In some cases the seller will financing part of the sale price, so have an attorney review any Note documentation. - Security Agreements These documents may be necessary if you are going to finance your purchase. A Security Agreement lists the assets that will be used for security as a promise for payment of the loan. - UCC Financing Statements These documents are recorded with the Secretary of State in the State in which you have purchased your business. Again, these documents are nece ...

Selling a Business: Suiting Up for the Spotlight

Preparation for putting a business on the market is like rehearsing for a stage the main the spotlight. When entering the center stage spotlight, both a business owner and a star performer must know their roles, the script, the story, as well as the other major players and the roles they will play. The goal of both are to achieve a certain response for their portrayal of the story from their own specific audience. Whether it be rave reviews for the actor or offers to buy the business for the owner, an experienced director is key to making the presentation a success. Putting metaphoric pros aside, directing and orchestrating the behind-the-scenes activity for the successful sale of a company, is a business brokerage firm. The Business Owner's Role in a Sale Before dressing up the company for its debut, be ready to share its best features, as well as its blemishes. All will become visible under the due diligence spotlight. As in the classic tale, "The Emperor's Ne ...

When Buying a Business -- Understand the Seller's Position

In the purchase of a business, the end result of negotiation is not winning an argument, but reaching a mutually beneficial agreement between buyer and seller.

The most common mistake people make in negotiation is thinking that their goal is to win at the expense of the other party. Adopting this win-lose approach almost always results in a failed, or less than optimal, negotiation. A win-win approach, where each party gets its needs met, is the most successful way to negotiate.

To better accomplish this end, the prudent business Buyer should understand the Seller’s position, establish a harmonious relationship with the Seller, and pave the way for negotiations which will lead to the successful purchase of a business.

Selling a Business in Houston -- Surfs Up!

Proper planning for the sale of your business is key to an enjoyable sail into your next adventure in life.

Surfs up! A wave of business buyers has flooded the Houston marketplace looking to take part in its promising future economic growth. Houston is booming and is ranked #3 best Metro Area for business.

Texas is home to almost one million privately-held small businesses with revenues under $100 million and less than 500 employees. As the largest city in Texas, Houston is home to one quarter of those small businesses (Source: InfoUSA) and it is estimated that less than 50 percent have had a change in ownership in the last 15 years. For many of these business owners, developing and executing a timely exit strategy is key to achieving the rewarding outcome they expect.

As 80 million baby boomers around the country move toward retirement, more than 7 million business owners are expected to exit their businesses over the next 10 to 15 years.

The Closing Table

THE SUCCESSFUL CLOSINGNow that all of the contingencies have been satisfied and removed from the Standard EarnestMoney Contract, it’s time to draft the final closing documents. These documents may beprepared by the Seller’s attorney, Buyer’s attorney or a third party attorney employed by thebusiness broker.The basic documents associated with the transfer of a small business generally include:The Bill of SaleThe Purchase/Sales AgreementThe Promissory NoteThe Security AgreementsThe UCC Financing StatementsThe Bulk Seals AffidavitsThe Board of Director’s (authorization to sell) ResolutionReal Estate Documentation (if appropriate)Lease AgreementsOther Side Bar AgreementsClosing Statements (prepared by broker and/or title company)Based on the agreement between the parties, as stated in the Standard Earnest Money Contract,the above closing documents are prepared and furnished to all parties (and their attorneys)several days prior to closing.Any other minor changes are made and agreed to prior to closing. There shou ...

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