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From the category archives: Certified Business Brokers News

Mergers & acquisitions are one of our favorite business broker topics. These deals can be structured in very creative ways, from financing to ownership. Learn how exciting M&As can be!

Earnouts In The Time of COVID-19 is a Win-Win

An earnout is a type of payment agreement which is sometimes used in a business acquisition. An earnout is a buyer's commitment to pay the seller a certain amount of the money tied to future performance after a sale. Under an earnout agreement, the seller receives part of the purchase price up front, and additional funds over time. The terms of the earnout are written into the sales contract.

Earnouts will probably play a bigger part of deal structure in the months ahead.  If business recovers, buyers and sellers both come out winners.

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Selling a Business is about Process and Knowledge

You are the heart of American commerce. You are a small business owner. You've built your business up over time.  We recognize and applaud your achievements.  We are much like you in that nearly all of us have walked in your shoes by owning and running a company ourselves. Now you are considering letting go.   You are considering your options for selling the business.  You understand the importance of confidentiality and wonder how you can market your business without disclosing sensitive information prematurely, or disturbing the status quo.

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Run Your Private Company Like It's Public and Get Top Dollar When You Sell Your Business

Small businesses often operate as if their sole purpose is to fund the owner’s lifestyle, but the most valuable companies are run with financial rigor. You may be years from wanting to sell your business, but starting to formalize the operations now will help you build the future value of your business. Then, when it comes time to approach the market and put your business up for sale, you’ll fetch more for what you’ve built. Learn how to get top dollar when selling your business.

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Your Guide To A Successful Business Exit Plan

Perhaps you’re planning to retire, or perhaps you’ve decided to pursue a different type of business venture. You realize this is the perfect time to sell your business, and you want to ensure you’ll receive a profit that reflects the time and dedication you’ve put into your business. A strategic and perfectly executed business exit plan is the cornerstone of intelligent and responsible entrepreneurship. 

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National Survey: M&A Advisors and Brokers Say 2018 Is The Best Year to Sell a Business in Last 5 Years

Optimism in the M&A market is at an all-time high according to findings from the Q2 2018 Market Pulse Report published by the International Business Brokers Association (IBBA)M&A Source and the Pepperdine Private Capital Market Project. 21% of business advisors surveyed say 2018 is the best year they’ve ever seen for business owners to sell their businesses. Another 37% say it’s the best time in five years, and 17% say it’s the best in the last 10 years.

Consistent with general market optimism advisors believe seller advantage is growing, with year-over- year seller-market sentiment increases in all market sectors. In the Main Street market, for businesses valued at less than $500,000, seller market sentiment is at the highest it’s been since the survey started in 2013.

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Avoid These Common Sell-Side M&A Mistakes

Selling a company is no small feat. It can be time-consuming and stressful. It demands meticulous planning, competent advice, and a keen understanding of the dynamics of negotiation and deal-making. CEOs and companies inexperienced in the M&A process commonly make mistakes that can undermine a deal, resulting in a less favorable price—or even kill the deal outright.   These are the most common mistakes. Avoid them at all costs if you want to get the most out of your deal:  Having unrealistic expectations about the time and effort the deal will demand of you. Deal-making takes time and expertise.  Not creating a competitive bidding process. You must make your business appealing to multiple buyers to drive up the price.  Poorly-crafted or nonexistent NDAs. Confidentiality is money when it comes to deal-making.  An incomplete or nonexistent online data room. Buyers need ready access to key information to review for due diligence. If they can& ...

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Initial Common Questions Buyers Ask Sellers When Looking For A Business To Acquire

When looking for a business to purchase, most prospective buyers have an initial list of qualifying questions they ask an owner of a business they are interested in. In addition to this baseline information, buyers may use the first couple of meetings or calls to get a clearer understanding of the business and to assess its risks and upside aspects.

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Buying a Business - Make Your Acquisition A Good Investment

Future profit potential, and how much you can impact that future, is the most important intel you can have when purchasing a business. Future growth will ultimately be the measurement of the merits of the investment and is key to your achieving a good return.

However, one of the key steps in determining whether or not you should purchase a business is to complete a comprehensive due diligence process to determine the health of the company and to ensure no details have been overlooked. 

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Is Lending for Business Acquisitions Back to Normal?

This is the question I get more than any other and my answer is YES, Absolutely Yes!! My answer may surprise you, and some may even want to argue, but if you have been in the lending or business brokerage industry for more than 6 or 7 years I think you will agree. When I look back to the 1990's and early 2000's when I was asked, "What does it take to get a business acquisition loan?" I would tell them a borrower must be able to CONVINCE the lender of the following: The ability and willingness to pay all of their obligations on time. The specific experience needed to own and run the business. They had enough cash to make a substantial investment into the business. They had some tangible assets to back the loan should things go bad. Today when I am asked "What does it take to get a business acquisition loan?" I tell buyers and brokers exactly what I did 10 and 15 years ago. The trouble with many individuals today is they are sitting around waiting for things to get back ...

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Earnouts - How and Why are They Used in a Business Acquisition?

An earnout is a type of payment agreement which is sometimes used in a business acquisition. Under an earnout agreement, the seller receives part of the purchase price up front, and additional funds over time. The terms of the earnout are written into the sales contract.

An earnout can be used for different reasons:

To tie the acquisition payout to future performance

An earnout, in a business acquisition context, is an arrangement in which the buyer doesn't pay the entire purchase price up front but agrees to pay a certain amount now and more later depending on how well the business performs in the future.

To bridge the pricing gap

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