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From the category archives: Certified Business Brokers News

Tips, tricks and long term strategies you should consider when buying a business in a Texas town near you.

It's A Competitive Market For Buying A Business

If you are looking for a profitable, well-run business to acquire, you are not alone.  Right now, there are not enough businesses for sale to meet buyer demand, as reported by a Market Pulse Survey in early 2017 sponsored by the IBBA (International Business Brokers Association) and M&A Source. The survey was conducted with support from the Graziado School of Business at Pepperdine University.

 

Not only are there not enough businesses on the market to satisfy the number of buyers looking for an acquisition, there's much more capital available than there are companies to buy, as indicated in Deloitte's Perspectives Report. 

 

As soon as a solid business goes on the market we see well-prepared ready-and-able buyers competing to put themselves in front of the Seller.  Buyers must be prepared and ready for the competition and be able to move quickly.

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Navigating Today's Business-For-Sale Environment

A record number of small businesses were bought and sold in America in 2016, topping 2015's totals by 8.6 percent and 2014's previous high by 4.6 percent. Will this momentum be sustained? According to Deloitte's year-end report "activity is poised to accelerate, perhaps significantly." Primary factors for the bullish outlook are stock prices at historic levels, interest rates... despite the forecast for an increase...remain near or at historic lows, an improving business environment, more qualified buyers on the market, and much improved financing options.

 

The following data shows a snapshot of 2016 market statistics for the Greater Houston Metro Area. A total of 66 U.S. metro areas were represented in a report by BizBuySell from data provided by Business Brokers. Most businesses are valued based on a multiple of adjusted earnings.

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Should You Become A Business Owner?

While being a business owner may in the end not be for everyone, there is no denying the great rewards that come to business owners. So should you buy a business of your own? Let’s take a moment and outline the diverse benefits of owning a business and help you decide whether or not this path is right for you.

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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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What Drives The Value of a Restaurant?

The valuation of a restaurant is much like any other business valuation. But, there are certain factors unique to the restaurant industry. The following are key elements that impact the valuation of food and beverage businesses.

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What Serious Buyers Look For When Looking For A Business To Purchase

Serious buyers want to carefully look at the financials of a company under consideration and all of the other major aspects of the company. However, there are a few other areas that the serious buyer will investigate that sellers may overlook. The Industry – The buyer will want to take a serious look at the industry itself, the customers, the suppliers, the competition, etc. This investigation will cover the strengths, weaknesses, threats from competition, and opportunities of the potential acquisition. With the growth of the “big box” retailers, much power has shifted from the manufacturer to the retailer. A manufacturer may want to increase prices, but if Wal-Mart says no, it’s a very powerful no. Discretionary Costs – Some sellers will reduce their expenses in discretionary areas such as advertising, public relations, research and development, thus making for a higher bottom line. However, these cuts will hurt the future bottom line, and smart buyers will take notice o ...

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Buying A Business? | Buyer Beware: Do You Really Want to Meet Employees Prior to Closing?

As intermediaries, we always look to protect our clients. When a buyer wants access to employees before closing, the risks to the seller are numerous and obvious (loss of confidentiality, disruption to the business, concerned employees, etc.). However, if these are the only arguments made when representing a seller, the buyer may not see the entire picture and perhaps even feel that some of their concerns are being validated. The key is to express to the buyer why it is not in their own interest to let the cat out of the bag prior to closing.

Now, there may be some exceptions, such as a key employee, manager or member of a bona fide executive management team (rare for a small business). Even in these instances, you will want to carefully consider the timing and nature of bringing others into the fold. Also, please note this advice pertains primarily to main street transactions and some at the low end of the lower middle market.

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Buying Or Selling A Business? -- Is It SBA Financeable?

There is a general misconception in the small-business acquisition marketplace that a person could easily purchase any type of business through the SBA with a low down payment and get a loan for the rest. Most people also believe that SBA loans are a major source of small business financing. But data shows that SBA-guaranteed loans make up a small portion of the value of the overall small business lending market.

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10 Tips - Negotiating a Business Purchase from a Buyer's Point of View

Having a formula and understanding the fundamentals of successful negotiation can help you make the best deal possible and avoid lost opportunities.

Negotiation may seem a daunting task, but when handled in a balanced manner, negotiation can be a positive experience rather than a negative one. The negotiation strategy should be one that results in a winning deal for both parties. It's not about who strong-arms the other. Nor is it a game with a winner and loser. It’s a complex process for sure.

A good deal is never one-sided. Negotiation isn't about capitulation, it's about finding a mutually acceptable solution. If the parties can determine the factors that are most important to each, the price and the terms of the deal can be structured to meet those needs.

The following are some key negotiating tips. While they can't guarantee that you will always get what you want in a negotiation situation, they will certainly enhance your chances for success.

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You Can Purchase a Business Using Retirement Funds

Don't let your retirement dollars idle away! Put your money to work! Invest it in your own business and let your money work for you!

You can use cash from your 401(k) or IRA account to purchase a business without incurring early distribution penalties, with no taxes, no loan repayment, and no hassle.

For example, a Texas resident using $100,000 from a qualified retirement fund can keep the extra 31% that would have been paid in taxes, leaving an additional $31,000 to fund the new business by adopting a transfer trust plan versus withdrawing the funds outright.

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