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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.

How to Buy a Business Using Retirement Funds, and NOT Pay a Penalty Tax

  You can use funds from qualified retirement accounts such as 401(k), 403(b), pension, profit sharing, and IRA rollovers to start or buy a business with no taxes, no penalties, no loan repayment and no hassle. Will I pay tax or penalties if I use retirement funds to buy a business? Not if you use qualified money correctly. Qualified money is money with a tax beneficial wrapper around it because it was accumulated in a tax-benefited plan. Many people have been building retirement accounts with much of their money in qualified retirement vehicles like an IRA or 401k. If these accounts are improperly accessed (“unwrapped"), they stand to be hit with up to a 50% tax penalty in state and federal income taxes, depending on tax bracket and state of residence. So, the question to be answered is, "How can a person access their retirement funds to purchase a business without paying a penalty or income tax?" How to Use Retirement Funds to Buy a Business Without Penalty There are three p ...

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The State of the Business-For-Sale Market 2020

Is 2020 a Good Year to Sell a Business?  Before deciding whether or not buy or sell a business in 2020, you should be aware that political unease is driving down business valuations. While there is no recession yet, the prospect of one is still on the horizon, and 53 percent of business brokers surveyed by the Market Pulse Report of Pepperdine Business School says it’s already driving down valuations. This national survey was completed by business brokers and M&A advisors with the intent of providing a valuable resource to business owners and their advisors.

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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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Our Top 6 Posts on Buying a Business

Buying a business is a nuanced endeavor. There are a lot of details that can be easily overlooked if you aren’t doing due diligence. From analyzing the competitive marketplace to examining the top buyer mistakes, we’ve compiled a list of our six most popular blog posts to provide the wealth of information you need as you consider purchasing a business:

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Buying a Business? 16 Common Business Buyer Mistakes

The following is a discussion of 16 common mistakes made by first-time or novice Buyers in their search for a business to purchase. Use this checklist to help you from making the same wrong moves. (1) Inadequate Assessment of Capital Resources When a business broker attempts to QUALIFY A NEW BUYER in terms of his financial resources, the primary Buyer capabilities of interest are: cash on hand available for a down payment additional funds available for working capital credit or borrowing capacity From experience, brokers recognizes the necessity of having a reserve of funds for working capital including, operating costs, transition costs, changes desired by the Buyer after purchase, additional advertising and a safety margin. The BUYER'S ASSESSMENT of his financial resources should be made prior to searching for a business to buy in order to focus efforts on acquisition candidates that fit financial capabilities. (2) Unrealistic Expectations Owning your own business ...

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Will It Sell?

“Not every business will sell and a significant number never make it to market because professional, ethical advisors won't take on an engagement with little-to-no chance of success. The Q1 2019 Market Pulse Survey reveals that, on average, advisors decline about 70% of the business opportunities that come their way because the business is considered "non-saleable." 

There are any number of reasons we might decline to take a business to market,” said Lisa Riley, principal of LINK Business-Phoenix. “Unrealistic expectations, meaning sellers place too high a value on their business, is typically the number one deal killer. Declining sales trends, dated business practices, over-reliance on the owner, and significant customer concentration issues can all impact your ability to sell.” 

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Why You Should Work With A Certified Business Intermediary (CBI)

Selling your business will likely be one of the biggest decisions of your business life.

No doubt you have a good idea of what your business is worth. But there are many factors to consider when putting your company on the market. Is now the best time to sell? Should I look for a cash deal or should I consider certain terms? What about confidentiality?

Working with a professional business intermediary will provide the expertise to help you make those decisions. Consider teaming with a Certified Business Intermediary (CBI), a professional who fully understands what it takes to successfully sell a business. A CBI can bring significant value to the complex process and help you complete a sale that will include the best possible value and some peace of mind.

A Certified Business Intermediary, or CBI, is the designation awarded by the International Business Brokers Association (IBBA) to members that have met certain educational requirements and ethical standards. IBBA is the largest international, non-profit association operating exclusively for the benefit of people and firms engaged in the various aspects of business brokerage and mergers and acquisitions.

A CBI is an experienced, proven professional whose claim of competence is supported and documented. With the skills necessary to handle the marketing, negotiations and complex details involved, a CBI can successfully complete the purchase or sale of your business.

To earn the CBI designation, an IBBA intermediary must meet the following requirements:

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Why Are Business Owners Selling Their Companies?

Recent studies indicate that retirement continues to lead as the number one reason for selling a company. Because a business often represents up to 70% percent of the owner’s overall wealth, it is critical that they take a proactive approach when preparing for their exit. Owners who succeed in harvesting years of hard work will not only financially benefit them on a personal level, but they will have more wealth to pass on to their families.


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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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Training New Owners After Selling a Business

When you sell your business, it's common practice to provide training for the new owner.  But what does new owner training involve? What are your responsibilities? And how long will you will be "on the hook" after the deal has closed?

The whole idea of training the new owner may seem alien to the Seller.  After all, why would someone purchase a business they aren't capable of operating?  But in reality, people with relevant backgrounds, can and do, with limited training and experience regularly purchase small businesses. They probably have experience in either the industry or business management aspects, but maybe not both. Seller training gives them a crash course in their area of weakness and prepares them for the real world challenges of running the company on their own.

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