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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.

Selling Your Business? Don't Let Anyone Know!

Family and private businesses are sold in an environment that is unlike the selling environment of anything else you can imagine! Sound surprising? After you review the following ten reasons that make selling a business different, perhaps you will agree. (1) Confidentiality Making the decision to sell one's business is a difficult enough task in itself. However, once the decision is made how do you sell it without anyone knowing it's for sale? Adverse things can and do occur when people know, or think they know, a business is for sale. Confidentiality must be maintained. Here's why. a) Employees get nervous and may leave for more stable employment. They believe that the "new broom will sweep clean." That may be true in public company acquisitions but is generally not true in private company sales. Your staff represents a significant portion of your company's value. Should your key employees leave, most buyers of private companies will not buy. b) Competitors may take advantage by using the ...

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The Seller Remorse Stage of Selling 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. "Seller’s Remorse" doesn't happen at any specific stage of the process. It can occur at any time and the usual symptomatic thoughts start going through the seller's mind. “Do I really want to sell my business?” “At this price, am I just giving my business away?” “What if the new owner mistreats my long-time customers and loyal employees?” "What if I’m bored as soon as I retire?” “Who is this new potential owner? "Will he maint ...

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The 1031 Exchange -- Sell Business Property Now, Pay Tax Later

A growing number of investors are selling properties and paying taxes later through a deal structure called a 1031 exchange. Section 1031 of the U.S. Tax Code permits a seller of commercial properties to defer the capital gains obligation if it identifies a replacement property within 45 days of closing the sale. The seller must then close on its new purchase within 180 days of the first closing. In a typical transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date. Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a business owner who has outgrown a company-owned building, for example, can defer the tax liability as long as the proceeds are used to buy another building of equal or greater value within a spe ...

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Buying a Business - Questions to Ask the Seller

The following serves as an excellent checklist for a Buyer in compiling questions to ask the Seller about his business during the Due Diligence period. Potential Problem Areas to be Addressed Changes in law, New competition, Change in technology Foreign imports, Drop in demand, Equipment obsolescence Facility obsolescence, Market shifts, Down trends Employee theft, Interest rate flux, Labor problems Tax liens, Increased repair costs, Low margins Capital improvements needed, Single supplier position, Single customer position Bad receivables, Low backlog, Shipping problems Political instability, Restricted credit, Lavish facilities Closed business, Customer problems, Supplier problems Regulatory violations, Utility rate changes, Insurance cost changes Obsolete inventory, Slow moving inventory, Obsolete advertising Key talent leaving, Lease about to expire, Employee promised equity High lease escalation, Product liability claims, Patent ex ...

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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 Forbes.com. 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 ...

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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.


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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 ...

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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 ...

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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 ...

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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.

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