As markets continue to stabilize, 45% of CEOs interviewed for Pricewaterhouse-Coopers’ Private Company Trendsetter Barometer survey are optimistic about the US economy over the next 12 months (up two points from the previous quarter), and 47% who market abroad are optimistic about the world economy. Additionally, an increasing number plan to raise operational spending over […]
Extension of SBA Recovery Lending Programs Will Support $1.8 Billion in Small Business Lending Agency plans to restart Recovery loan approvals on March 10 WASHINGTON – President Barack Obama signed legislation Tuesday extending until March 28 the U.S. Small Business Administration’s ability to provide small business loans that are enhanced with special provisions of the […]
Reporting a lower inventory to their accountant is something many business owners have been doing for a long time. And many accountants just accept the number. In addition to the obvious concerns, when it comes to selling the business, big problems can arise. How will the inventory be valued in the Purchase Allocations? And who […]
The closing is the formal transfer of a business. It usually also represents the successful culmination of many months of hard work, extensive negotiations, lots of give and take, and ultimately a satisfactory meeting of the minds. The document governing the closing is the Purchase and Sale Agreement. It generally covers the following: A description of […]
“Whatever the reason, there should be something other than dollars that motivates you to explore a sale. After all, if it weren’t more valuable to own the business than to sell it, no one would ever buy it.” Mike Sharp, M&A Today, November 2002. The owner of a successful company is considering selling, thinking now may […]
One of the very first questions that business owners really want to know is: How Much Is My Business Worth? A fair determination of a firm’s market value is essential to insure proper compensation for years of hard work and personal investment. The following are some key factors that add value to your company and […]
“My Business could be a Gold Mine for a New Owner!” The statement, “With a little sales and marketing, a new owner could make a fortune with my business,” has been heard over and over by prospective buyers. The question of course is, “Mr. Business Owner, why haven’t you made that effort?” Buyers are not […]
More small businesses in Houston were sold in 2009 than in any other city in the U.S. Why? Because buyers are positioning themselves for the future. We have been bragging about Houston’s economy and the engine behind it for a long time. Pick your industry, we’ve touted it. Houston Business Journal last week reported, “Houston-area […]
The 2010 new year brings with it the time when business owners review their strategic plan and business goals. Many of the owners we talk to are wondering if this is the year to consider selling the business. In Texas, there are five specific reasons why it would make sense to sell in 2010. There […]
On Thursday December 10th, Sens. Landrieu and Snowe introduced S. 2869, the Small Business Job Creation and Access to Capital Act. This new bill contains a series of measures that were separately introduced by Sens. Landrieu and Snowe earlier this year. The Senate Small Business Committee will mark up S. 2869 Thursday, December 17th. Highlights […]
1. Know why you want to sell your business. Having a solid reason and a committed resolve to a sale is essential in achieving a successful transaction. In addition, one of the first questions buyers ask is, “Why is the owner selling?” They want to know that it is for a good reason and not […]
The following are factors that can have a negative impact on the value of a business and some are issues that can rear their ugly head during the due diligence investigative period. Keep in mind that this list is a compilation of potential problem areas and do not apply to all types of businesses. […]
There’s always been lots of discussion about what, exactly, defines a lifestyle business. You can ask 10 people and you’ll have 10 different answers. But is it an antiquated term that has no bearing in the world today? There are many small business owners who are living proof that you can work much less than […]
Due Diligence is when the buyer reviews all aspects of the company to uncover any warts, wrinkles, and….skeletons in the closet. No bones about it, this step is necessary in evaluating what risk is involved for the buyer in making the acquisition. Skeletons found in due diligence, however, should not normally break a deal but […]
It’s not just about the price tag. The terms and structure are what makes a deal. An old saying in negotiating the sale of a business goes like this: The buyer says to the seller, “You name the price, and I get to name the terms.” Another saying used to explain the actual value […]
So you want to be your own boss. Consider the options – work as an independent contractor…start your own business…buy an existing company. Certainly there are pros and cons to each option. If you do a careful analysis, you’ll learn what many seasoned entrepreneurs have discovered…the risk-to-reward ratio is tipped in your favor when you […]
We’ve been touting the Houston Economy and marketplace for years. But don’t just take our word for it. You’ll enjoy watching this YouTube production that struck a chord with people across the country and has become an online hit. See why everyone is talking about Houston! Watch the YouTube Video
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. It bridges a valuation gap between what the seller wants out of the business and what […]
Your customer base is the foundation of your company. Knowing who they are is crucial to your business, which is why potential buyers will want to know as much as possible about your customers. Therefore, if your are thinking about selling your business, be ready to provide a basic profile of your customer base. However, […]
When selling your business, it is important to know that your customer base has a major impact on its value in the marketplace. A diverse customer base means your revenue comes from a number of clients or customers, not just two or three, and preferably comes from multiple sources other than your primary service. Simply […]
We get email alerts every other week or so from the SBA saying that the 7A guaranteed loan program for buying a business only requires a proven history of stable cash flow that can support the debt payments, which means that goodwill (an intangible asset) can be used as collateral. These SBA email updates also […]
Potential buyers who read about a business for sale are interested in knowing how it can be grown once they bought it. The growth potential of a business plays a major role in its value. While buyers will purchase a business at a price predicated on current and historical cash flows, their main motivation is […]
Lost Interest or Drive in Your Business? Consider Selling Now. Many business owners have operated their companies for too long and have lost their interest or drive. As a result, the business may flounder or stop growing. Not only will revenues and profits suffer, the value of the company will as well. And it only […]
Many buyers looking for acquisitions today in the small business marketplace struggle with the decision whether to buy or lease the real estate for their business operations. With real estate values having been softened by the economy, now may be the best time to evaluate the pros and cons of small business real estate ownership. […]
The lease terms of the business space can be a major consideration for a buyer. For example, a distribution company with a long-term lease on a good location can be attractive. But a long-term lease on a business needing more space to grow could be a detriment. Or, there can be concerns about an expiring […]
Recurring revenue is the holy grail for business owners looking to have a valuable and sellable company. A customer base with a subset of recurring revenue that is contractual and repeating in nature increases the probability that the business will have stable, predictable revenues and cash flow into the future. From a buyer’s perspective, this […]
The lack of financial integrity is one of the most common hurdles encountered during the process of selling a small business. What is being bought or sold is primarily a future stream of income. Not the assets or property of the business, but the income these assets will generate in the future. Since future income […]
Burying excessive personal expenses in the business financials can lower business value! The most popular method of valuing a business uses a multiple of earnings over a period of years. Business owners should be aware of that while attempting to reduce the bottom line with personal expenses to minimize taxes. Though there are a number […]
When you have closed the deal and are now the new owner of the business, there are a few things to take care within the first month to put your new enterprise on the right path. Nothing drastic Put Your Staff at Ease Have a group meeting with the employees. It is likely that they […]
No ten-point list can ever hope to supply you with every imaginable consideration when it comes to buying a business. The following factors – listed in no particular order – should be a good jumping-off point, but feel free to expand on them and dig even deeper to decide that the business you plan to […]
If a company is on a downward trend, many business owners think they can bring their companies back from a valuation that doesn’t meet their expectations. But it takes energy that many business owners no longer have. Very few companies can make that leap back to new heights without a strong drive, vision, and leadership […]
How can you nail that inevitable meeting with your employees when the time comes? The issue of what you tell your employees when you’re trying to sell your business is a tricky one that requires careful thought. Maintaining confidentiality surrounding the sale typically takes precedence over other concerns, yet it may be impractical — or […]
What does it mean when we say that we need to “Recast” your financial statements as one of the initial steps in preparing to sell your business? Financial statements and tax returns for most privately-held businesses are prepared for tax purposes, not for business sale purposes. The objective of business owners and their financial advisors […]
Diversify Your Customer Base Before You Sell Your Business Many companies have a few large customers that dominate their overall sales. After all, nobody wants to turn down business! But when it comes time to sell the company, this becomes a huge problem. Most buyers won’t look at a business whose revenues could drop dramatically […]