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
What Is an Earnout? 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 […]
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 […]
What Is Recurring Revenue & Why Is It So Valuable? 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 […]
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 […]
If you plan to buy an existing business, be sure to get a Certificate of No Tax Due. Failing to do so makes you, the purchaser, liable for any past due state taxes or fees, plus any interest and penalties that are owed by the business. CBB will assist a buyer in obtaining this certificate […]
Not all businesses need to have cutting edge technology, but a company can’t fall too far behind. Buyers will be concerned if they must make a large investment in the latest technology to get the company to a competitive level. A business owner should do the research and purchase the necessary technology to keep the […]
When a business for sale is being evaluated by a prospective buyer as a possible candidate for purchase, the quality of the human resources element will be considered. The staff is a major component and the backbone of any successful business operation. Any aspect that reduces risk in the continuity of the business under new […]
Most small business owners are not familiar with the dynamics of selling a business because they have never sold one before. Most people only buy or sell a business once in a lifetime. While there are lots of potential deal breakers, avoiding the following ten mistakes will mitigate the possibility of an aborted transaction. […]
Acquiring a business is a team effort and finding the right business broker (intermediary) is just the start of building your squad. Oftentimes, buyers do not know how to go about tackling the whole process of investigating the business they like or how to evaluate the financial data. This question represents a common real-buyer inquiry: […]
Why is self-assessment important? Not only is the acquisition of a business one of the most important financial decisions you will ever make, but it is also quite often a major lifestyle change. While there is certainly no requirement that your personal interests conform to your business purchase, a thorough and realistic assessment of your […]
Think of the bottom line cash flow of your business as the first introduction to a prospective buyer. If that bottom line is not attractive, buyers will look elsewhere. The right strategy towards achieving a successful sale is to pin your bets on improving cash flow to stand out in the marketplace when it comes time to […]
When selling a business, it is important to know who the buyers are for privately-held businesses and why they buy. Most owners of small and medium-sized businesses do not think about exiting their business nor do they plan for that inevitable day. They enjoy their work and their lifestyle. Many of them do not even […]
The answer is a resounding NO! Confusion and misunderstandings often occur if the soon-to-be new owner takes over or works in the business before closing. In our experience this has never been a winning scenario. There are times when the buyer and seller think it would be a great idea if the buyer began operation […]
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 […]
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 […]
In today’s business climate a strong online presence is vital. Prospective buyers of your business are googling you and your competitors to determine your standing. Today’s buyers of businesses are much more sophisticated than they used to be. One of the very first places a potential buyer will go to be introduced to and learn […]
Article written by Jerry Osteryoung “Only passions, great passions can elevate the soul to great things.” ~Denis Diderot I give many speeches every year, and in each one I always include time for questions. By far, the most frequently asked question is what attributes are needed to be successful as an entrepreneur. After observing more […]
When selling a business, maintaining proper inventory levels is essential to maximizing value. Don’t let poor inventory management drag down the value of your business. How Do Inventory Levels Impact Business Value? Inventory is an ever-renewing, moving, and perishing thing. The longer it hangs around, the less valuable it gets, and eventually dies as a viable product. […]
The evaporation of small business capital markets and other economic factors have made creative financing the norm for today’s business buyer. During these turbulent times there are a number of creative financing options that you can consider. Seller Financing – Increasingly, buyers and lenders are looking to the seller for financing as they try to put […]
“A major competitor made an unsolicited offer to acquire my small business. The amount seems significant, what should my next step be?” While the offer may sound great, the real question is whether or not it is an offer that truly reflects the value of the business you have built. So, in order to make […]