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 […]
Do cities have a future? Pessimists point to industrial-era holdovers like Detroit and Cleveland. Urban boosters point to dense, expensive cities like New York, Boston and San Francisco. Yet if you want to see successful 21st-century urbanism, hop on down to Houston and the Lone Star State. You won’t be alone: Last year Houston added […]
Texas ranked as the No. 1 state for business in a recent survey (May 24, 2010) of CEOs published in “Chief Executive” magazine. Closely following in the poll of 651 CEOs were North Carolina, Tennessee, Virginia, and Nevada. Rounding out the top 10 were Florida, Georgia, Colorado, Utah, and South Carolina. As for the bottom […]
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 Small Business and Entrepreneurship Council (SBEC) has ranked Texas the second-best state in America for small-business development for 2010. The council released its Business Tax Index: Best to Worst State Tax Systems for Entrepreneurship and Small Business report. The report analyzes and combines 16 different tax measures into one tax score for all 50 […]
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 […]
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 […]
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. 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. If it’s not turning over fast enough, […]
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 […]
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 than selling anything else, perhaps you will agree. When the decision is made to sell and the sale is […]
This is a common question from business owners who are thinking about selling. While there are many ways to increase business value without incurring costs, the following quote sums it up in a nutshell. It is relevant to any business and will spark the thought process for a DIY project. “Every business has something that […]
How long does it take to sell a business? The average time on the market for around 82% of businesses is four to 12 months. Fewer than 10% of businesses sell more quickly, and a little over 8% are on the market for more than 12 months. Why does it take so long to sell […]
While all transactions are as unique as the parties involved, in most small business sale transactions the seller keeps the cash and outstanding receivables. They pay off the bills and any other outstanding payables and deliver the business free and clear of debt to the buyer. In somewhat larger business sale transactions, there are many reasons why buyers consider […]
How much money down do I need to buy a business? This is one of the most frequent questions we get from those who want to buy a business. Not all ask that question, however, but should. Since most people only buy a business once in their lifetime, they do not know how much money […]
This question was asked by a business owner who is considering the sale of her business. An addback is an expense that is not a normal one for the business and is, therefore, taken out of the equation when performing a valuation and calculating a company’s earning power. The goal when presenting financial information to a potential […]
It has traditionally been a common practice for the sale of a privately-held small business to include some seller financing as part of the deal structure as a key to getting a deal done. In the U.S., about 60% to 90% of business sales involve seller financing when bank financing is not an option. Seller financing can […]
Two of the most common questions business owners ask is, “How much is my business worth,” and “What information is required to do a market valuation of my business.” The answer to the first question is ultimately answered by the market itself. What we do is approximate the range of the most probable selling price a business might achieve […]
Take This Test to See if the Shoe Fits. According to Fortune Magazine, nearly 80% of the 400 richest Americans have earned their wealth through business ownership. This may help to explain the tremendous interest in entrepreneurial pursuits today. Another explanation may lie in the way corporate America works. When corporate America downsizes, a key […]
Some people are just born with it! These are traits that successful business owners commonly share. Above all, however, business owners need to have strategic thinking skills, time management skills, and know the job. No one can embody all these traits if they are part of the human species, but varying degrees of these characteristics […]
The following information explains the tax consequences of buying or selling a business. Be sure to see the Seller/Buyer Comparison Table at the bottom of this article. Key Points You are only taxed if there is a gain on the sale or if income is earned Capital Gains tax rate is almost always lower than […]
The decision to finally sell the business is just the beginning of the sale process. While it is common for business owners to feel emotionally fatigued and ready to move on by the time the business is up for sale, it is important that they stay engaged during the entire sale process and not turn […]
Statistics indicate that only about one out of 15 buyers looking for a business to purchase actually ever buys one (Business Brokerage Press, August 2009). Therefore, it is standard practice for business owners and brokers to separate the real buyers from the rest. These indicators will help you determine in which buyer type you may […]
The boomer generation spans many years creating a unique situation in the business world. Aging boomers are looking toward retirement, while many younger boomers find they’re ready to be their own boss. For those younger boomers, and others looking to be a business owner, buying an existing business is a great option. But be aware […]
Since the biggest part of the purchase price of a profitable small business is goodwill, it is important for a buyer to have knowledge and understanding of just what goodwill is and why there is value in it. Much of the value of a business is not to be found in its hard assets such as […]
Takeaway: Building barriers to entry is critical to increasing business value. Understand how to widen the business moat so that you can keep competitors at bay. Circumstances that give a business an advantage over its competitors, strengthen its strategic position, or can be leveraged for future gain boosts business value. Why? Because it increases the […]