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From the monthly archives: April 2010

We are pleased to present below all posts archived in 'April 2010'. If you still can't find what you are looking for, try using the search box.

When Should You Tell Your Employees That You Are Selling the Business?

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 even impossible — to keep employees in the dark.

The most common approach is to keep information about the sale limited to as few people as possible. “The general public typically knows nothing about the small-business-for-sale marketplace because it happens below the radar,” said Rose Stabler, managing partner of Certified Business Brokers in Houston. The primary reason for strict confidentiality is to prevent customers, vendors and employees from assuming that there is something wrong with the business and putting a successful sale at risk.

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Recasting Financial Statements: A Crucial Step In Preparing Your Business For Sale

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 is to use all available accepted accounting methods to minimize taxable net income. This is effective for minimizing taxes, but may paint an incomplete picture for business valuation purposes….and for showing the company’s true profitability to a potential buyer. The goal when presenting financial information to a potential buyer is to maximize net income by clearly outlining the owner benefits, net income, and cash flow of the business.  Since bottom-line earnings is the primary factor that influences business value, a proper presentation of the financials is essential. Prospective buyers must be able to appreciate the full benefit of owning the business and be able to understand its actual income-generating ability. By recasting, or adjusting, the financial statements, the actual financial performance of the business can be demonstrated.

 

 

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Texas Comptroller's Economic Outlook

Updated April 10, 2010 The Texas economy, the world’s 12th-largest, continues to fare better than those of many other states. But Texas felt the effects of the worldwide recession during 2009. According to the National Bureau of Economic Research, the U.S. economy peaked in December 2007 and entered recession. The Texas economy continued to grow through most of 2008, with employment peaking in August that year, then Texas joined the nation in losing jobs. During 2009, Texas’ gross state product (GSP) declined more slowly than the U.S. economy (-1.7 percent versus -2.5 percent.) Despite the state’s economy contracting in 2009, Texas’ relative economic advantage should continue as the state and U.S. economies turn around and expand again in 2010. Although job growth will continue to lag the renewed expansion of economic production, the Comptroller’s office estimates that the Texas’ GSP will grow by 2.6 percent during calendar 2010. The U.S. economy should grow at a s ...

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Tip #16 - What About That Big Customer

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 from the possible loss of one or more of those customers. Business owners have to find a way to diversify their customer base before they ever decide to sell their business.

A Strong Online Presence Adds Value When Selling a Business

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 about your business is the Internet. What will the potential buyer find? Is your website getting top rankings in search engine results? Are you actively using Internet marketing to keep your clients and customers engaged? Dominating the major search engines for your profession or industry is an important asset when it comes time to sell the business. It takes time, perseverance, and dollars to get there and is viewed favorably by prospective acquirers of the business. Keeping in tune with modern technology is key to staying relevant and competitive. If today's buyers, and your customers for that matter, cannot find you on the web, your business is loosing out. Lack of an I ...

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