Certified Business Brokers (CBB) Represents Houston Top-Tier Graphic Design Firm, Gateway Design, Inc., in Sale of Business
Selling a Business
Overcoming Declining Revenue Trends When Selling a Business
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 […]
Buying a Business – Are You a Real Buyer?
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 […]
A Business For Sale is More Valuable When the Owner is Replaceable
Most potential buyers would be averse to purchasing a business if the owner’s shoes are too big to fill or if the owner’s hand would be too difficult to unravel from the operation. When preparing to sell or build value in a business, the owner should not be so involved in the business that it would […]
10 Tips – Negotiating a Business Purchase from a Buyer’s Point of View
Having a formula and understanding the fundamentals of successful negotiation can help you make the best deal possible and avoid lost opportunities. Negotiation may seem a daunting task, but when handled in a balanced manner, negotiation can be a positive experience rather than a negative one. The negotiation strategy should be one that results in a winning deal […]
How is Inventory Handled in the Sale of a Small Business?
Inventory (stock held for resale) is a significant part of the tangible assets of most businesses. It is customary to include a normal inventory level in the purchase price of a business for sale that can sustain current revenues being generated by the business. Just as tangible assets like machinery and equipment are included in the purchase […]
Buying an Existing Small Business Beats Starting a New Franchise
A few years ago I was a guest on KSEV Radio AM 700 with host Aubrey Thoede and had the opportunity to discuss a subject that many call-in listeners wanted to learn more about….starting their own franchise. But buying a new franchise is not the best way to go about achieving the “American Dream.” Once […]
Increase the Value of Your Business – Document Your Marketing Plan
An articulated, working marketing plan is a sign of an organized business and provides a roadmap for a new owner to follow. A marketing plan that is tailored to reach a defined target audience instills confidence that growth can be achieved in an effective, predictable manner under new ownership. In other words, by increasing the […]
Selling a Business: The Problem of Overvaluation
Last week I met with a business owner after an introduction by his accountant. He was thinking of selling his profitable waste recycling business, a business he had been running for nearly 30 years. The business had a reliable management team, an enviable customer base and a strong balance sheet. Unfortunately, the owner had a […]
Capital Gains Tax – Its Affect on the Sale of a Business
A decline in the number of small businesses means an increase in unemployment and an uncertain economic outlook for the next generation. Everyone loses when small business fails. When a business is sold, the former owner pays Uncle Sam a capital gains tax based on the profit gained in the sale. Unless Congress acts to […]
11 Things You Should Know Before Selling Your Business
Know why you want to sell your businesss. 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 because […]
Financing and Tax Implications of Selling Your Business
Taking the time to research the financing and tax implications of a sale can provide you with a strong advantage come negotiation time. Before you can understand the importance of negotiating a final small business sale agreement, it pays to brush up on facts about how sales are financed and how proceeds are taxed. Why? […]
How Goodwill Impacts Business Value
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 […]
The Key Benefits of Using a Business Broker to Sell a Business
Selling a business is usually a very intimidating and time-consuming process. There may be legal, tax, accounting, and regulatory issues to address. Business brokers and agents deal with these issues and negotiate business deals on a daily basis. They are professionals with a fiduciary duty to you, and they are authorized to act on your […]
Create Barriers to Competitive Entry and Increase Business Value
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 […]
Buyers for Companies Outnumber Sellers 16 to 1
The June 2012 M&A Source Conference was the place to meet fifty plus Professional Buyers with available funds to invest. It was apparent there are more funds available than there are good companies to buy. Repeat, there is no shortage of buyers with money. I would estimate there are about 16 buyers for every seller. […]
Add Value to Your Business with Systems and Brand
Takeaway: Understand the importance of documented systems that allow owners to remove themselves from the business. A business valuation is not about what a company is worth in the current owner’s hands, it’s about the company’s transferable value. It’s about the probability that the business will sustain its profitability and continue to grow with a […]
Brand Recognition – How Important Is It If I’m Selling My Business?
Business branding has become an art and it all starts with a vision! A little moxie can go a long way if your business is in a competitive market. A unique brand identity that distinguishes your business from your competitors is the route to success for all companies. The better the brand position you have […]
Design a Growth Plan for a Premium Purchase Price of Your Business
Takeaway: Purchase price is predicated on current and historical cash flows, but a well thought out growth plan will increase the attractiveness and price of a business. Potential buyers who are considering the purchase of a business are interested in knowing how it can be grown once they bought it. The growth potential of a business […]
How Much Does Escrow Cost to Close a Business Sale?
Customarily, escrow fees are split 50/50 between the buyer and the seller and vary depending on the size of the transaction. Escrow cost is less than 1% of the purchase price of the business. However, there is a minimum fee for unusually small deals. Other charges may apply to one party or the other for specific […]
Human Capital Risk and its Impact on Business Value
Takeaway: A stable, skilled, quality workforce is one of the top value drivers that contributes to the purchase price of a business. When a business for sale is being evaluated by a prospective buyer as a possible candidate for purchase, the quality of the human element will be considered. The staff is a major component and […]
Selling A Business Is All About The Process
Most business owners, have thought about selling their business a time or two. They’ve imagined, dreamed, and wondered what it would be like to be free of all the trappings, headaches, and burdens of running their company. They probably also wonder how cumbersome the sale process might be and what it entails. While we can’t tell […]
Diversify Your Customer Base: Increase Business Value
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 put, […]
Should the Owner of a Business for Sale Expect to Negotiate Price?
This is a common question asked by business owners who are thinking about putting their business on the market for sale. They want to understand the parameters of a business deal and what to expect from prospective buyers. Negotiation may seem a daunting task, but when explained in a balanced manner, negotiation should be deemed a […]
How to Build Recurring Revenue: a Key to a Valuable Business
Takeaway: Recurring revenue is the holy grail for business owners looking to have a valuable and sellable company. Learn how to secure stable and predictable cash flow in your business. 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 […]
Three Popular Myths of Selling A Business
Over the past 38 years our firm has been involved in many discussions with business owners considering the sale of their businesses. There are a few particular myths that have repeatedly surfaced during these discussions. Since a typical small business owner will sell a business only once in his or her life, it is not […]
Buying a Business? How Do Brokers Screen Buyers?
Prior to discussing confidential information about businesses for sale, business brokers require prospective buyers to complete certain forms that serve two purposes. They protect the interests of the business owners during the sale process and enables a business broker to competently assist buyers in their acquisition search. These documents are necessary to the process and […]
Value Driver #6: Branding and Documented Systems Add Value to a Business When it’s Time to Sell
A business valuation is not about what a company is worth in the current owner’s hands, it’s about the company’s transferable value. It’s about the probability that the business will sustain its profitability and continue to grow with a new owner at the helm. Therefore, the factors that contribute to the company’s stability and consistency will be […]
The Non-Compete Agreement – A Negotiated Contract in a Business Sale Transaction
Non-compete agreements are typically included as part of the terms of a business sale transaction to protect the buyer from direct or indirect competition from the seller. A buyer would not want to purchase a business if the seller could relocate down the street. For this reason, buyers usually require that this threat be eliminated. […]
Passing Financial Due Diligence When Selling A Business
Due Diligence is the final hurdle of the business sale process. It is the time when the buyer requests from the seller any documents and materials needed to verify that all representations made by the seller are accurate and occurs after a purchase contract is signed by both parties in the transaction. The contract is […]
Buying a Business – What is the Value of Goodwill for a Buyer?
Takeaway: Identifying and articulating the goodwill in your business can have a significant impact on business value. According to a 2010 study by KPMG entitled, “Intangible Assets and Goodwill,” over 50% of the purchase price of a business is typically allocated to goodwill. Since the largest part of the purchase price of a profitable small business […]
Is Lending for Business Acquisitions Back to Normal?
This is the question I get more than any other and my answer is YES, Absolutely Yes!! My answer may surprise you, and some may even want to argue, but if you have been in the lending or business brokerage industry for more than 6 or 7 years I think you will agree. When I […]
CBB Sold Four Well-Known Sports Bars in Houston’s Party Hub Within a Short 6-Week Period
Certified Business Brokers (CBB) completes the sale of four well-known sports bars and clubs in Houston’s after-hours party hubs within a short six-week period. With the rush of new bars opening in areas of Houston like Midtown, Kirby and the Heights, some bar and club goers have already forgotten about the Austin 6th-Street-like party that […]
Selling Your Business is a Taxing Matter – How Much Will You Bring Home
While the first question a business owner asks is, “What kind of price can I expect in the marketplace if I sell my business,” the real question is not the price paid for the business, but how much will you take home. The Federal Tax Laws determine how much money you will actually be able to put in […]
Why Deals Fall Apart — Loss Of Momentum
Deals fall apart for many reasons – some reasonable, others unreasonable. For example: The seller doesn’t have all his financials up to date. The seller doesn’t have his legal/environmental/administrative affairs up to date. The buyer can’t come up with the necessary financing. The well known “surprise” surfaces causing the deal to fall apart. The list […]