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 […]
There are three major negotiation methods. 1. Take it or leave it. A buyer makes an offer or a seller makes a counter-offer – both sides can let the “chips fall where they may.” 2. Split the difference. The buyer and seller, one or the other, or both, decide to split the difference between what the buyer is willing […]
There are unique attributes of a company that make it more attractive to a possible acquirer and/or more valuable. Certainly, the numbers are important, but potential buyers will also look beyond them. Factors that make your company special or unique can often not only make the difference in a possible sale or merger, but also […]
Vacation – it’s often an elusive concept for the owners of small businesses. Even when owners do take time off, chances are they’re still checking in constantly, which has become increasingly easy to do in this age of the smartphone and ever-omnipresent Internet connectivity. The ironic thing is that this constant owner involvement can actually […]
The valuation of a restaurant is much like any other business valuation. But, there are certain factors unique to the restaurant industry. The universal drivers for many restaurants are pretty simple: quality, hospitality, consistency, value, cleanliness, and customer loyalty. You may have heard the saying that the three most important ingredients for a successful business […]
Serious buyers want to carefully look at the financials of a company under consideration and all of the other major aspects of the company. However, there are a few other areas that the serious buyer will investigate that sellers may overlook. The Industry – The buyer will want to take a serious look at the industry […]
When you hear something described as a perfect storm, you aren’t sure if it’s a good thing or a bad thing. Hurricane Ida hit the US a few weeks ago, and it was a perfect storm no one wanted to experience. But a perfect storm can be a good thing, such as today’s M&A environment. […]
Concentration in the acquisition world is a bad word. Businesses with high supplier concentration attract fewer buyers and this lowers the price. What’s too high? Having a supplier with 40% of your business is too high. Diversify if at all possible. When buyers look at a company for sale, they look at risk. Supplier concentration […]
If there’s one thing I’ve learned in my years of working as a Certified Financial Planner™, it’s that entrepreneurs are a special breed of people. They’re motivated. They’re inspired. They’re incredibly tenacious. They’re smart. They’re optimistic. And they know how to get what they want. On the flip side, many entrepreneurs are guilty of being […]
The Dow Jones closed at an all-time high on Friday, September 19, 2014. And the NASDAQ and S&P were within ¼ of 1% of their all-time highs. As a result, corporations, private equity groups, and individual investors are flush with cash – trillions of dollars. Where can they go with all that cash? Interest rates […]
Every small business owner invests a substantial amount of blood, sweat and tears into their business. Late nights and early mornings, weekends away from their loved ones, hours lying sleepless, wondering what entrepreneurial surprises are coming next. All this effort is intended to make the business a success – and to make it worth more than just […]
Selling your business is the most important transaction you will ever make. It would be a shame to spend 20 years building your business like a pro, only to exit like an amateur. By avoiding these eight common novice mistakes you’ll have a more profitable and satisfying experience. 1. Selling Because of an Unsolicited Offer […]
When getting ready to sell a house or a car, the first thing people do is clean it up and get rid of the clutter. It is not different when selling a business. The process just has to begin much sooner. Buyers look at the past three or four years of financial performance, so that […]
We have all been there before—you are cruising along with some great momentum, on the verge of putting a deal together, until suddenly the buyer thinks they should be allowed to meet and speak with employees prior to the closing. This can sometimes stop a deal in its tracks, but in my opinion, it never […]
Selling your business is no stroll in the park. You’ll need the right motivation, a ready mindset, and something attractive to sell. So, a key factor to a successful sale is preparation. The more effort you spend preparing your company for an eventual sale, and understanding the factors that make a business sellable, the more attractive your business […]
When selling a business, time is not your friend. Time is the enemy of all deals. In fact, “Time kills all deals” is an expression that can be associated with a number of different industries but is especially relevant to business acquisitions. So, the key to a successful deal is to prepare well, come out […]
There are very logical reasons why you don’t see public “Business For Sale” signs posted on reputable, profitable companies. Why? Because that sign would soon be replaced with “Going Out Of Business Sale.” Consider the following points. First, even if the you don’t actually hang a “For Sale” sign outside the window, trying to sell it on your own […]
Years 2018 and 2019 may be ideal times to sell your Houston business. Values have never been higher, particularly for well-run companies. We’re also beginning an upswing in economic cycles. That’s the ideal time to sell a business. It won’t last forever, so if you’re contemplating an exit, 2018 may be the best time to […]
Takeaway: Internal and external factors are important considerations when selling a business. Here are issues you should think about when trying to time your exit. There are many factors that determine best timing for selling a small business — the financial condition of the company, valuation, growth cycle, profit history, and the current market. Usually […]
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 probability of the continued future profitability of the business and decreases perceived risk by prospective buyers. As with all value drivers, it’s about risk. Lower risk […]
As an avid wine fan and wannabe aficionado, I can’t help but notice the parallels between winemaking and the principals involved in effectively building a successful transferrable business. Frank and I often visit Napa Valley touring our favorite vineyards……and marveling at the amount of care and knowledge required to grow the perfect grape. Each Grapevine […]
There is little doubt that valuing a business is often complex. In part, this complexity is due to the fact that business evaluation is subjective. The simple fact is that the value of a business is often left to the mercy of the person conducting the evaluation. Adding yet another level of complexity is the […]
It would be nice to live in a world where every business-for-sale was sold at top dollar. While there is no such thing as a perfect business free from all defects, there are a number of problems that can hinder a sale that could be remedied, if given enough time. This article lists ten of […]
How much can you sell your landscaping business for? This checklist outlines the most important variables that impact how much your landscaping company is worth. Groom your landscaping or lawn care business to achieve maximum value before putting it up for sale. Staff Build a management team: A business is more valuable if the owner is […]
Performing due diligence on a business being considered for purchase should be conducted much like a surgical procedure. The operation should be an organized examination of the vitals of the company. It should also be approached knowing that this is an invasive phase of the sale process for the owner. This stage of buying a […]
The reasons for selling a business can be divided into two main categories. The first is a sale that is planned almost from the beginning or by an owner who knows that selling is or should be a planned event. The second is exactly the opposite – unplanned; the sale is motivated by a specific event such as health, divorce, business crises, etc. However, in between the two major reasons, are a host of unpredictable ones.
It’s no fun telling a songwriter his song is bad. Telling an author her novel won’t sell takes nerves of steel. Telling a business owner his business is overvalued is no way to make a friend, much less gain a client. Marvin (not his real name) was flat P-O’ed at me. When I told him […]
When selling a business, time is not your friend. Time is the enemy of all deals. In fact, “time kills all deals” is an expression that can be associated with a number of different industries, but is especially relevant to business acquisitions. So, the key to a successful deal is to prepare well, come out […]
No matter how the real estate is held, many owners desire to sell the real estate with the business. There's only one problem. Many buyers that will want to acquire your business will not have the capital to also acquire the real estate. Or they may feel that parking a significant investment in real estate makes a large portion of their investment capital unavailable for growing their new enterprise. The ideal scenario that creates the largest buyer pool is for the seller to offer the real estate for sale or for lease at the option of the buyer.
If you are looking for a profitable, well-run business to acquire, you are not alone. Right now, there are not enough businesses for sale to meet buyer demand, as reported by a Market Pulse Survey in early 2017 and sponsored by the IBBA (International Business Brokers Association) and M&A Source. The survey was conducted with […]
The business sale process typically begins with an initial inquiry stage, during which owners try to get an idea of what their businesses are worth and whether selling makes sense. They are “sale curious” and have been thinking about it more than a time or two. When a business is sold, big or small, taxes […]
We understand that most people do not have time to monitor everything that is happening in the market. So, to make things easier, we have compiled a brief report on last year’s business sales and the current economic outlook. A record number of small businesses were bought and sold in America in 2016, topping 2015’s […]
Are you a business owner at that stage in your life where you are contemplating the potential sale of your company? Undoubtedly you have thought about selling a time or two and truth be told, 100% of all business owners have from time to time. It’s perfectly normal to question why, when or how to […]
Is 2020 a Good Year to Sell a Business? Before deciding whether or not to buy or sell a business in 2020, you should be aware that political fears are driving down business valuations. While there is no recession yet, the prospect of one is still on the horizon, and 53 percent of business brokers surveyed […]
Small businesses often operate as if their sole purpose is to fund the owner’s lifestyle, but the most valuable companies are run with financial rigor. You may be years from wanting to sell your business, but starting to formalize the operations now will help you build the future value of your business. Then, when it comes […]