Why Business Buyers Won’t Buy Your Business
Learn why business buyers view your business as unattractive and it fails to sell once it’s on the market. We’ve summed up the top seven reasons and included suggestions regarding how to overcome these obstacles.
How To Choose A Business Broker Intermediary
Choosing the right intermediary or business broker to represent a business owner in the sale of their business can make all the difference when it comes to the right price, the right buyer, and the ability to close the deal.
![The Three Business Valuation Approaches [Infographic]](https://b226520.smushcdn.com/226520/wp-content/uploads/2022/10/three-approaches-to-business-valuations.jpg?lossy=1&strip=1&webp=1)
The Three Business Valuation Approaches [Infographic]
At some point during a company’s existence, it’s very likely a business owner will need a business valuation. Regardless of the reason, it is very important to understand how business valuations are conducted.
Buying and Selling a Business in a Changing Market
Buying and selling a business is a challenging and calculated process that is influenced greatly by market conditions. On one hand, business buyers must consider the historical performance of the business they intend to purchase and gauge that against financing options and other acquisition challenges to make a judgment call on how the business would perform post-acquisition. Business owners, on the other hand, must consider the money they are making now, and weigh that against a pay out and their need or desire to work less.
Does the Stage of My Business Matter When It’s Valued?
Many business owners are uncertain about how to establish a value for their business, regardless of its stage of development. How to value ideas, start-ups and mature businesses differ greatly. Learn more.
What the Great Resignation Means to Your Business
If you intend to grow and sell a valuable business, the Great Resignation that kicked off in mid 2021 means everything. Everything that is if you care about the value of your business.
How to Add Value to Your Business
Business owners who address the three hallmarks of a valuable business are very likely to have more options for exit and attract multiple buyers.
What is Exit Planning?
Learn about the three phases in a business exit plan and why each is important for the business, its employees, the owner and his or her family. This post includes our most popular FAQs on this topic as well. Wondering about the Exit Planning designations for professional advisors? We’ve covered that in this post as well.
20 Ways Business Brokers Pay For Themselves
Selling a business can be overwhelming. Here, we explore 20 ways that business brokers pay for themselves when selling a business.
4 Things To Do to Prepare to Sell Your Business
What should a business owner do to prepare to sell his or her business some time in the near future?
Aside from right-sizing the business’s overhead costs to line up with its current level of revenue, and looking for opportunities the pandemic may be presenting, there are four things a business owner can do now to prepare to sell. And more importantly, doing these four things will mean that when a Letter of Intent is received from a buyer, the business will be very well-prepared to survive the due diligence stage of the sale.
How Much Does it Cost to Sell a Business?
As an intermediary, I have many conversations with business owners about how much their business is worth. As these conversations progress, owners realize that it’s not how much they make, it’s how much they can keep that truly matters.
What Happens to PPP Loan When Selling a Business
The Small Business Administration (SBA) issued a Procedural Notice on October 2, 2020 which offers business owners and lenders guidance on how Paycheck Protection Program (PPP) Loans are to be handled when a business has a change in ownership.
This post summarizes the notice and includes an Infographic to assist business owners. It includes the following topic:
When does a Business Sale Require the SBA’s Approval
Does a Business Sale Require the PPP Lender’s Approval or Notification
Required Steps Pre and Post-Closing for PPP Borrowers
SBA Timeframe to Approve a Sale or Merger when a PPP Loan Transfers
Does the EIDL Grant Impose Additional Steps When Selling a Business
ESOP as an Alternative Exit Strategy
When thinking about ways to sell your business, you are likely familiar with the most common strategies proposed by business advisors: selling to a third-party such as a private equity firm or a competitor, or selling to your family. What your business transition advisor may not have discussed with you is instead selling your business to an Employee Stock Ownership Plan (an “ESOP”).
Tips for Expediting the Sale of Your Small Business
As a business broker serving business owners who want to explore their options for exit, I get this question at almost every listing appointment:
“How long will it take to sell my business?”
The research indicates the answer is as follows:
For businesses that sell for under two million dollars, the IBBA’s research indicates it’s going to take 7-9 months…
Essentially you could have a baby in the time it takes to sell a business.
Many owners aren’t excited about this answer, but there are a few things you can do to expedite the sale of your small business. Let’s explore how to sell a business quickly.
Won’t My Business’s Assets Increase the Value of my Business?
As a business intermediary helping owners determine the “Most Probable Sales Price,” or MPSP of their businesses here in the Triangle, I hear a common question:
“That value makes sense, but what about all my stuff? Can I get paid for that too?”
The answer is rarely what the business owner wants to hear, but there’s a sound reason for it, and understanding how businesses are priced can help an owner with decisions on how to allocate resources for assets; especially if they are planning to sell in the near future.
In this article, we’ll explore the market approach for small businesses and what value the assets carry…
Understanding Business Valuations
Quite simply, a business valuation is a process and set of procedures used to determine what a business worth. Sounds unambiguous, right? But it takes more than just plugging numbers into a formula — a credible business valuation requires knowledge, preparation, and a thorough understanding of the business. The result is an objective assessment of the real value of the business. In addition to estimating the selling price of a business, a business valuation can be used for many legal purposes such as divorce litigation, shareholder disputes, and estate or gift taxation.
When to Hire a Business Advisor
Doing deals can be expensive. A lot of entrepreneurs want to save money by not hiring an advisor or they don’t know when they should make the investment on an advisor. It’s important to understand the roles of the broker and other advisors, especially legal counsel, and to know when to bring in a professional. Here are some milestones in a deal, and how to know when to hire a business advisor.
How to Overcome Customer Concentration Objection When Selling a Business
One of the greatest risks any buyer faces is what will happen to the business’ best customers post-sale. Will the top customers celebrate the founder’s great accomplishment or maybe decide it’s a good opportunity to negotiate better pricing or payment terms with the new owner? Or worse yet, will they be spooked by the new owners and find an alternative vendor?
Astute buyers measure this risk quickly. Typically, one of the first questions experienced buyers ask the business broker is about the presence or lack of a customer concentration.
For the business owner considering the sale of his business in the near future, having a clear understanding if a customer concentration exists is vitally important. In fact, the lack of a customer concentration is a great selling point.
What is the Value of My Business and How to Improve It?
Depending on the circumstances and objective of the owner, the value of a business can vary considerably. For instance, upon sale to unrelated party, an owner would expect to receive the maximum purchase price for their business the unrelated party is willing to pay. However, that same sale to a family member or employee may need to be structured so the cash flow of the business can support the purchase price.
For a closely held business, owners generally have little idea about the value of their business, or whether their business is generating an adequate return on investment, and what drives its value.
How to Prepare and Include the Business Owner’s Family in the Exit Planning Process
For the business owner who desires a great outcome, including the business owner’s family in the exit planning process, as well as the decision to sell, is vital.
How Can a Broker’s Opinion of Value Help a Business Owner?
A Broker’s Opinion of Value, or BOV, can help an owner determine what the business would sell for on the open market. This, in relation to an owner’s “pain” level, are often enough to make a decision if they are ready to sell.
3 Things to Know About Preparing Your SBA Business for Sale
Learn about three very important facts you need to know as you prepare your SBA business for sale.
How to Prepare for Due Diligence When Selling a Business
Our Featured Advisors, Attorney Mark Fazio and Business Broker Neal Isaacs, answer a few questions to help business owners learn how to prepare for due diligence when selling a business.
Can I Sell My Business For Less Than I Owe the Bank?
For many businesses, the ultimate goal is to sell the business. Can you picture it? Walk away from the daily stress and aggravation with a fat pile of cash. Hop a plane to your favorite tropical destination and spend the rest of your days lounging a white sandy beach, sipping pina coladas out of a coconut, without a care in the world.
Well, friends, the above scenario is the ideal scenario. I like sipping cold drinks on a beach as much as the next guy, and I hope that happens for you. But if you clicked on this article, you may be looking at a much different scenario.
And that’s what this article is going to cover: the less-than-ideal scenario.
Contribution Margin Formula
Contribution margin is an important method of not only understanding how profitable a business is, but also how its products and services contribute to the bottom line. It’s important to understand that contribution margin is different from profit margin, since profit...
Discount for Lack of Marketability
Have a Question? Ask your question below and one of our Advisors will answer. The Discount for Lack of Marketability, or DLOM, is a discount applied to a company’s value when an ownership interest cannot be converted to cash quickly, and free of excessive expenses....
What is a Seller Note?
Have a Question? Ask your question below and one of our Advisors will answer. A seller’s note receivable is an alternative form of business capital. This type of debt financing is often used in small business acquisitions, where the seller agrees to accept a...
Quick Business Valuation
As a business owner journeys through entrepreneurship, it’s inevitable for most to seek a quick business valuation on one or more occasions. Such a conversation with a business advisor may be about the need to understand the value of the business for the purpose of...
Selling A Business: How to Prepare for the Exit
Jim Beach, author and serial entrepreneur, interviewed Exit Promise founder Holly Magister on his radio show School for Startups Radio. We want to share some of the insights from that interview here on the blog. This is the third post in this series, and Holly...
Exit Planning Starts When You Launch Your Startup
Jim Beach, author and serial entrepreneur, interviewed Exit Promise founder Holly Magister on his radio show School for Startups Radio. We want to share some of the insights from that interview here on the blog. First, read about how Holly recommends entrepreneurs can...
ESOP vs. 401K Plan – Definition and Benefits to Business Owners and Employees
The method chosen to transfer ownership of a business for sale is one of the most important factors to consider as a business owner. And the reason for its importance is related to the wide differences in the amount of cash received (net of taxes) by the business owner across the various methods of transfer or sale. An ESOP or Employee Stock Ownership Plan is one method of ownership transfer or sale many business owners consider when they decide it’s time to retire. That said, let’s explore the ESOP as a potential method of transfer or sale from both the business owner’s and employees’ perspectives.
Business Valuation Specialists
Business Valuation Experts come in many forms, and for a business owner it can be very difficult understanding the various designations. More importantly, when the business owner is in need of a valuation, understanding exactly what type of expertise is necessary and ultimately who to hire can become a daunting task.
Surviving Due Diligence & Contract Negotiation
You have endured multiple meetings with potential buyers. You’ve written dozens of emails and suffered through several rounds of negotiations to secure the best price and deal structure. At last you have decided on the offer to accept. That’s the worst of it over then? Think again – you have yet to experience the joys of due diligence and sale contract negotiation.
How to Calculate Customer Concentration Risk
If a customer’s total revenue for the year represents 8% or more of all revenue for the same year, you have a customer concentration risk.
The Value of a Business Plan in Selling Your Business
A business plan is critical to the success of any business. And, if the plan is frequently reviewed and updated, it becomes increasingly valuable over time. It provides valuable historical information to help a business owner make decisions on the future direction of the company.
10 Steps to Selling a Business [Infographic]
Selling a business for the entrepreneur often is a tumultuous, emotionally draining experience. Unless the entrepreneur has sold a business previously, the journey feels awkward and is marked with multiple high and low points. To guide the entrepreneur, we’ve created the 10 Steps to Selling a Business Infographic.
Developing Ground Rules for Selling A Business With Partners
There are ways to improve the likelihood you will achieve a successful sale of your company if you take the time to develop ground rules with your business partners. The sooner you do so in the process of selling a company, the better.
