by Neal Isaacs, MBA, CBI, CM&AP | Business Valuation, Exit Planning, Grow a Business |
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.
by Holly Magister, CPA, CFP | Business Valuation, Exit Planning, Sell a Business |
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.
by Holly Magister, CPA, CFP | Business Valuation, Exit Planning, Sell a 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.
by Neal Isaacs, MBA, CBI, CM&AP | Business Valuation, Exit Planning, Grow a Business, Sell a 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.
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business |
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.
by Holly Magister, CPA, CFP | Business Valuation, Sell a Business, Selling a Business Questions |
When it comes to the sale of a business, there are a number of costs – both expected and unplanned – all business owners should understand before they agree to sell their business. A few of our Featured Advisors have weighed in, offering their expertise and perspective to explain the costs – from business broker fees and legal costs to hidden fees – as they relate to selling a business.
by Neal Isaacs, MBA, CBI, CM&AP | Exit Planning, Sell a Business |
Selling a business can be overwhelming. Here, we explore 20 ways that business brokers pay for themselves when selling a business.
by Holly Magister, CPA, CFP | Business Valuation, Exit Planning, Sell a 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.
by Neal Isaacs, MBA, CBI, CM&AP | Exit Planning, 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.
by Holly Magister, CPA, CFP | Business Capital, Exit Planning, Sell 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
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business |
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”).
by Neal Isaacs, MBA, CBI, CM&AP | Exit Planning, Sell a 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.
by Neal Isaacs, MBA, CBI, CM&AP | Business Valuation, Exit Planning, Sell a 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…
by Eric M. Magister, M.A. in Law | Business Valuation, Exit Planning, Sell a Business |
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... 
by Neal Isaacs, MBA, CBI, CM&AP | Business Valuation, Exit Planning, Grow a Business, Sell a Business |
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.
by Holly Magister, CPA, CFP | Business Valuation, Exit Planning, Sell a Business, Selling a Business Questions |
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.
by Eric M. Magister, M.A. in Law | Business Valuation, Exit Planning, Sell a Business |
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.
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business, Selling a Business Questions |
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.
by Neal Isaacs, MBA, CBI, CM&AP | Business Valuation, Exit Planning, Sell a Business |
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.
by Jason Milleisen, SBA Workout Specialist | Exit Planning, Sell a Business |
Learn about three very important facts you need to know as you prepare your SBA business for sale.
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business, Selling a Business Questions |
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.
by Jason Milleisen, SBA Workout Specialist | Business Capital, Exit Planning |
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.
by Neal Isaacs, MBA, CBI, CM&AP | Sell a Business |
Often successful business owners invest in real estate because it can be a tax efficient way to handle the retained earnings of a business. And when it comes to exit planning, business owners with real estate have more exit options. This is a good thing. For... 
by Holly Magister, CPA, CFP | Sell a Business |
Speaker: Holly A. Magister, CPA and Certified Financial Planner® This post is intended to help those who either own a business or advise business owners in the lower-middle market — defined as a business with gross revenue between $5MM and $50MM — and is... 
by Holly Magister, CPA, CFP | Business Valuation, Grow a Business, Trepopedia |
v Have a Question? Add it to the bottom of this post! For many entrepreneurs, launching a new business often means walking a fine line between pursuing earnings growth and growing the top-line revenue. A business can’t be successful in the long-term without earning a... 
by Holly Magister, CPA, CFP | Business Valuation, Sell a Business |
EBITDA Margin and Adjusted EBITDA Margin are similar measurements used by business owners and others who value businesses for sale. Let’s break down the two terms to help your understand which measurement of profit and cash flow are most relevant for your... 
by Holly Magister, CPA, CFP | Grow a Business, Sell a Business |
How could there be risks in your business relationships? For most business owners who’ve started a business from scratch, the notion of regarding as risky the many positive relationships they’ve built over the years with customers, vendors, and even employees is... 
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business |
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.... 
by Holly Magister, CPA, CFP | Business Valuation, Sell a Business |
Business goodwill is defined as an intangible asset that increases a business’s value above and beyond its current market value. Business goodwill arises when one company is acquired by another at a premium, above market or book value price. Goodwill can be attributed... 
by Holly Magister, CPA, CFP | Sell a Business |
v Have a Question? Add it to the bottom of this post! In any business acquisition, a deal structure must be formed to specify the financial terms, conditions, and process for successfully completing the transaction. The deal structure outlines a set of terms that... 
by Holly Magister, CPA, CFP | Business Valuation, Grow a Business, Sell a Business, Trepopedia |
The term business value is a broad term that refers to any form of business valuation which determines the financial health and potential of a company. While a purchase or selling price is simply an amount that may be asked to be paid for a 100% ownership of a given... 
by Holly Magister, CPA, CFP | Sell a Business, Trepopedia |
Seller’s Discretionary Cash Flow (SDCF), also sometimes referred to as seller’s discretionary income (SDI) or seller’s discretionary earnings (SDE), is a computation often used when valuing a small or medium-sized business. While larger, public companies are often... 
by Holly Magister, CPA, CFP | Grow a Business, Sell a Business, Trepopedia |
v Have a Question? Add it to the bottom of this post! There is a significant difference between “working capital” and “change in working capital.” Working capital is a snapshot of a moment in time which measures the level of assets a business has available to meet its... 
by Holly Magister, CPA, CFP | Business Valuation, Sell a Business, Trepopedia |
Middle market or “mid-market” companies or firms are businesses that typically earn between $5 million and $1 billion in yearly revenue. This group of businesses makes up the middle third of the U.S. economy’s revenue and employs 25% of its labor force, with large and... 
by Holly Magister, CPA, CFP | Business Entities, Grow a Business, Sell a Business, Start a Business, Trepopedia |
A buy-sell agreement is a legally-binding agreement between two co-owners that governs any situation in which one co-owner dies, chooses to leave the business, is incapacitated, faces divorce, bankruptcy, retirement, or sells his/her share of the company. The... 
by Holly Magister, CPA, CFP | Business Valuation, Exit Planning, Sell a Business |
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... 
by Holly Magister, CPA, CFP | Grow a Business, Sell a Business, Trepopedia |
The term ‘rule of thumb’ generally refers to the idea of a principle with a broad application – something that is not intended to be exact or strictly accurate. In the business world, the term ‘rule of thumb’ refers to a guideline that provides simplified advice about... 
by Holly Magister, CPA, CFP | Business Entities, Exit Planning, Start a Business |
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... 
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business |
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.
by Holly Magister, CPA, CFP | Sell a Business |
When a business owner begins to negotiate the sale of his or her business with buyers for the first time, he or she will inevitably face a difference between the buyer’s offer price and the desired selling price. It’s at this point when a lively debate between the parties will occur over the underlying reasons for the business’s asking price being what it is. At this time a seller will be well-served if able to offer justification for an increased business valuation and a higher business selling price.
by Holly Magister, CPA, CFP | Sell a Business, Trepopedia |
The valuation multiple formulas available to compute the value of a business for sale are numerous and can be confusing to many small business owners. In fact, many professionals can be similarly confused by the various multiple formulas currently in use.
by Paul Cronin | Grow a Business, Sell a Business |
My business partner, the author Jack Beauregard, and I recently had breakfast with Lorraine McGregor from Vancouver, BC Canada. Lorraine is the author of books on Exit Planning and Entrepreneurship, as well as an experienced business consultant. We were all discussing why so many business owners were delaying (the inevitable) transition planning from their businesses.
by Holly Magister, CPA, CFP | Sell a Business, Trepopedia |
Business Brokers and M&A Intermediaries may use or reference the ‘Lehman Scale’ when discussing their compensation method with a business owner contemplating the sale of their business. The Lehman Scale was originally developed in the late 1960’s and used by the Lehman Brothers when raising business capital for their clients.
by Holly Magister, CPA, CFP | Exit Planning, Grow a Business, Sell a Business |
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.
by Greg Younts, CMAI | Sell a Business |
To sell or not to sell, that is the question many business owners ask themselves at least once during their tenure as business owners. Sometimes, the decision to sell is easy if the owner is ready to retire or has decided to pursue a new career or business opportunity. However, in many cases, business owners struggle with this critical decision. Fortunately there are several steps you can take to make an informed and stress-free decision on whether to sell your business now, later, or not at all. In all cases seek the advice of several third party professionals such as a Business Attorney, Certified Public Accountant (CPA), Business Appraiser and/or Broker, and a Financial Advisor as well as consultants in your industry.
by Matt Harnett, CAIA | Sell a Business |
v Have a Question? Add it to the bottom of this post! As a business owner, you have worked long and hard to get your company to a point where it can be sold. You have likely worked long days and endured sleepless nights at some point during your journey. So selling is... 
by Paul Cronin | Sell a Business |
When an asset has a grossly inflated price, it is by definition an asset bubble. Does this apply to many small businesses in the US? Probably yes, in my opinion. Most small businesses have a balance sheet listing some assets; therefore they are subject to being part of a bubble.
by Leilani Costa, Attorney | Sell a Business |
There are many pitfalls to avoid and precautions to be taken when contemplating the sale of your business to a competitor. In particular, selling a business to a competitor can have tricky antitrust implications that require much care prior to closing.
by Holly Magister, CPA, CFP | Exit Planning, Sell a Business |
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.
by Chris George | Sell a Business |
The reasons for selling a business are many and varied; in the end, however, the desired result is the same – money. So how does one go about maximizing profit when selling a business?
by Holly Magister, CPA, CFP | Grow a Business, Sell a Business, Trepopedia |
If you’ve grown a valuable business, there is no doubt your employees are a big part of your success. You also know that hiring, training, and managing a great team of productive employees is a difficult task. And keeping your best employees is yet another accomplishment! But the painful truth is your competition would be very pleased to hire away your best employees.
by Holly Magister, CPA, CFP | Business Capital, Sell a Business |
Many business owners are under the wrong impression that their business debt will disappear when their business is sold. In some cases, the debt is absorbed or is assumed by the buyer. But usually this is not the case.
by Matt Harnett, CAIA | Business Capital, Sell a Business |
Recapitalizations can be used to provide liquidity to owners, refinance the balance sheet or fund future growth initiatives. When the owners sell a majority of the business but still retains some ownership, it is termed a “majority recapitalization”.
by Holly Magister, CPA, CFP | Sell a Business |
In many cases, the business owner finds it difficult to know who they should target as a potential buyer for their business. At first glance, any buyer with a checkbook may be attractive. In practice finding the right buyer when selling a business is both an art and a science.
by Matt Harnett, CAIA | Sell a Business |
Management Buyouts, or MBOS, can sometimes have a negative connotation. Maybe that’s because it sounds like the management team is getting “taken out”. On the contrary, it is the exact opposite. A Management Buyout is a fancy acronym for when the current managers buy controlling interest of a company from its owners. That’s a good thing for management!
by Leilani Costa, Attorney | Grow a Business, Sell a Business, Trepopedia |
Gone are the days when companies could choose the exercise price and option terms for stock options without thinking about IRS Code Section 409A consequences. Employees and executives, as well as independent contractors and advisors, could face significant taxes... by Holly Magister, CPA, CFP | Sell a Business |
Selling a business is one of the most exhausting endeavors an entrepreneur will undertake. Unfortunately, many simply do not succeed. In fact, only one out of ten entrepreneurs will actually complete the business sale process and transfer their business to another. Selling a business involves many different parties, all of whom have a special role and a unique skillset. Most importantly, they must all work together. Those entrepreneurs who succeed recognize ‘it takes a village to sell a business’.
by Holly Magister, CPA, CFP | Grow a Business, Sell a Business |
Often, business owners ask me one of those “quick questions” – what can I do to maximize the sale price of my business? The answer? Not as simple as you may think. But there are 4 factors that can increase the value of your sale price.
by Holly Magister, CPA, CFP | Sell a Business |
If you have ever endured the process of selling a business with the assistance of professional advisors who specialize in mergers and acquisitions, you will agree with me that this is not something to try at home!
by Paul Cronin | Sell a Business |
This is a story with an unhappy ending. I heard this story from employees who worked for a company many years ago. I knew the company well and as far as I know, this is the truth.
by Kathleen Kuznicki, Patent Attorney | Grow a Business, Start a Business, Trepopedia |
A copyright protects the particular ways by which people expressed themselves. A copyright gives an owner the exclusive legal right to reproduce, publish, sell, or distribute an original creative work.
by Holly Magister, CPA, CFP | Business Valuation, Sell a Business |
As I meet with entrepreneurs, I’m often asked the same question: “When is the best time for me to sell my business?” The answer to this question is not the same for every business owner, for many reasons.
by Holly Magister, CPA, CFP | Grow a Business, Sell a Business |
The best solution to a problem lies in uncovering what the root cause of the problem really is. So often, this is the case when an entrepreneur is struggling with profitability in their business. Over the past few posts, we have discussed the concepts of how a minimum order policy and Pareto’s Principle applied to the customer/client base can be very powerful to help an entrepreneur improve the value of their business.
by Michael Silverman, Attorney | Sell a Business |
The many years of hard work and long days at the office may be about to pay off—you have just received an offer from a potential buyer to acquire your business. Just as you developed and followed a detailed business plan to build your business, now you need to develop a well-thought out plan covering the sale of your business, paying proper attention to the due diligence process.
by Holly Magister, CPA, CFP | Grow a Business, Start a Business |
It takes a special kind of person to start a business: a rare combination of drive, ambition, creativity, tenacity and impatience for action. But even within the community of business experts and entrepreneurs there is a special breed of person known as a “serial entrepreneur.”
by Eric C. Pfeil, Attorney | Business Valuation, Sell a Business |
Anyone who owns a family business is intimately familiar with the blood, sweat, and tears associated with building and then keeping the business viable. Nevertheless, it is not unusual for the business entrepreneur to postpone consideration of various issues involved in transferring the business to the next generation, including determining the value of the business.
by The Exit Promise Contributors | Grow a Business, Sell a Business |
Your worst nightmare comes true! You get an email on Friday afternoon from your largest customer indicating that they are changing suppliers for “strategic reasons.” They represent 20% of your sales revenue and 35% of your profits.
by The Exit Promise Contributors | Sell a Business, Trepopedia |
For every entrepreneur, a smooth transition of business ownership will be of importance at some future point. The Buy Sell Agreement deals with a specific exit strategy case. An agreement by and between business owners, it establishes a mechanism for the purchase of ownership interests following the departure of an owner due to a triggering event (i.e., death, divorce, disability, retirement, etc.).
by | Grow a Business, Sell a Business |
The various types of valuation reports produced by a business appraiser can be confusing to an entrepreneur, especially when the appraiser belongs to more than one valuation association. Under most appraisal standards, a business appraiser can produce two types of reports: a detailed appraisal report or a calculation report.
by Andrew N. Jones | Grow a Business, Sell a Business |
Understanding a company’s operating results is an important factor for a business owner to determine the value of a business. However, the operating results must be placed in the proper context by comparing them to results of the industry as a whole. By doing so, a business owner is able to understand how they are doing financially relative to their industry peers. This exercise is known as benchmarking.
by Andrew N. Jones | Business Valuation, Grow a Business, Sell a Business |
At some point in time, every business owner will leave their business (voluntarily or involuntarily). Through proper planning, an owner should expect to achieve their desired goals. Statistics show that the value of an owner’s business accounts for over 90% of their personal wealth. However, more than 75% of all business owners do not have a formal transition plan in place.
