Cartoon & Tip
Business owners need to recognize that operating a business on a day-to-day basis is not the same thing as preparing it for sale.
There are many steps necessary in the planning process and it all starts with the AWARENESS of that fact.
It is in the best interests of a business owner to get professional advice early – business broker, mergers & acquisitions advisor, exit planning consultant or business coach – to understand what may need to be done for their business.
And the business owner …
OK, everyone has heard about a few huge deals for technology companies over the years. But business owners rarely receive a premium for their business.
Buyers will look at all the important factors such as cash flow, key employees in place, profit margins and prospects for future growth, to name just a few.
Then they will try to purchase the business for the best deal possible.
Business owners should consider having a valuation performed by a professional now and then begin preparations to…
Business owners can be confronted with many yes or no decisions every day. Some are small decisions with not much impact, but some are critical decisions that can affect the direction of the company, such as adding a new line of products or a new service.
And many times, it can be much harder to say "no" than to just give in and say "yes" to the pressure of the moment.
A good question to ask yourself to help make that decision might be "will saying YES risk the value of the company by was…
Most businesses will lose a certain amount of customers over time. This attrition can be caused by anything from customers who are unhappy to customers moving away.
The value of a business has a lot to do with the expectations of a buyer being able to maintain the current revenue levels (in addition to opportunities to grow the business). Buyers will want to see proven marketing programs in place that will fill that ongoing “leaking bucket”.
Key employees in place can be very important in the sale of a business!
Buyers are always interested to know if there are well-trained key employees that will stay with a new owner of the business. That expertise within the company's operations can be very important in the transaction and future performance.
Key employees can include top managers, department heads and other long-time employees in important positions throughout the company. In order to sell their business, owners must give t…
Technology and the internet are essentially changing every business in some way or other. It can be challenging, but business owners must keep aware of what ‘s going on in their industry and where it is headed.
Some businesses have a bright future, others need to make drastic changes. Business owners can search on the internet, go to trade shows and seminars, read books, articles, blogs, talk to others in the industry.
In order to have future value for a buyer, business owners can't ignore …
"Due Diligence" or the "Right of Inspection" gives the buyer the full rights to inspect all items in a business -- financials, equipment, inventory, premises and anything else. And if the buyer finds any material discrepancies, he or she usually has the legal option of backing out. Some transactions fall apart during due diligence, only because the sellers have ignored fixing the problems of their business and just hoped for the best.
No matter what price a business owner wants for his or her company, the market is the true indicator of what buyers are willing to pay. Selling a business can be very emotional - all the hard work over the years, attachment and loyalty to employees, the profitability in the past, etc., etc. But if the business has been properly presented to the market and there are offers, the business owner must pay attention to "the writing on the wall". He or she should negotiate hard, but must consider th…
Many business owners try to determine the price of their business based on how hard they have worked over the years. But the market will tell them that the value is really what it is worth to a new owner in the future. As a result, there are many factors to examine – equipment, employees, market position, technology – the list goes on and on. Business owners should get a business valuation performed by a professional to get a real sense of market value.