Biz Broker Florida: September 2012

Friday, September 28, 2012

Keeping Your Numbers Secret - Tips for keeping negotiations secret when sell your business

Imagine this worst-case scenario: During negotiations to sell your company, news leaks out to your employees, key customers, and competitors. Your managers and customers jump ship -- and then the deal falls through.

Read: Keeping Your Numbers Secret

For a complimentary consultation:
Contact Cecil Williams (cecil@bizbrokerflorida.com) or call at 888-925-5055 ext.206. Visit my personal website to search for business for sale in Florida www.bizbrokerflorida.com Also, visit our Florida Business Exchange website at www.fbxbrokers.com

Monday, September 24, 2012

Is it Time To Sale Your Business - Take This Quiz

A One Minute Quiz for Business Owners Only!

Circle your answers to the following questions, then see how you scored.

1. Is your business less enjoyable now than before? Y N

2. Does your business challenge and excite you less than before? Y N

3. Do you think of selling your business more often now than
you did before? Y N

4. Do you find yourself complaining more lately? Y N

5. Has the business come between you and your loved ones? Y N

6. Has your business begun to level off or decline? Y N

7. Are you concerned you no longer have the stamina your
business requires? Y N

8. Do you ask yourself “What would I do if I sold?” Y N

9. Do you often wonder “What is my business worth?” Y N

10. Would you be hesitant to personally guarantee a sizable
loan in order to grow your business? Y N

The question: Is now the time to sell my business?
To determine your answer, count your yes answers.
0-3 Yes
Congratulations! You are happy and probably quite prosperous in your business. Keep it up.
4-6 Yes
Pay attention to your “early warning signals”! It’s best not to make the mistake of staying too long! Sell while you are still having fun. Best to start the preparation process early. The actual sale of a business can take a long time.
7-10 Yes
Do not let time spoil the fruits of your labor. Most great men and women in history have had more than one career. Time for you to decide that you want a change. Choose what you want to do next, and then act.

For a complimentary consultation:

Contact Cecil Williams (cecil@bizbrokerflorida.com) or call at 888-925-5055 ext.206. Visit my personal website to search for business for sale in Florida www.bizbrokerflorida.com Also, visit our Florida Business Exchange website at www.fbxbrokers.com

Advantages and Disadvantages of Buying An Existing Business

Advantages of Buying An Existing Business

It may continue to be successful
It may already have the best location
Employees and suppliers are established
Equipment is already installed
Inventory is in place and trade credit is established
You can “hit the ground running”
You can use the previous owner’s experience
Easier financing
It’s a bargain

Disadvantages of Buying An Existing Business

It’s a loser”
Previous owner may have created ill will
“Inherited” employees may be unsuitable
Location may have become unsatisfactory
Equipment may be obsolete or inefficient
Change and innovation can be difficult to implement
Inventory may be stale
Accounts receivable may be worth less than face value

For a complimentary consultation:

Five Critical Areas for Analyzing an Existing Business

Why does the owner want to sell.... the real reason?

What is the physical condition of the business?

What is the potential for the company's products or services?

Customer characteristics and composition

Competitor analysis

What legal aspects must I consider?

Is the business financially sound?

For a complimentary consultation:

Key Questions to Consider Before Buying a Business

Key Questions to Consider Before Buying a Business

Is the right type of business for sale in the market in which you want to operate?

What experience do you have in this particular business and the industry in which it operates?

How critical is experience in the business to your ultimate success?

What is the company’s potential for success?

What changes will you have to make – and how extensive will they have to be – to realize the business’s full potential?

What price and payment method are reasonable for you and acceptable to the seller?

Will the company generate sufficient cash to pay for itself and leave you with a suitable rate of return on your investment?

Should you be starting a business and building it from the ground up rather than buying an existing one?

For a complimentary consultation:

Friday, September 21, 2012

How Much Is Your Florida Automotive Related Business Worth?

A question on the top of every business owner’s mind is, “how much is my business worth?”

Here is a look at automotive related business. This analysis is based on sales throughout Florida and give you some data regarding sales and pricing. Here are some numbers for you to ponder:

26 = the number of automotive businesses sold in the last twelve months by the Business Broker of Florida Association members.

$1,094,053= the average revenue of the 26 sold automotive businesses.
$371,257 = the average sold price of the 26 sold automotive businesses.
$148,394= the average owner benefit generated in each sold automotive business.
0.364 = the revenue multiple (sold price divided by revenue) of the 26 sold automotive businesses.
2.5 = the owner benefit multiple (sold price divided by owner benefit) of the 26 sold automotive businesses.81% = the average percentage down payment of the 26 sold automotive businesses.346 = the average number of days on the market of the 26 sold automotive businesses.

What does this mean?
Automotive businesses are in high demand. And, in spite of a more conservative and cash strapped buying clientele, they are still paying near historical multiples with a percent down not realized in many other industries. If you have been contemplating selling your automotive business, now is a great time! Please contact me for a no obligation discussion.

For a complimentary consultation:

Determining Your Company's Value: Recasting the P.&L. - NYTimes.com

Determining Your Company's Value: Recasting the P.&L:

Your CPA attempts to lower your taxable income, and your business broker should be recasting your P&L statement to maximize your cash flow. Understanding this concept is critical for any business owner planning to sell their business.

Read: Determining Your Company's Value: Recasting the P.&L

For a complimentary consultation:
Contact Cecil Williams (cecil@bizbrokerflorida.com) or call at 888-925-5055 ext.206. Visit my personal website to search for business for sale in Florida www.bizbrokerflorida.com Also, visit our Florida Business Exchange website at www.fbxbrokers.com

Ask James Caan: I want to sell my business — but what is the best way to go about it? - Business News - Business - Evening Standard

You Want to Sell Your Business — But What is the Best Way to Go About it?:

Selling a business is the most valuable transaction any owner will ever make. If you compare it to selling a property, naturally we always want the best price. We spend time presenting it in a way that is more attractive to potential buyers. So it always surprises me that when business owners sell their most valuable asset, they often miss the opportunity to maximize the value and increase their chances of success. What many business owners don't realize is that there is a right time to sell. The biggest hurdle is that often, businesses are just not ready for sale.

Luck favors the prepared. To ensure that you get maximum value, preparation is essential. Speak to experts and select an advisor who will walk you through the sale process, much like an estate agent for your home. They will draw you to some key areas for example if you are looking to leave the business, you must ensure that the people who will run it are credible and can ensure that the business continues to be successful. As part of the due diligence process your prospective buyer will want to access a number of your documents, start by pulling these documents together in one place.

Don’t forget, buyers want something with value. Sell the unique points of your business. Put yourself in the shoes of a buyer and ask yourself some key questions. How easy is it to copy? How many competitors are there?

Your intellectual property is another key area that is so important. You definitely don't want IP issues to arise at the due diligence stage of a sale process. Such issues will inevitably result in delays, price chipping, or worse scenarios such as the buyer withdrawing.

Business owners often assume that their buyer will be a competitor of theirs. It could be of course. However, spending time identifying buyers where there is some clear synergy between your businesses can be an invaluable exercise. Try to think out of the box and consider buyers who may be in a different market. This may help sell your service or product through different channels. The right purchaser, and typically one that is not your closest competitor, can be the one that pays the highest price. Once you know who will be interested, you can tailor your preparation to suit their needs.

Selling a company isn’t easy. It takes time and commitment; issues will inevitably need addressing before you start the process of selling the company. Buyers need the confidence that you have built something that is sustainable, that has a good reputation, and most importantly they know has a strong future under their ownership. The only way to achieve this is to plan your exit by preparing to your business for sale. So seek the advice of experts - you will reap the rewards both emotionally and financially.

Source: You Want to Sell Your Business — But What is the Best Way to Go About it?

Thursday, September 20, 2012

Red Flags in Choosing a Business Broker, Buying a Business or Franchise Article | Inc.com

Red Flags in Choosing a Business Broker
By: Carole Matthews

When selecting a broker to sell your business, be suspicious if:

The broker wants a significant or total fee paid upfront. Many brokers have begun taking upfront fees, but generally the total fee is a combination of an upfront fee and commission paid upon sale of the business. But in what Glen Cooper, president of Maine Business Broker's Network in Portland, Maine, calls a "take away" sale, an unreliable broker meets with you, runs some quick numbers, tells you that you can get your price or even more for your business, and then asks for a check to get started. In many cases, business owners are so relieved that they've found a broker and elated that they'll write a check on the spot, without checking any references. "They get to 'take away' your check when they leave," says Cooper. "You'll never see them again, if they can help it."

During your first meeting , the broker says he or she can get your asking price or higher. Be wary of too much optimism. "The key to selling is that the price be reasonable," says Jeff Jones, chairman of the board of Certified Business Brokers LC in Houston and president of Certified Appraisers, Inc., the firm's appraisal practice. And according to Tom West of Business Brokerage Press in Concord, Mass., most owners overvalue their businesses. An unreliable broker might suggest after a brief meeting with you that he or she can get you your asking price or higher for your business.

The broker doesn't have a Web site. Most likely, if the broker doesn't have a site, he or she is behind the times. The Internet is a powerful marketing tool for business brokers, according to Cooper. Is the site well-written? That's another way to gauge a broker's competence, he adds.

The broker can't or won't show you printed marketing materials. "Today, all brokers prepare some kind of offering summary for each business they represent," says Cooper. He or she should be willing to share materials prepared for past clients to show you how they might handle your business.

The broker doesn't seem well grounded in business valuation. "Your broker should be able to explain business valuation to you clearly," Cooper says. If he or she can't, then how can he or she explain to a buyer what your business is worth? Make sure your broker is confident in this area.

The broker is not licensed to sell or lease real estate in your state. Ninety-two percent of business brokers have a real estate license, according to an annual survey of business brokers West conducted. Even if your business doesn't include real estate, make sure your broker carries the license. "Unlicensed brokers are usually new to the business or out-of-state con artists," warns Cooper. And just because the broker holds a real estate license doesn't mean he or she should be selling commercial or residential real estate too. A good broker will hold the licenses but be focused on selling businesses

Wednesday, September 19, 2012

Do Business Buyer Pay A Premium For a "Quality" Business?

Do business buyers pay a premium for a “quality” business?

Do business buyers pay a premium for a “quality” business? Let’s say we have two companies, A, Inc. and B Co. that each have $1 million in earnings for the past five years and are in similar industries. What could make A worth more than B? The answer will surprise many business owners.

Source: Do business buyers pay a premium for a “quality” business?

Seven Tips on Selling Your Small Business

Seven Tips on Selling Your Small Business

This article is well written and elaborates on the seven items below in a manner that prepares a business owner to begin the process of selling a business:

1. PLAN, PLAN, PLAN.
2. UNDERSTAND WHY YOU ARE SELLING
3. PERSONALIZE THE DECISION TO SELL
4. UNDERSTAND THE BASICS
5. ASSEMBLE A TEAM OF EXPERIENCED ADVISERS
6. DETERMINE WHETHER TO USE AN INTERMEDIARY
7. COMMIT TO THE PROCESS

Read: Seven Tips on Selling Your Small Business

Buying a business can be a smart option, if…

Buying a business can be a smart option, if…

You’ve always wanted to be a business owner. An entrepreneur’s blood pumps through your veins. But starting out on your own takes time and effort you don’t have. Giving up your day job isn’t an option since dreams don’t buy milk. Buying a business can allow you to replace your salary and provide the "freedom" you're seeking. Read on for some insights and challenges you need to be aware of.

Read: Buying a business can be a smart option, if…