Showing posts with label Florida Business Exchange. Show all posts

Wednesday, October 31, 2012

Who is a Strategic Buyer? - And Should You Be One

Who is a Strategic Buyer? - And Should You Be One:

A strategic business buyer is a person or corporation that is considering buying a company based on how that new acquisition will fit into their overall long-term business plans for their existing business or an entity they are looking to build. A strategic business buyer will purchase a business or a series of businesses with the end goal of what they want their empire to look like. For example: a strategic business buyer may first buy a small business that specializes in cleaning products for cars. They may then look into buying their own car wash. These two businesses can work together to create an even stronger business structure.

Strategic business buyers are, typically, more willing to pay more for a business than financial business buyers because they are looking at the potential synergistic benefits with what they already own. However, these buyers will scrutinize financial statement and only offer terms that meet their established criteria. However the better the business will work within their plan, the more a strategic business buyer is willing to pay for it.

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

Thursday, October 25, 2012

Sell Your Business - Confidentially Is A Must!

Selling Your Business - Confidentially Is A Must! :

When selling your business or company, the entire process must be performed confidentially to maximize your value. Vendors, customers, employees, your competition, and others should be unaware of your intentions.

If your customers learn that the business is for sale, they might go elsewhere on their own. If your vendors find out, they may change your credit terms, or level of service to you. If employees learn of a sale they may leave to work in a more stable environment or begin to spread rumors about the "demise" of your company. If your competitors learn that the business is for sale they may raid your customer base, start rumors that you are going out of business, slash prices temporarily to attract your customers or start an aggressive advertising or marketing plan aimed at your customer base. Every seller wishes to complete the transaction privately and confidentially and announce the sale at the appropriate time.

So, you as business owner are probably very concerned that the word will get out that your company is for sale. It is pretty tricky to sell an asset that you can't really let anyone know is for sale.

Well it is comforting to know that experienced professional business brokers/intermediaries sell many businesses in this type of confidential environment. They are trained and educated to accomplish this feat routinely. Business brokers/intermediaries actually thrive in this type of confidential environment.

Their services also include developing an appropriate value for your company and preparing a comprehensive profile of your business to put it in position to be confidentially reviewed by serious qualified buyers. Through their marketing efforts they carefully secure buyers and handle the entire process, working with your professional team to successfully complete the transaction.

The sale of your company will probably be the biggest financial transaction of your life. Seek out a professional business broker/intermediary to successfully achieve your goals. ... CONFIDENTIALLY!

Tuesday, October 2, 2012

Buying a Franchise - Mistakes to Avoid

Many mistakes that people make are predictable. To help you to avoid making them, FranNet has compiled a list of ten of the dumbest mistakes you can make when going into business. Remember these are mistakes others have made, so take advantage of our experience and save yourself from some potential problems!

• Don’t overextend financially when buying a franchise.

• Don’t start to look until you have an idea of what you’re looking for.

• Don’t assume that starting a business is easy!

• Don’t try to go it alone. Use Experts.

• Don’t forget about a business plan.

• Don’t pick a business because “there are so many of them, they must be good.”

• Don’t skip talking with the other franchisees.

• Don’t put it on your credit card.

• Don’t pick the business your dad (or spouse) likes best.

• Don’t fall in love with the product.

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, October 1, 2012

Buying A Business - What Should You Think About?

If you are thinking of buying a business it may be because buying an already established business could be an easier option than starting a business from scratch. When choosing a business to buy you must ensure that the business is totally right for you as it is a huge investment. Whether you are buying a business or beginning a business for the first time, you will need money behind you.

What Should You Think About?

1. If you are buying a successful business you are buying not only a thriving business but you are also buying a business which is based on the previous owner's reputation, this can be an advantage but can also leave you with big boots to fill so make sure you feel totally up to the job.

2. The business will come with established contacts, customers and staff. You may have to honor agreements and contracts which the previous owner made. However, this is hopefully not going to be a problem.

3. Why is the current owner selling? You do not want to be in a situation where the owner is selling in foresight of business slowing, or if the staff is unhappy. They may be selling a failing business which you will have to invest a lot of further money in, beyond the purchase price, to turn it around. Take into account how the current owner's sale will affect the staff and the clients; they may not take well to a new managing director.

4. You should not have to worry about a business plan nor a marketing plan.

5. Applying for loans and financial support should be easier as you will be able to refer to the company's current figures.

6. Your skills and the amount of money you can invest in the business. You would do well to choose a business which you feel you can do well in, a business which you have knowledge and contacts if possible. Buying a business because you are intrigued by it, and are planning to learn on the job, is probably not the best idea. Also rein your ambition in, and keep to things you can afford. This is going to be a huge investment of both time and money so do not make it harder on yourself by going for things you cannot commit to financially for the long term.

7. Location does not matter! Many many businesses have the potential to be relocated, so look for exactly the right business opportunity for you, not for the business opportunity simply located by you.

Make sure you get an accurate valuation for the business. You can receive advice from a business transfer agent or business broker and they will be able to value the business with the help of an accountant. Once you have agreed on a deal for an amount with the current owner you will have a window in which to check the figures and information you have been given about the business is correct. Make sure you use this opportunity you do not want a nasty surprise. This is termed 'due diligence'.

Source: By Paul Howe

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

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:

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

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:

Friday, September 21, 2012

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?

Wednesday, September 19, 2012

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

Tuesday, September 18, 2012

10 Things You Can Do To Increase The Value of Your Business

Don't wake up one morning and decide to sell your business. Wake up and decide to plan for your exit. Because if you have a year or two to plan, you can tangibly increase the value and the selling price of your business. How?

1. High Earnings = High Selling Price. Pretend nothing else matters, because, well, nothing does. At least not enough that if you had one thing to focus on to increase the value of your business, this is it.

2. Depreciate. Earnings (both discretionary earnings for small companies and EBITDA for larger ones) don’t include depreciation expense. For tax reasons business owners tend to expense rather than capitalize and depreciate, but in the year or two before a sale? Depreciate.

3. Reduce Working Capital Needs. A midsize company is sold with enough working capital (current assets minus current liabilities) to continue to operate the business. Think of it as having to sell your car with gas in the tank. Prove you can reduce this amount now (e.g. lower AR, lower inventory, increase payables, etc.) and you can take more cash home in the deal later.

4. Nix the C-Corp. If you think it will be a number of years before you close a deal, see if you can take an S-Corp election. Most buyers will want to do an asset sale (more on this later) and the double tax created by a C-Corp can be extremely painful.

5. Concentration Is a Bad Word. Businesses with high customer concentration or supplier concentration (or knowledge concentration, etc.) attract fewer buyers and this lowers the price. What’s too high? Having a customer with 25 percent or more of your business, or having a supplier with 40 percent of your business is too high. Diversify if at all possible.

6. Make Yourself Unimportant. What business would you rather buy? The one where the owner takes frequent trips and takes every Friday off, or one where the owner has to come in even when he is sick because the place will fall apart without him. A company that relies on the owner gets far less cash up front and often less overall.

7. Pay Some Taxes. Yes, everyone plays the tax avoidance game, but only to a degree. A broker/advisor can only adjust earnings only so much, so it is far better to just pay your taxes for a few years before a sale than the complications that can arise otherwise.

8. Understand What “Adjusted Earnings” Means. Well before a sale is the time to understand what adjusted seller’s discretionary earnings and/or EBITDA means. For example, some expenses will be valid adjustments, so there would be no need to work on reducing that expense, while other areas may need some real focus.

9. A Risky Business Is a Cheap Business. A legal issue dragging on? Environmental problem lurking? Buyers hate risks and risks tangibly lower the price. Identify and attack these areas before a sale.

10. Pick That Low-Hanging Fruit. We hear many business owners say things like, “Pay me X, because you can easily grow this company by doing Y, but I didn’t want to do that because of Z”. For example, “All you have to do is hire a sales manager but I didn’t because I don’t manage people well”. If you have an easy way to boost sales, do it, because you are not going to get X otherwise.

Source: 10 Things You Can Do To Increase The Value of Your Business

Are There Upfront Fees For Selling Your Business - Business Brokers and M&A Firms

If you are small business with earnings under $300K then you would probably approach a “main street” business broker to sell your business. It is industry standard practice for business brokers to not charge an upfront fee. Actually, in most states it is even more than that – it’s the law. In many states in which business brokerage is regulated under the department of real estate, brokers are not allowed to collect upfront fees that are a part of the sales commission. If they do charge an upfront fee, it has to be for a tangible product or service such as a formal valuation (not a 5 or 10 page “broker’s opinion of value”).

If your business need a M&A firm, read on for some excellent advice.

Source: The Upfront Fee For M&A Firms and Business Brokers

Tips To Sell Your Business In This New Economy

6 Tips To Sell A Small Business Successfully In The New Economy

By : Peter Siegel, MBA

Current news reports about ups and down affecting the stock market, employment numbers and consumer confidence in the economy have an impact on those who want to buy a small business as well as those who have a business opportunity for sale. The mood of uncertainty causes entrepreneurs to hesitate before moving forward with plans. And those seeking business purchase financing, must learn to navigate through a lending environment still reacting to the banking crisis of 2008 and the resulting recession.

Fortunately, the owner of a retail shop, service company, restaurant or other small business who wants to sell, can rely on some smart strategies to help overcome obstacles and succeed with a satisfactory sale. Here are six of those ideas.

1. Be certain you're ready to sell. This is not a good time to offer the company on the market just to "test the waters," or because a persuasive business intermediary wants a listing and claims he can get a great price. The moment of truth may come to a seller who is merely exploring the market but is not fully committed to turning over the company to someone else. If the intermediary brings an offer from a qualified buyer who matches price and terms of the listing, the seller probably will owe a commission whether or not he signs the deal.

2. Organizing materials about the company, including up-to-date financial information, into a presentation is more important now than ever. There are more serious buyers now than at any time in the past generation or two, thanks to the insecurity in the job market. Many people have stopped looking for work and started looking for a way to secure the future with business ownership. But there is intense competition from a number of baby boomer owners ready to retire. And most buyers in today’s economic climate are not going to send time investigating any opportunity for which there is not a lot of solid and positive information.

3. Develop a business plan and a marketing plan to go along with the basic background profile covering the business for sale. A document that gives buyers ideas about expanding markets, adding to the company’s capabilities to generate additional revenue, is an important sales tool. A skilled business intermediary can help with this project.

4. Choosing the right intermediary - the licensed business sales professional - to offer the small business for sale, devise and implement a strong marketing campaign, and give valuable market feedback to the owner, is critical to the process of selling a small business. This is no market for amateurs. The seller who’s serious about getting results when the company is offered to the public, needs to interview at least three potential intermediaries about listing the business and make sure to get references from each. And then, spend the time and effort to actually contact those references. Key attributes to look for in a listing broker are experience marketing your kind of business, and knowledge of how the industry has changed, along with the ability to adapt to those changes.

5. Get the business prequalified for financing. Of course, it ultimately is the buyer who’ll need to qualify for a loan to buy your business, but it still is an excellent strategy to have a business purchase money lender to evaluate the company. The seller and buyer with a deal containing a loan contingency will be able to move quickly if there is a lender who knows the company and is willing to help fund its purchase. It’s a powerful selling point when offering a small business for sale that has been preapproved for a purchase loan.

6. The owner who is prepared to help finance part of the purchase for the right buyer will have a better chance of selling the business at an acceptable price. And if the business value has declined with the slowed economy, but you think things will improve, you may be able to achieve a higher price with a creative deal structure. Perhaps some form of earn out agreement can be reached with the buyer. It will establish a selling price that may be more favorable for the buyer than the seller, but the price can be subject to change for the better, and the payments to the seller increased, if the company becomes more profitable in an improving economy.

Challenges presented by circumstances of the New Economy require that an owner wanting to sell a small business learn to adapt to current realities. That will increase the chances of achieving a sale and at a price that will match or come close to the dollar amount the seller wants to receive.

Key Things To Do Before Selling Your Business

Five Key Things to Do Before Selling a Business

Selling a business for a price deemed fair and equitable to both parties — the seller and the buyer — can be a complicated negotiation. But following these five tips will put you on the right path toward a fair deal:

Define your priorities. It's vital for you to sit down at the outset and do some serious thinking about exactly what you want from the sale. Do you want an all-cash deal or are you willing to finance part of the sale price? Are you looking for a buyer who'll continue your business traditions? Can you identify a minimum price you must get in order to be happy? Odds are you'll have to make some compromises. If you insist on a lump sum at closing, you'll almost surely have to compromise on price. On the other hand, if you're willing to finance part of the deal, you may get a higher offer. When you begin to think in these terms you'll start to realize that the more flexible you can be, the closer you'll come to realizing your business's top-dollar value.
Time your decision to sell. You're most likely to receive the highest dollar value for your business when the national economy is strong and when your particular business is having its best year ever (with the next looking even better). However, history has shown that even the brightest economists can be wrong about where the economy is headed, and your industry's moment in the sun may have passed years ago. To get the best price for your business it pays to keep an eye on what Wall Street is doing and to be flexible about when you're willing to sell. Getting out earlier than you like is often preferable to getting out too late.
Start planning early. Businesses on average require about a year to sell once they've been placed on the market. So start planning at least a of couple years in advance of when you anticipate wanting to sell. Much like selling real estate requires good curb appeal, selling a business requires attractive nuances for potential buyers, who may present themselves unsolicited. Make sure your business is attractive at all times so you don't feel pressured to dress it up at the last minute, when you'll be more likely to take the first offer you get, or to accept terms that are less than favorable to you. Worse yet, you may not find a qualified buyer at all.
Renew leases and key contracts. When prospective buyers investigate the possibility of purchasing a business, they try to predict what they'll need to spend on rent, labor, supplies, etc. They don't want to immediately renegotiate key contracts or run the risk that a lease may not be renewable at all. Therefore, do your best to renegotiate all leases and key contracts early. Also, have your lawyer ensure that the contract is assumable by a new owner.
Assemble your expert team. No matter how independent you are, selling your business isn't a job you should attempt alone. Even for a small business there are numerous federal, state, and local regulations to consider, not to mention tax issues. You need to spend your time running your business at the precise time you need it to run most successfully, so strongly consider filling these positions: accountant; lawyer; business broker; business appraiser/valuation expert; and tax expert.

Source: Five Key Things to Do Before Selling a Business

Monday, September 17, 2012

Questions to Ask a Business Broker, Buying a Business or Franchise Article | Inc.com

Questions to Ask a Business Broker:

How do you select a business broker to sell your business? The areas discussed in this article are ones I ensure each seller is aware of and comfort with before we begin working together.

Read: Questions to Ask a Business Broker

Buying A Business - What Occurs During the Closing

Buying a Business—Closing

by Douglas Griess on September 11, 2012 at 8:00 am

Posted In: Griess Law Legal Blog Articles

After the negotiations, the due diligence, the contract, and all the work to get the transfer of a business or its assets put together comes the closing. This is when the “keys” to the business are actually given from the seller to the buyer. Often, obligations and requirements of the parties will be executed in new document(s) that are contemplated in the purchase agreement and which survives the closing. These might include a new employment or consulting agreement with the seller, assignments of assets, liabilities, or intellectual property, a bill of sale, or a promissory note. Still, some parts of the contract may also continue beyond the closing such as noncompete restrictions, certain warranties or representations, indemnity provisions, alternative dispute resolution provisions, or confidentiality requirements.

Generally, at closing, the parties will actually execute any promissory notes, employment or consulting agreements, bills of sale, security agreements, assignments, stock certificates, and the like. The parties will also actually exchange any payments and the property at issue. Sometimes, when the price is based on audits or analysis that takes place between the contract and the closing, the parties will conduct a final verification and certification of that information at the closing. The parties may also verify or inspect the property and the current financial documents. Finally, the seller may be required to certify that the warranties and representations made in the contract remain accurate.

After the closing, the buyer is usually in possession of the business.

Biz Broker Florida

Wednesday, October 31, 2012

Who is a Strategic Buyer? - And Should You Be One

Thursday, October 25, 2012

Sell Your Business - Confidentially Is A Must!

Tuesday, October 2, 2012

Buying a Franchise - Mistakes to Avoid

Monday, October 1, 2012

Buying A Business - What Should You Think About?

Monday, September 24, 2012

Advantages and Disadvantages of Buying An Existing Business

Five Critical Areas for Analyzing an Existing Business

Friday, September 21, 2012

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

Wednesday, September 19, 2012

Seven Tips on Selling Your Small Business

Tuesday, September 18, 2012

10 Things You Can Do To Increase The Value of Your Business

10 Things You Can Do To Increase The Value of Your Business

Tips To Sell Your Business In This New Economy

Key Things To Do Before Selling Your Business

Five Key Things to Do Before Selling a Business

Monday, September 17, 2012

Questions to Ask a Business Broker, Buying a Business or Franchise Article | Inc.com

Buying A Business - What Occurs During the Closing

Buying a Business—Closing

Followers