Why Some Owners Won't Sell Their Business

Why Some Convenience Store Operators (Business Owners) Won't Sell :

Although this article was written for an audience of convenience store operators, the reasons for not selling a business apply to all business owners that fall in that category.

This is an excellent article and a must read.

Read: Why Some Convenience Store Operators (Business Owners) Won't Sell :

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 

I want to retire in a few years. What do I need to do to prepare the business for sale?

I want to retire in a few years. What do I need to do to prepare the business for sale?

Question:
I want to retire in a few years. What do I need to do to prepare the business for sale?

Answer:
Many owners make mistakes in selling their businesses. They create a business that is too dependent on the owner for its operation and profitability. Buyers and lenders recognize the owner is the business and when the owner leaves the business will be worth a lot less. The buyer won't pay full value. Start now to delegate and prepare your key employees to run the business after you're gone. Other owners set an unrealistic price for the business based on the income they need to maintain their lifestyle in retirement. That's not likely unless the business owns a lot of assets with high market value. Get a realistic appraisal for the business and adjust your retirement expectations accordingly. Don't use unqualified family members who are attorneys and certified public accountants to assist you in the sale. Select advisers with experience in mergers and acquisitions. Selling a business is a complicated process. Poor advice can cost you a sale.

Get your financial statements including balance sheet, profit and loss statement and cash flow statements in good shape. The prospective buyer will want to see financial statements for the past three years certified by a certified public accountant. It's difficult to reconstruct financial statements retroactively and it's unlikely a certified public accountant will certify them retroactively. The same applies for the business's tax returns and bank statements. The prospective buyer will have their certified public accountants review all those documents carefully to detect any red flags that indicate the business is not as profitable as shown.

If you have a business that is likely to grow and be worth more than $5 million at the time of sale and plan to give part ownership to relatives, consider doing it now and let it appreciate in the relative's name. That will minimize gift taxes. Don't rush the choice of a buyer because the initial price seems best. After due diligence the buyer may lower the offer considerably. They may not be willing to keep key employees or the financing may be too risky. In the meantime you have lost other better buyers.
Don't underestimate the emotional trauma of selling the business. Often the owner's sense of self worth and purpose in life is tied to the business. Their business and social status in the community depends on the business. Giving that up can be more emotionally traumatic than they expect. That can cause them to act irrationally and do damage to the sale, their lives and their family life. Set goals for what you want to do in retirement. Before I retired I set seven goals that would keep me busy. Consider doing part time consulting to fill your time and keep you connected with your industry and business community.

Read: How to prepare to sell a business

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

Selling a Business Don't Underestimate Your Power!

Selling a Business Don't Underestimate Your Power! :

When sellers prepare to sell their business, some are quick to take a defensive role relative to the buyer. After all, buyers conduct the due diligence, buyers make the offer, buyers request the necessary financial information, buyers make demands during negotiations, etc. The subservient role can be an easy trap for a seller to fall into. After all, they want their business to sell. But sellers have rights, too. And they have a responsibility to protect and defend the interests of their business.

The majority of business owners sell a business only once in their lifetime. The same can be said for someone buying a business...they typically only do it once. But, a strategic, corporate or equity buyer, is likely to have been involved in quite a few transactions - some that worked and some that did not. What does this mean for the seller? It means buyers that express interest in buying a business could have an experienced team of mergers & acquisitions advisors helping them or, have been through the business transaction process more than once. This can result in a lopsided negotiating arrangement - the amateur (the seller) versus the professional (the buyer).

Read:  Selling a Business Don't Underestimate Your Power! 

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

Do You Run Your Business as if it’s For Sale? | SucceedAsYourOwnBoss.com

Do You Run Your Business as if it’s For Sale?:

Even if you have absolutely no plans to sell in the near or far future, you should keep your business in sale-ready shape. For one thing, running a business so attractive and competitive that someone would want to buy it is more rewarding – personally and financially – than running a business that’s in constant disarray.

Read:  Do You Run Your Business as if it’s For Sale?

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

Keep emotions in check when selling your business

Keep emotions in check when selling your business:

One of the top deal killer when selling a business is the owner's emotional preparedness.
Typically, owners looking to sell and retire will be near the completion of negotiating a deal and a wave of emotion will hit them when they’re at the precipice of exiting the business.All of a sudden, the owner will start making irrational demands and changing terms.

Read:  Keep emotions in check when selling your business

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

7 Essentials to Sell Your Company at a Premium

7 Essentials to Sell Your Company at a Premium

This article provides a great planning framework for making a business more attractive to prospective buyers.

Read: 7 Essentials to Sell Your Company at a Premium - Forbes

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

Small Businesses' Unique Opportunity in Social Media by @tammykfennell | Spin Sucks

Small Businesses' Unique Opportunity in Social Media :

According to a recent study by Blue, 50 percent of small businesses report they have developed new leads from social media. Are you utilizing social media? Do you have a social media strategy?

 Read: Small Businesses' Unique Opportunity in Social Media

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

Read: How To Sell A Restaurant

How To Sell A Restaurant

Excellent insights into preparing to sell a restaurant and increasing the value and chance of selling it.

Read:  How To Sell A Restaurant

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

7 Blogs and Newsletters That Can Help You Sell a Business

Every business sale is different. Here is an article from a New York Times columnist and Arkansas business broker that provides links to seven excellent blogs and newsletters on business sales.  Whether you are a business broker, or business owner wanting to keep up with the latest information on business sales, this is worth a read.

Read:  7 Blogs and Newsletters That Can Help You Sell a Business - NYTimes.com

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

3 Must-have Agreements When Selling Your Business

3 Must-have Agreements When Selling Your Business:

This article discusses the:

1. Purchase Agreement

2. Confidentiality Agreement

3. Non-compete Agreement

3 Must-have Agreements When Selling Your Business | Small Business Support:

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

3 Questions to Ask Before Selling Your Business

3 Questions to Ask Before Selling Your Business

Running a business can be exhausting. It's no surprise that even the most successful entrepreneurs feel at times that cashing out – selling the business to someone else or another company – might be the best way to maintain their mental health as well as their financial well-being.

But is selling a business worth considering during a weak economy?

The answer, according to experts, is a resounding yes.

"I could sell a hula-hoop manufacturer if it's priced right and marketed professionally," said Philip Pearl, a Ramsey, N.J., business broker and accountant.

To get the best deal on your business in any economic environment, ask yourself these three questions:

1. Will my business be as successful when someone else owns it?

The success of certain businesses is tied unalterably to their owners' personalities and customer relationships. "Mary's cookies may be great, but can Tom sell Mary's cookies? If not, her business is less valuable to a buyer," said Pankaj Amin, a New York-based entrepreneur who purchased a telecommunications business and sold it seven years later.

Mary may change the equation, though, by agreeing to continue running the business after selling it. Self-employed professionals such as lawyers may find this method useful, said Peter Raffalski, a vice president at Gibraltar Private Bank & Trust, based in Coral Gables, Fla. For example, a small law firm that specializes in bankruptcy proceedings might garner the attention of a larger firm that focused until recently on real estate closings.

2. How will the weak economy affect my business's value?

What a business is worth – always a source of contention between a buyer and seller – is usually settled around a multiple of the business's earnings, Amin said.

Even businesses whose sales have dipped recently may prove an attractive acquisition target, even more than some businesses that are suddenly enjoying brisk sales.

Pearl said that when a business broker and client look into buying such a business, they try to determine whether its fortunes will improve in better economic times.

Owners who find a potential buyer willing to take a long view of earnings should keep in mind that such a view cuts both ways: A short-lived sales surge won't mask the years of anemic growth that preceded it.

Pearl has worked with such a business. "Their growth spurt was so high that if I were to try and market the business based on this last year, buyers wouldn't accept it," he said.

3. Would selling help me meet my personal goals?

This is one of the key questions Gibraltar's Raffalski asks of business owners seeking his advice. Preparing to sell is wise for owners who seek to retire soon and for entrepreneurs who specialize in starting a business, bringing it to profitability and handing it off, Raffalski said.

For other owners, however, acquisition offers can lead to decisions they'll later regret, Raffalski said.

"Let's say someone is running an insurance business," Raffalski said. "He receives an offer to buy that he wasn't expecting. He thinks to himself, 'What would I do if I don't want to start a new business?' He can't just pick up where he left off. Sometimes the timing is wrong for personal reasons."

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

Exit Planning - Preparation Will Allow You To Sell Your Business On Your Terms

 Business ownership transfer will be either on a voluntary and non voluntary manner, or let's describe as proactive or reactive. The realities are that most business owners do not “formally” plan for ownership transfers; in fact, it’s estimated that 85% of business owners have no exit strategy. The following are some reasons why.

• Emotional Issues – Have not come to grips with “letting go”, plus trying to meet the varying needs, through some level of consensus, amongst other stakeholders (i.e. family, employees, and co-owners).
• One Sided Role – Too busy in the role of manager of the day-to-day operations in “growing the business”, leaving little time to address the dual role as an owner, and the eventual exit from the business.
• Qualified Successor – Difficulty finding a qualified “internal” replacement to both own and run the business, or simply don’t know how to groom one.
• Taxes – Dealing with the fact that most every ownership transfer will be taxed in some way (gift, estate, income).
• Lack of Advice – The business owner’s advisors (CPA, Attorney, etc.) are not addressing this planning activity at a practical and emotional level it demands.
• Changes – Maybe what many business owners, partners and stakeholders fear most – things will be different. Change is inevitable!

Change or transformation whether it's personal or business will always cause an ownership transfer. So whether it’s formalized or not, at some point in time, there will be an exit from the business. It’s a matter of choice if a business owner is proactive and develops an Exit Plan.

But a business owner can start with a first step by watching this video:

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

It May Be Time To Sell (Don't Let A Bad Economy Stop You

A business owner needs to consider two crucial elements in making a decision to sell; (1) As a business owner where they are personally (quality of life, family matters, age, etc.), and (2) What position in the life cycle of a business is their company. The business owner already fully realizes that ever product and service has a life cycle, so why is it sometimes so hard for them to attribute the same fact to their business.

This excellent article by Ted Burbank is very insight, and a must read for any business owner.

If You Are Considering Selling Your Business,
Don’t Let a Bad Economy Stop You

By: Ted Burbank, CBI, FIBBA

There is a rhythm and pattern to life and to business. The seasons and cycles of the plant world are generally well recognized. In example, a plant sprouts, grows to maturity, flowers or produces fruit then withers and dies to decay and enrich the soil in support of the next cycle. Businesses have their cycles also, but they need not die in order to benefit the next generation.

The life cycle of a typical business begins with an idea or concept, the start up or grand opening, continuous fine tuning and adjustment until things seem to be running smoothly. At this stage business is good and, albeit financially rewarding, not as exciting as previously. Eventually, essentially all business owners come to the stage where the business begins to interfere with how they wish to live their lives and they begin to have thoughts of selling the business.

Many never act upon these thoughts for countless reasons and as a result less than 25% of small businesses and franchises are ever sold. This is indeed a tragic statistic but it gets worse in a down economy, not because of the economy – but rather because the decision was not made to sell at the time it was supposed to have been during the normal cycle.

A Time to Grow and a Time to Go

Perhaps I can explain it this way. There is a time to grow and if you are not focused on growth – it’s time to go. There is no status quo. Either grow or go. There comes a time in every business’ cycle when a business owner should make the decision to sell and sell to the entity that will take the enterprise to the next level. This time can be recognized as when the demands of the business begin to conflict with an owner’s desired lifestyle. This optimum time or Window of Opportunity to sell at an optimum price does not last very long.

When the decision to sell is postponed in favor of waiting out a bad economy, the window of opportunity will often close and business cycle’s end game begins and the business’ value begins to diminish. This end game is not one designed or controlled by the owner but rather one enabled by the outside forces created by allowing a business to coast.

When that window of opportunity passes we generally find the owner just going through the motions and allowing the business to coast or, more accurately stated, slide. Decisions to invest in the business are postponed or rejected. Eventually, and often, very quickly the slide accelerates with the end game no longer controlled by the owner. Much of the value of the business has been dissipated. At the end, either the business is "Sold" to a competitor (at the value of selected assets) or closed and the assets liquidated.

A Down Economy Intensifies the Usual Seller’s Market

Selling more than 2,000 businesses through good times and bad over the last thirty years has taught us that good businesses can and do command premium prices in down economies and here’s why:

• Layoffs, company closings and down-sizing flood the marketplace with people wanting to buy businesses
• Pricing formulas do not change because of economies
• Most owners of good businesses postpone selling in a poor economy resulting in fewer opportunities for the increased number of buyers
• A business’s value is dependent upon its outlook for future profitability
• You can get tomorrow’s price today for your business if you choose a buyer who recognizes the opportunity your business represents and considers expectations of future profitability when assessing value.

In order to obtain an optimum price for a business, regardless of the economic condition, one must attract the type buyer who will recognize the opportunity the business represents. In real estate, optimum value is determined by the entity that will recognize highest and best use of a property. Business prices typically reflect an acquirer’s perception of future earnings under their ownership. Therefore, the optimum value of a business is determined by the buyer who recognizes the most opportunity the business represents. A business can be considered worthless to one yet be worth millions to another.

How can you tell if it’s time for you to think about selling? We have developed a little quiz just for this purpose.

A One Minute Quiz
for Business Owners Only!

This One Minute Quiz will help you answer the most difficult question a business owner ever has to face. Count your Yes answers to the following questions to determine where you are in your business’s life cycle.

The Question: 　Should you begin preparing your succession plan or perhaps decide to sell your business?

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Your number of 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 is best not to make the mistake of staying too long! 　Go out on top. Sell while you are still having fun. 　Best to start the planning process early. The actual succession or sale process can take a long time.

7-10 Yes
Don't let time spoil the fruits of your labor.  Most great men and women in history have had more than one career. It is time for you to decide that you want a change.  Choose what you want to do next, and then act.　

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In Summary:

If you score between 7 and 10 and decide to put off selling until the economy improves - be warned.  The value of your business is at its peak now.  Putting off your decision to sell increases the odds that you will end up with the 75% of business owners who fail to receive significant value for the business. 

Why a savvy business owner may decide to sell his business in a down economy:

• Savvy business owners realize that if you aren't growing you should be going
• Business pricing methods remain unchanged even in a down economy
• Fewer good companies are on the market as their owners await an improved economy 
• The number of serious buyers in the marketplace increases in a down economy - seller's market. 
• There is a narrow window of opportunity between growing one’s business and the time for selling it. 

Sell while you are still having fun and you will leave in style with a pile.