Selling a Business Is a Journey Filled With Emotional and Financial Complexities. Explore the Emotional Challenges of Letting Go, Strategies for Reinvesting Proceeds, and the Lessons Learned About Finding Purpose and Financial Security Post-sale.
Navigating the Emotional and Financial Journey of Selling a Business Read More »
Explore Essential M&A Strategies for Sellers – From Employee Retention to the CEO’s Role. Navigate Purchase Agreements, Disclosure Balance, and Financial Stability. Equip Yourself for Success in The Dynamic World of Mergers and Acquisitions.
How to Master the Art of M&A: A Comprehensive Guide for Sellers Read More »
Seize the Opportunity as Retiring Baby Boomers Create a Favorable Market for Business Buyers. Explore Key Steps for a Successful Small Business Acquisition: From Choosing the Right Type of Business, Assembling a Deal Team, Drafting a Letter of Intent, Conducting Due Diligence, Assessing Risks, and Preparing a Forward-Looking Business Plan to Creating a Purchase Agreement.
How to Find and Evaluate a Business for Sale Read More »
Unlock The Secrets to Successfully Buying a Small Business. Explore The Vital Criteria: Potential for Growth, Strong Return on Investment, And Sustainable Income. Make Informed, Profitable Decisions for Your Entrepreneurial Journey.
Small Business Acquisitions: 3 Things You Need to Know Before You Buy Read More »
This quiz was designed to test your knowledge of buying a franchise. Are you ready to put your knowledge to the test?
Franchise Fundamentals: Put Your Knowledge to the Test in This Quiz Read More »
This quiz was designed to test your knowledge of selling an existing small business. Are you ready to put your knowledge to the test?
From Valuation to Closure: Test Your Expertise in Selling a Business Read More »
This quiz was designed to test your knowledge of buying an existing small business. Are you ready to put your knowledge to the test?
Buying An Existing Business: Test Your Knowledge About Buying a Business Read More »
Business purchases are either an asset purchase or a stock purchase. Buyers like to buy assets. Seller like to sell stock for tax advantages.
Types of Business Purchases – Taxes and Legal Issues Read More »
When buying or selling a business and the discussion comes around to financing options, few have ever considered the role of an earn-out. An earn-out can benefit both the buyer and the seller when used properly.
How to Increase Business Sale Profits with an Earn-Out Read More »
There are a few steps that a franchisee considering a franchise will go through to get to a decision about investing in the franchise. In this article, we will break the process down into four basic steps.
How Do I Research a Franchise Investment? Read More »
In any industry, you will find good, and not-so-good businesses and business associates. The same is true in the franchise consulting industry. Franchise consultants play an important role in the franchise industry. They can be a sturdy bridge between individuals seeking franchisees to invest in, and the franchisors who are seeking good franchisee candidates.
Are You Working with an Ethical Franchise Consultant? Read More »
When I sold my first company, I got a call from my business broker just before I was packing up to go home one night. He said that there was some interest in my business by a potential out-of-state buyer. He added they were a publicly traded company and wanted to fly out a team
Selling a Business – What to Expect During Due Diligence Read More »
Once you agree on a final price for the business, the seller and buyer must agree to what portion of the purchase price applies to the tangible assets vs. intangible assets (e.g., goodwill). The allocation of the purchase price will dictate what portion of the sale price the seller can treat as capital gains vs.
Allocation of Sales Price Governs Tax Consequences Read More »
Most buyers and sellers just assume that when you buy or sell a business you pay cash. While cash may be a component in the sales price, generally a business sale is never an all cash deal. Often, there are secured notes and/or unsecured notes that the seller my extend to the buyer. Of course,
Forms of M&A Payments Read More »
Whether you are using a business broker or attempting to sell your business yourself, you will need to start with a solid business plan. Using the business plan as your base, you will need to edit it to create a confidential business review document (CBR). The CBR is the main document buyers will use to
So, You Decided To Sell – The Documentation Read More »
Between the time when a business owner puts his company on the market and the closing date, there are two events that can occur which either kill the deal outright or negatively affect the final sale – the inadvertent disclosure of the sale and the accidental disclosure of proprietary information to competitors and customers. The
Process Mistakes that Reduce a Business’s Value During a Sale Read More »
There are several factors that can positively and negatively affect the value of a business from the point of view of the buyer. Some common factors that add value to a business include: When I sold my first business, the payment was to be made in the acquiring company’s public stock. Since it was during
Factors that Effect Business Value Read More »
When it comes to non-profitable businesses, the Liquidation Appraisal Method is used. For this method, only the value of the tangible assets is used. The reason behind this is the buyer is only purchasing the tangible assets. Any liabilities of the business entity are the responsibility of the seller and are not factored into the
Liquidation Appraisal Method Read More »
The Asset Accumulation Appraisal Method is used primarily for real estate holding companies, oil & gas companies, or other asset-heavy companies with earnings that do not support a value higher than the tangible assets. This method is sometimes used with profitable companies to represent the low end of the range of indications of value. This
Asset Accumulation Appraisal Method Read More »
Companies like Business Valuation Resources and Bizcomps are leading providers of information about private company transactions. They sell reports to business brokers, which they can use to do comparable company searches and evaluations. When it comes to valuations using comparable companies, the values are based on a lot of financial analysis data such as net sales, cash
Comparable Company/Transaction Appraisal Method Read More »
The Discounted Cash Flow Appraisal Method is also used for larger businesses similar to the EBITDA method. To understand the Discounted Cash Flow Appraisal Method, one needs to understand the concept of the “time value of money.” If you invest a dollar and it earns you a 10% annual return, that dollar would be worth
Discounted Cash Flow Appraisal Method Read More »
EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation, and Amortization. The EBITDA Appraisal Method attempts to remove all the factors that are viable from one owner to the next in privately held businesses. That said, the EBITDA Appraisal Method is most often used for public companies where their enterprise value can be computed.
EBITDA Appraisal Method Read More »
The Rule of Thumb Appraisal Method is a method often used to compute the approximate value of closely held small businesses. This method relies on a multiple of some unit of measure. The unit of measure changes based on the type of business or industry. It may be the number of subscribers, gross annual commissions,
Rule of Thumb Appraisal Method Read More »
Business Buyers Come in Two Flavors. Financial Buyers and Strategic Buyers. Each Type of Buyer Values a Business Differently.
Types of Business Buyers Read More »
When it comes to buying a business, buyers buy a documented and believable future. If you are the seller, it is your job to explain the past and sell the future. While it is up to the seller to prove the value of the business, it is often not a good idea for the seller
In M&A, He Who Mentions Price First Loses Read More »
The inverse to why sellers sell a business is why buyers buy. Often a seller may only sell one business in a lifetime. However, buyers often buy several companies during their lifetime as they assemble pieces to help another business grow. Many buyers purchase a business to avoid the risk associated with start-ups and are
Why Buyers Buy a Business Read More »
I teach a boot camp class each month for our local Small Business Development Center (SBDC). There is portion of this course that looks at the three ways to become a business owner. These ways include: buying a business, buying a franchise, and starting from scratch. As I discuss the option of buying an existing
Why Owners Sell Their Business Read More »
When the seller makes the decision to sell his business, time is often his worst enemy. Many things outside of the seller’s control can often negatively effect the value of the business. For example, changes in the industry can make elements of the business obsolete. The interest rate hikes by lenders can make your business
Business Cycle Economics and Selling a Business Read More »
There are many reasons to conduct a business valuation. Some valuations are pretty straightforward while others can be quite complicated. If there is a good possibility that the valuation will be challenged on legal grounds or by the IRS, it is often best to have the valuation performed by a qualified appraiser. That said, I
5 Reasons for a Business Valuation Read More »
When it is time for an owner to sell his business, the wise seller will “recast” his financial reports to create a clearer and often better impression of his business for the buyer to see. If you are the buyer and the seller has not done a recasting of their financial statements, you’ll want to
Recasting Financial Reports When Selling Your Business Read More »
Most banks say that they are small business lenders. The missing part of that statement is how banks define small businesses and what banks will lend money for. From the bank’s perspective, a small business is an established business and not a new business. Banks lend money primarily for tangible assets that double as collateral.
How to Argue for Seller Financing Read More »
When it comes to buying a business, size does matter. Most lifestyle or micro businesses have under 1 million in annual sales. When it comes to lifestyle and micro businesses, the owner is also the top manager. For valuation purposes, a good rule of thumb for a marketable lifestyle or micro business is that the
How to Value an Existing Lifestyle or Micro Business Read More »
With many baby boomer entrepreneurs in their 60s, many are contemplating their exit strategy. While many will consider selling their business or passing it on to their children, there is another way. While this strategy does not receive much attention, it represents a viable way to pass along the business and cash out at the
Exit Strategy for Successful Employer Based Companies Read More »
The other day I had a client look at buying someone’s business. The seller was very anxious to close the deal quickly which was the first indication that there might be a problem. Looking at the finances for the prior three years, revenue and profits were definitely moving in the right direction and the buyer
Value of Due Diligence Read More »
