buy a business Archives - Page 8 of 14 - Sell A Business Florida

Selling My Business – How Much is my Business Worth

By Scott | July 19, 2010 - 4:03 pm |July 19, 2013 business broker florida, buy a business, how to sell a business, Main, sell a business, sell a business florida, selling my business, small business ideas, small business owner

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Selling My Business How Much is my Business Worth. Almost all businesses are for sale to some degree. Lets say your business is not For Sale. Assume Your business is worth $100,000. You love what you are doing, someone contacts you with an offer to buy your business for $500,000. Is your business now For Sale? The preceding is not a likely scenario for most business owners. To successfully sell your business planning and preparation is needed. But if you are now or at some point considering the sale of your business you may want to consider the following 3 points:

1. Identify your honest interest level when selling your business. Early in the decision process of selling your business consider what approach you may take towards selling your business. As a Business Broker in Florida I interact with the various interest levels by small business owners.

My business is not for sale but if someone walks in and offers me way more than what I think it is worth- I would sell my business
My business is not for sale but if you run across someone that would want to buy it please let me know.
I want to pursue selling my business but I won’t sell it for less than…( A somewhat inflated price) . I am willing to accept that it may take 1-2 years to sell my business, and if priced too high I can accept the fact that my business may not even be sold.
I want to pursue selling my business and after significant due diligence I feel the price I am seeking is consistent to what other like businesses have recently sold for.
I want to sell my business and I want out now. I will set my price aggressively and set a lower price than price currently sought for businesses similar to mine. I will expect this aggressive pricing to both help me sell my business and decrease the amount of time it will take to sell my business.

If you do have a true interest in selling your business as suggested in above last 2 points you do need to exercise due diligence to gain understanding of what the value of your business may be.

Photo (c) nett.com.au

2. You can expect that the perceived value of your business to you and the value of the business to a potential buyer will probably be 2 different values.

Ultimately the price of your business is what a willing and able buyer is prepared to pay to buy your business.
Seek “reasonableness” to your price that you will seek to sell your business for. If similar businesses to yours are sold at 1 1/2 times adjusted cash flow, why is yours worth 3 times adjusted cash flow?
Ask yourself what you honestly would pay to buy your business.
Do a free Search on my website https://www.sellabusinessflorida.com 0r similar sites to research what similar businesses to yours is asking to sell their business for. Remember – all businesses are different, but use such a search as part of your due diligence. A business for sale asking price and the price a business sold for can be greatly different, but asking prices can provide some basis-while current Businesses Sold information is more pertinent
Speak to your trusted advisers. A business broker may be able to help with non-public info on sold businesses in your area. Your accountant or attorney also may or may not be aware of such sales as well. A Professional Business Valuation specialist may benefit you.

3. Whether it is part of your exit strategy to sell your business or not, you should have an exit strategy.

Most small business owners do not have an exit strategy.
If you own a business you should have an exit strategy. Do some planning, perform some due diligence. Know what you have or may have.
Even if you are not planning to sell your business there is value in knowing approximate value of this potentially large asset. You know what your house is worth, you car, your other assets. Understanding the value of your business can be a significant piece of information when planning ahead.

Selling ones business can be a rewarding experience when done properly. Understanding a proper value for your business can set the stage to a successful sale of your business or a business that is unable to find a willing and able buyer.

Can a Goat Herder Teach Banks How to Loan to Small Business

By Scott | July 12, 2010 - 5:45 pm |July 19, 2013 business broker florida, buy a business, entrepreneur, how to sell a business, Main, sell a business, sell a business florida, selling my business, small business ideas, small business owner

Change Of Perspective For Business Owners

Now- For a moment pretend that you are a poor goatherder walking to town to get a loan , you don’t have any money to open a savings account with, you don’t have any normal collateral to secure a loan with, you don’t have a credit record as you have never been formally employed and you’ve never taken out a loan before. Also consider that you might even be unable to complete the necessary paperwork as you are illiterate. You earn about $1/day, and you want a loan of $250 to buy more goats to grow your business. Do you think you will get the loan? – Due to Micro financing the the goatherder may get the loan before the Lexus college graduate.

Many of us Entrepreneurs and Small businessmen/women donate time and or money to various causes or needs. I have been involved with Kiva since 2007. Kiva provides microfinance to Third World Entrepreneurs to help them grow their business. Kiva was founded by 2 former 20 something year olds that were former employees of TIVO and PAYPAL.

Microfinance is the supply of loans, savings, and other basic financial services to the poor. As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term “microfinance” helps to differentiate these services from those which formal banks provide. Why are they small? Someone who doesn’t have a lot of money isn’t likely to want to take out a $5,000 loan, or be able to open a savings account with an opening balance of $1,000. Hence – “micro”.

These are small loans, multiple lenders will “pool” their loans to come up with a lump sum to provide to the Entrepreneur. Again most of the Entrepreneurs I have loaned money to over the last 4 years earn less than $1/day. When an entrepreneur pays off a loan, I reloan those moneys to another. So far I have loaned to 18 different entrepreneurs and repayment of loans have been 100%. Sinces 2005 Kiva as a group has loaned almost $150,000,000 to almost 400,000 Entrepreneurs and repayment has been 98.27%.

Why can this organization have such success in getting loans repaid from those with so little and banks in our “developed nations” loaning to those with abundant resources have problems so significant that these banks need a “bailout” from their govenment and ultimately taxpayers. Is it the conventional bank that is doing something wrong? Are they loaning to the wrong people on a consistent basis?. How much of the blame falls on those that are requesting the loan?

Getting A Loan For Your Business

Currently how many good entrepreneurs and small business are not able to get loans as a result of mistakes made by conventional banks in the past. It seems to me that banks tend to over respond to problems. Obviously if you are a lender and want to have no loans default and you loan no money- you can achieve your goal.

As a business broker I see the need for lending to allow buyers to finance the acquisition of buying a business. I also see income statements and balances sheets of reasonable small businesses that are using credit cards to help finance their businesses. It is hard for me to understand how our economy is benefitting by having small business owners take these “whatever is necessary” financing steps when traditional prudent lending to small businesses could truly be our fastest way to our economic recovery.

The banks reduce/tighten their lending, the need for small business financing continues, higher interest is being paid thru credit card financing, non-conventional means, and when does that higher expense cause employee reductions. Small business could divert money from high interest payments to investments and improvements that actually improve their business and create jobs.

Why can the goat herder get a loan and the Print Shop owner not? Or maybe if I were a banker I could ask why does the goat herder pay off his loans and the Lexus driving College Graduate Default? I understand there is a lot more that goes on between the comparison of a conventional bank and micro finance- but maybe conventional banks could learn something from Micro finance groups such as Kiva.

Hands off or Hands On- What Type of Business Owner Are You?

By Scott | June 24, 2010 - 9:20 am |July 19, 2013 business broker florida, buy a business, how to sell a business, Main, sell a business, selling my business, small business ideas, small business owner

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What kind of business owner do you consider yourself- Are you a Hands on Business Owner or do you consider yourself more of a big picture operator that consistently effort yourself to avoid the minutia of the business. I think the majority of us are a hybrid of these 2 approaches.

When running a small business, or involved with a startup business, on an almost daily basis you are faced with the question ” Do I do it myself or do I hire others to do it for me”. Most all are aware of the concept Time is Money- but like so many other business concept we all draw the line in the sand at different places. We are not always consistent with where we draw that line, and find that that line moves as or business moves or the economic climate around our business moves.

This question can be applied from basic business task of running to the post office to mail off some stuff or calling some prospects to significant larger issues like hiring outside help to handle your marketing functions, doing my own website, or trying to do my own SEO . I am a business broker and I help business owners and individuals in the process of buying or selling businesses. Selling ones business is a very significant event and very often like so many other decisions a business owner will decide to try to sell the business themselves or hire someone to help sell their business.

Are You A Hands-On Person Like Me?

This decision is part of the never ending series of question a small business owner needs to answer. In my current profession as a business broker if Florida I am faced with these same similar questions on a daily basis. Do I do it myself or subcontract out that task or role. ” Maybe someone else can do it better, but I can do it cheaper”, or “Maybe someone else can do it cheaper, but I can do it better…” Relatively speaking I am a fairly hands-on person.

My previous business I had owned for 20 years I was fairly hands on as well. I helped install our production equipment on day 1 of the business, I worked on the production line, I worked in the truck delivering product, helped troubleshoot our equipment, performed testing and so on. I also set our policies, accounting procedures, QC procedures and company philosophy. I enjoy knowing and understanding as much detail about my business as possible. Ultimately I was able to build a team of 25+ employees that both allowed our business to grow and ultimately allowed me to run the business from 1500 miles away for 7 years.

Photo (c) stage2planning.com

While others may say “I don’t want to know the details- I just want it to work”. People reach business success with both approaches. I have a good friend that owns a Plumbing business and has very little plumbing knowledge- he doesn’t want to. He is a very good businessman, with a very successful plumbing business – he is a big picture, hands-off guy and I think his wife may call me to fix their leaky faucet before she ask him. But again he is a successful business owner.

The real question that comes in is at what point does the hands on approach limit your business growth. When does- “I have to do it myself or it wont get done right” approach become business limiting? So many businesses do not make a transition to “count on others” and the business remains a certain size. If the company goal is to stay a certain size then this approach may be both applicable and appropriate.

Hands-On VS Hands-Off Business Owner

But as one desires to grow a business to a certain size- “letting go” a little control is needed. As working as a business broker in Florida very often I have business owners ask me can I just sell my business myself. Here is how I summarize my true beliefs on this very important question.

Most business owners I know have a fairly full day- to say the least. If your day is full already how can you possibly take on the task of trying to sell your business. And I truly believe this. Assuming selling your business is a fairly involved process how do you squeeze that continuous task into to your already packed stream of work. Maybe you say to yourself, I am going to devote a lot of time and effort towards selling my business, but then what suffers?

Does the business you are trying to sell now have the person steering the ship significantly pre-occupied? During a recent speaking engagement I compared the process of running a business to running a marathon and addressed the need to finish strong. Why run the race hard for 23 years or 23 miles and then stumble in for the last year/mile? It is important when one is selling their business to try to finish strong.

I beleive one of the most important decision a business owner makes its the decision to sell their business. Like so many decisions a business owner has to “do it myself” or hire others to do it. Can I do cheaper? Can I do it better? Do I have the time to do it? Do I want to do it?Some of the similar questions one faces every day waking up as a business owner, but when selling ones business the stakes are significantly higher.

Business Ethics – Overrated or Underrated?

By Scott | June 8, 2010 - 4:20 pm |July 19, 2013 business broker florida, buy a business, entrepreneur, how to sell a business, Main, sell a business, selling my business, small business ideas, small business owner

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Ethical behavior, quality character, honesty, moral integrity – how does one in business view these human attributes? I tend to view them as a given with the people I interact in both the business world and in my personal life as well. I expect the best from people yet keep my eyes open for behavior that contradicts my expectations.

I am a business broker based in Florida. In the profession of helping those buy and sell businesses. In my profession, as with most all professions you have what some consider good business brokers, bad business brokers, and OK business brokers. Most all industries have the good, the bad, and the average. Is it ethical practices which help define the good, bad or OK?

Business Ethics Among Your Clients

I recently experienced a business activity that made me take special note of a business clients actions. Basically, we had a verbal understanding and agreement regarding a business relationship we would enter into contractually. While driving to meet with client to sign the documents that outlined our agreement my client was approached by others.

The client and I had no written agreement between us. The client could potentially go in another direction which could cost me a fair amount of money. I had left at 5:00 am to drive 6 hours to meet client and about 1/2 hour before I got to our meeting he called me to tell me of this other situation.

After listening to what he had on his mind, I was somewhat pleased when he then asked me how long before I could get there and we could sign our papers and I could represent him with this prospective buyer of his business. He told me he felt he needed the assistance of my representation, yet he could of handled the situation so much differently. Before this exchange I viewed this potential client as a good, honest, straight forward individual. His actions reinforced to me the value of dealing with a person of good character.

I have shared this story with several of my friends that are business owners and their response was fairly common. They too also greatly value dealing with a person of good character. But that fact that those around me hold business relationships with those of good character in such high regard, makes me realize good character from others is a valuable yet somewhat limited commodity.

Photo (c) reputationalcompliance.com

A few weeks back my teenage son and I were talking of the Tiger Woods situation regarding his many documented affairs. We both are active golfers and had admired Tiger Woods golf skills over the last 10+ years.

Golf is an interesting game and it has been said that one can learn more about a person in one round of golf than you can in multiple office based meetings. I asked my son that if Tiger Woods had “cheated” on his wife and family, do you think he may have cheated on golf. My son said, “No,” I said, “Why?” He said that he thinks Tiger Woods views golf so importantly that he wouldn’t cheat on golf. So I asked him the obvious, “So you think he views cheating on golf to be worst than cheating on your wife and family and that is where he draws the line?” My teenage son said, “Yes.”

Ethics Of Financial Gain?

I have been associated with several different organizations, associations, and trade groups. I still get a little surprised that many of these such groups feel compelled to teach ethics. I am in the profession of being a business broker and I work with individuals and businesses in the process of buying and selling businesses. I consider the fact that I will treat my clients and customers in an honest, ethical, and moral manner as a given, yet when I witness others that “consistently take the high road” I take special notice. I have been a member of the business community for several decades and recognize that most all of us are on a quest to increase financial gain. Where does ethical behaviour fit in that mix?

Do you feel business ethics can be taught and learned by all in the business world?
Is business ethics much different than normal ethics one utilizes in the everyday game of life?
Can ethics be taught to a 20, 30, 40, 50, 60 year old? Or is it ingrained in you before you enter the workforce?
Is it ok to treat someone unethically and then pass it off as “Its just business” ? To this I say No and have always felt that. I have never really understood “Its just business.”
I have never understood “I had to cheat you out of $X, but it was just business”, ” I know I treated you wrong, but it was just business” – what does that really mean?
Does proper ethical behavior really require actual thought or is it more of an involuntary response that just occurs like breathing and blinking?

Is dealing with a person and expecting honest ethical behavior a given and glossed over to allow “more important business issues to be discussed”, or is it the important issue that all else revolves around?

Why Buy A Towing Company

By Scott | June 1, 2010 - 3:41 pm |July 19, 2013 business broker florida, buy a business, entrepreneur, how to sell a business, Main, sell a business, selling my business, small business ideas, small business owner

Why Should Your Buy Towing Company Business:

This Towing business for sale will be a solid business investment for someone and I’d like to highlight reasons why someone will buy this business:

1. Multiple Income Streams- Yes they do tow cars, but the business model is so much more than that. They derive revenue from towing, also, vehicles towed in very often pay a daily storage fee, sometimes for vehicles in accidents vehicle require “sealing the car with stretch wrap” to eliminate additional damage from weather, some vehicle owners elect to get vehicle serviced at the towing companies service shop, so there are service fees, some vehicles get towed in and never get claimed.(more than you would think). These vehicles get fixed and resold, sold for parts, or sold for scrap. So Income comes from: a. Towing, b. Storage, c. Securing d. Storage e. Service work f.resale g. Disposal

2. Significant Assets are included in purchase Price- Land, multiple buildings, multiple trucks, equipment collectively total over $1,000,000. I have never been a fan of buying a business because of the assets- Usually cash flow is main area of interest. But owning the property that your business operates on and paying “yourself the rent”, allows you both control and the ability to enjoy appreciation of this asset as you grow your business. Also, securing money for your business is easier with assets on your balance sheet.

3. Good Cash Flow– This Towing business generate about $160,000 a year in cash flow. With Revenues of about $600,000 this is a respectable cash flow. Cash flow has been fairly steady and consistent over a several year period.

4. A Towing Business is a Recession Resistant Business- There may be a business that is “Recession Proof”, but I am not so sure what that business may be. The economic downturn that began in 2008 has been both extended and far reaching. Outside of insurance companies, most businessesIi know of have felt the effects of this downturn by significant reduction in revenues. The towing business is a service that is neither a “luxury item” nor discretionary expense. A towing company provides a service that is needed regardless of the economy. This business did realize a 12% reduction in revenues, but compared to the 20%, 30%, and 40%+ reductions in revenues by many of the businesses that i have been working with, this dip in revenue is minimal.

5. Future Prospects– Business has opportunity to add an onsite used car auto division.(both the land and building exist and the towing nature of the business results in vehicles potential for resale). Service department has considerable room for growth, and unlike many auto service companies that may wonder where their next customer may come from, the towing operations bring customers in! As with the auto resale operation, most of the infra structure is in place, incremental revenue could result in substantial incremental cash flow.

Photo (c) grandrapidsmilocksmith.com

Yes , I have a vested interest in the sale of this towing company. I stand to gain financially as this business sells. I also attain personal satisfaction helping a long term business owner work thru this process of transition. Finding the right buyer and getting the right price and terms for this business are the goals we set.

I believe this Towing business for sale will be of benefit to the right buyer.

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