selling my business Archives - Page 5 of 14

How to Sell Your Business for More

By Scott | January 14, 2011 - 7:41 am |July 17, 2013 business broker florida, buy a business, how to sell a business, sell a business, sell a business florida, selling my business, small business ideas, small business owner

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At some point a business owner considers selling their business. Sometimes it is just a fleeting thought. Sometimes its a thought of “I don`t need this anymore, get me out”. Other times its a well planned out progressive process. You want to sell your business- how do you sell it for more.

This sounds like a fairly straight forward approach, but just as the selling of a business process can be very involved, the question of how to sell it for more firstly needs definition. I am a business broker based in Florida and speak to many many business owners about the potential sale of their business. I also sold my own business several years ago.

Selling Your Business When The Time Is Right

Just consider the simple analogy of having a rusty bike in the garage with flat tires that you want to sell today. You put it out at the end of the drive way put a For Sale sign on it- what do you think it will sell for? How can you sell that bike for more tomorrow than you can today?

Selling Your Business For More:

Selling your business for more can be a very good thing and very reasonable goal.
Trying to sell a business for more than it is worth can ultimately result in your business not being sold at all.
Setting the Goal today to improve your business, prepare it for sale so that it is worth more after your improvements is probably your best approach
Wanting to sell your business for more than “what you heard a local competitor sold for” can also be a mis-guided path.

Preparing Your Business For Sale

So selling your business for more is a reasonable and understandable goal. How do you get more for your business? Start today preparing your business for sale. Like so many of your other important business decision, prepare yourself a to-do list and systematically address those items. Below are some items you will want to include on your to-do list to help ready your business to sell for more. Ask and honestly answer these questions about your business.

How are your financials? Are there some unusual entries on your P/L that have escaped needed adjustment? Are all sales accounted for? Do you have a good clean P/L statement? For smaller businesses Do you have a P/L and Balance sheet?

How reliant is your business on you. What can you do today to help your company be more about your company and less about you.?

How documented are your systems, procedures, policies, pricing structure?

Photo (c) discoverytraining.co.za

Is your customer base as diverse as it should be? How reliant is your business on a few key customers. And again do those customers do business with you the business owner or with the company?

Do you have the opportunity to add recurring revenue streams to your business, but elected to not pursue? Do you have some contracted customers that you just haven’t updated contracts with?

Spend some time to meet with some of your trusted advisers. Dont rely on information you hear through the grapevine about this person selling their business for this amount. Talk to your attorney, your accountant , or visit with a business broker start to really learn the marketplace. Have you scraped the rust off your bike?, painted it ? oiled the chain? pumped up the tires? put an ad in the newspaper? on the Internet?- Is your bike worth more today than it was yesterday?

How do you sell your business for more tomorrow or next year than it is worth today? Start today preparing your business for sale.

Sell or Buy Business with goal of Hybrid Retirement

By Scott | December 29, 2010 - 9:37 am |July 17, 2013 business broker florida, buy a business, how to sell a business, selling my business, small business ideas, small business owner

Why not aspire to Hybrid Retire?

I personally think the majority of those currently working full days either employed or as small business owners look forward to the day they can retire, stop working, and spend the rest of their days fishing, golfing, or hobbies. Of course your age at the time of cashing in can greatly affect your decision process. If you are 75 years old, maybe you say enough is enough and just head to the golf course. But if you are fortunate to be successful and exit in your 40’s, 50’s or maybe even your 60’s your perspective, and needs could be greatly different.

The thought process for someone thinking of selling a business goes something like this:

I think I need to sell my business, walk away with $500,000 and that will be enough for me to retire. But what if you had someone that would buy your business and allow you to walk away with $400,000? Maybe this is a good time to entertain such an offer and consider Hybrid retirement.

Photo (c) yahoo.com

If you believe you need $50,000 per year to live off of, and the sale of your business may give you $35,000 to live off of, should you walk away or consider.? Many small business owners get overburdened with the responsibility of owning a business, and really want to sell those responsibilities away to others. Maybe making the $25,000 monthly payroll or covering the $100,000 per month fixed overhead cost month after month just gets to be too much.

Perhaps you can consider upon the sale of your business, you can find another business to buy, possibly one that you have aspired to do for years, or possibly work for someone, under terms conditions that fit your lifestyle. But this second business you don’t need to make that high monthly expense, and now you are supplementing the proceeds you have from your sale, and what you need to draw from the business is a lesser amount. “Needing” to make $15,000 per year instead of $50,000 can be somewhat liberating!

Why Hybrid Retirement?

Do you really know that you can “do nothing” after working for 20, 30, 40 + years
You have someone looking to buy your business near the price you think you need. maybe consider the offer and plan to supplement the difference with a second career, part time job etc.
This is an opportunity to build a profession around your lifestyle, whereas before you may have had to try to build a lifestyle around your business.
Are you really prepared to try to live off a “fixed income”- supplement that with something you aspire to do.

I think currently due to economic condition there are many small business owners delaying the exit / sale of their business because the recent performance of their company may not allow them to achieve the “walk away” money they believe they need to retire comfortably on. There also are eager entrepreneurs ready to start a new venture with hopes of one day selling and retiring off the proceeds. Maybe planning for both of the above scenarios can best be addressed by allowing yourself to consider Hybrid retirement.

Number 1 Reason For Selling Your Business

By Scott | December 2, 2010 - 6:35 am |July 17, 2013 business broker florida, buy a business, Main, sell a business, sell a business florida, selling my business, small business ideas, small business owner

Solid Reason For Selling Your Business

Good businesses get sold for very good reasons. Being “ready to do something else” is a good reason. A seller of a business needs to be ready to sell. Really- you only really exit your business by 2 means.

1. By your choice-your timeframe, your plan.

2. Not by your choice– closing due to business failure, business conditions, bankruptcy,Forced Sale.

Granted there may be certain undesirable business or personal events that prompts one to “be ready”. A business owner may have additional employee problems and decide that enough is enough and that is the impetus to sell ones business. New frustrating regulation, customer problems, and any one of numerous problems a business owner may face may be the “final straw” and induce a business owner to pursue the sale of the business.

But again for any business owner that has owned and managed a business for an extended period of time problems such as these come and go. Business can be going quite well and the owner may just be ready to move on. Actually selling a business while the business is doing well is a well thought out exit strategy for a business owner. And yes problems can and, do come along with the business. Problems within the business does not make a business a bad business.

A business owner may “just be Ready” to:

retire
try something new- a second career
want to move or relocate
Just be done running the business I have been running for the last 20 years

I am not aware of the existence of a Perfect Business. Even the best of business opportunities will likely contain issues and or undesirable situations. But if you truly want to own your own business and move into the role of business owner- Understand that good business are being sold by business owners that are just ready…. to move on.

7 Ways to Improve Your Business that Cost No Money

By Scott | November 17, 2010 - 12:37 pm |July 17, 2013 business broker florida, buy a business, entrepreneur, Main, sell a business florida, selling my business, small business ideas, small business owner

What Can I Do To Improve My Business With Limited Or No Money

1.Look at your company from the perspective of a customer. Can you do that?, can you pretend you are a customer trying to do business with your company. You send an inquiry via email, you place a call into your company- what happens?. We all have dealt with companies that customer service seems more like “How to effectively get a customer off the phone” instead of ” I wont let you hang up the phone until I know I have completely helped you to fulfillment” IS it a pleasant experience to do business with your business?

2. Attempt to surround yourself with more beneficial synergistic strategic partners-

As a business broker I have various strategic partners that allow me to best assist my clients. These professionals include, Attorneys, Accountants, bankers and Financial people. Not so long ago I relocated to a city 5 hours away. Among other things, I needed to develop a new “team” that I could rely on that help me help my clients. I researched banks that do a lot of SBA loans to small business, migrated thru the company website, found a point of contact that I had an interest in meeting with, sent an email, and got an email back saying “going on vacation back in 2 weeks, call me then”. I proceeded to pursue a relationship with someone that would call me back., passed over this prospective strategic partner and found someone that I feel may develop into a mutually beneficial business relationship. My clients will benefit from my valued strategic partners.

3. Use the Internet more

Photo (c) highachievingwomen.biz

post a blog- how much does that cost?
post a tweet about a sale, a special or event- We’ve all heard/read that this can be a good idea- just do it.
check out a site such as Fiverr.com and see if someone can do something for you for $5. Are there other sites that facilitate low cost solutions? Can you afford to make a $5 error?
Try something you haven’t tried- a video, guest blogging, join more related forums or user groups, start a group.

4. Educate yourself– take some time out of your day to read other related blogs info on your industry or specific area of focus. Commit yourself to learn your own financials better than you presently do. Again the ROI on your time invested in this can be quite high.

5. Go to a network meeting– there are several available in most communities that are either free or cost a couple bucks. How much could you benefit from making that “right contact”.

6. Consider a Freelancer– Are there some functions/task that you currently are having performed that may be done more cost effectively thru an outside source such as a free lancer. Open your mind to it.

7. Treat all customers, prospects, employees, vendors with respect and integrity– The ROI on this no cost effort is immense

Dont ever stop trying something different. I have utilized the above items in my various business ventures throughout the years and still utilize them on a regular basis. If you are running a business, buying a business, or growing a business these low and no cost business practices will result in very good return on investment and usually all it takes to get these returns is to consider them and just do them.

Most Important Step to Starting,Running, Buying, or Selling a Business

By Scott | November 5, 2010 - 8:10 am |July 17, 2013 business broker florida, buy a business, entrepreneur, how to sell a business, Main, sell a business, selling my business, small business ideas

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You are looking to Start a Business. You are Running a Business. You are Buying a Business. You are Selling a Business. What is the most important step in any one of these ventures, And no the answer is not having unlimited deep pockets. To start, run, sell,or buy a business you need to understand that business. You need to understand not only the operational side of your business, you need to understand the financial side of your business.

I am a business broker in Florida and I help people buy and sell businesses. (and current and former business owner) This last week I completed a very busy week of helping an out of town business buyer visit several different businesses. Our intent of visiting these multiple businesses was an effort to understand the businesses. To buy a business you have to understand the business. A small business owner truly needs to understand the financial health of their business.

Running Your Business Successfully

Many, Many Many small business owners DO NOT understand the financial side of their business. Do you feel as an entrepreneur you need to understand the difference between a debit and credit or if you buy something if it should be a capital purchase or an operating expense. So many small business owners and entrepreneurs run their business using their gut as their guide, they can feel if their business is going good or bad.

Other small business owners look at their checkbook- if there is money in that things are ok. On the other side you may have a very successful business, you buy several new truck and new equipment with cash every year, you have very little money in the checkbook and “feel” you have an unsuccessful business. You could be very wrong. And yes it is also very easy to hire a CPA and or accountant and send all the monthly records to them, count on them to sort thru them and have them generate a report for you to maybe glance at and file away.

Photo (c) freelancefolder.com

Your CPA or accountant is a great place to start the learning process. The more you know, the more effective they can be to you. Your Balance sheet and your Income statement tell your companies story. You may feel your company is healthy, or improving, or getting better, or getting worse- your balances sheet or Income statement (Profit/Loss Statement) will tell you in a factual manner.

You need money for your business- you go to a banker or financial institution to get money, do you think they will listen to you tell them about your business and loan you money based on that. they will use your company financials to make that business decision. A few years ago banks I had worked with strongly considered your balances sheet to make loan decision. Now-a- days both Balance Sheets and income Statement both are a strong part of that evaluation. Why is that?. Understanding the “whys” about your business is important to your business.

In the preceding scenario a business may have a strong balance sheet due to significant assets like real estate owned or equipment owned by the company. But in current economic conditions the companies Income statement show that the business sales are down 25% and and shows losses for the last year- lending may not occur. The banks may not be all that excited about the fact that you own real estate thru your company.

The business buyer I was working with flew in town for 3 days for him and I to visit businesses. Most of the small business owners we visited had good businesses. Without divulging any confidential information, they all showed cash flow in excess of $200,000 per year. They (the respective business owners) all said they didn’t really understand the financial side of the business, but “here our our records for your review”. (after confidentiality agreements were signed) They could speak for hours about their customers, employees, procedures and ideas. Questions regarding financial information were usually answered with 1 or 2 brief sentences.

Buying A Business – The Right Way

The buyer I was working with was a very educated buyer, a President of a publicly held $40 Million company , and 30+ years of experience. He had looked thru maybe 30 businesses to narrow down visits to less than a handful. He and I both knew that to buy a business, he had to understand the business. We spent hours discussing the financials of the businesses.

You as an entrepreneur that is starting a business or running a business may someday want to sell your business. Understanding the true financial condition of your business is the 1st step to improving the financial condition of your business.

Buying a business is a very effective way to expand your customer base and Revenues. knowing how to read and understand the financial statements of others could be the difference of a business acquisition that is a success or a failure.

And when an educated buyer approaches you about buying your business, you provide the business buyer your Balance Sheet, your Income Statement, and your explanation and understanding of the true financial condition of your business may be the difference in someone buying your business at a good price or passing your business over to pursue other businesses to buy.

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