small business ideas Archives - Page 2 of 11

You Want to Sell Your Business Someday How to Prepare Today

By Scott | March 14, 2011 - 7:44 am |December 15, 2014 business broker florida, buy a business, entrepreneur, Main, sell a business, sell a business florida, selling my business, small business ideas, small business owner

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Every Business Needs an Exit Strategy. Do you want to Run Your Business Forever? Do you Want to Sell your business? Do you want to leave your business to your children? Do you want to sell your business to Your Employees? Do you Just want to close your doors and Move on? How do you want to exit your business ?- And when?

Recently a good friend of mine that is a successful business owner contacted me about the prospect of selling his business in a few years. He asked me to contact him regarding what he may want to be doing now to prepare his business for sale. He has a successful growing business, he has grown his number of employees from 10 to 75 over the last 18 months. He is effective at gaining new contracts and growing revenue, but like so many businessmen, he has never attempted to sell his business.

Devising An Exit Strategy For Selling Your Business

Normally during the startup of a new business the thought of an exit strategy is not even a consideration. Then small business owners get so involved with the day-today operation of their businesses that again an exit strategy is either not even thought of or possibly just put on the back burner. Taking some time to put some thought into your exit strategy can go a long way to increasing your odds of exiting your business the way you desire to.

Planning, gaining knowledge, and preparing may be the 3 most important measures you can take when considering an effective exit strategy.

If your exit strategy involves an interest in trying to successfully sell your business in several years, what sort of measures or actions should a business owner take to make this successful:

Make sure your financials are in order. Clean understandable Income Statements and Balance Sheets will add value to your business.
Systematize and document your operations and procedures. Well documented policies, procedures and practices are a sign of a well run company and probably would help your company run better, and add value. If you got hit by a truck tomorrow could someone use your documented practices to help continue run your business?
Move your business towards a business that does not rely on you. Do your customers do business with your company or do customers do business with you. When you go to sell your business are you selling a business that is dependent on you the owner or a self-sustaining business based on a solid philosophy, solid customer service and reliable employees and practices. Or when you go away, does your business go away?
Speak to your trusted advisers- let them know your intentions see if they have any input suggestions that could help move you towards this goal. Trusted advisers may include your attorney, CPA, financial advisor, business brokers.
Learn by speaking to your trusted advisers what are the most important aspects that affect your business value. How does one value your business? What is most important to business buyers?- Your Assets, your cash flow, your sales, your number of customers, your patents, trademarks, your competitive advantage. Learn what the real driving factors are behind raising the value of your business and work on them. Understand that not all businesses that attempt to sell actually do find a business buyer and sell.
Running your business and concurrently, preparing your business for sale is a viable approach towards business transition. It is not a” one or the other approach”. Preparing your business for sale does not need to get in the way of running your business, and most measures improve your business. If you make needed improvements to your business and or operations and decide not to sell your business or exit your business, you still most likely will have a better business on your hands.

For planning purposes try to learn what the potential value of your business may be. Also educate yourself on the business buying or selling marketplace. It is not always the same. Selling a business during the 90’s was different than selling a business in 2006, and is significantly different than selling a business in 2010… and different than 2015 or 2020.

If you think you want to sell your business in 5 years for $1M, attempt to understand what realistically your approximate value may be today. If your business may realistically only be worth $250,000- change your expectations, change your time frame, or maybe more importantly get to work on making necessary changes to your business.

11 Steps to Business Failure in 2011

By Scott | February 11, 2011 - 9:35 am |July 17, 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

How To Avoid Business Failure?

Find something that is working and try to make it repetitive. Find something that is not working and try to eliminate it before it brings further undesirable results.

I have a good friend that is an attorney and we would discuss business and he accounted his success to the fact that he consistently and diligently returned phone calls. To that I say What? Something so simple as just returning a phone call made you better than your counterparts? And the answer to that is yes. Not everyone does return phone calls or emails . So you can be better than the next guy by just returning phone calls.

To me this business practice is just a given, but I find to others it is more of an “optional service” that they provide. Sometimes the difference between success and failure is not some long winded algorithm or new gee-whiz technology, it is focus on the basics and do them right and do them consistently. Currently I am a business broker based in Florida and work with small business owners in the process of buying and selling businesses. I consistently find so many of the business issues I have had as a business owner are shared by so many other business owners.

Photo (c) theidgroup.co.uk

Tips For Steering Clear Of Business Failure

Do you want to have a better business? Do you want to improve your business? Then review the below list. If you are wondering what may be the fast track to business failure then use the below as a guideline:

Dont keep good track of your numbers and dont feel the need to really understand them. That job should be for others.
Dont return emails phone calls timely
Continue to delay your involvement with Internet marketing, social marketing and website optimization
Dont pay attention to existing customers and clients
Be willing to treat customers and employees improperly, as long as you the business owner benefit, and when you do something wrong to others that benefit you- assure yourself that its “just business”.
Dont take any time to review where you are spending your advertising/marketing dollars. Assume that even though you have not been getting results from your current efforts that if you do nothing long enough results will occur… eventually.
Dont embrace technology, continue to fight it and close your mind to “new ways”.
As a business owner dont take any time planning for a business exit strategy
Minimize the value of input from employees. You are the boss and because of that fact your way is the only way.
People say “either your business grows or your business dies”- dont believe that. Believe you have enough customers right now and that is good enough.
Dont worry about any long term planning. Long term planning is really a waste of your valuable time.

Like most list, this list as well can go on and on. Want to run a better business in 2011?

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

1 Comment

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.

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