small business owner Archives - Page 5 of 13

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.

Negotiating from a Business Owner Business Broker Perspective

By Scott | October 19, 2010 - 9:50 am |July 17, 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

3 Comments

As a Small business owner or Entrepreneur, we find ourselves always negotiating. We negotiate with our vendors for better prices/terms. We negotiate with our spouses to spend just a few more hours at the office before we come home for dinner. I believe everyone’s views and methods of negotiation are as different as our taste in music.

Negotiating When Buying Or Selling A Business

My profession as a business broker certainly involves negotiations at most every step of the long process of buying and or selling a business. Someone “needs” to sell their business, he “needs to sell at this price”, according to all the other Business For Sale , his price is 3 x what other like businesses are asking, I find myself “negotiating or discussing” the merits of his target price. My previous position as an owner of a small business with 25 employees and handling manufacturing, transportation, multiple office locations, and distribution required constant negotiation. I used to formally review my employees on an annual basis.

They generally expected a raise. Before the meeting, I would calculate what the company could afford, set a range and meet with the employee. I never viewed this process as a meeting that allowed negotiation on wages. I viewed it as a means to allow di-directional feedback, but the wage increase was not an arbitrary number. Very often employees would ask for more, I think just because they thought that is what they were supposed to do- which is fine with me. They viewed this as a negotiation, I viewed it as something else.- This was just part of my personality or philosophy on negotiation. I had fantastic long term employees and we would later negotiate days off, holiday pay and other items, but raises were not a point of negotiation. Again, I think we all have our own unique views and ideas on negotiation.

Very often how ones negotiates may be a matter of his or hers personality. Other time “someone told me or taught me” how to negotiate and that becomes the norm. Currently as a business broker I do have to negotiate terms and conditions of me helping a business owner sell a business. The line between negotiation and discussion does become blurred and for me I think it is fine to have business negotiations and business discussion become one and the same thing.

My Negotiation Tips For You

1. I find I don`t get so caught up on the concept of negotiation and semantics. I find that we have a business decision to resolve, we have 2 parties seeking to resolve it, and the 2 parties work together to seek resolution. Put yourself in the position of having options and the process has the potential for the best results.

2. Its not always about price. I have been through the process of negotiating leases on a facilities, annual purchase orders with major suppliers, and larger purchases of capital equipment and many other “negotiable situation. Very often the person that I am trying to reach agreement with is very strong and firm upon the price they believe is needed. And in many situations I have been willing to accept the price desired by the other party, BUT I make absolute sure the other party hold true to every other term and condition within the agreement.

So my position is ok let us go with the price you desire, but it is mandated that delivery date, guarantees, support, followup and every other item involve with this matter is followed completely. At times I feel that such value can be added thru the other terms that the actual price is really a value to both parties. Or as it relates to my current profession as a business owner selling a business, I will give you a $50,000 price reduction, but I want a personal guarantee on the buyer, I want 8% interest instead of the 7% interest the buyer is offering for me to finance my business, and I want the owner to stay on as a free consultant for an extra 3 months. SO the person buying the business gets the reduced price, and the seller gets some real added value.

Photo (c) thesologuide.com

3. One more point about price. How many times have we been working thru a deal and felt the need to drive the price down to a level that the seller is willing to accept but not really happy with. Then a week later when we want this little extra help or assistance or concession and we hear “We’re already losing money on this deal and we really cant help you with that”.

4. Really a good deal is a deal that is good for both parties. Sometimes one party can leave the “negotiating table ” knowing that it is a great deal for him/her, and knowing that the other party is “taking a hit”. How does that help sustain an ongoing relationship. There are businesses that are ok with the “one and done” concept and have little regard to the effect on the other party. I think our globe is fairly small, and getting smaller and I aspire, plan and count on all business relationship being perpetual. Again the example about buying or selling a business.

If you are selling a business and you want a price that is higher than the actual business can justify, and if you provide some seller financing to the buyers, what is going to be the result of you getting this inflated price. Very likely it results in the buyers of the business, not being able to make payments to you, going into default, and you having to deal again with the business that you originally sold because you had not longer wished to be dealing with it.

5. Dont mistake negotiating with wishing or hoping. If you know the terms that you need to attain to make the deal make sense to you, be prepared to walk away from the deal. Are you making an offer and hoping /wishing the other party takes it because you know you want or “need” this product or service? Be prepared to walk away form the deal, again try to put yourself in the position of having options. If someone is wanting to buy a Towing Business and makes a bottom line offer to someone selling, it helps the potential buyer knows that there are 3 other similar towing businesses for sale in the area and is fully prepared to pursue these other options.

Steps Involved with Buying Selling a Business

By Scott | October 11, 2010 - 7:39 am |July 18, 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

1 Comment

Buying or Selling a Business is a process. The below provides a framework to define the process and steps needed to buy or sell a business. The size and type of business that one may be buying or selling will influences the complexity of each of these steps.

1) INITIAL INFORMATION REVIEW– Confidentiality and Non-Disclosure Agreements are signed to assure confidentiality related to this private matter. Irreparable harm can occur if the confidential content of discussions and negotiations are improperly disclosed. Seller reserves right to approve potential buyers and may require that additional buyer information/capability be submitted before confidential information is released to the buyer of the business.

2) THE INITIAL MEETING: At the first meeting, the potential buyer of the business will want to know the seller’s motives for selling the company as well as more detailed information about the business and the seller will want to know how if the buyer is the type of person to whom he wants to sell the company. If the results of the initial meeting warrant further consideration of the deal, the buyer will next begin to evaluate the company and develop a financial structure for the proposed business purchase.

3) THE LETTER OF INTENT/PURCHASE CONTRACT: Either a contract with

contingencies or a letter of intent will be presented. A letter of intent may have an ” escape clause” in it to allow one or both parties the opportunity to withdraw from the deal if certain conditions are not met. The letter of intent will address :

The purchase price/ consideration – Selling price of cash, notes, equity, or some combination of these.
What is being purchased — Assets, liabilities, and operations that are being transferred to the buyer and those being retained by the seller should be identified.
Photo (c) webuybusinesses.com.au

Structure — The parties need to agree about whether the sale will be a sale of assets, a sale of stock, a merger, or some other structure. Whether the SBA, bank, or owner takes back a note, the company cash flows must be able to support that loan.
The definitive purchase agreement — As the buyer begins its detailed evaluation of the company, the attorneys will be preparing the purchase agreements. The Sales Purchase contract is usually drafted by the buyer’s attorney.
Due diligence — The seller will need to have ready his financial records, all corporate records,pertinent contracts and all pertinent other documents that the buyer of the business will be requesting for review once the letter of intent or contract is signed. This will allow the buyer of the business to analyze the company in greater depth to determine whether everything has been represented properly, whether he wants to buy the company, and, if so, the appropriate price to pay. A purchase price is usually negotiated based in part on historical financial information. and future potential earnings.
Escrow — The buyer will establish an escrow account into which his initial Good Faith deposit of monies shall be deposited and handled by a 3rd party escrow agent .

Other significant items- non- compete terms, and employment contracts. leases and long-term purchase contracts, and any other pertinent business agreements shall be addressed.

Professional fees – Usually the buyer and seller will bear their own costs for attorneys and accountants.
Conditions and Timing for closing. Usually the closing is within two weeks after all contingencies have been completed, and like most steps in the buying or selling of a business this time is negotiable.

4) CLOSING– Once all issues have been resolved, the documents are signed, and the consideration exchanges hands, the deal is in condition to close. The actual closing marks the conclusion of the process.

Again buying or selling a business is a process and depending upon the size of the business and type of business this process from start to end can take several months or even longer. Due diligence when buying or selling a business is a very important part of this process. Negotiations are made at most every step of the process as new information becomes available and additional analyses are performed.

In a successful negotiation, both the buyer and the seller need to be flexible and to understand which points are important and which ones may be “deal breakers”. Most people may buy or sell a business maybe once in his or hers life. Following the advise of a trusted advisor such as a business broker can help increase the likelihood of a successful business sale or business acquisition.

I’m Looking to Buy a Business

By Scott | September 24, 2010 - 6:26 am |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

2 Comments

“I’m Looking to Buy a Business“. As a business broker based here in Florida this is a statement that I hear often. Within the industry various statistics are stated regarding business buyers. I have heard that 9 out of 10 of those that say they want to buy a business actually don’t buy a business. Based on my experiences that statistic may hold true. There are so many currently employed that during their 40- hour work week aspire to “be their own boss” by starting their own business or buying their own business.

Live Your Dream – Buy A Business

There are many unemployed out there that also think they may want to buy or start a business. So while there are probably as many as millions of those both currently employed or unemployed that aspire to buy a business or start a business, there is a much much smaller subset of those that even attempt to act on those aspirations. Of that small percent that actually act on their dreams and or goals a small percent may contact a business broker such as myself, and a small percentage of that group may find themselves at a closing table signing documents and actually buying a business.

Many business acquisitions are done with out the assistance of a business broker. The numbers of how many entrepreneur types set off to buy a business and successful find a business without the professional assistance of a business broker are unknown to me. I personally had bought several businesses on my own without the assistance of a business broker.

These were strategic acquisitions within a certain industry. I personally feel these types of acquisitions have a higher success rate. Existing relationships, industry knowledge, focus, and synergies provide for a higher success rate. My views on this are based upon a fair amount of first hand experiences of myself and peers. This discussion is based primarily on non- strategic type acquisitions as referred to above.

Photo (c) richardparker.com

Just one of the many steps in the process of buying a business that I assist in is how to apply some focus and some parameters to the basic statement of “I want to buy a Business”. Being my company website is Sell a Business Florida I assume the person contacting me thru my website is looking to buy a business in Florida, but very often many of the other parameters have not been carefully considered.

When one is looking to buy a business criteria can range from looking at a certain specific company, to a certain “type” of business, to “I want to buy A business in the state of Florida”. If you (or someone that you know) are currently employed and want to act on aspirations to buy their own business and gain the feeling of control of ones destiny, or are currently unemployed and view buying a business to be the best means to a gainful career please consider the following.

Things To Consider Before Buying A Business

Below are a few parameters to consider when searching to buy a business. The list can be long and extensive but the below is a starting point that allows the search to buy a business to maintain some focus.

Location- For business purposes and family purposes does the business need to be in a certain State, County, City, or a certain side of town? Or are you looking to buy a home based business that you can operate from most anywhere in the world?
Type of Business- Are you looking to buy a certain type of business like a Landscape Company For Sale or Towing Business For Sale , or are you looking to buy a business that has maintained certain performance levels such as “I want to buy a business that has at least 3 consecutive years of Net Income of $100,000+”.
Are you looking to buy a Hands on or Hands off business.
How much Available Capital to do you have? – This will set a range of businesses that you may consider. Keep in mind that both Available capital for buying a business and Working Capital for running the business should both be considered.
Are you looking for a business that includes real estate
Are you looking for a business that provides Seller Financing?

Prospective Business Buyer– ” Hi Scott I am looking to Buy a Business in Florida” Scott– ” Great, What type of business are you looking to buy” Prospective Business Buyer – “I really don’t know”

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