Getting Your Business Ready For Sale

By Scott | May 18, 2016 - 4:38 pm |May 18, 2016 business broker florida

Getting Your Business Ready For Sale

I am a business broker. I work with business buyer and business sellers in both South Carolina and Florida. I also owned my own business of 20 years and sold it. A business owner interested in selling a business needs to know how to prepare a business for sale.

FACT- Many businesses that try to sell do not actually sell.

Looking at the reasons that a business does not sell can be guidance towards measures a current business owner can make to prepare a business for sale. Selling a business has a lot of moving parts. How can one increase the likelihood of a successful sale? The answer can be in knowing how to prepare your business for sale.
What are some of the top reasons businesses Don’t Sell?
• Price
• Business Performance
• Business has poor records
• Business completely dependent on Business Owner
• other liabilities encumbrances

The value of a business is ultimately defined by what a willing capable buyer (s) is willing to pay for that business.
What could possibly be the best approach to getting your business ready to sell is to look at your business as a Business Buyer rather than a Business Seller. Would you buy your business? If so how much would you pay for your business?
What steps can a business owner do today to prepare a business for sale?
Getting your business ready to sell –
1. Have realistic expectations. Stories circulate about “Google buying this business for 10-20x cash flow”.
Sales like this are not the norm. Businesses with Sales of $5M + sell for a higher multiple of cash flow than businesses with $800k of Sales- Generally. Try to research what other similar businesses my be selling for or have sold for. A qualified Business Broker may assist with this step.
2. Ensure your financials are concise and clean. Are there any outdated entries on any of your financials. Can you readily reconcile any differences between tax records and Income Statements? Furthermore a business that is doing better is more likely to sell than a business with declining sales or margins.
3. Have documented business operational procedures or business practices and procedures. If you already have them, review and update them. Consider if it is time to archive or throw out records from 5- 10-15 years back.
4. Make big and small steps to have less reliance on you as a business owner. Ask the question- “Does your business rely on you ? Delegate if possible. Sometimes it’s hard to let go of the idea that “only I can do that”. I’ve personally experienced a long stretch of illness while owning a business and quickly learned of the many activities that I was doing that could be done by other members of my staff.
5. Clean up your business. Your office, your trucks, grounds, facilities, equipment, tools and employees appearance can all add value. Equipment involved with the sale that is well maintained and in order provides to the “Peace of Mind” a business buyer is seeking. Again envision yourself as business buyer and looking at your trucks and most of the tires are bald, and smoke is coming out of the exhaust and they look like hell. It may only take a few thousand dollars to improve this conditions, but a prospective buyer may mentally devalue the business value by tens of thousands or more. It may create more doubt and uncertainty about other components of business.

Again- not every business that tries to sell actually find a buyer that is a fit. There are steps you as a business owner can make to increase the likelihood of a successful business sale and transition.
Getting your business ready to sell is a very important step in the process of selling your business. Working with a trusted advisor, finding prospective business buyer candidates is highly important as well. Finding the “right” buyer candidate to transition your business to is the end goal that begins with preparing your business for sale.

For More information on Selling a Business or Buying a Business contact Scott Messinger- Business Acquisition and Sales- Gateway Business Advisors www. SellaBusinessFlorida.com

What does a Business Buyer look like

By Scott | October 9, 2013 - 11:56 am |October 9, 2013 Florida business broker

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What does a Business Buyer look like

What does a Business Buyer Look Like?

Are you a Business Seller Looking to Sell Your Business and wondering what does a Business Buyer Looks Like?

Do you represent a Business Seller and are looking for a business buyer for your client- What should you look for in a business Buyer- What Does a Business Buyer Look like?

I am a Florida Business Broker working with both business buyers and business Seller. I am also a Business Buyer. Prior to being a business broker I started and owned my own business of 20 years and utilized business acquisitions along with organic growth to advance my business. I had bought multiple businesses as a stategic business buyer. I am also a business Seller as I actually did sell my own business. The “Business Buyer” I sold my business to was represented by a business broker and we experienced a successful business transition.

The person that bought my business is a business buyer -He is not a Business Buyer Prospect. So much of the work and efforts involved with the process of buying and selling a business is the extensive involvement with Business Buyer Prospects. Very often “business buyer prospects” are referred to as Business Buyers. There is a significant difference between a business buyer and a prospective business buyer. Each deal has 2 sides- a Buyer and Seller. I like to use the term Business Buyer Prospect for someone contemplating an acquisition. Most Prospective Business Buyers dont buy a business. Various business brokers, M&A people, and related professionals have their own personal experiences as to how many “Business Buyer Prospects” turn into actual “Business Buyers”.

Personally I think that anywhere between 75 %-95% of those that state an interest in buying a business do not buy a business. So approximately 9 out of 10 (plus/minus) of these “Business Buyer Prospects” never become “Business Buyers”.

SO What does a Business Buyer Look like? How do they look different than the 75-95% of the “Business Buyer Prospects” that do not buy a business.

I contend that looks have nothing to do with what does a business buyer looks like.

A Business Buyer Acts a certain Way. A Business Buyer acts different than a Business Buyer Prospect.

What Does a Business Buyer Act Like?

1) They have a plan- “When you buy the business in Florida ,and you now live in Chicago-How will you run the Florida business?”

Business Buyer Prospect- “I dont know”

Business Buyer- ” I just sold my house and have a rental in Florida and plan to move there in December”

2) They have funds or funding plans- “How much money do you have available to buy a business?”

Business Buyer Prospect- ” If I find the right business- I can get the money” or ” Im not sure yet”,”I’m not worried about that yet”

Business Buyer- “I have x amount available for down payment on a business, so I know what the maximum I can spend and need to find a business that fit this budget”

3) They understand certain information will be required from them-

Business Buyer prospect- “why do I need to sign this NDA and give you some financial or background information on me? I just wanted to know what the Sellers Taxes look like”

Business Buyer- ” I have returned the requested NDA and personal financial statement. what is our next step”

4) They ACT,they make necessary steps/moves to move the deal forward

Business Buyer Prospect- ” Yes that business looks to be exactly what I said I was looking for but think I will wait to see if Seller drops price or another opportunity becomes available.”

Business Buyer- “Yes that business looks to be exactly what I said I was looking for- what is the next step so I can get closer to ensuring I dont miss out on this opportunity.

What does a business buyer look like? – They are tall, short, fat, skinny, young,old, wearing shorts, wearing dress pants, wearing a dress, have tattoos all over their body. They are from many different backgrounds, they are many different religions and races. They look “normal” like you and I.

When I was growing my business though acquisition and I identified an acquisition opportunity I would worry about not securing that opportunity. I made the decision that the opportunity was good for my company and would be disappointed if I missed out on that business opportunity. I knew I needed to ACT like a business buyer. You wont know what a business buyer looks like based on appearance, “business buyer prospects” and “business buyers” look very much alike. Are you looking to sell your business? As a business Seller you will know what a business buyer looks like by the way a business buyer acts. Are you a prospective “business buyer prospect” and are you genuinely looking to buy a business? I could suggest that you act like a business buyer and you will both stand out from all the others out there looking and also achieve your goal.

Buying a Business Selling a Business Using the Internet

By Scott | February 21, 2013 - 6:56 am |July 11, 2013 Florida business broker

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: SellaBusinessFlorida.com

I just sold a business last month and the buyer saw the business advertised on Craigslist and on one of the large “Businesses For Sale” websites. I am a business broker that works with business owners with the process of buying and selling a businesses. My profession of being a business broker is my own business.

I have also owned another business of 20 years. I am a business broker that has been trying to figure out this “Internet thing” for quite some time. I think I am figuring out that I will never figure it out.

It seems that there are a lot of Internet marketing experts and this industry appears to still be somewhat at the early stages of a rapidly growing industry. As a business broker and business owner, I recognize that utilizing the internet is integral in business success going forward. Maybe I know more about trying to maximize the Internet than some, but the question of asking a business owner (that is not in the Internet marketing business) if they understand Internet marketing is akin to asking someone if they are a golfer. The average golfer may have a handicap of 20-25, Some golfers shoot at professional levels- 0 handicap, some people have never golfed, some have golfed once or a few times, some golf a lot but are still a 30 handicap (the higher the handicap the worse the score). In golf, I am about a 12 handicap. For Internet marketing maybe I am about a 12-20 handicap , I dont know.

What Does Selling A Business Online Involve?

I may know more than some, but know there are a lot more that know a lot more than me. My job involves many discussions with business owners regarding the state of their business as it relates to a potential sale of their business or a possibly buying another business. The questions I have about utilizing the internet as a business broker are also questions shared by the plumbing contractor, the print shop owner, the restaurant owner, the card shop owner and the small business owners scattered throughout the world.

10 Interent marketing observations from a Business Owner / Business Broker:

The Internet today is so different than it was 10 years ago. Ten years ago, so many businesses didn’t have websites. Those that did had these fancy Home pages with lots of “neat stuff”. And the site just sat there. Now-a-days it is known that a lot of that neat stuff gets in the way of search engines. A few years ago it seemed if you didn’t show up on Google – you didn’t show up, and then came, Myspace (and went), Facebook, Craigslist, LinkedIn, Twitter, Google+, Pinterest, etc. . I am convinced the Internet 10 years from now will greatly different than it is now. Trying to figure out where it is going is the challenge.
To me , I see the value in Social Media marketing is that it decreases my reliance on Google. With Social Media customer have another way to find you. You don’t need to show up on page one of google to be found. I may be wrong with this line of thinking but this is my perspective.
It feels like everything I learned yesterday, is almost outdated tomorrow
I see the question asked so often online- Is anybody making any money on Twitter. Twitter is growing at 1,000,000 new users per minute 🙂 doesn’t it just make business sense that some are making profit on Twitter- I am not yet, are you? Does Twitter work for your product or service? Does it help to sell/buy a business?
Is Internet marketing another strong way to reach customers, market and advertise, or is it so much more? As a business owner we know we need to advertise and market. In the past and present we use the Yellow pages, direct mail, radio, maybe TV, trade shows, telemarket, direct sales, networking and other methods. Is it proper to view internet marketing as a very strong means of marketing and advertising or view it as so much more. I tend to think to view it as so much more.
Is it true that if you can drive “mad traffic” to your website that is so effective that you could sell ice cubes to an Eskimo?.
Is blogging better than tweeting, is Facebook better than Twitter. Do I need to post videos to Youtube? How important is SEO, incoming links, adding more friends, social media buttons/widgets?
Is email marketing dieing, improving, necessary, changing, or being somewhat replaced by social media?
How do I do all that I should be doing on the Internet, without having to bear the cost of “sub contracting” that task out and still run my business.
How will we be accessing the Internet down the road and how does that affect my approach today? It seems a few short years ago accessing the Internet with ones cell phone was a novelty at best.

How Do You Find A Business Owner Who Is Selling A Business?

Photo (c) mobivation.com

I am just a business owner who’s profession as a business broker requires significant marketing efforts. How do you find a business owner that is looking to sell a business? This is a very confidential event. How do you find a business buyer that is looking to buy a Jacksonville Towing company or a Florida HVAC Contractor, Tampa Retail Business, or Computer Repair shop?

My approach is to try different things. I Tweet the businesses I have for sale- I get some follow up questions, I blog about my business experiences- it has driven”some traffic” to my site, I am on Facebook- but pretty weak, I am on Linked-In and a few other social/business sites. I personally feel value in writing a blog as it allows me control to provide SEO optimized current content to my site. I do email marketing. I certainly am not in a position to provide well grounded advise on this subject but my major point is- Are you a business owner confused about what you should be doing on the internet? – You are not alone.

Selling My Business Next Year

By Scott | March 28, 2012 - 9:28 am |July 13, 2013 business broker florida, Florida business broker, Jacksonville Florida businesses for sale, Main, sell a business, selling my business, small business owner

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Getting a business ready for sale is both advisable and prudent. Waking up one day and deciding you want to sell your business tomorrow may not be a good idea. Deciding that you would like to sell your business as an exit strategy and putting together a plan is likely to maximize your gain from the sale of your business.

You could easily Google Preparing your business for sale and find many many articles/list and sources of information. I had written a related article in the past as well. But beyond the list- what of these methods are most important? Are all of these measures necessary or are they just guidelines?

I had sold my own business of 20 years, I had entertained several offers over the years, I went thru various stages of decisions as to how I would exit my business. At some point I realized that my exit strategy would be to sell my business if I could find the right situation. But from my perspective the most important part of my approach was to commit to running my business as if I would own it perpetually.

Photo (c) smallbiztrends.com/

So many businesses that try to sell- don’t sell. A business owner needs to realize this and allow this fact to influence their thought process. Currently I am a business broker in Florida and work with Florida small business owners with the process of buying and selling a business.

Be Realistic When Deciding On Selling Your Business

Many components and aspects of your business should be looked at from a realistic standpoint, critiqued, and adjusted as needed when preparing your business for an eventual sale. Some important areas to address when looking to sell your business include:

Either develop, establish, or refine your business operational procedures, practices, and methodologies and have them documented
Does your business rely on you the business owner? If so, make changes to reduce that reliance.
Clean financials- Does your Income statement and Balance Sheet make sense ?

But the question to pose is what of these measures is most important or essential as it relates to preparing for the sale of my business?

In my opinion it is accurate , sensible, reliable Financial records.

The Importance Of Reliable Financial Records

Photo (c) bristoltn.org

Typical financials involved with the sale of you business can include Profit/Loss or Income Statements, Balance Sheets and Tax Records. Further into the due diligence process of your business good Sales Journals, Customer Information, Inventory Info, all can go a long way to maximizing the value of your business.

Clean financial records are so essential to all parties involved with the acquisition of a business. And all involved includes the Seller, the buyer, and possibly a bank, lender or third party investor.

So when looking to Sell your business-

If you have a great business that is producing great margins, produces a great bottom line, and a very high owner benefit- but the financial records do not support this – what do you have?

If you have a business that you own and run it semi-absentee, great systems, increasing sales, good industry but poor financial records- what do you have?

If you have the nicest looking, shiniest looking store, website, equipment, office or vehicles, but your financial records don’t make sense- what do you have?

Looking to sell your business next year? Start working on your financial records today.

Starting Or Buying A Business-Own or Rent Building?

By Scott | February 7, 2012 - 2:16 pm |February 24, 2014 business broker florida, buy a business, entrepreneur, Florida Businesses For Sale, Jacksonville Florida businesses for sale, Main, sell a business florida

Owning A Real Estate For Your Business

Currently my role as a business broker has me working with business owners that both own the building they operate the business from they are selling and business owners that rent their space. Of almost 1000 businesses sold in the state of Florida in the last year, thru the Business Brokers of Florida of which I am a member of, less than 8% of them involve real estate.

: Is it better to Own or Rent your Businesses Property?

Most business owners in Florida that sold their business rent their buildings. There are just way more non- owner occupied properties than owner occupied properties. Again I owned and currently own and rent out the building I operated my business out of. My thought process was that I had long term plans for my business and I viewed it as a means of building equity. I do look at it a little different in today`s economy.

I do know of several business owners here in Florida that bought their building 5-10 years ago, ( they viewed the acquisition as an investment) and while the business may be doing somewhat ok during these difficult lean times, the building is so upside down that it may take 5, 10+ years or more, before the amount owed on the building is equal to or greater than market value.

To exacerbate that dilemma, ” like spaces” may be rented at a fraction of what monthly mortgage, insurance, and taxes payments may be. It would be nice to be able to treat this expense as other expenses and when you have a more cost effective means just pursue that route, but buying/selling a building (or a business) is not a very liquid investment- especially in today`s market.

Some Pros of owning a building may include:

more control, no landlord to report to and changes to your building allow you greater flexibility
potentially over the long haul you can accumulate equity
If you are buying now, are you buying at a real value price, and its hard to argue that locking in at todays interest rates would not be a good thing.

On the Con side:

One must consider the opportunity cost of the money that is devoted to a down payment when buying a building- how much could that money have helped you grow your business?
If you need to move your business a rental/lease agreement may allow you greater flexibility.
Owning a building is more responsibility

Operating lean, low overhead, low monthly expenses greatly enhances the likelihood of acceptable profits. I am pleased I had owned my building I operated my business out of, but would I make the same decision today to buy a building to run my business from?

If I were buying a business here in Florida would I require that I can buy the building along with the business I am buying- today I am not so sure. Leaning towards the flexibility of renting until further clarity on where on economy is truly heading seems to be a reasonable approach.

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