Kendric Foultz, CBB just launched a new listing: http://www.bizex.net/listing/363 Westside Cellphones Asking: $55,000 * Gross: $133,000 * Net: $35,000 Cell phone store for sale in a very desirable area of westside Los Angeles. This business is situated in a high traffic retail zone that attracts a lot of consumers. The business has been established for [...]
Kendric Foultz, CBB just launched a new listing: http://www.bizex.net/listing/363
Westside Cellphones Asking: $55,000 * Gross: $133,000 * Net: $35,000
Cell phone store for sale in a very desirable area of westside Los Angeles. This business is situated in a high traffic retail zone that attracts a lot of consumers. The business has been established for about seven years and has great write ups on Yelp, etc. At one point the business had revenue of over $500,000, but the economy and other factors have depressed sales the last couple of years. Here is your chance to pick up a well known business with great reputation on the cheap and build it back up to its former glory. Get in now and enjoy the cool summer months working in an attractive setting in one of the most desirable areas of town. For more information go to www.bizex.net and “register” as a buyer or you may contact Kendric Foultz directly at 310-968-2369.
Kendric Foultz, CBB Email: kfoultz@bizex.net Office: (310) 882-2200 ext 102 Blog: http://www.bizex.net/blog Web: http://www.bizex.net/business-broker/kendric-foultz
A strategic business sale takes place when the buyer finds additional value in the business for sale than the average financial buyer is able to identify. Most small businesses for sale, if positioned correctly, will attract a number of possible buyers. But in some cases the business for sale in question might be so specialized [...]
A strategic business sale takes place when the buyer finds additional value in the business for sale than the average financial buyer is able to identify.
Most small businesses for sale, if positioned correctly, will attract a number of possible buyers. But in some cases the business for sale in question might be so specialized in its market as to require a very unique buyer.
I recently brokered the sale of a specialized jewelry design and manufacturing business that posed this very challenge. The only viable buyers for this business were well known by the seller. These prospects did not know that owner was interested in selling his business and it was my job to keep it that way until we had secured enough general interest in the opportunity.
What we were able to find was that one of the companies had a weakness that could be solved by buying the business. In addition we realized that the worst thing that could happen to this particular company would be to have one of his competitors end up buying the business and there were no real viable alternatives. The prospect buyer probably knew that there were only a few other companies that would be interested in buying the business, but this particular company had a strong strategic motivation to purchase the business and was willing to listen to our pitch.
In the end the strategic business sale was transacted and the seller got a very fair purchase price including an employment agreement. These types of engagements require a lot more finesse than the standard business sale. In some cases you only have one shot to get it right and if not handled properly you can end up with an unsold business that will never sell. The old saying in selling a business that goes “If you have only one buyer, you have no buyer” can really have a devastating effect.
Sometimes when selling a business it can be such a niche that you really do have only one buyer and it takes a savvy broker to help you navigate the waters so that you can actually get it sold and get the kind of results you desired when selling your business.
By Kendric Foultz CBB, BizEx Business Broker Profile 310-882-2200 Ext 102What do you do as a business owner if your business is in an impossible situation and is taking you down with it? Depending on the ownership structure, you may be able sell it in what essentially looks like a real estate short sale or otherwise known as a “pro rata escrow”. If your business [...]
What do you do as a business owner if your business is in an impossible situation and is taking you down with it? Depending on the ownership structure, you may be able sell it in what essentially looks like a real estate short sale or otherwise known as a “pro rata escrow”.
If your business has lots of assets or if you look at it from a debt free standpoint and it’s profitable, then there is a good chance that someone would want to buy it. So how do you take a business that is laden with debt and turn it into a debt free enterprise? The key is understanding creditor positioning in a bulk sale. Basically when a business is sold and there is not enough cash in the transaction to pay off the creditors and less consideration in the purchase than the indebtedness, then the creditors are paid off according to a state schedule. This usually amounts to the creditors receiving a fraction of the amounts owed or nothing at all, but leaves the business in a much stronger position to survive. Usually this allows the business to maintain its employees, service its clients, purchase from its vendors, etc. This is a far better outcome than having the business simply collapse and go bankrupt.
So what happens to the business owner in this process? In most cases there is little if any cash going to the owner and the creditors could still pursue the owner for the balance of the debts, but again it is likely a better way to go than bankruptcy for the business and there may be some advantages to the owner as well. The key to this process is to find a knowledgeable bulk sales escrow company and retain the services of a good business law attorney to help you navigate these waters. Having a business broker who understands this process is a must as he or she will be able to properly articulate the value proposition to the buyer and get the most out of the transaction for the business owner.
By Kendric Foultz CBB, BizEx Business Broker Profile 310-882-2200 Ext 102To help a small business seller understand how buyers value businesses, I like to use this analogy. If you bought a nice car fifteen years ago and took very good care of it, chances are that it looks pretty much how it did when you bought it. It still runs great and does the job [...]
To help a small business seller understand how buyers value businesses, I like to use this analogy. If you bought a nice car fifteen years ago and took very good care of it, chances are that it looks pretty much how it did when you bought it. It still runs great and does the job that you got it for in the first place. If you take care, it could keep going for decades. Now let’s say you bought that car for thirty thousand dollars. What do you think you could get for that car today?
Now look at the business that you started fifteen years ago. Isn’t it doing the job today that you built it for in the first place? You’ve taken care of it, invested in keeping it current, it does the job it was designed to do; so, why in the mind of the buyer is it worth less than what you think? The first reason is financially driven. Just like selling the used car, there is a market for used businesses. Look up the specifics on any used car and you’ll find a range that the car will sell for. The same is pretty much the case for a business. The second reason is emotional. The buyer does not have fifteen years of their life invested in your business and doesn’t care what it took you to get it to this point. You may have invested more money over that time into this business than it is even worth today. The same is most likely the case with that used car. The car has gotten you down the road literally and the business figuratively.
So if you love that old car and can’t sell it for what it is worth to you then why sell it at all? Maybe your life needs have changed and you need a truck instead of a car. Maybe there just isn’t room in the garage now that you’ve gotten a new car. Whatever the reason, it must be compelling enough to cause you to let go. The same is true for the business.
By Kendric Foultz CBB, BizEx Business Broker Profile 310-882-2200 Ext 102Selling a small business is not easy. The first thing to acknowledge is that no matter how successful you have been in running your own business you probably don’t know the first thing about what it is going to take to sell your business and get the best price and terms for it. A seasoned [...]
Selling a small business is not easy. The first thing to acknowledge is that no matter how successful you have been in running your own business you probably don’t know the first thing about what it is going to take to sell your business and get the best price and terms for it. A seasoned business broker can fairly quickly analyze your situation and let you know just how marketable your business is and what can be done to make it more so.
The next thing you need to do is become emotionally prepared and committed to the process of selling your business. Up to now, you have been the boss, but now you are going to have to take direction from the broker and deal with the demands of the buyers. This is not an easy challenge for many owners. The broker is your partner in this process so you’re going to want someone you can trust.
Lastly, make sure your priorities are in alignment with the marketplace. If the reason you have decided to sell your business is purely financial then you are in for a tough time. I have had only one client who thought their business was worth less than was ultimately realized. During the process you will probably work harder than you ever worked prior to deciding to sell. In the February issue of Inc. magazine a seller regrets not hiring a broker because he said the process took up 75% of his time over a year period and he still didn’t sell the business.
A good broker will be able to paint a picture of how the process will unfold. He or she can prepare you so that your expectations will be aligned with the realities of the market and in the end you will be successful in attaining your goal.
By Kendric Foultz CBB, BizEx Business Broker Profile 310-882-2200 Ext 102If the number one rule in business is to buy low and sell high then now is a terrific time to buy a business! 2009 was a rough year for the overall economy. Businesses across the board showed revenue declines that haven’t been seen in decades. Many business owners who were planning on selling their [...]
If the number one rule in business is to buy low and sell high then now is a terrific time to buy a business!
2009 was a rough year for the overall economy. Businesses across the board showed revenue declines that haven’t been seen in decades. Many business owners who were planning on selling their businesses and retiring found themselves in a position where financially they had to either reduce their retirement expectations or continue to work. Until recently, most were opting to continue to work, but now we are seeing more owners adjusting to the new reality and selling their businesses at today’s valuations.
This is a buyer’s market. Over the last couple of years, many marginal businesses failed and their market share was absorbed by the ones that survived. So as a buyer you are left with an opportunity to buy a business that has weathered the storm and has had its valuation pushed down, possibly below where it should be. It is likely that most if not all of the down side is behind you and for someone who is going to own this business for the next five or ten years, you have a real opportunity to build some wealth along with an income.
Banks are starting to lend more, but only under tight criteria. They are going to take a hard look at you and at the business. If you don’t have any specific industry experience or have a partner who does then they are most likely going to deny the loan. This is a good thing because this limits the potential buyer pool and therefore reduces the ultimate sales price of the business. If the owner has been having a hard time finding a buyer who can qualify for a loan then you have a real opportunity to make a deal if you have cash. Good Hunting!
By Kendric Foultz CBB, BizEx Business Broker Profile 310-882-2200 Ext 102
