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How to Sell a Business or Restaurant- The Process

July 10, 2012 by Shelli Margolin

Selling a Small Business as a Short Sale

December 05, 2011 by Shelli Margolin

Drowning in business debt!?! Even when a company’s sales start increasing, debt can eat away at the profits… More and more small business owners are finding that profits are going to servicing their debt and keeping their business operational.  In such cases, an option is to sell the business through a short sale.  Especially if a business owner is burnt-out, looking at shuttering the business and declaring bankruptcy. Declaring bankruptcy is different as a small business owner.  It’s not just an anonymous bank or bureaucratic phone company that is owed money; it’s often suppliers and vendors with whom there are long-term personal relationships.  And often, friends and family have invested in the business or lent large sums of money to help keep the business afloat.

How to Value a Restaurant or Bar that is not Showing Profit

November 03, 2011 by Mina Singson-Brightman

How much money is a restaurant worth? Does it have any value if the restaurant is not turning a profit or barely breaking even? Restaurants, coffee shops or bars are valuable even if they are not showing a profit. These kinds of businesses are valued through the replacement value technique which assumes a buyer pays the seller a price that is not dependent on the income value to benefit from the existing investment in the restaurant facility, the lease and the location. In other words, the buyer is starting a restaurant business at a discount and will pay for the right to avoid spending hundreds of thousands or even millions and avoid all the delays and city regulations in building a new restaurant Here is what a restaurant –seller has to say when he received an offer on his business.

How to Sell a Restaurant in 90 Days

October 31, 2011 by Shelli Margolin

How to Sell a Restaurant in 90 Days A True Story   Restaurants are not necessarily an easy sell.  However, if they are priced at their proper value and positioned to sell in the right forums, they can be sold in a timely manner to the satisfaction of both the buyer and seller. Preparing the restaurant’s books and records for sale is as important as bringing in the right buyer. The following is a true story of a restaurant that recently sold through an experienced restaurant business broker. When the Johnston’s[1] bought their pizza deli in Los Angeles five years ago, the plan was to build a business for their children to takeover.  Both Mr. & Mrs. Johnston had fulltime careers that they wanted to keep.  With the help of their son, the restaurant was able to sustain a positive cash-flow for several years.

Buying a Restaurant or Bar and the Transfer of Liquor License

September 08, 2011 by Mina Singson-Brightman

When we list a restaurant or bar for sale with Alcoholic Beverage Control (ABC) license, we generally get significant buyer activities on them.  For buyers of such businesses who do not understand how a liquor license is transferred, here is an overview. The number of retail liquor licenses, especially Type 47 (full liquor license for restaurants) and Type 48 (full liquor license for bars and nightclubs) that can be issued in a county is restricted.  The limited supply of liquor licenses and the lengthy process to get an ABC license approved make businesses with permit to sell alcohol highly desirable and valuable. When buying a business with beer and wine or full liquor license, the transfer of ABC license from one person or entity to another person or entity is called a “person-to-person” transfer. Generally, this is how it works:

HOW TO SELL YOUR BUSINESS WHEN YOU ARE THE KEY TO YOUR BUSINESS

August 11, 2011 by Dan Munter

In a perfect world, when owners decide to sell their business, a buyer will come forward and write a check for the full asking price. In the real world, this rarely happens. There are so many reasons why this rarely occurs.  In this blog, I want to focus on one of the most important issues. One of the biggest risks for a buyer is whether the business will survive without the seller’s presence, knowledge and relationships.  I want to give you some actual examples of businesses I have both recently sold and am in the process of selling.

What Is a Typical Restaurant Business Worth?

July 12, 2011 by Shelli Margolin

As written for ehow.com... What Is a Typical Restaurant Business Worth? The worth of a restaurant is predicated on what someone will pay to buy that restaurant. As restaurants come in as many shapes and sizes as do their owners, determining worth is complex. In the most general terms, value can be established through either a multiple of annual sales or by its assets. Restaurant Categories Restaurants fall into two major categories: full-service and limited-service (or quick service). Then there are many subcategories such as, fine dining, casual dining, dinner house, bar & grill, deli’s, fast food, pizza take-out and the list goes on. Within those categories are independently owned, franchises, corporate owned, single location to international multi-location. Thus, “typical restaurant” cannot be rationally defined. Profit vs. Assets

How to Appraise a Restaurant Business

July 11, 2011 by Shelli Margolin

As written for ehow.com... There are several reasons for appraising a restaurant, along with many nuances to the appraisal itself. Let's review how a prospective buyer can appraise a restaurant for purchase. There are three general ways that restaurants' sale prices are established: based on profits, assets, or "key costs," referring to its location value. The buyer should be aware of whether the restaurant is making a profit and what furniture, fixtures and equipment (FF&E) are included in the sale. If a restaurant is profitable, a buyer can take a financial approach to the appraisal. If the restaurant is not turning a profit, it still has value in its equipment. In some cases, a restaurant is sold for key costs: its location, property/lease value and entitlements. Instructions: Profitable Restaurants

Inc's 10 Questions to ask before Buying a Business

May 26, 2011 by Michael Davidson

I just read an interesting Article from Inc., entitled 10 Questions to ask before Buying a Business. Many experts are predicting that a huge wave of businesses will become available over the next decade or so as baby boomers look to sell. As the economy continues its climb into a full-blown recovery (we hope), it just might be the perfect time for you to fulfill that lifelong dream of buying a business. If you can find the right business that is the right fit for you, I think this is a great time to buy! Overall, I think it's a pretty good list.  When we create a Confidential Business Review (CBR), we try to address these questions up front before you even meet with the owner. Some of the questions not asked by Inc., which we think are important include: Can you as a new owner successfully run and operate this business? If not, the other questions don't really matter.

What Is a Typical Restaurant Business Worth?

May 06, 2011 by Shelli Margolin

http://www.ehow.com/info_8360777_typical-restaurant-business-worth.html

Selling a "used" business

April 23, 2010 by Kendric Foultz

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?

BUYING A BUSINESS WITHOUT THE EMOTION

March 30, 2010 by Dan Munter

Buying a business has many similarities to buying a stock. They both require appraising the value of a company to make sure that you buy at a price which will give you the ability to grow your investment and earn an income (dividend). A careful analysis will use many of the same tools for appraisal. Both buyers will look at the multiple of earnings (P/E ratio), the multiple of revenues (p/s ratio). They will also look at macro trends within the industry of the business/stock and within the general economy. They will both look at what is the barrier of entry into the business.

BOSS Theory- What small business buyer should look for

March 23, 2010 by Dan Munter

I recently participated in a Webinar on How to Buy a Business by industry expert Richard Parker (Diomo.com) and one of the topics discussed really hit home for me... There are 4 qualities of a business that will help a new small business succeed with his new purchase. The 4 components can be remembered with the anagram called the BOSS Theory: B-Bland. A business that is today's 'hot new business" will become the 'out of style business' of tomorrow. A bland business is less vulnerable to fads and innovation. O- Operational sound. Buying a turn-around business is very risky. There are people who specialize in turning around companies. It really takes a different skill set then simply running a business. There are enough challenges in taking over a business without having to engineer a turn around.

Why now is a great time to buy a business

March 15, 2010 by Kendric Foultz

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.

Free Online Business Evaluation Tool

March 09, 2010 by Michael Davidson

Want to know what your business is worth? BizEx Business Brokers has a fun and interesting tool available for small business owners.  Just answer some basic questions and our site will show you the estimated value of your company. The valuation process is based on the Multiple of Earnings Method, which is the most common process used for small business valuation.  It’s a fairly simplistic tool, but it’s online and it’s free. Free Online Business Evaluation Tool I would appreciate any feedback you might have as we'd like to create a version 2 down the road. Thanks!

To Blog or not to Blog, that is the question

January 28, 2010 by Michael Davidson

Like most small business owners in Los Angeles and throughout Southern California, we’ve heard about the benefits of hosting our own blog. After exploring this further, we found out about the time commitment and it made us cringe. Two or three blog posts a week? We don’t have time for that. We are so busy; we have a hard time getting out of the office most days! So we delay and explore other ways to promote our business and wait for someone else to figure out the magic recipe on how to blog time and cost effectively.