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Selling Your Small Business? What Makes a Good Buyer?

April 20, 2010 by Stuart Gross

Anyone who has ever sold a business knows that attracting interested and qualified buyers is the name of the game. When a buyer has inquired about your business for sale they will have questions about the business and how it runs. You or your broker should answer those questions and interview the buyer. You want a buyer who is genuinely interested in this business, one who has the skills necessary to run the business, and the financial wherewithal to make this purchase. Your questions and the buyer’s answers must resolve these issues. If you do not know about your buyer you are likely to waste a lot of time and take your eye off of running your business and finding the right buyer. There are many nightmares that the wrong buyer can cause:

Can positive thinking really make a difference?

April 16, 2010 by Dan Munter

Recently I was interviewed for an upcoming video called “Success Can be Simple”. All of us who deal in the world of business may agree that success can be simple, but most of us know in reality that it rarely is. Many of us are confronted with obstacles on a daily basis that are not of our own making. We may have the best business plans in place, yet often find ourselves dealing with problems that distract us from following those plans. We may have goals to grow our business but spend every day feeling overwhelmed. In the enclosed video I tell a story that I hope you find both inspiring and educational. The first video is only 6 minutes long. I am interviewed in the last 3 minutes if you want to fast forward to my story.. If you find this helpful, please let me know.

How to be successful in selling your business or why you need a broker!

April 13, 2010 by Kendric Foultz

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.

A Company's Business Records Will Affect The Company's Value.

April 09, 2010 by Robert Dean

It is important to have good Books & Records to run a successful business, but it's also very important to have good Books & Records to sell a business. I have dealt with Business Owners with both immaculate Books & Records and owners with improper Books & Records. If your looking to acquire a business, which business would you rather buy? I think you know the answer. It is very difficult to properly value a business with poor books & records. If you want to get optimum value for your business, make sure you have a solid grasp on your company's business financials. Make sure you have Profit & Loss Statements and Tax Returns and for 3 years, a Balance Sheet, a General Ledger and Bank Statements. You will also need this to qualify for SBA business acquisition financing. If you don't have a Profit & Loss, this is where I would start. This will show a buyer exactly how your company operates. Break it down into Gross Revenue, Cost of Goods Sold,

Seven factors that will affect the sale of your business

April 05, 2010 by Stuart Gross

When you are selling your business you should know that the average business takes 6 to 9 months to sell. There are several factors that affect the salability of your business. Revenue and profitability A major factor affecting the salability and price of a business is its revenue and profitability (P&L). There is little you can do to change those facts but the presentation and explanation of unusual activity is important to instill confidence in a buyer. The P&L usually has the most direct effect on sales price. Potential and Scalability Most buyers want to buy a business that they can grow and make better. It is good to know what could be done to grow the business in new ways. For example you may not have an effective website or the business could be open more hours, or it is reasonably easy to expand to larger facilities or additional locations. Be prepared to provide some growth strategy for the potential buyer.

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.

Why Use A Business Broker To Sell Your Business?

March 25, 2010 by Robert Dean

There are many benefits in using a Business Broker when selling your business. One of the main reasons to use a Business Broker is to free up the owners time so he can concentrate on the business. When an owner tries to sell his or her own business, they will waste a lot of valuable time in doing so. Another very important factor of using a Business Broker is the confidentiality involved with the sale. By not using a Broker, an owner risks loosing key clients, vendors and employees. So how else can a Business Broker help? A Business Broker's  duties includes: Coming up with the appropriate value of the business, and explaining to the owner how the value was established. Writing a comprehensive Business Review on the company to increase the marketability of the business and to  outline the business for potential buyers. The Advertising and marketing of the business to attract buyers. To answer all questions about the business from potential buyers

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.

Selling a business in the media, entertainment, film and TV industries?

March 16, 2010 by Stuart Gross

The first thing to consider when deciding to sell your business in media and entertainment (or any of the many creative business sectors including advertising, graphic, communications, branding and even consulting)  is transferability. And it’s not just the creative skills that may need to be transferred, it is also the relationships that mean business to your business.  Can a new buyer learn to do what you do and maintain and attract business? If you conclude that your business is transferable you need to have solutions to some key issues. What kind of buyer is capable of taking over this business? Where will I find this buyer? Will my key people stay on? How will I handle my clients in transition? How long should I stay on to make an effective transfer? Should I work with a broker? How do I make a deal? How will the buyer finance the acquisition? Am I really ready to move on from my business?

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.

Event Report on the recent Los Angeles VC and Angel Event

March 12, 2010 by Michael Davidson

Yesterday, I drove to downtown LA to attend the Los Angeles VC and Angel Event put together by fundingpost.com. I heard about the event from one of the LinkedIn groups I joined called "On Startups - The Community for Entrepreneurs".  I thought, well at BizEx we get all kinds of requests from our clients who are primarily small business owners.  Perhaps Angel/VC funding might be a good option for some of them. The place was packed and it was standing room only if you got there late.  Everyone attending was an Entrepreneur, which was cool.   They all had their vision and it was clearly something they were passionate about.

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!

Thinking of selling your Maid Service Franchise? What you need to know.

March 03, 2010 by Dan Munter

There are 14 franchise enterprises that focus primarily in the residential market. According to a recent report from information company FRANdata, the franchises of residential cleaning companies are growing at annual rate of 10% . There are two main Rules of Thumb for valuing these businesses. • 40% to 45% of annual sales plus inventory. • 1.5 times DE (Discretionary Earnings). Other selling points would be the exclusivity of the territory assigned to the franchise. How long the franchise has been established for. How long any competing franchises have been established in the same territory. And if there is any open territories in surrounding areas. If you would like to learn more, please contact me at dmunter@bizex.net.

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.