The Biz Blog - Business Valuation

Home / Blog / Category / The Biz Blog - Business Valuation

Business Valuation

How to Sell a Business or Restaurant- The Process

July 10, 2012 by Shelli Margolin

Thinking About Selling Your Business? Get Prepared

May 31, 2012 by Mina Singson-Brightman

If you are thinking about selling your business, then preparation is the key to getting the best possible selling price at the best terms. How soon do I need to prepare to sell my business? Having a good exit strategy in your business plan is prudent. Successful businesses keep a current business plan on file all the time, which includes a great exit strategy. This may not be a priority for new entrepreneurs, or owners of flourishing businesses but keep in mind that an exit strategy is just as good as an expansion strategy. Investors, banks and other sources of growth funds will look at the same information that the buyers review. An exit strategy emphasizes those elements of a business that constitute value to the market. By having an exit plan in place and in mind, a smart business owner will naturally focus on the growth of their business. So to answer the question, how soon do I need to prepare to sell my business? The answer is, NOW. Where do I begin?

Maximize the Business Valuation of Your Sporting Goods Store

April 17, 2012 by Jered Chapman

If you are thinking about selling your business sometime in the next few years, it is time to start working on maximizing its value.  Maximizing your business value is directly associated with reducing the buyer’s perceived risks.  Buyers determine the value they are willing to pay for your business based on their perceived “Risk vs. Reward”.  They often focus on the risks because they fear losing their investment if something goes wrong.  I’ve listed some great ways to reduce buyer fears, and also maximize your business value. Bookkeeping

How to Sell a Restaurant Fast

February 24, 2012 by Shelli Margolin

As with most businesses, price is a prime factor in selling a restaurant fast. However, restaurants can sell for their asset value alone, such as furniture, fixtures and equipment (FF&E) along with their permits and licenses.  Knowing how to value those assets is the key to selling a restaurant quickly. Price is not the only determining factor in procuring a quick sale.  You need to get into the “buyer mindset” and make sure a buyer sees the same value in your restaurant as you do.  Here are some no nonsense step to getting your restaurant sold fast: 1.       Price – Price – Price!!! Just like anything else…   the better the deal, the faster someone will snatch it up.  Some factors that go into determining the price are location, FF&E replacement values, permits and licenses. 2.       Make it easy to understand -

How to Sell a Business Fast

February 24, 2012 by Shelli Margolin

Price is not the only determining factor in procuring a quick sale.  You need to get into the “buyer mindset” and make sure a buyer sees the same value in your business as you do.  Here are some no nonsense universal step to getting your business sold fast: 1.       Price – Price – Price!!! Just like anything else…   the better the deal, the faster someone will snatch it up. 2.       Make it easy to understand - If someone can’t understand how you do business and how you derive your net profit, they generally aren’t going to buy your business at any price. Make sure you have straight forward profit and loss statements for the last three years Put together a list of inventory and other assets such as furniture, fixtures and equipment (FF&E) and list their replacement costs. Have any employment contracts organized and ready for review Organize your customer/client lists List out any debt that will need to be dealt with in the sale

Keys to Selling Your Business

January 24, 2012 by Kendric Foultz

Knowing what a business buyer wants is the key to selling your business and getting the best price for it.  In this market climate, most buyers are looking for two things, a cash flowing business and a deal.  Here are a few things that a business buyer is gong to want to know that will allow the buyer to asses the situation and determine if yours is the right business for them. • Is the business currently producing an income for the owner? • Is the business seller retiring and fully funded his or her retirement plans?          • Does the sale of the business only represent a small part of the retirement portfolio? • Is the business debt free? • Do the financials show that the depreciation schedules are completely exhausted? Affirmative answers to these questions tell the business buyer that the business is making enough money for their needs and you are indeed in a financial position to sell your business and sell it within the constraints of the marketplace.

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.

Selling a business in the media, entertainment, creative, film and TV industries? 10 Things to Consider

September 06, 2011 by Stuart Gross

Are you the owner of a small or medium-size business in the creative of media industry who dreams of “getting out” and retiring, writing a memoir, or simply getting away from it all? Thinking about selling your business? In today’s economic climate, selling your media or creative business can be a complicated and daunting experience. The skills and knowledge you acquired by running a successful business are not necessarily the same skills you will need to sell it. Here are 10 things to consider: 1. Am I REALLY ready to sell my business? One of the most important questions a buyer has is, “Why are you selling?” Selling your company is a life-changing event, with both positive and negative effects on your financial condition. Your mental and physical health may also be affected. You need to know if you will have enough money, moving forward, to live the way you choose. It is a very big decision. …And you need to be able to answer the question for potential buyers as


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.

Preparing a Restaurant for Sale

August 08, 2011 by Shelli Margolin

If you are considering selling your restaurant, preparation is essential in order to make the sale easier, faster and more profitable. Buyers will usually estimate the value of a restaurant beyond a wonderful menu and steady clientele.   Their assessment will determine what they are willing to pay.    Having all aspects of your restaurant in order is the key to a successful sale. Many of the steps below may seem like no brainers.  However, often restaurant owners are so engrossed in their day to day operation that they over look simple things that can drastically effect how buyers will perceive their restaurant. It is crucial to look at your restaurant through the eyes of a buyer and ask yourself some key questions: Are your books & records organized? Can a buyer clearly understand how much profit you make? Is your profit provable on paper? Do you have cash sales?  Can you easily prove those sales to a buyer?

What Is a Typical Restaurant Business Worth?

July 12, 2011 by Shelli Margolin

As written for 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 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

What Is a Typical Restaurant Business Worth?

May 06, 2011 by Shelli Margolin

Assessing the Assets of Your Business

July 06, 2010 by Robert Dean

If you are thinking about selling your business, it would be greatly beneficial to catalog all of your assets in order to help with a successful sale. A business's value is calculated in part by its list of assets. The more you can substantiate your asset value, the more it will increase the business value. Assets are different in every business, and one asset may be more or less important depending on the business and industry. Make sure that you write down and understand how all of your assets contribute to the success of the business. Some of the assets that a seller needs to address include: Equipment: Is the equipment old or new? What condition is it? What's the replacement value? Trade name, Trademarks, & Patents: Does your name and product represent value to your customers? Inventory: How much inventory do your have? What condition is it in? What's the value? Customer & Database Contacts: How many contacts do you have? How many are repeat customers?

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?

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!

Logos Member of the California Association of Business Brokers Member of the International Business Brokers Association Member of the M&A Source Holder of the Merger & Acquisition Master Intermediary designation, M&A Source's highest qualification Holder of the Certified Business Intermediary designation, IBBA's highest qualification Holder of the Certified M&A Professional designation from Coles College Trained by the National Association of Certified Valuators and Analysts to conduct business valuations