Are You Ready To Sell?

…….What a "loaded" question you may think, but the reality is that almost no business owner and their business reach the qualifications of "Ready to Sell" without professional assistance from a qualified individual. Getting your business and yourself,  as the business owner "ready to sell", takes quite a bit of work and preparation. You need to know and work with someone whose sole profession is selling businesses. You know your business better than anyone, but do you know how to get it ready and in its best shape to sell?  Most probably not and the worst mistake a business owner can make is try to get both themselves and their business ready to sell and then try to sell it themselves.         Experience has shown us that more often than not, the Seller will spend more time and money trying to sell and take less than the business is actually worth because they skipped the professional assistance they needed to insure the best price. In short, leaving money on … [Read more...]

10 Questions A Seller Should Ask A Broker

Are you a Certified and Registered Broker/Intermediary? Are you affiliated with any business brokerage associations or trade groups? Will you provide any references? (Sellers, Attorneys, etc.) How will you determine how much I should ask for my business? Will you display my business on any Internet sites? If so, how many? How, other than the Internet, will you market my business? How can you help me to qualify a potential Buyer while protecting my Confidentiality? Under what circumstances will you show my business? How often will you contact me about what is going on? Can you please tell me about you and your firm? … [Read more...]


BUYERS WANT CASH FLOW Recasting financial statements will help you provide a potential buyer with a better view of cash flow.  Cash flow is not the same as profit.  All potential buyers will want to see the income tax returns, profit and loss statement, owner compensations, etc. LOOKS CAN MAKE A DIFFERENCE Just as you will need to do all that you can do to show a well organized, profitable business, you also will need to make sure that your facility is as aesthetically attractive as possible.  Anything that you do to increase sales, increases profits and adds to that important cash flow that buyers seek. ADD VALUE TO YOUR BUSINESS Don't overlook the impact of a loyal customer lists, proprietary products, well-maintained equipment, special computer software programs, unique services or products and good employees will make when considering the value of your business. ELIMINATE SURPRISE If your business has any flaws, be open about them.  Do not allow legal, environmental or any … [Read more...]


Your reason(s) for selling your business and your future goals need to be clear and well thought out before you try to market your business.  A prospective buyer will want to know why you are selling and may be curious about what you intend to do after the sale. A poor economic climate and/or a peronal emotional dilemma can cause you to accept a deal that is not in best interest for you or for a buyer.  It is important to market your business for sale at a time when you are not under pressure to sell. As soon as you have a firm objective to sell, gather key information to facilitate the marketing and divestiture process: Three years of profit and loss statements. Three years of Federal income tax returns for the business. A complete list of business assets (fixtures and equipment). All lease agreements and related documentation (property and equipment). List of loan amounts and payment schedules. Copy of franchise agreement (if applicable). Total worth of the assets. Names … [Read more...]

Is It Time to Raise Prices?

Increasing the price of your products or services is, in most cases, the most difficult decision a business owner has to make. Looking at the negatives is easy. •    Our business is too competitive to increase prices. •    Our customers/clients are used to our pricing. •    Customers are too price-conscious. •    We won’t be able to get new customers/clients. •    We are known for low prices. •    We have a lot of repeat customers, they won’t pay more. The list of reasons why prices shouldn’t increase could go on and on. The fear is always that people won’t pay the increase and profits will suffer. Before considering a price increase, one must look at their current pricing method. Do you work on a cost plus a certain mark-up? If you use a mark-up percentage, are all items marked up by the same percentage? Do you try to maintain a price comparable to the competition? If you work on an hourly rate, for example consulting, when was your last increase? Have costs increased and have you … [Read more...]

Visiting Your Lease Again

When is the last time you reviewed the lease on your business premises? When you signed it years ago?  There are some important reasons that should prompt a business owner to revisit the terms of his lease. If you can’t assign your lease to a new owner, you may not be able to sell your business. A similar concern is that if you can’t assign the lease, it may cost you a lot of money. This means that the landlord may want what could be termed as a “transfer” fee; or the seller may have to reduce the price accordingly. Whether you are thinking of selling or not, it is a good idea to review your lease and the transfer of lease provisions. It’s also a good idea to check what happens at the end of the lease. Is there an option to renew and if so, how soon before the termination of the lease do you have to notify the landlord? And, just as important, do you want to stay, or is it time to move on? A recent article in the New York Times titled “Thinking Past Location in Finding Space” said: … [Read more...]

What are Business Buyers Really Looking For?

The obvious answer is probably that most people are looking to buy a business that makes a lot of money. But the real answers may surprise you. Here is a list of just a few that buyers have mentioned: •    Pride of ownership •    A business that looks like fun to own and operate •    Happy employees •    Financial records that make sense •    Good growth prospects •    A well-known or popular business •    A good track record •    A great location •    A seller who is willing to finance the sale •    A reasonable price Certainly, a buyer wants to make money when buying a business, but there is more involved, as the list above indicates. If you’re even thinking about selling, a visit with a business brokerage professional will pay big dividends by finding out what local business buyers are really looking for. … [Read more...]

Why Sellers Won’t Sell

A recent survey asked leading business brokers and intermediaries: What is the seller’s biggest obstacle to selling the business? In other words, why do business owners who are considering selling fail to follow through? Seller’s Biggest Obstacle to Selling The answers to this question were revealing, fascinating and important for prospective sellers to understand and consider prior to placing their business on the market. The biggest reason was one that most people would guess—price. Here are a few explanations that sellers offered concerning price: •    Price—net amount after tax proceeds •    Never enough dollar value in the deal, after taxes, lawyers, accountants, brokers •    Price justification •    Price versus offer •    They don’t want to accept the market price of the business •    Price does not meet owner’s retirement needs •    Understanding that valuation is based on historical cash flow rather than “potential” cash flow •    Perception of value of their … [Read more...]

The Numbers Don’t Tell the WholeStory

You’re considering selling your business.  Your accountant or financial advisor has reviewed your profit and loss statement, and told you what he or she thinks your business is worth. Is this a valid figure? Do the numbers reflect the real value of your business? Below are some other factors to consider regarding the true value of your business. These factors may not have a specific dollar amount attached to them, but they certainly influence value and the price a business may sell for. •    Are you serious about selling, and is it the right time? (Use this only if selling is the reason for the valuing.) •    What are the two or three biggest obstacles to growing the business? •    Why is your business different than the competition? •    If you don’t own the real estate, what is the status of your lease? •    What is the short-term and long-term trend of your business and the industry? •    Does, or can, international competition impact your business? •    Why do customers … [Read more...]

Price or Terms: The Structure of the Deal

An old saying in negotiating the sale of a business goes like this: The buyer says to the seller, “You name the price, and I get to name the terms.” Another saying used to explain the actual value of the term full price: “If we could find you a business that nets you $250,000 a year after debt service, and you could buy it for $100 down, would you really care what the full price was?” It seems that everyone is concerned only about full price. And yet, full price is just part of the equation. If a seller is willing to accept a relatively small down payment and carry the balance, a higher full price can be achieved. On the other hand, the more cash the seller wants up front, the lower the full price. If the seller demands all cash, barring some form of outside financing, full price lowers – and, in most cases, the chance of selling decreases as well. Even in cases where outside financing is used, such as through SBA, etc., the lender will do everything possible to ensure that the … [Read more...]