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Atricle Dump - Selling A Small Business
I nearly panicked recently! Well, maybe a slight exaggeration but here was a situation I had not been in for some time. The freezer had broken down and the dilemma I faced was a speedy solution was necessary BUT I did not know anybody who repairs freezers. For the first time in some years I nearly reached for the Yellow Pages a pristine copy that never sees the light of day but sense prevailed and I consulted my wife. She rang her friend who works in a local hospital. They have an internal communication system for the employees to ask questions or post messages and within 30 minutes we had the choice of three prospective service engineers and one name had been suggested by three separate people. The choice was simple and yes Mr Freezerman turned up and was superb!The point is that we prefer to buy from traders who have been recommended and preferably from people we know and trust. Business networking is all about trying to address this situation by ensuring that business owners meet each other frequently and build relationships and trust first, long before any deals are struck. Networking is fast becoming the primary way of sourcing new business, but and this is a big BUT you have to go about networking with the right attitude or it will not work for you.I have been a member of BNI (Business Networking International) for nearly three years and know first hand that it can work for you as I have had many thousands of pounds worth of business as a direct result of being a member. And yet I did not get one meaningful referral for the first few months and was about to give it up as a bad job. I have also seen many new members give up in the early days saying it wasnt for them. The thing is that we were all making the same fundamental mistake we were too concerned with what was in it for us and not thinking how can we help our fellow members.The strapline of BNI is givers gain and the moment I adopted that as my focus everything changed. If I give business to you will want to give me business to me is the message, but the emphasis is on the giving. Referrals are the currency and actively seeking help and support for fellow members becomes second nature after a time. Its simple - it works.Now, BNI is not for everyone and I can understand some of the reasons. The procedures are quite rigid and attendance and time keeping are essential. How many times have I heard new members say it is like being back at school. The v
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of their present situation, be it unemployment or job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of
Call center services are appraised on the basis of the efficiency and efficacy they apply. The advancement of technology makes it possible for more information to be congregated. This supplementary information can mean very little without the means to organize and assess it. In addition to outstanding management, a provider must use suitable call center software.In order to chose the appropriate call-center software there are a list of useful tools available. It is advisable to use data base systems, as they allow better management of the campaign. Contacts can be selected and made available at any time. This increases the efficiency in targeting and delivery. Customized Reporting Software helps in allowing the management to easily monitor, identify and correct all the call center inefficiencies. Multimedia interactive systems software allows a number of miscellaneous data values to be displayed, while the agent is helping a contact. This allows the agent to receive new script manipulations, view relevant information and consequently to be as effective as possible in helping the contact.The dialer processes potential help by contacting and identifying the disconnected numbers, busy signals and unanswered calls. It also helps in detecting answering machines. The Interactive Voice Response software can handle various tasks, even without the use of a live agent. The software can "talk" to the caller and recognize the responses. Surveys and appointments could be scheduled, sales and orders can be placed and much more can be done with this resourceful software. The Automatic Call Center Distribution Software helps in establishing contacts, in a call queue, to be directed most effectively. Calls can be directed to the next available agent, by the level of their significance or to agents with the highest performance statistics. They improve the performance level of the center and increase its profitability.
Is it time to sell? Selling your business is a major decision! You have devoted your time, money, and energy to building, running, and operating your business. It may well represent your life's work. You may have already decided that now is the right time to sell, and you want the very best professional guidance you can get. This is when working in tandem with a professional business broker can make the difference between just getting rid of the business and selling it for the very best price and terms!
ARE YOU READY TO EXIT?
If you've gone this far, then selling your business has aroused enough curiosity that you are taking the first step. You don't have to make a commitment at this point; you are just getting informed about what is necessary to successfully sell your business. This section should answer a lot of your questions and help you through the maze of the process itself.
Question 1
The first question almost every seller asks is: "What is my business worth?" Quite frankly, if we were selling our business, that is the first thing we would want to know. However, we're going to put this very important issue off for a bit and cover some of the things you need to know before you get to that point. Before you ask that question, you have to be ready to sell for what the market is willing to pay. If money is the only reason you want to sell, then you're not really ready to sell.
*Insider Tip:
It doesn't make any difference what you think your business is worth, or what you want for it. It also doesn't make any difference what your accountant, banker, attorney, or best friend thinks your business is worth. Only the marketplace can decide what its value is.
Question 2
The second question you have to consider is: Do you really want to sell this business? If you're really serious and have a solid reason(s) why you want to sell, it will most likely happen. You can increase your chances of selling if you can answer yes to the second question: Do you have reasonable expectations? The yes answer to these two questions means you are serious about selling.
The First Steps
Okay, let's assume that you have decided to at least take the first few steps to actually selling your business. Before you even think about placing your business for sale there are some things you should do first. The first thing you have to do is to gather information about the business. Here's a checklist of the items you should get together:
Three years' profit and loss statements
Federal Income Tax returns for the business
List of fixtures and equipment
The lease and lease-related documents
A list of the loans against the business (amounts and payment schedule)
Copies of any equipment leases
A copy of the franchise agreement, if applicable
An approximate amount of the inventory on hand, if applicable
The names of any outside advisors
Notes: If you're like many small business owners, you'll have to search for some of these items. After you gather all of the above items, you should spend some time updating the information and filling in the blanks. You most likely have forgotten much of this information, so it's a good idea to really take a hard look at all of this. Have all of the above put in a neat, orderly format as if you were going to present it to a prospective purchaser. Everything starts with this information.
Make sure the financial statements of the business are current and as accurate as you can get them. If you're half way through the current year, make sure you have last year's figures and tax returns, and also year-to-date figures. Make all of your financial statements presentable. It will pay in the long run to get outside professional help, if necessary, to put the statements in order. You want to present the business well "on paper." As you will see later, pricing a small business usually is based on cash flow. This includes the profit of the business, as well as the owner's salary and benefits, the depreciation, and other non-cash items. So don't panic because the bottom line isn't what you think it should be. By the time all of the appropriate figures are added to the bottom line, the cash flow may look pretty good. Prospective buyers eventually want to review your financial figures. A Balance Sheet is not normally necessary unless the sale price of your business would be well over the $1 million figure. Buyers want to see income and expenses. They want to know if they can make the payments on the business (more on this later) and still make a living. Let's face it, if your business is not making a living wage for someone, it probably can't be sold. You may be able to find a buyer who is willing to take the risk, or an experienced industry professional who only looks for location, etc. and feels that he or she can increase business. *Insider Tip: The big question is not really how much your business will sell for, but how much of it can you keep?. The Federal Tax Laws do determine how much money you will actually be able to put in the bank. How your business is legally formed can be important in determining your tax status when selling your business. For example: Is your business a corporation, partnership or proprietorship? If you are incorporated, is the business a C corporation or a sub-chapter S corporation? There are some new tax rules, effective January 1, 2000, that impact certain businesses on seller financing. The point of all of this is that before you consider price or even selling your business, it is important that you discuss the tax implications of a sale of your business with a tax advisor. You don't want to be in the middle of a transaction with a solid buyer and discover that the tax implications of the sale are going to net you much less than you had figured.
WHO IS THE BUYER?
Buyers buy businesses for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses:
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of their present situation, be it unemployment or job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of p
Dictator, Imperial or democratic are different types of administration for many different countries in the world. All of them have one thing in common. There is always one person at the top. The difference lies in how the delegation of power is distributed & the structure of its hierarchy.The above analogy can be applied to an office environment. There is the main boss, principal or Chief Executive Officer (C.E.O.), the upper management, lower management, & the normal workers. Different companies may have different management styles as the above example.However, the hierarchy of position still remains as we know who everybody is because of the chain of command in an office environment. Basically we can adhere to a guideline to help us maintain a feasible working relationship with our office subordinates, peers, office superiors & bosses. The number one rule we should know is how to avoid offending the boss. Remember that an office hierarchy is traditionally not flat. It is shaped like a pyramid with one point at the top. Offending anybody from any of the levels above your level will ensure that you stay where you are or even demoted to a lower level. A good trait we should develop is leadership communication skills for succession. Practice good public speaking, leadership skills, & set an example to co-workers as they may look up to you one day in the future. Never forget your status in the office. Act appropriately to other people according to their position in the office. You can act superior to people at lower rank than your position but you should act humble to those above your rank. The hierarchy must be understood & respected. Find out what type of management structure the office practices. Is the boss very social with the workers or prefer the office to be managed by another person? Who is your direct superior? Do not bypass your direct superior over office matters unless instructed by a higher ranking boss. The position must be respected even though you do not respect the person. Perhaps you know of a persons lifestyle preference outside of the office. The person may not deserve your respect outside of the office but a persons position in the office hierarchy must remain respected to maintain a good & conducive working environment. Understand the upwards & downwards communication in the office hierarchy. Practice good interpersonal communication skills with as many people in differen
Question 2
The second question you have to consider is: Do you really want to sell this business? If you're really serious and have a solid reason(s) why you want to sell, it will most likely happen. You can increase your chances of selling if you can answer yes to the second question: Do you have reasonable expectations? The yes answer to these two questions means you are serious about selling.
The First Steps
Okay, let's assume that you have decided to at least take the first few steps to actually selling your business. Before you even think about placing your business for sale there are some things you should do first. The first thing you have to do is to gather information about the business. Here's a checklist of the items you should get together:
Three years' profit and loss statements
Federal Income Tax returns for the business
List of fixtures and equipment
The lease and lease-related documents
A list of the loans against the business (amounts and payment schedule)
Copies of any equipment leases
A copy of the franchise agreement, if applicable
An approximate amount of the inventory on hand, if applicable
The names of any outside advisors
Notes: If you're like many small business owners, you'll have to search for some of these items. After you gather all of the above items, you should spend some time updating the information and filling in the blanks. You most likely have forgotten much of this information, so it's a good idea to really take a hard look at all of this. Have all of the above put in a neat, orderly format as if you were going to present it to a prospective purchaser. Everything starts with this information.
Make sure the financial statements of the business are current and as accurate as you can get them. If you're half way through the current year, make sure you have last year's figures and tax returns, and also year-to-date figures. Make all of your financial statements presentable. It will pay in the long run to get outside professional help, if necessary, to put the statements in order. You want to present the business well "on paper." As you will see later, pricing a small business usually is based on cash flow. This includes the profit of the business, as well as the owner's salary and benefits, the depreciation, and other non-cash items. So don't panic because the bottom line isn't what you think it should be. By the time all of the appropriate figures are added to the bottom line, the cash flow may look pretty good. Prospective buyers eventually want to review your financial figures. A Balance Sheet is not normally necessary unless the sale price of your business would be well over the $1 million figure. Buyers want to see income and expenses. They want to know if they can make the payments on the business (more on this later) and still make a living. Let's face it, if your business is not making a living wage for someone, it probably can't be sold. You may be able to find a buyer who is willing to take the risk, or an experienced industry professional who only looks for location, etc. and feels that he or she can increase business. *Insider Tip: The big question is not really how much your business will sell for, but how much of it can you keep?. The Federal Tax Laws do determine how much money you will actually be able to put in the bank. How your business is legally formed can be important in determining your tax status when selling your business. For example: Is your business a corporation, partnership or proprietorship? If you are incorporated, is the business a C corporation or a sub-chapter S corporation? There are some new tax rules, effective January 1, 2000, that impact certain businesses on seller financing. The point of all of this is that before you consider price or even selling your business, it is important that you discuss the tax implications of a sale of your business with a tax advisor. You don't want to be in the middle of a transaction with a solid buyer and discover that the tax implications of the sale are going to net you much less than you had figured.
WHO IS THE BUYER?
Buyers buy businesses for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses:
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of their present situation, be it unemployment or job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of
The demand for child day care in the US is rising. This is due to many factors including but not limited to the steady increase of working single mothers, more and more married couples working during the day and parents seeing the benefits of day care on a social and educational level.A viable opportunity exists for day care in most US markets. In 2002 two thirds of all women with preschool aged children worked outside their home. In 1975 only 39% of all women with preschool aged children worked outside their home.It is very attractive to work from home while running a day care business but careful examination of all the details must be considered to ensure success and compliance with the law. You must treat home day care like a true business. This requires planning, preparation, vision, discipline and dedication. Many people love the idea of owning their own business only to be blown away by all the headaches and responsibilities that come with it. Once you are in business for yourself there is no boss to keep you motivated. You must remain self motivated and you must remain accountable for your actions.Below are five essential ingredients for successfully starting a home based day care center.1. Determine the business license requirements for your state, county and city. Some local jurisdictions require a floor plan of your house or the area of the house that will be designated as the day care facility. Be sure to read all of the requirements of the business license. When inquiring about your business license always be friendly when dealing with government employees. There can be nothing worse than getting on the bad side of these employees. This can stonewall the whole application process for months. Once you have befriended one of the state, county or city employees dont be afraid to ask them plenty of questions about the license. These people can be a wealth of information and ensure you have everything correct the first time.2. Check on local zoning codes and local laws regarding home day care facilities. Some jurisdictions may have specific zoning requirements if you are running a business out of your home. This may not always be the case but be sure to look into it. Also check any and all local laws pertaining to home based day care facilities. Some states have limits to the amount of children you can care for out of your home.3. Determine if you can hire employees. While you may start off as just yourse
Make sure the financial statements of the business are current and as accurate as you can get them. If you're half way through the current year, make sure you have last year's figures and tax returns, and also year-to-date figures. Make all of your financial statements presentable. It will pay in the long run to get outside professional help, if necessary, to put the statements in order. You want to present the business well "on paper." As you will see later, pricing a small business usually is based on cash flow. This includes the profit of the business, as well as the owner's salary and benefits, the depreciation, and other non-cash items. So don't panic because the bottom line isn't what you think it should be. By the time all of the appropriate figures are added to the bottom line, the cash flow may look pretty good. Prospective buyers eventually want to review your financial figures. A Balance Sheet is not normally necessary unless the sale price of your business would be well over the $1 million figure. Buyers want to see income and expenses. They want to know if they can make the payments on the business (more on this later) and still make a living. Let's face it, if your business is not making a living wage for someone, it probably can't be sold. You may be able to find a buyer who is willing to take the risk, or an experienced industry professional who only looks for location, etc. and feels that he or she can increase business. *Insider Tip: The big question is not really how much your business will sell for, but how much of it can you keep?. The Federal Tax Laws do determine how much money you will actually be able to put in the bank. How your business is legally formed can be important in determining your tax status when selling your business. For example: Is your business a corporation, partnership or proprietorship? If you are incorporated, is the business a C corporation or a sub-chapter S corporation? There are some new tax rules, effective January 1, 2000, that impact certain businesses on seller financing. The point of all of this is that before you consider price or even selling your business, it is important that you discuss the tax implications of a sale of your business with a tax advisor. You don't want to be in the middle of a transaction with a solid buyer and discover that the tax implications of the sale are going to net you much less than you had figured.
WHO IS THE BUYER?
Buyers buy businesses for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses:
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of their present situation, be it unemployment or job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of
Home nursing jobs are nursing jobs for people who can provide care to those who require personalized patient care. In home nursing jobs, the nurses have to mingle with patients and their family members. Home nursing jobs offer quality and affordable home nursing services for the needy elderly sick or disabled persons in the home. Home nurses provide periodic services to patients at home. They care for a wide range of patients, such as elderly people who are confined to the bed, those recovering from illnesses and accidents, and those resting after childbirth.Home nurses are also hired by the parents who are unable to take care of their children. Most of the families treat home nurses as close friends or as family members. Addressing the patients health problems and needs is the main responsibility in home nursing jobs. Based on their needs, the home nurse develops and implements nursing care plans.The other responsibilities of home nursing jobs include providing an extensive range of services from very specialized home care to supportive long-term care for people of all ages. In addition, it includes helping aged people with a variety of needs from companionship through to high-dependency nursing, and routine jobs like checking patients pulse, blood pressure, temperature, and respiration rate. Home nurses work relatively independently and therefore have more personal responsibility than other types of nurses.In recent years, home nursing jobs have become one of the fastest growing occupations, as more and more nurses are in demand. There has also been an increase in the number of nursing agencies that offer home nursing jobs. Most of these agencies offer experienced home nurses who provide quality health care to each and every one in the family. While seeking the help of home nursing agencies, one should ensure whether the agency is Medicare-certified. Certain Web sites also list the opportunities for home nursing jobs. The minimum requirement is that the nursing job seekers should have home care or home care related experience.
WHO IS THE BUYER?
Buyers buy businesses for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses:
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of their present situation, be it unemployment or job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of
If you've received poor response from your online career site submissions, it may be due to the way you registered. You can change that by using specific, pre-selected keywords. Today we're going to build a more effective online profile that will draw more responses from Monsterฎ and other online sites.So, let's get started.Once you register on Monsterฎ, choose: "Build Your Resume Online".They allow you to set up 5 different resumes or profiles. Let's just set one up for now. There are only 5 major areas that we will be concerned with here:1. Target Job Title 2. Objective 3. Resume Title 4. Job Title 5. Work ExperienceTip: every one of these fields has keyword capability, so you must use each of these areas to the fullest extent by including as many keywords as are relevant, for example:1. Target Job Title: 2,880 character limit. That's almost 4/5's of a page, if you were to fill it up! List as many different job titles as you can imagine for this role. List other closely allied titles that the searcher may be searching on. For instance, "Java Programmer" might also be titled as "Software Engineer", "Application Developer", or "Software Developer" within even the same corporation, not to mention other companies. How many different but similar titles can you come up with? Put them all here.2. Objective: This is your stated job goal and has a 2,000 character limit. Just as we talked about in yesterday's lesson, transfer that keyword-rich objective from your revised resume to here. You should have a decent short paragraph that showcases and combines your current skills and your future goals. Remember, you want to stay away from standard cliches such as "Challenging opportunity as a (title) where I can effectively use my (managing and sales, etc.) skills in my ongoing effort to help grow an organization, blah, blah " This is not only boring, it's also highly ineffective. Instead try something like: "Solid Java Developer with strong (skill#1), (skill#2), and (skill#3) to make major programming contributions to remote server projects while growing to project lead role. The difference is each of the above underlined terms is now searchable. Use each section in your resume to answer one question only. By putting several keyword phrases under each section, you tighten up your focus and make your profile work for you by getting search engine hits when employers run database searches.3.
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
A Buyer Profile
Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. The buyer will never have owned a business before, and most likely will buy a business he or she had never considered until being introduced to it.
Their primary reason for going into business is to get out of their present situation, be it unemployment or job disagreement (or discouragement). The prospective buyer wants to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own business, the buyer must be able to make that "leap of faith" necessary to take the risk of purchasing and operating their own business. Buyers who want to go into business strictly for the money usually are not realistic buyers for small businesses. Keep in mind the following traits of a willing buyer:
The desire to buy a business
The need and urgency to buy a business
The financial resources
The ability to make his or her own decisions
Reasonable expectations of what business ownership can do for him or her
What Do Buyers Want to Know?
This may be a bit premature since you may not have decided to sell, but it may help in your decision making process to understand not only who the buyer is, but also what he or she will want to know in order to buy your business. Here are some questions that you might be asked - and, should be prepared to answer:
How much money is required to buy the business?
What is the annual increase in sales?
How much is the inventory?
What is the debt?
Will the seller train and stay on for awhile?
What makes the business different/special/unique?
What further defines the product or service? Bid work? Repeat business?
What can be done to grow the business?
What can the buyer do to add value?
What is the profit picture in bad times as well as good?
A FEW THINGS TO CONSIDER
Buyers Want Cash Flow
The first thing to keep in mind is that the vast majority of buyers want to buy cash flow. Sit down with your accountant or bookkeeper and begin to get your financial statements in order, with cash flow the order of business. Cash flow is not the same thing as profit. Most buyers look at the profit and loss statement or tax return, as well as owner or family compensation. They will consider any excess compensation to employees and family. Buyers will also look at large, one-time expenses such as a new computer system or remodeling. They will consider non-cash items like depreciation and amortization. Interest expenses will be reviewed, as will owner prerequisites. These are items that a professional business broker considers when advising a selling client on a selling price.
*Insider Tip
What about the Internet? The Internet is a real "buzz" word - and if its use is appropriate for your business, then developing a web site is important not only to your on-going business, but also to a buyer. Many buyers are conscious of what the Internet is doing for many businesses. If you have a web site for your business, it could be a big plus.
Appearances Do Count
The time to replace that old worn-out piece of equipment is before you decide to sell. Don't assume that a new owner will want to do it or that the price will be slightly lower because you haven't replaced it. The time to "spiff up" the business is now, even if you aren't selling. Fix the sign, replace the carpet, paint the place - make it look good. Even if you're not selling, it's just plain good for business, and you never know when the time to sell occurs. Keep-in-mind that anything that increases sales also increases profits and the all-important cash flow!
Everything Has Value
There are other things that add value to your business. Don't discount the value of customer lists, proprietary products and/or techniques, well-maintained equipment, secret recipes, customized software programs, or good employees. These are termed "off-balance sheet items," and although not used in most pricing models, they add to value. Look at your business very carefully so you don't overlook those items that make your business more attractive to the buyer.
Eliminate the Surprises
Long before you put your business on the market eliminate the surprises! Review every facet of the business and remedy any problems that could appear during the sale process. No one likes surprises - most of all potential buyers. Whether legal, accounting, environmental, or anything else - solve it now.
*Insider Tip
This may sound like something that should have been done when the business first started, so it may be "after-the-fact". You should create an operations manual. You may already have started one years ago, or simply, have thought of doing one. Now is the time. It may actually create added value to the business. Even if it doesn't, it will impress buyers that you have your business "act" together and should help you sell more quickly and effectively. Preparing a manual on how to operate your business can also be helpful even if you don't want to sell. It doesn't have to be elaborate, just cover the basics. A collection of ads that you have placed a catalog or sample of products, publications, or menus (if the business is food related) is also impressive. Include anything to do with the business that might be helpful for a new owner. However, don't include anything that is proprietary, such as customer lists, suppliers or secret recipes, etc.
YOU CAN HELP
We look forward to working with you in finding a suitable buyer for your business. You, as the seller, are an integral part of the total marketing program. We would like to offer a few friendly recommendations that will help in our marketing efforts. We have checked those items that we think will be especially applicable to your type of business.
It might also be helpful if you took a good look at your business from the perspective of a buyer. Try to put yourself in the place of a prospective purchaser of the business. What would you do to make it more attractive or more saleable? Obviously, the financial records of your business are critical to the sale of your business, but how it looks is also important. First impressions really count! If a potential buyer doesn't like the appearance of your business, the rest of it may never get a chance. If you have any questions, please don't hesitate to call us. It's only by working together that we'll get the best results.
You might want to check the following to see if any of them are applicable:
Keep normal operating hours. There may be a tendency to "let down" when you put your business up for sale. Howev
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