Timing a business sale is never an easy task, especially in today’s volatile market. Much like the value on your home, there is often no good way of telling what the future will hold. The economy has only complicated matters as business profits, cash flow and overall values have been in a state of fluctuation for some time now.
With the recession taking a firm hold on the business-for-sale marketplace over the past few years, many owners may be asking themselves when the right time to begin the sale process will come. Will the economy rebound soon? Will that boost valuations? How will it affect the number of buyers and sellers on the market?
These are all certainly things business owners should consider and we have seen a slight improvement in the market as of late. But while some might be tempted to continue waiting a few more years for better prices, there are several issues that could cause this strategy to backfire. Here are just a couple of the possible pitfalls of waiting too long to sell your business:
A Slow Recovery
While we’ve seen a few positive signs, a full economic recovery is still a long way away. Too many owners are waiting for their businesses to spring back to the profit levels they were seeing pre-2008. But a quick fix isn’t going to happen anytime soon. Business owners who are emotionally and financially ready to sell need to start the sales process now and take the necessary steps to maximize their business value. Even if sales are slow right now, many experts have tossed around the phrase “flat is the new up.” If your numbers are staying consistent, consider that a good sign that your business will be in demand on the market.
Increased Taxes
There were many business owners scrambling to sell their assets in 2010 in fear of the expiring capital gains and personal income tax rates. The government decided at the last minute to extend those taxes another two years, giving business owners more time to enjoy low rates. But don’t take these two years for granted. Eventually, most likely in 2013, the capital gains and income tax rates will increase and the hike will have a drastic effect on your business sale. For example, a capital gains increase from 15% to 20% would increase taxes $100,000 on a $2,000,000 sale. That doesn’t include any federal or state income taxes that will be increasing and taking an even larger portion of your proceeds. So unless you can afford to lose that money or find a way to increase your bottom line, selling before another tax increase would be a wise investment.
Demand Fluctuation
This may seem contrary to most beliefs, but there are certain industries that are actually more attractive right now than they may have been a few years ago. Health care, for example, is drawing a lot of interest as baby boomers, a large chunk of our society, begin to reach elderly status. Business service and repair service operations are in demand as well as we battle our way out of the recession. In business services, collection agencies and anything debt related is selling well. During an economic struggle, consumers are also looking for their equipment to last longer, resulting in additional attention for places like auto and computer repair shops. Waiting for a recovery could lower values in these types of industries.
Baby Boomers Retiring
As mentioned, the baby boomer generation is reaching retirement age. And it is these baby boomers who own a large portion of the small business industry. What this means is that once these owners decide to sell, it will drastically alter the business-for-sale market. We’ve seen some of these boomers sell in recent years but the majority have been waiting out the recession. Whether you are one of those boomers ready to retire or their eventual competition, you’ll want to sell before the majority of these businesses hit the market. It will be tough to stand out once the market becomes flooded with similar businesses.
The truth of today’s market is that no matter when you decide to exit you business, you should already be in the planning stages. But with issues like these looming, now may be the time get things moving at a brisker pace. If you’re not getting the interest or offers you’d like, you can always pull back and work on improving the business. Waiting too long, however, could leave some prime opportunities, and profits, behind.
Showing posts with label business brokers. Show all posts
Showing posts with label business brokers. Show all posts
Thursday, October 20, 2011
Monday, March 14, 2011
Setting Goals and Budgeting to Meet Them
Setting Goals and Budgeting to Meet Them – By Jeffrey D. Bronswick, CPA, MBA
It’s already February. Do you have your 2011 goals and budgets set yet? Many companies do but others have found that the day to day activities of running and working in their businesses have gotten in their way. It’s not too late. So whether you haven’t done this already or you need to do some fine tuning, here are a few tips that will keep you on the right path.
What you should take away from this blog is:
1. Set goals
2. Have a budget
3. Hold your employees accountable
4. Be profit-driven!
What you need to do to get there:
Accounting information and controls
Without good information, you cannot make good decisions. Make sure your accounting is accurate, timely and enables you to drill down for details when necessary. You will have a better understanding of the financials side of your business so you have less surprises and more control. Also, you need good financial controls and processes in order to minimize mistakes, avoid being taken advantage of, and to maximize profits.
Sales
Sales goals should be consistent with the type of sales in your overall marketing/business strategy. The goals should be specific: be able to identify who, what, when, where and how. Hold your sales staff accountable. Don’t let them tell you how much they can sell. You need to tell them. You/management sets pricing and terms. Any price concessions must require your/management approval. Monitor sales people frequently. And, of course, reward those that meet or exceed the goals you set.
Gross margins
Negotiate costs and terms with vendors. Set goals for operational efficiencies. Reward those in charge of costs for lowering costs while maintaining/increasing quality of your product or service.
Selling, general and administrative expenses
What does the company really need to drive a successful business? Hold your employees accountable for the performance of the business, control of costs and productivity. Set goals for them and train/mentor them.
Net profits
A business is formed to earn profit and increase the wealth of its owners. If a company isn’t profitable, it will ultimately fail. So management should be rewarded based on bottom line results and not on sales or gross margins. If the company doesn’t make a reasonable profit then management hasn’t earned an extra reward.
ROI to investors (you /your partners/stockholders/investors)
Ask yourself, why should someone buy or invest in this business? Make your business into something that a buyer or investor would covet. If you can do that, you are on the path to either make a lot of money with your business or sell your business for a large return. You win either way. However, this is where longer range plans (beyond one year) are needed.
Jeffrey Bronswick, CPA, MBA
Jeffrey D. Bronswick is President of RP&Co. - Certified Public Accountants located in Buffalo Grove, IL. Jeff received his Bachelor of Science in Accountancy (Cum Laude and with University Honors) from Northern Illinois University in 1988 and later received his MBA. Since 1965, RP&Co has helped hundreds of businesses and organizations with their financial concerns. Whether it's analyzing a client's business performance to help improve profitability, minimizing income taxes, performing certified audits, or providing specific consulting services, they make recommendations that help their clients make better decisions and achieve their goals.
It’s already February. Do you have your 2011 goals and budgets set yet? Many companies do but others have found that the day to day activities of running and working in their businesses have gotten in their way. It’s not too late. So whether you haven’t done this already or you need to do some fine tuning, here are a few tips that will keep you on the right path.
What you should take away from this blog is:
1. Set goals
2. Have a budget
3. Hold your employees accountable
4. Be profit-driven!
What you need to do to get there:
Accounting information and controls
Without good information, you cannot make good decisions. Make sure your accounting is accurate, timely and enables you to drill down for details when necessary. You will have a better understanding of the financials side of your business so you have less surprises and more control. Also, you need good financial controls and processes in order to minimize mistakes, avoid being taken advantage of, and to maximize profits.
Sales
Sales goals should be consistent with the type of sales in your overall marketing/business strategy. The goals should be specific: be able to identify who, what, when, where and how. Hold your sales staff accountable. Don’t let them tell you how much they can sell. You need to tell them. You/management sets pricing and terms. Any price concessions must require your/management approval. Monitor sales people frequently. And, of course, reward those that meet or exceed the goals you set.
Gross margins
Negotiate costs and terms with vendors. Set goals for operational efficiencies. Reward those in charge of costs for lowering costs while maintaining/increasing quality of your product or service.
Selling, general and administrative expenses
What does the company really need to drive a successful business? Hold your employees accountable for the performance of the business, control of costs and productivity. Set goals for them and train/mentor them.
Net profits
A business is formed to earn profit and increase the wealth of its owners. If a company isn’t profitable, it will ultimately fail. So management should be rewarded based on bottom line results and not on sales or gross margins. If the company doesn’t make a reasonable profit then management hasn’t earned an extra reward.
ROI to investors (you /your partners/stockholders/investors)
Ask yourself, why should someone buy or invest in this business? Make your business into something that a buyer or investor would covet. If you can do that, you are on the path to either make a lot of money with your business or sell your business for a large return. You win either way. However, this is where longer range plans (beyond one year) are needed.
Jeffrey Bronswick, CPA, MBA
Jeffrey D. Bronswick is President of RP&Co. - Certified Public Accountants located in Buffalo Grove, IL. Jeff received his Bachelor of Science in Accountancy (Cum Laude and with University Honors) from Northern Illinois University in 1988 and later received his MBA. Since 1965, RP&Co has helped hundreds of businesses and organizations with their financial concerns. Whether it's analyzing a client's business performance to help improve profitability, minimizing income taxes, performing certified audits, or providing specific consulting services, they make recommendations that help their clients make better decisions and achieve their goals.
Sunday, January 9, 2011
Is Selling Your Business the Best 'Exit Plan'
My neighbor asked me, “Why would anyone sell a successful company?”. He could not understand why anyone would leave a business that was doing well. Of course successful companies get sold all the time.
So why do these business owners sell? The short answer is that most closely held businesses sell for human reasons, such as burn out, retirement, illness, partnership disputes, family issues or other personal reasons. Usually the business is fine but the human being running the business needs a change. To understand this better it is key to understand the other options for exiting a business.
Close the Business/Liquidation
Closing a business that is profitable never makes sense. Even if the assets are liquidated the price is likely to be pennies on the dollar versus selling the business as a going concern with employees, customers and a reputation that is intact. Not only does the business owner get the lowest value but the employees, vendors and customers are hurt by this type of exit.
Accident, Illness or Death
No one wants to exit their business this way, but many do. The loss of an owner not only creates tremendous issues for the family but also creates a leadership void in the business. Even the most competent management can struggle when a key business leader is lost to a serious accident, illness or death. No one plans for this type of exit but many end up exiting the business this way because they failed to create an alternate plan.
Succession
Succession by a family member or key employee has its benefits. They know the business, its product or service, employees, customers and vendors. Succession can be operationally successful for the exiting owner if they make sure the successor is carefully selected, qualified and groomed for the position. The owner must be careful not to make an emotional choice of a relative or favorite employee but instead choose the successor with the right skills to lead the company into the future. You are not seeking an “Employee” mentality but an “Owner” mentality. If that rare person can be found in the business who can make the transition to Owner, they often do not have the cash needed to purchase the business. They are also likely to want to pay less for the business as familiarity will blind them to many of the value drivers of the company. So although succession can be operationally successful it is rarely a financial success for the outgoing owner.
Sell
Closing or liquidating the business minimizes the value to the owner. Accident, illness or death forces the issue on the owner. Succession provided a very limited pool of options with limited financial reward.
Selling on the other hand allows the business owner to decide their ideal timing, maximize the value of the business they worked so hard to build, coordinate the use of the sale proceeds for financial planning and align their personal goals with the sale of a business. Selling the business allows the business owner to create a wealth event and often significant on-going passive income without having to run their business.
Whatever they are, human reasons are always pushing and pulling on a business owner. Burn out, stress, divorce, illness, partner disputes and limited growth capital are some of the human reasons that push owners out of the business. Retirement, enjoying life, relocating, a new business opportunity and passive income are some of the reasons that pull a business owner out. Whatever the motivation, the fundamental reason a business owner chooses a sale as their ideal exit plan is control. The business owner chooses to understand the value of their business and to proactively pursue the right buyer and the right price. By selling a business you choose to exit your business by choice, not by force.
The professional team at Chicagoland Sunbelt can help you confidentially sell or buy a business in Chicago and surrounding areas. For more information check out our site at ChicagolandSunbelt.
So why do these business owners sell? The short answer is that most closely held businesses sell for human reasons, such as burn out, retirement, illness, partnership disputes, family issues or other personal reasons. Usually the business is fine but the human being running the business needs a change. To understand this better it is key to understand the other options for exiting a business.
Close the Business/Liquidation
Closing a business that is profitable never makes sense. Even if the assets are liquidated the price is likely to be pennies on the dollar versus selling the business as a going concern with employees, customers and a reputation that is intact. Not only does the business owner get the lowest value but the employees, vendors and customers are hurt by this type of exit.
Accident, Illness or Death
No one wants to exit their business this way, but many do. The loss of an owner not only creates tremendous issues for the family but also creates a leadership void in the business. Even the most competent management can struggle when a key business leader is lost to a serious accident, illness or death. No one plans for this type of exit but many end up exiting the business this way because they failed to create an alternate plan.
Succession
Succession by a family member or key employee has its benefits. They know the business, its product or service, employees, customers and vendors. Succession can be operationally successful for the exiting owner if they make sure the successor is carefully selected, qualified and groomed for the position. The owner must be careful not to make an emotional choice of a relative or favorite employee but instead choose the successor with the right skills to lead the company into the future. You are not seeking an “Employee” mentality but an “Owner” mentality. If that rare person can be found in the business who can make the transition to Owner, they often do not have the cash needed to purchase the business. They are also likely to want to pay less for the business as familiarity will blind them to many of the value drivers of the company. So although succession can be operationally successful it is rarely a financial success for the outgoing owner.
Sell
Closing or liquidating the business minimizes the value to the owner. Accident, illness or death forces the issue on the owner. Succession provided a very limited pool of options with limited financial reward.
Selling on the other hand allows the business owner to decide their ideal timing, maximize the value of the business they worked so hard to build, coordinate the use of the sale proceeds for financial planning and align their personal goals with the sale of a business. Selling the business allows the business owner to create a wealth event and often significant on-going passive income without having to run their business.
Whatever they are, human reasons are always pushing and pulling on a business owner. Burn out, stress, divorce, illness, partner disputes and limited growth capital are some of the human reasons that push owners out of the business. Retirement, enjoying life, relocating, a new business opportunity and passive income are some of the reasons that pull a business owner out. Whatever the motivation, the fundamental reason a business owner chooses a sale as their ideal exit plan is control. The business owner chooses to understand the value of their business and to proactively pursue the right buyer and the right price. By selling a business you choose to exit your business by choice, not by force.
The professional team at Chicagoland Sunbelt can help you confidentially sell or buy a business in Chicago and surrounding areas. For more information check out our site at ChicagolandSunbelt.
Thursday, September 30, 2010
New Small Business Law Could Make Buying or Selling a Business Easier
The financial markets have made it difficult for small businesses to get loans – but this may be changing, as the President just signed a new law aimed at making it easier. This new law could benefit those looking to buy an existing business or start a new business or franchise. The law could also benefit current business owners who have been thinking about selling their companies.
The law improves existing loan programs and includes multiple small business tax cuts. Some elements of the new bill include:
- Fee Waivers on SBA loans are now in place, but only while the money lasts. Buyers considering an SBA loan should act quickly to take advantage of fee waivers, as they will only last as long as the limited funding.
- Lending limits have been increased significantly on SBA loans. Transactions that previously may have been too large for SBA funding may now qualify. This is especially good news for sellers and buyers of companies who were previously too large to qualify for SBA financing.
- When small businesses buy new equipment, they may immediately write off the first $500,000 of that investment.
- For eligible small businesses, some long-term investments in the company will be subject to zero capital gains taxes.
- Entrepreneurs with a fresh idea will be able to deduct the first $10,000 of their start-up costs.
- Those who are self-employed will be able to deduct 100% of the cost of health insurance for themselves and their family.
SBA lenders are working to incorporate the new law into their lending practices. Sunbelt Business Brokers encourages those considering SBA financing to 1) make sure they are working with SBA preferred lenders, and 2) get a recommendation from a local business broker on banks that are friendly to small business loans. Just because a bank is “SBA preferred” does not mean they are SBA friendly. A business broker can make sure you are talking to a lender that won’t waste your time.
Tuesday, August 10, 2010
2010 Fast Selling Businesses
It is no surprise that 2009 was a challenging year for business sales transactions. Most companies were experiencing sharp declines in revenues, customers and profits — not the sort of environment conducive to selling a business.
Before the economic meltdown, our firm had been forecasting that the large wave of baby boomers approaching retirement would fuel the business transaction marketplace, but those plans changed in late 2008 and 2009. The economy has altered those plans permanently for some of the unfortunate business owners who could not weather the downturn.
We had no reason to believe, given the weak economic forecasts, that the transaction markets would rebound in 2010. But rebound they did. We have experienced a very robust first half of 2010, with many of our transactions selling in record times with multiple offers. We have analyzed these business transactions and there were some key traits they share.
Seller financing: Banks are still not lending and buyers have few alternatives to fund a transaction. Motivated sellers have stepped forward with offers to finance the transfer of their businesses, and they are being rewarded for this approach. Seller financing has been the single biggest factor in securing a quick sale at a premium price. The earnings multiples these businesses are receiving are at least 20% higher than those received by businesses being offered with little to no seller financing.
Infrastructure: It is important that a new owner be able to work into a business that has a diverse client base, trained employees, documented systems and procedures and the capacity for growth. Buyers are flocking to businesses that are built with solid foundations and where the seller is not ‘the business.’
Recurring revenues: Businesses that have a certain amount of recurring revenue are garnering lots of attention. This structure is true in good and in bad economies, but it has been especially true in our current market. For example, we represented a business in which 70% of the revenues were recurring. The business was on the market for seven days and garnered nine offers.
Growth potential: Companies that have the capacity to grow with little or no capital investments are attractive. There’s an adage in our industry that “buyers pay for what the business is doing today, but they buy it for what it could be.” Every buyer wants to know that they can take the business to the next level and increase their ROI with little to no capital investment. These businesses can typically receive additional value in the form of a higher earnings multiple or future payments tied to the growth of the business. Businesses are selling in record times and at solid multiples of earnings.
If your business has some or all of the above traits then now can be a great time to go to market and maximize your value.
Before the economic meltdown, our firm had been forecasting that the large wave of baby boomers approaching retirement would fuel the business transaction marketplace, but those plans changed in late 2008 and 2009. The economy has altered those plans permanently for some of the unfortunate business owners who could not weather the downturn.
We had no reason to believe, given the weak economic forecasts, that the transaction markets would rebound in 2010. But rebound they did. We have experienced a very robust first half of 2010, with many of our transactions selling in record times with multiple offers. We have analyzed these business transactions and there were some key traits they share.
Seller financing: Banks are still not lending and buyers have few alternatives to fund a transaction. Motivated sellers have stepped forward with offers to finance the transfer of their businesses, and they are being rewarded for this approach. Seller financing has been the single biggest factor in securing a quick sale at a premium price. The earnings multiples these businesses are receiving are at least 20% higher than those received by businesses being offered with little to no seller financing.
Infrastructure: It is important that a new owner be able to work into a business that has a diverse client base, trained employees, documented systems and procedures and the capacity for growth. Buyers are flocking to businesses that are built with solid foundations and where the seller is not ‘the business.’
Recurring revenues: Businesses that have a certain amount of recurring revenue are garnering lots of attention. This structure is true in good and in bad economies, but it has been especially true in our current market. For example, we represented a business in which 70% of the revenues were recurring. The business was on the market for seven days and garnered nine offers.
Growth potential: Companies that have the capacity to grow with little or no capital investments are attractive. There’s an adage in our industry that “buyers pay for what the business is doing today, but they buy it for what it could be.” Every buyer wants to know that they can take the business to the next level and increase their ROI with little to no capital investment. These businesses can typically receive additional value in the form of a higher earnings multiple or future payments tied to the growth of the business. Businesses are selling in record times and at solid multiples of earnings.
If your business has some or all of the above traits then now can be a great time to go to market and maximize your value.
Sunday, May 23, 2010
Are You Emotionally and Financially Ready to Sell Your Business
Walking away from your life's work is a big step that doesn't come without its obstacles. Determining your readiness to sell your business -- sans any pressing circumstances to do so -- largely comes down to two factors: 1) your financial readiness to sell a company, and 2) your emotional readiness to sell a company.
Assessing Your Financial Readiness to Sell a Company
Your financial situation, the easier of the two factors to consider, is oftentimes the one most overlooked by sellers. The key question is whether the proceeds you will receive from selling your business will give you the financial means to leave the business. For most business owners, the value of their business is a large chunk of their net worth. Unleashing that value is critical to reaching their post-sale goals. You're one of the lucky ones if the proceeds of your sale are not required for you to retire or move on.
On the flip side, selling a business involves cutting off your access to the money you've been drawing out of the business every year. Ideally, the proceeds from the sale of your business will be large enough to cover your obligations going forward. How much money do you need and what sale price will give you what you need? Can your business command that price or anything close to it? If not, now may not be the right time to list your business for sale.
To best assess your financial readiness to sell a company, it's often a good idea to engage the services of a reputable wealth manager, an individual who can analyze your entire portfolio and calculate your post-sale needs. One of the key steps in completing this financial analysis is engaging with a knowledgeable independent third party to value your business. As business valuation is a complex matter, it should only be undertaken by professionals with the appropriate certifications, years of experience and access to a database of comparable transactions. Most business intermediaries will have a handful of appraisal and valuation firms that they work with on a regular basis, and can offer a recommendation.
After receiving a completed business valuation, your wealth manager can now appropriately analyze your portfolio and understand whether or not a sale will yield enough money to fund your projected retirement and allow you to sustain the lifestyle you want post-sale.
If the proceeds from the business sale are not enough to allow you to leave the business, you may need to focus on spending a few years to build up the value before you sell, or you might consider lowering your targeted financial spend after the sale. Alternatively, you might need to come up with a way to supplement your income and bridge the gap.
Assessing Your Emotional Readiness to Sell a Company
The more elusive part of evaluating your readiness to sell is your emotional readiness. Can you really walk away from the business you built for so many years?
While most transitions will require the seller to stay in touch with the new owners for some period of time, there is still that moment when your services will no longer be needed. What are your plans for when that day arrives? It's best if, as a business owner, you can detail exactly how you are going to spend your days after the sale. This gives a clear indication of whether or not you are ready to sell. For instance, will you plan trips and activities with friends, kids and/or grandkids? Will you pursue a hobby? Or perhaps even run a smaller business in a completely different field? If you cannot describe post-sale life, you should question your sale decision.
While there might be some legitimate reasons an owner has not planned this next phase – burnout, a partnership break-up or an illness – a seller's motivations matter in so many ways.
Knowing the seller's 'next steps,' and motivations for selling, can be extremely important in the actual transaction process. It can be an indication of how they will handle a business negotiation, their willingness to provide the necessary training and transition to a new owner, their flexibility and patience with a deal, and most importantly, their receptivity to heeding the advice of any professionals helping to manage the transaction.
The story of a seller who owned a niche manufacturing business illustrates the importance of assessing emotional readiness to sell. The seller's business was very unique and had great fundamentals. It was in a great position to attract multiple buyers and, in fact, six very substantial offers were made to the owner shortly after it was listed for sale. Unfortunately, none of those deals were consummated. Why? It really came down to the fact that the owner was just not emotionally ready to walk away unless he received an exorbitant -- and unrealistically high -- offer. He had engaged the expertise of a business intermediary, took the time to meet with many different prospective buyers, and appeared to be committed to selling. Yet when the moment arrived, he could not disengage from the business and he created veiled objections that boiled down to the fact that he just wasn't ready to sell. The net result was that the time, energy and capital of many involved parties was wasted.
To this end, it's really important to ask yourself the tough questions before pursuing the difficult and long task of marketing your business for sale. Will you have the necessary funds for your desired post-sale lifestyle, and are you emotionally ready to pursue a life after business ownership? If you cannot develop a post-sale picture of your life, you may need to keep running the business -- assuming you have the will and drive to remain competitive and relevant.
Assessing Your Financial Readiness to Sell a Company
Your financial situation, the easier of the two factors to consider, is oftentimes the one most overlooked by sellers. The key question is whether the proceeds you will receive from selling your business will give you the financial means to leave the business. For most business owners, the value of their business is a large chunk of their net worth. Unleashing that value is critical to reaching their post-sale goals. You're one of the lucky ones if the proceeds of your sale are not required for you to retire or move on.
On the flip side, selling a business involves cutting off your access to the money you've been drawing out of the business every year. Ideally, the proceeds from the sale of your business will be large enough to cover your obligations going forward. How much money do you need and what sale price will give you what you need? Can your business command that price or anything close to it? If not, now may not be the right time to list your business for sale.
To best assess your financial readiness to sell a company, it's often a good idea to engage the services of a reputable wealth manager, an individual who can analyze your entire portfolio and calculate your post-sale needs. One of the key steps in completing this financial analysis is engaging with a knowledgeable independent third party to value your business. As business valuation is a complex matter, it should only be undertaken by professionals with the appropriate certifications, years of experience and access to a database of comparable transactions. Most business intermediaries will have a handful of appraisal and valuation firms that they work with on a regular basis, and can offer a recommendation.
After receiving a completed business valuation, your wealth manager can now appropriately analyze your portfolio and understand whether or not a sale will yield enough money to fund your projected retirement and allow you to sustain the lifestyle you want post-sale.
If the proceeds from the business sale are not enough to allow you to leave the business, you may need to focus on spending a few years to build up the value before you sell, or you might consider lowering your targeted financial spend after the sale. Alternatively, you might need to come up with a way to supplement your income and bridge the gap.
Assessing Your Emotional Readiness to Sell a Company
The more elusive part of evaluating your readiness to sell is your emotional readiness. Can you really walk away from the business you built for so many years?
While most transitions will require the seller to stay in touch with the new owners for some period of time, there is still that moment when your services will no longer be needed. What are your plans for when that day arrives? It's best if, as a business owner, you can detail exactly how you are going to spend your days after the sale. This gives a clear indication of whether or not you are ready to sell. For instance, will you plan trips and activities with friends, kids and/or grandkids? Will you pursue a hobby? Or perhaps even run a smaller business in a completely different field? If you cannot describe post-sale life, you should question your sale decision.
While there might be some legitimate reasons an owner has not planned this next phase – burnout, a partnership break-up or an illness – a seller's motivations matter in so many ways.
Knowing the seller's 'next steps,' and motivations for selling, can be extremely important in the actual transaction process. It can be an indication of how they will handle a business negotiation, their willingness to provide the necessary training and transition to a new owner, their flexibility and patience with a deal, and most importantly, their receptivity to heeding the advice of any professionals helping to manage the transaction.
The story of a seller who owned a niche manufacturing business illustrates the importance of assessing emotional readiness to sell. The seller's business was very unique and had great fundamentals. It was in a great position to attract multiple buyers and, in fact, six very substantial offers were made to the owner shortly after it was listed for sale. Unfortunately, none of those deals were consummated. Why? It really came down to the fact that the owner was just not emotionally ready to walk away unless he received an exorbitant -- and unrealistically high -- offer. He had engaged the expertise of a business intermediary, took the time to meet with many different prospective buyers, and appeared to be committed to selling. Yet when the moment arrived, he could not disengage from the business and he created veiled objections that boiled down to the fact that he just wasn't ready to sell. The net result was that the time, energy and capital of many involved parties was wasted.
To this end, it's really important to ask yourself the tough questions before pursuing the difficult and long task of marketing your business for sale. Will you have the necessary funds for your desired post-sale lifestyle, and are you emotionally ready to pursue a life after business ownership? If you cannot develop a post-sale picture of your life, you may need to keep running the business -- assuming you have the will and drive to remain competitive and relevant.
Sunday, March 21, 2010
Thinking about Buying a Business - Answer these Questions
At face value, the life of an entrepreneur may seem glamorous. You run the show, make your own hours and don’t have to answer to anyone but yourself.
Unfortunately, it does not always work in your favor. It often takes hard work and determination to create a thriving business poised to become the next big success story. Before rushing out to buy a business, new entrepreneurs would be well-advised to take a step back and consider five important questions prior to jumping into business ownership.
What Are My Strengths and Weaknesses as an Entrepreneur?
Do you really understand your strengths and weaknesses, and how those compare to the norms for successful entrepreneurs? The skill set of successful entrepreneurs, which has been studied and modeled for many years, requires more than a just a well-rounded background consisting of functional and strategic experience. Knowing your strengths and weaknesses, as it specifically pertains to business ownership, will typically guide you towards acquiring a business that showcases your assets while at the same time downplays your limitations.
On the other hand, it can help gauge what kind of support may be required in a co-owner or business partner. For instance, if you have a high numerical aptitude coupled with low numerical reasoning, there’s a strong likelihood you can manage the books and records of your business -- but may need assistance building business models. This serves as only one of countless examples that demonstrate the importance of assessing your skills.
It's tough to be objective when assessing your strengths and weaknesses. As such, it may be worth investing in a third-party Entrepreneurial Assessment. My business brokerage firm works with an industrial psychologist who conducts Entrepreneurial Assessments of would-be business buyers. The feedback we get from the buyers is that these assessments are very helpful in streamlining their path to business ownership.
As an unbiased, scientific assessment of your skills and background, Entrepreneurial Assessments can give you a snapshot of how you might succeed as an entrepreneur, as well as what type of businesses would best suit you.
What Is My Tolerance For Risk?
To reference an overused but oftentimes ignored cliché, small business ownership is not for the faint of heart. Even under the best of circumstances, steering the ship of a small business takes a healthy combination of intelligence, hard work, perseverance and sheer guts. Unlike what many new entrepreneurs anticipate, there is no such thing as a day off.
All business decisions require your complete involvement, as any capital investment is either coming out of your pocket, or you are guaranteeing the loan. Sleepless nights and the feeling of living on the edge can easily permeate your lifestyle unless you practice counter-balance measures.
If you are easily troubled and the worry paralyzes you, it may be wise to think twice before buying or starting a business of your own. It’s imperative you understand your risk thresholds, as well as those of your family or significant others, prior to taking the plunge into entrepreneurship.
What Is My Financial Profile?
It is absolutely critical to fully understand your ability to financially leverage the purchase of a business.
As lending has become difficult amidst a struggling small business economy, what works one month may not work the next. Your comprehensive financial profile should take into account not only your personal net worth, for example, but also the other factors banks are now considering when processing loans.
A contact of mine who works with buyers to secure loans for business acquisitions, recapitalizations and debt restructuring recently mentioned how he urges today’s business buyers to complete a lending profile prior to embarking on a business search. A lending profile will ultimately guide you on a more focused search, giving you information about the size and type of business you can afford to purchase, its cash flow requirements, working capital needs, the most appropriate investment vehicles and a pre-approval for lending you may need. The latter can give you a leg up with sellers, as they receive comfort in knowing you are indeed financeable.
What Type Of Business Is Best Suited To My Talents?
Buying a business is your opportunity to do what you love, so your passion for the specific industry should be one of your primary objectives when looking for a business. Nearly all of the 350 new buyers who seek help from Chicagoland Sunbelt each month, for example, are focused on the cash flows of a particular business over the type of business. A high percentage of these buyers are middle-to-senior level executives who are attempting to buy a business to replace lost income.
It’s usually a good idea for new buyers to engage in a brief educational session surrounding tactics involved in business acquisition. During these sessions, buyers learn the steps involved in buying a business and the first rule of focus: concentrate on your career goals first, and worry about the financial benefits second. If you cannot say you would love running a particular business, skip it and keep looking.
In fact, the process of buying a business could last anywhere between six months and two years. New entrepreneurs are lucky if they find something immediately. More often than not, you are turning over many stones to find the prize. Don’t let the long process discourage you from finding the business that truly meshes with your career goals, passion, personality and core strengths.
One of the best ways to know where to focus your energies is to think about all the jobs, tasks or situations throughout your career that seemed effortless. We have all been in situations where work did not seem work -- you could not wait to get up in the morning; you put in extra hours; you collaborated; you had tons of energy even though you were working harder than usual; and everyone around you knew you loved what you were doing. Think about those moments and then compare the attributes of a particular business to those situations. Once you find a business that invokes this type of passion within you, commence your due diligence to test your assumptions.
It is hard work and you may have to recalibrate along the way, but there’s a good business out there for every personality and skill level.
Who Are My Advisors?
From day one, assemble a competent team of advisors who are skilled and committed to the business-buying process. Your team should include an attorney, accountant, banker, insurance advisor and business broker. All of these professionals should be highly skilled in business acquisitions.
While many professionals will tell you they understand the work of business acquisitions, there are few who make it their living to focus solely on this type of work. This is an important distinction since buying a business is fraught with many challenges and obstacles. It is easy for an unskilled professional to tell you to walk away from an opportunity that might be ideal for you.
Unfortunately, it does not always work in your favor. It often takes hard work and determination to create a thriving business poised to become the next big success story. Before rushing out to buy a business, new entrepreneurs would be well-advised to take a step back and consider five important questions prior to jumping into business ownership.
What Are My Strengths and Weaknesses as an Entrepreneur?
Do you really understand your strengths and weaknesses, and how those compare to the norms for successful entrepreneurs? The skill set of successful entrepreneurs, which has been studied and modeled for many years, requires more than a just a well-rounded background consisting of functional and strategic experience. Knowing your strengths and weaknesses, as it specifically pertains to business ownership, will typically guide you towards acquiring a business that showcases your assets while at the same time downplays your limitations.
On the other hand, it can help gauge what kind of support may be required in a co-owner or business partner. For instance, if you have a high numerical aptitude coupled with low numerical reasoning, there’s a strong likelihood you can manage the books and records of your business -- but may need assistance building business models. This serves as only one of countless examples that demonstrate the importance of assessing your skills.
It's tough to be objective when assessing your strengths and weaknesses. As such, it may be worth investing in a third-party Entrepreneurial Assessment. My business brokerage firm works with an industrial psychologist who conducts Entrepreneurial Assessments of would-be business buyers. The feedback we get from the buyers is that these assessments are very helpful in streamlining their path to business ownership.
As an unbiased, scientific assessment of your skills and background, Entrepreneurial Assessments can give you a snapshot of how you might succeed as an entrepreneur, as well as what type of businesses would best suit you.
What Is My Tolerance For Risk?
To reference an overused but oftentimes ignored cliché, small business ownership is not for the faint of heart. Even under the best of circumstances, steering the ship of a small business takes a healthy combination of intelligence, hard work, perseverance and sheer guts. Unlike what many new entrepreneurs anticipate, there is no such thing as a day off.
All business decisions require your complete involvement, as any capital investment is either coming out of your pocket, or you are guaranteeing the loan. Sleepless nights and the feeling of living on the edge can easily permeate your lifestyle unless you practice counter-balance measures.
If you are easily troubled and the worry paralyzes you, it may be wise to think twice before buying or starting a business of your own. It’s imperative you understand your risk thresholds, as well as those of your family or significant others, prior to taking the plunge into entrepreneurship.
What Is My Financial Profile?
It is absolutely critical to fully understand your ability to financially leverage the purchase of a business.
As lending has become difficult amidst a struggling small business economy, what works one month may not work the next. Your comprehensive financial profile should take into account not only your personal net worth, for example, but also the other factors banks are now considering when processing loans.
A contact of mine who works with buyers to secure loans for business acquisitions, recapitalizations and debt restructuring recently mentioned how he urges today’s business buyers to complete a lending profile prior to embarking on a business search. A lending profile will ultimately guide you on a more focused search, giving you information about the size and type of business you can afford to purchase, its cash flow requirements, working capital needs, the most appropriate investment vehicles and a pre-approval for lending you may need. The latter can give you a leg up with sellers, as they receive comfort in knowing you are indeed financeable.
What Type Of Business Is Best Suited To My Talents?
Buying a business is your opportunity to do what you love, so your passion for the specific industry should be one of your primary objectives when looking for a business. Nearly all of the 350 new buyers who seek help from Chicagoland Sunbelt each month, for example, are focused on the cash flows of a particular business over the type of business. A high percentage of these buyers are middle-to-senior level executives who are attempting to buy a business to replace lost income.
It’s usually a good idea for new buyers to engage in a brief educational session surrounding tactics involved in business acquisition. During these sessions, buyers learn the steps involved in buying a business and the first rule of focus: concentrate on your career goals first, and worry about the financial benefits second. If you cannot say you would love running a particular business, skip it and keep looking.
In fact, the process of buying a business could last anywhere between six months and two years. New entrepreneurs are lucky if they find something immediately. More often than not, you are turning over many stones to find the prize. Don’t let the long process discourage you from finding the business that truly meshes with your career goals, passion, personality and core strengths.
One of the best ways to know where to focus your energies is to think about all the jobs, tasks or situations throughout your career that seemed effortless. We have all been in situations where work did not seem work -- you could not wait to get up in the morning; you put in extra hours; you collaborated; you had tons of energy even though you were working harder than usual; and everyone around you knew you loved what you were doing. Think about those moments and then compare the attributes of a particular business to those situations. Once you find a business that invokes this type of passion within you, commence your due diligence to test your assumptions.
It is hard work and you may have to recalibrate along the way, but there’s a good business out there for every personality and skill level.
Who Are My Advisors?
From day one, assemble a competent team of advisors who are skilled and committed to the business-buying process. Your team should include an attorney, accountant, banker, insurance advisor and business broker. All of these professionals should be highly skilled in business acquisitions.
While many professionals will tell you they understand the work of business acquisitions, there are few who make it their living to focus solely on this type of work. This is an important distinction since buying a business is fraught with many challenges and obstacles. It is easy for an unskilled professional to tell you to walk away from an opportunity that might be ideal for you.
Friday, January 15, 2010
When Is It Time to Sell
As a business broker who's been involved in hundreds of deals, I can tell you with certainty that the best time to sell your business is when it's doing well. I can also tell you that this is exactly when most business owners have the hardest time pulling the trigger on a sale. If things are going so well, they ask, why should they sell and potentially leave money on the table?
An entrepreneur's dream is to build a successful and profitable business, so to many owners it might seem illogical to walk away. Using a recent example involving a client, let me illustrate how it can pay off to sell when things are good.
This client hired our firm to determine the value of his business and market it to potential buyers. This company had all the attributes buyers are seeking--a great track record, increasing revenues and profits, long-term clients, key employees, a niche product, and very healthy margins. In fact, this business was just wrapping up a record year, and the future prospects were outstanding. At first glance, this was a model seller who had made the tough decision to sell when things were going well.
As anticipated, our firm generated multiple offers--several of them well above the value placed on the business. This was great news, and we thought the toughest part would be deciding which of the many qualified buyers the owner would choose. Wrong.
Because of all these offers, the owner began to second-guess the value of his business and became convinced that the buyers were undervaluing it. As such, we could not get a deal done, and the buyers went on to pursue other deals. Just four months later, the business started to slow. Today, it's not as valuable as it was when offers were on the table, and it will be some time before it regains its previous value.
The timing of a business sale can be a nebulous thing, especially in the current environment. Many people are surprised to hear that there are plenty of businesses performing well and generating healthy returns. There are great opportunities to successfully sell a business right now and maximize your investment. Even if sales are currently flat, don't misread that as a bad sign. Many analysts and economists like to toss around the phrase "flat is the new up." So if your business is holding its own--or if sales are slightly up or slightly down--consider it good news in this economy.
Selling a business has always been an individual decision, and timing the sale right can be tricky. It's always best for sellers to plan their exits so they can leave when they want and under the circumstances they want.
As such, it would be wise to plan an exit strategy even as you launch your business, but most people can't fathom taking that step just as they are getting started. What follows is a 10-year timeline to help you plan for the eventual sale of your business.
Let's assume you're thinking of retiring and selling your business when you turn 65. (That number could be 55 or 75, of course.) This timeline, a rough guide, will help you put the pieces in place to prepare your business for sale. If you create a plan from day one, most of your time will be spent running the day-to-day operations of your business so you won't need to scramble when you're ready. It also helps you better calibrate the best time to sell so you can get top dollar and achieve your personal goals.
An entrepreneur's dream is to build a successful and profitable business, so to many owners it might seem illogical to walk away. Using a recent example involving a client, let me illustrate how it can pay off to sell when things are good.
This client hired our firm to determine the value of his business and market it to potential buyers. This company had all the attributes buyers are seeking--a great track record, increasing revenues and profits, long-term clients, key employees, a niche product, and very healthy margins. In fact, this business was just wrapping up a record year, and the future prospects were outstanding. At first glance, this was a model seller who had made the tough decision to sell when things were going well.
As anticipated, our firm generated multiple offers--several of them well above the value placed on the business. This was great news, and we thought the toughest part would be deciding which of the many qualified buyers the owner would choose. Wrong.
Because of all these offers, the owner began to second-guess the value of his business and became convinced that the buyers were undervaluing it. As such, we could not get a deal done, and the buyers went on to pursue other deals. Just four months later, the business started to slow. Today, it's not as valuable as it was when offers were on the table, and it will be some time before it regains its previous value.
The timing of a business sale can be a nebulous thing, especially in the current environment. Many people are surprised to hear that there are plenty of businesses performing well and generating healthy returns. There are great opportunities to successfully sell a business right now and maximize your investment. Even if sales are currently flat, don't misread that as a bad sign. Many analysts and economists like to toss around the phrase "flat is the new up." So if your business is holding its own--or if sales are slightly up or slightly down--consider it good news in this economy.
Selling a business has always been an individual decision, and timing the sale right can be tricky. It's always best for sellers to plan their exits so they can leave when they want and under the circumstances they want.
As such, it would be wise to plan an exit strategy even as you launch your business, but most people can't fathom taking that step just as they are getting started. What follows is a 10-year timeline to help you plan for the eventual sale of your business.
Let's assume you're thinking of retiring and selling your business when you turn 65. (That number could be 55 or 75, of course.) This timeline, a rough guide, will help you put the pieces in place to prepare your business for sale. If you create a plan from day one, most of your time will be spent running the day-to-day operations of your business so you won't need to scramble when you're ready. It also helps you better calibrate the best time to sell so you can get top dollar and achieve your personal goals.
7 to 10 Years Before Selling
This is the education and reading stage. Learn about successful business transitions, attend seminars on how to sell a business, and talk to retirees who have sold a business. Essentially, get familiar with the notion of what you'll need to do as the process continues. Take your time; this phase can last for several years.
3 to 5 Years Before Selling
Start to assemble a team of advisors (accountant, attorney, wealth manager, insurance agent, business broker and exit planner) for the express purpose of designing a plan that will meet your needs post-sale. These advisors may be different than the people you use to help you manage your business, and they should be well-versed in business transactions, tax planning and wealth maximization. An experienced exit planning professional should be retained to quarterback this process and ensure that all the parties involved are working toward a common set of objectives and goals. The outcome of this process can range from minor tweaks to your financial record-keeping and legal structure to significant changes in your business operations to ensure that you maximize the value of your asset.
2 Years Before Selling
At this stage, you should be revisiting the exit plan every six months to a year to ensure you are on pace to achieve your goals. If so, you can begin the window dressing necessary to prepare for a sale. If not, you may have to consider a course correction, modification of your goals, a delay in your exit or any combination thereof. If things are on track, this is the time to firm up your vendor and client agreements and ensure key employees are in place and that you have a complete operations manual that documents all processes and procedures.
1 Year Before Selling
Make sure you can answer this question with clarity: Why are you selling? That will be the first question every potential buyer will ask. By now you know what your business is worth and you have prepared all other aspects for a sale. Work with your business brokerage firm to start developing the "go to market" strategy. Ensure that you have a mix of strategic and financial acquirers identified, as well as a broad-based marketing plan to attract the largest number of buyers. Finally, when everything is ready, take a step back. Just focus on managing the business so it's running smoothly and let your brokerage firm manage the life cycle of the business transaction. This will lead to a graceful and profitable exit.
Sunday, November 29, 2009
Eight Steps to Prepare Your Business for 2010
Anyone who works with a business knows that the first 100 days of owning a business is crucial to its success. What the owner does from the word "go" can change the entire future outlook. However, it's important not to lose sight of those all important initial steps. Whether you're a long-time business owner or just starting out with your first business, getting back to the basics can help you boost productivity and efficiency in your operations.
Here are eight critical steps to gain an introspective look into your store and help determine what to do as 2010 approaches.
1. Meet with your key employees. Indeed, meet with everyone on your payroll, but prioritize those who are most important to the success of your business. Your employees are the front line of your organization. As such, they can sometimes be more closely tied to how the business is doing and where there is room for improvement than you may be.For new business owners, this step is crucial for easing anxiety over an ownership transition. For owners that have been at this a long time, reconnecting with your employees will give you great insight into where your business is going, what your customers are saying and how frontline operations can be improved.
2. Meet with key customers. A business doesn't survive without customers. That's true for the small family-run business, to the franchise chain, to the Fortune 500 company. Prioritize your most valuable customers. Who are the largest and most profitable clients? Who buys the most products or services? Ask what you can do better to retain their trust. Try to meet with customers your business may have lost recently and ask what you can do to earn their business again. Don't forget the smaller customers. With proper care and nurturing, they can become your biggest spenders - and your biggest advocates. If it makes sense for your business, consider appointing a go-getter employee with a new task: customer service rep for small and mid-sized accounts. Perhaps add an incentive for that employee if he or she brings in more business from those existing customers.
3. Meet with key suppliers. If suppliers ran into payment issues with the previous owner of the business, they'll probably be relieved to find out it's under new ownership. On the other hand, if things went smoothly in the past, they might suddenly become nervous about your ability to continue this positive relationship. The key is to assure them by meeting with them right away and clearly spelling out how you plan to work with them. They are your partners. Listen to them. Consult with them. They can help you succeed - or fail. Of course, there could be big issues that need to be addressed. Perhaps one key supplier doesn't understand the concept of a deadline, or the products you have been receiving are of dubious quality. Manage these issues, and, if necessary, be prepared to make a change before you meet with problem suppliers.
4. Get on top of the accounting. Organize, organize, organize. Know who you are paying and why. Know how much you are spending and why. Who's paying you on time and who's not? These are all concerns you need to examine routinely. You need to identify problems, but more important, you need to make sure you understand the process of how your records are kept.You may want to change how the books are done if you're not satisfied with the process. If you have a knack for numbers, consider bringing the basic accounting in-house. If you don't, use your network to find a trusted accountant. Typically, a new owner can save money through a simple financial review. Multiple small savings can really add up and drop immediate dollars to the bottom line.
5. Get hands-on experience with the business. If you're running a small business, this is probably the first thing you will do simply because cash flow dictates you do much of the work. But if the business is larger than a storefront, you want to get hands-on experience in all aspects of the business. This won't make you an expert in marketing or customer service, for example, but it will give you a better understanding of the processes involved. Also, if you detect a problem in marketing, for example, you will have better understanding of what you should be asking to fix that problem. Also, having your employees seeing you on the job accomplishes two critical functions: First, it can be a morale booster to see the boss in the trenches. Second, it puts employees on alert that you're paying attention to what they are doing. That can reduce laziness and theft.
6. Create an issues list. This is an ongoing task. As you work your way around the business - talking to your employees, customers, suppliers and understanding how each department works - you'll start to encounter issues that need to be addressed. Rank these by importance. For example, if you know you have waste in the manufacturing process, you will want to put that high on your list. Does a key supplier deliver substandard products? As you rank your issues, you can develop an action plan. That will help with the final step.
7. Refine your business plan. Now it's time to take everything you have learned and determine how to optimize your opportunities. What needs the most attention? Where can your unique skills be most useful to growth? What aspects of the business can you trust to certain employees?It is typically not a good idea to refine your business plan until you carefully and critically look at the business you just bought. Don't rush into changes on Day 1; waiting 100 days will lead to wiser decisions.Your patience will pay off in the long run.
8. Create an advisory board. It can be lonely at the top of a small to mid-sized business. All of the decisions ultimately land on your shoulders and you need to be well-versed in most functional disciplines to make the best decision possible. Business owners who are continually seeking out the "best" business practices will be well-prepared for the ongoing challenges. It would be smart to assemble a small group of trusted advisors who you can meet with on a regular basis. These meetings should be strategic and have a strong emphasis on reality-based issue resolution. If you cannot put the right group together there are advisory groups you can join that will serve as a "kitchen cabinet" One such service provider is The Inner Circle, which has operated peer-to-peer advisory groups across the country for over 30 years. The Inner Circle facilitates monthly meetings with eight to 12 business owners from non-competitive businesses helping each other think through their most pressing issues. When you get that many smart entrepreneurs together on a monthly basis, you are certain to gain a better perspective on how to run and maximize processes for your own business.
Running a business is hard work and having a plan is critical to ensuring your success. Most psychologists will tell you that one of the distinguishing traits of successful entrepreneurs is the willingness and ability to commit their plans to writing and executing those plans. Proactively manage your business and it will return you with many rewards both financially and personally.
Here are eight critical steps to gain an introspective look into your store and help determine what to do as 2010 approaches.
1. Meet with your key employees. Indeed, meet with everyone on your payroll, but prioritize those who are most important to the success of your business. Your employees are the front line of your organization. As such, they can sometimes be more closely tied to how the business is doing and where there is room for improvement than you may be.For new business owners, this step is crucial for easing anxiety over an ownership transition. For owners that have been at this a long time, reconnecting with your employees will give you great insight into where your business is going, what your customers are saying and how frontline operations can be improved.
2. Meet with key customers. A business doesn't survive without customers. That's true for the small family-run business, to the franchise chain, to the Fortune 500 company. Prioritize your most valuable customers. Who are the largest and most profitable clients? Who buys the most products or services? Ask what you can do better to retain their trust. Try to meet with customers your business may have lost recently and ask what you can do to earn their business again. Don't forget the smaller customers. With proper care and nurturing, they can become your biggest spenders - and your biggest advocates. If it makes sense for your business, consider appointing a go-getter employee with a new task: customer service rep for small and mid-sized accounts. Perhaps add an incentive for that employee if he or she brings in more business from those existing customers.
3. Meet with key suppliers. If suppliers ran into payment issues with the previous owner of the business, they'll probably be relieved to find out it's under new ownership. On the other hand, if things went smoothly in the past, they might suddenly become nervous about your ability to continue this positive relationship. The key is to assure them by meeting with them right away and clearly spelling out how you plan to work with them. They are your partners. Listen to them. Consult with them. They can help you succeed - or fail. Of course, there could be big issues that need to be addressed. Perhaps one key supplier doesn't understand the concept of a deadline, or the products you have been receiving are of dubious quality. Manage these issues, and, if necessary, be prepared to make a change before you meet with problem suppliers.
4. Get on top of the accounting. Organize, organize, organize. Know who you are paying and why. Know how much you are spending and why. Who's paying you on time and who's not? These are all concerns you need to examine routinely. You need to identify problems, but more important, you need to make sure you understand the process of how your records are kept.You may want to change how the books are done if you're not satisfied with the process. If you have a knack for numbers, consider bringing the basic accounting in-house. If you don't, use your network to find a trusted accountant. Typically, a new owner can save money through a simple financial review. Multiple small savings can really add up and drop immediate dollars to the bottom line.
5. Get hands-on experience with the business. If you're running a small business, this is probably the first thing you will do simply because cash flow dictates you do much of the work. But if the business is larger than a storefront, you want to get hands-on experience in all aspects of the business. This won't make you an expert in marketing or customer service, for example, but it will give you a better understanding of the processes involved. Also, if you detect a problem in marketing, for example, you will have better understanding of what you should be asking to fix that problem. Also, having your employees seeing you on the job accomplishes two critical functions: First, it can be a morale booster to see the boss in the trenches. Second, it puts employees on alert that you're paying attention to what they are doing. That can reduce laziness and theft.
6. Create an issues list. This is an ongoing task. As you work your way around the business - talking to your employees, customers, suppliers and understanding how each department works - you'll start to encounter issues that need to be addressed. Rank these by importance. For example, if you know you have waste in the manufacturing process, you will want to put that high on your list. Does a key supplier deliver substandard products? As you rank your issues, you can develop an action plan. That will help with the final step.
7. Refine your business plan. Now it's time to take everything you have learned and determine how to optimize your opportunities. What needs the most attention? Where can your unique skills be most useful to growth? What aspects of the business can you trust to certain employees?It is typically not a good idea to refine your business plan until you carefully and critically look at the business you just bought. Don't rush into changes on Day 1; waiting 100 days will lead to wiser decisions.Your patience will pay off in the long run.
8. Create an advisory board. It can be lonely at the top of a small to mid-sized business. All of the decisions ultimately land on your shoulders and you need to be well-versed in most functional disciplines to make the best decision possible. Business owners who are continually seeking out the "best" business practices will be well-prepared for the ongoing challenges. It would be smart to assemble a small group of trusted advisors who you can meet with on a regular basis. These meetings should be strategic and have a strong emphasis on reality-based issue resolution. If you cannot put the right group together there are advisory groups you can join that will serve as a "kitchen cabinet" One such service provider is The Inner Circle, which has operated peer-to-peer advisory groups across the country for over 30 years. The Inner Circle facilitates monthly meetings with eight to 12 business owners from non-competitive businesses helping each other think through their most pressing issues. When you get that many smart entrepreneurs together on a monthly basis, you are certain to gain a better perspective on how to run and maximize processes for your own business.
Running a business is hard work and having a plan is critical to ensuring your success. Most psychologists will tell you that one of the distinguishing traits of successful entrepreneurs is the willingness and ability to commit their plans to writing and executing those plans. Proactively manage your business and it will return you with many rewards both financially and personally.
Tuesday, September 8, 2009
Factoring to Finance a Business Acquisition
Financing has been a common theme for most of our blog posts this year. The lack of bank funds for business acquisitions has left the marketplace to scramble for alternatives. One such option is to 'factor' a company's receivables to secure a transaction. Factoring is simply the ability to obtain upfront cash against a company's accounts receivables.
As with most financing options, factoring has its pros and cons, and I recently had the opportunity to interview Sean Lelchuk of Bibby Financial Services to learn more about this service. Below is a recap of my interview with Sean and some insights into how this may apply to your business acquisition plans.
First, a little background on Sean and Bibby Financial. Bibby Financial Services is an independent, family owned business that operates in 27 countries. Bibby provides receivables funding services for domestic and export receivables, and purchase order financing. Sean is a Business Development Officer in their Florida office and is responsible for assisting clients with their factoring needs. Sean is a former small business owner and understands the importance of having access to capital for business growth and maintenance.
Interview with Sean Lelchuk from Bibby Financial Services:
Q: Please explain factoring.
A: Factoring is where an advance of cash is made to a Client against the purchase of an accounts receivable by a financing company (aka Factor). The Factor then proceeds to collect the receivable. The balance of the receivable less any fees due to the Factor is then payable to the Client on collection of the receivable by the Factor. Factoring is an effective way for a business to finance growth or to assist in the restructuring of a business. It is also a means by which an acquiring company may leverage existing assets of a target company as collateral for secured financing to help close a deal. It also does not lead to any loss in equity of your business nor does it involve taking specific security over personal assets.
Q: How can factoring be used to help buyers and sellers in a business sale transaction?
A: For the buyer, there are two main ways to use receivables finance to creatively finance an acquisition transaction.
1. Funding your receivables: In this scenario, you establish a factoring facility on your own receivables to extract cash out of your business to bring to the closing table. Usually, this can be done on a relatively short term basis allowing for the purchase of the target company with the conversion of a current asset.
2. Funding the target company's receivables: This approach is a little bit more complicated, but can work to even greater advantage. Assuming it is an asset sale, you can work with a factoring company to finance the existing receivables of the target allowing for the seller to essentially help finance the sale of their business. At the closing table, the factoring company will provide an advance on the outstanding receivables of the seller's company to contribute to the cost of acquisition.
For the seller, the advantages of this approach are that the seller usually does not need to offer direct financing to the buyer, can "take home" some of the money they have earned through delivering their product or service, and can, in some instances, offer this method as a way to finalize a deal.
Q: What are the Pros of Factoring?
A: The biggest pro in working with a factoring company is that the main determinant in whether or not the funding will come through is the credit of the business's customers - not the credit of the buyer or seller or their companies. To obtain traditional debt financing everyone knows that it can be a challenge to close on a facility, especially for an acquisition, and more challenging in these times. The other pros are that you will also acquire a built in credit team to monitor the business's customer quality and aid in decisions to sell to new customers, a collections team to help make sure payments are received in good order, and access to other types of secured financing as most factoring companies have a long list of colleagues that finance other assets (i.e. equipment, inventory, property, etc.) that may prove to be helpful in the event additional funding is needed. Also, factoring companies do not require the submission of a regular borrowing base certificate and all the time necessary to compile one, and in the event additional availability on the facility is needed it is much easier to obtain an increase from a factor than it would be with a bank - if the invoices are there and the debtor credit is good, these companies make money by putting money out the door.
Q: What are the Cons of Factoring?
A: Most often the biggest concern is cost. It is true that factoring rates are higher than a traditional line of credit, but the flexibility with a factor, the ease with which a factoring facility may be obtained, and the opportunities that can be realized usually outweigh the additional cost. There is documentation that is required on a regular basis, but this is usually related to the transactions conducted by the business (i.e. PO's, invoices, and proofs of delivery) and is typically readily available. Customer notification and invoice verification can be worrisome for those who are guarded with their customers, but I have found that this is usually managed very well by the better factoring companies.
Q: Can you give a recent example of how you used factoring in a sale transaction?
One other item to look into is whether the assets are currently secured.
In this case, you must make sure that the receivables you intend to use as collateral are unencumbered since almost all factoring companies require a UCC-1 filing in the first position on at least the receivables themselves. The best way to avoid these issues is to do your due diligence and speak directly to a factoring company that is capable of handling these types of transactions during the purchase and sale negotiations.
Q: What are the costs of Factoring and typical terms?
In these uncertain times, finding creative ways to finance an acquisition is a given. You need to be aware that the cost of money derived from factoring receivables is usually higher than if you were to take out a traditional loan or line of credit, but the flexibility and ease of obtaining increased limits often allow for more business to be transacted or supplier discounts to be realized, thus offsetting (an in some cases eliminating) the effective costs.
As with most financing options, factoring has its pros and cons, and I recently had the opportunity to interview Sean Lelchuk of Bibby Financial Services to learn more about this service. Below is a recap of my interview with Sean and some insights into how this may apply to your business acquisition plans.
First, a little background on Sean and Bibby Financial. Bibby Financial Services is an independent, family owned business that operates in 27 countries. Bibby provides receivables funding services for domestic and export receivables, and purchase order financing. Sean is a Business Development Officer in their Florida office and is responsible for assisting clients with their factoring needs. Sean is a former small business owner and understands the importance of having access to capital for business growth and maintenance.
Interview with Sean Lelchuk from Bibby Financial Services:
Q: Please explain factoring.
A: Factoring is where an advance of cash is made to a Client against the purchase of an accounts receivable by a financing company (aka Factor). The Factor then proceeds to collect the receivable. The balance of the receivable less any fees due to the Factor is then payable to the Client on collection of the receivable by the Factor. Factoring is an effective way for a business to finance growth or to assist in the restructuring of a business. It is also a means by which an acquiring company may leverage existing assets of a target company as collateral for secured financing to help close a deal. It also does not lead to any loss in equity of your business nor does it involve taking specific security over personal assets.
Q: How can factoring be used to help buyers and sellers in a business sale transaction?
A: For the buyer, there are two main ways to use receivables finance to creatively finance an acquisition transaction.
1. Funding your receivables: In this scenario, you establish a factoring facility on your own receivables to extract cash out of your business to bring to the closing table. Usually, this can be done on a relatively short term basis allowing for the purchase of the target company with the conversion of a current asset.
2. Funding the target company's receivables: This approach is a little bit more complicated, but can work to even greater advantage. Assuming it is an asset sale, you can work with a factoring company to finance the existing receivables of the target allowing for the seller to essentially help finance the sale of their business. At the closing table, the factoring company will provide an advance on the outstanding receivables of the seller's company to contribute to the cost of acquisition.
For the seller, the advantages of this approach are that the seller usually does not need to offer direct financing to the buyer, can "take home" some of the money they have earned through delivering their product or service, and can, in some instances, offer this method as a way to finalize a deal.
Q: What are the Pros of Factoring?
A: The biggest pro in working with a factoring company is that the main determinant in whether or not the funding will come through is the credit of the business's customers - not the credit of the buyer or seller or their companies. To obtain traditional debt financing everyone knows that it can be a challenge to close on a facility, especially for an acquisition, and more challenging in these times. The other pros are that you will also acquire a built in credit team to monitor the business's customer quality and aid in decisions to sell to new customers, a collections team to help make sure payments are received in good order, and access to other types of secured financing as most factoring companies have a long list of colleagues that finance other assets (i.e. equipment, inventory, property, etc.) that may prove to be helpful in the event additional funding is needed. Also, factoring companies do not require the submission of a regular borrowing base certificate and all the time necessary to compile one, and in the event additional availability on the facility is needed it is much easier to obtain an increase from a factor than it would be with a bank - if the invoices are there and the debtor credit is good, these companies make money by putting money out the door.
Q: What are the Cons of Factoring?
A: Most often the biggest concern is cost. It is true that factoring rates are higher than a traditional line of credit, but the flexibility with a factor, the ease with which a factoring facility may be obtained, and the opportunities that can be realized usually outweigh the additional cost. There is documentation that is required on a regular basis, but this is usually related to the transactions conducted by the business (i.e. PO's, invoices, and proofs of delivery) and is typically readily available. Customer notification and invoice verification can be worrisome for those who are guarded with their customers, but I have found that this is usually managed very well by the better factoring companies.
Q: Can you give a recent example of how you used factoring in a sale transaction?
A: Recently, a venture fund wanted to acquire a company that manufactures flooring and sells to distributors. The fund had allocated a set aside amount for the acquisition, and expected, based upon purchase and sale negotiations that it would be sufficient to close the deal. At the last minute, the seller decided to raise the selling price due to an uptick in backlog orders and argued that the price increase was justified by the addition of the pending business. The fund went back to management, but was denied an increase in allocation for the purchase. The lead agent contacted one of our brokers who directed him to us. We discussed the opportunity, reviewed the supporting documentation (i.e.transactional paperwork for the target company's typical sale, financials, receivables and payables, legal entity documentation, etc.) and the revised draft of the purchase agreement. We proposed on the transaction where we would finance the receivables of the target company for 12 months at the specified discount, advance on the eligible receivables outstanding at the time of purchase to contribute the shortfall created by the revised selling price for the business, and the fund was pleased that they did not have to come up with additional cash to finalize the deal. The target company did not have any secured financing, so we were able to secure the assets and close on the transaction.
Q: Where are the pitfalls in this type of acquisition financing?
Q: Where are the pitfalls in this type of acquisition financing?
A: The biggest thing you want to watch out for using receivables financing as collateral for secured funding in an acquisition transaction is that you do not want to strip the target company of operating capital. This may happen by taking too large an advance on the receivables to support the purchase - make sure the company will have sufficient working capital to operate when the transaction closes and those funds are removed from the business. Another thing you want to watch out for using receivables (or any other asset) as collateral for secured financing in an acquisition transaction is that you do not pay too dearly for the asset as a line item in the purchase agreement. If the seller wants to sell at a price over book value of the asset try to structure the purchase such that you pay for the book value at closing and any amounts over that (i.e. goodwill) on a schedule out of future profits from the accounts sold or as some kind of royalty. Make sure that any receivables collected by the seller during the negotiation stage are either removed from the asset listings or credited against the purchase price. You may want to include a provision in the purchase agreement that allows for a credit or repayment for any accounts uncollected (bad debt) after 90 days from closing. As an alternative to the above, you may consider setting an allowance for bad debt/uncollectable accounts and discount that from the purchase price.
One other item to look into is whether the assets are currently secured.
In this case, you must make sure that the receivables you intend to use as collateral are unencumbered since almost all factoring companies require a UCC-1 filing in the first position on at least the receivables themselves. The best way to avoid these issues is to do your due diligence and speak directly to a factoring company that is capable of handling these types of transactions during the purchase and sale negotiations.
Q: What are the costs of Factoring and typical terms?
A: Some factoring companies will provide you a rate sheet showing you what discount they will take for x number of days an invoice is unpaid. I find this to be misleading and counterproductive since each business is unique and you cannot put a generic formula to task for businesses in various industries, operating a differing volumes, and, most importantly, with very different customers. Most factoring contracts are structured on a 12 month commitment with minimum monthly factoring volumes. They are typically full-turn which means that all invoicing must be submitted to the factor regardless of whether or not you want an advance on the sale. Advances, once product or service is delivered and verified (directly by the factoring company), range from 70 - 95% of eligible receivables. Accounts that will be excluded from eligibility are those that are over 90 days old, are cross-aged (meaning that even though there may be outstanding invoices under 90 days, there are some, usually a percentage of total outstandings, that are over 90 days for the same account), and those for which a credit limit decision was unfavorable. Pricing can range widely and is dependent upon two main
criteria: 1. Debtor (customer) credit, and 2. Monthly volume. These items are inversely related to pricing - the better the quality of the customer and the higher the committed volumes, the better the rate. Rates typically range from 12 - 24% on an annualized basis.
Summary
criteria: 1. Debtor (customer) credit, and 2. Monthly volume. These items are inversely related to pricing - the better the quality of the customer and the higher the committed volumes, the better the rate. Rates typically range from 12 - 24% on an annualized basis.
Summary
In these uncertain times, finding creative ways to finance an acquisition is a given. You need to be aware that the cost of money derived from factoring receivables is usually higher than if you were to take out a traditional loan or line of credit, but the flexibility and ease of obtaining increased limits often allow for more business to be transacted or supplier discounts to be realized, thus offsetting (an in some cases eliminating) the effective costs.
Wednesday, August 12, 2009
Should you Expand your Business through Acquisition?
Despite today’s market, countless business owners are finding ways to weather the economic storm and keep their businesses profitable. The gut instinct for many is to look for ways to cut costs internally by trimming headcount, salary, employee hours, or seeking ways to reduce production costs or improve efficiency. Some business owners, though, could benefit from considering business expansion.
There are plenty of ways to expand a business. The most basic form of expansion is to focus on your current customer base and adapt your business’s offerings to fit their changing needs. This may involve purchasing new equipment or enhancing the inventory selection to provide more products or services applicable to a variety of demographics. Excellent customer service is also essential when today’s consumers have many options available to them. Providing additional support hours at the request of customers, for example, is a surefire way to maintain a more loyal following and possibly generate word-of-mouth recommendations.
You can also look to expand your business to new customers by introducing a new location, acquiring a competitor or moving into a related industry. Not only will these expansion opportunities help position your company for continued growth, they will also enhance your business’s selling power once it comes time to exit the business. Here are some questions every business owner should ask themselves, however, before considering any type of expansion.
What Type of Expansion is Right for Me?
Not all types of expansion will work for every business or for every industry. Business owners need to be particularly diligent in researching what will work for them and what resources they have at their disposal. Before considering expansion, rule out the options you know are not plausible, or that you simply don’t have the time, money or desire to pursue.
You can make this decision by doing some initial research. If considering expansion that goes beyond internal activity or purchase, talk to local business brokers and ask for their input into what trends they are seeing in your industry. You can also look at competitors that may be expanding to see what they did and where they had success or failure.
Will I Really Benefit From Expansion?
There are several benefits that could come with business expansion, but also a lot of assumed risk. Some things to consider include:
Economies of scale - Expansion may expose you to economies of scale, with cost advantages that result from having expanded. Consider if this might be the case for you.
Customer base -- Not only should you ask yourself if expansion will expose you to new customers, but also if your existing customers will remain loyal while you work out all the growing pains.
Yourself - Will expansion bring unavoidable stress into your life that could potentially deter your ability to successfully operate the business under the new expansion?
Can I Afford Expanding the Business?
In today’s market, business loans are not easy to come by. With big lenders struggling to survive the market, receiving a loan for your business may be a bit more difficult than anticipated. People who are getting loans are being forced to leverage large pieces of collateral, such as their homes. This adds a lot of risk to any type of business expansion because failure could mean the loss of not only your livelihood, but your home as well.
For buyers considering the purchase of another business – whether it’s a competitor or a business in a related industry – seller financing is proving to be one of the only ways to get a deal done. Seller financing is a loan provided by the seller of a business to cover an agreed percentage of the sale price. Consider how you will fund your expansion before taking any drastic steps.
Getting Started with Expansion
Once you have decided to take the initial steps toward expansion, consider how exactly you will make it happen. If it is only internal growth, put together a plan for how you will allocate resources and what you will do to make your current business bigger and better.
If your plan includes acquiring a new business, judge how well you feel you can take on that process yourself. There are several tools already in place, such as buyer acquisition programs that utilize the expertise of business brokers and intermediaries to set your goals, identify target businesses, screen the businesses, advise on offers and assist with negotiations and closing.
While there are countless considerations to make before deciding to expand your business, these three standard questions can help facilitate your decision-making process. Taking advantage of the downturn -- with its lower business-for-sale asking prices -- by buying up your competition can put you in a great position for when the economy bounces back.
There are plenty of ways to expand a business. The most basic form of expansion is to focus on your current customer base and adapt your business’s offerings to fit their changing needs. This may involve purchasing new equipment or enhancing the inventory selection to provide more products or services applicable to a variety of demographics. Excellent customer service is also essential when today’s consumers have many options available to them. Providing additional support hours at the request of customers, for example, is a surefire way to maintain a more loyal following and possibly generate word-of-mouth recommendations.
You can also look to expand your business to new customers by introducing a new location, acquiring a competitor or moving into a related industry. Not only will these expansion opportunities help position your company for continued growth, they will also enhance your business’s selling power once it comes time to exit the business. Here are some questions every business owner should ask themselves, however, before considering any type of expansion.
What Type of Expansion is Right for Me?
Not all types of expansion will work for every business or for every industry. Business owners need to be particularly diligent in researching what will work for them and what resources they have at their disposal. Before considering expansion, rule out the options you know are not plausible, or that you simply don’t have the time, money or desire to pursue.
You can make this decision by doing some initial research. If considering expansion that goes beyond internal activity or purchase, talk to local business brokers and ask for their input into what trends they are seeing in your industry. You can also look at competitors that may be expanding to see what they did and where they had success or failure.
Will I Really Benefit From Expansion?
There are several benefits that could come with business expansion, but also a lot of assumed risk. Some things to consider include:
Economies of scale - Expansion may expose you to economies of scale, with cost advantages that result from having expanded. Consider if this might be the case for you.
Customer base -- Not only should you ask yourself if expansion will expose you to new customers, but also if your existing customers will remain loyal while you work out all the growing pains.
Yourself - Will expansion bring unavoidable stress into your life that could potentially deter your ability to successfully operate the business under the new expansion?
Can I Afford Expanding the Business?
In today’s market, business loans are not easy to come by. With big lenders struggling to survive the market, receiving a loan for your business may be a bit more difficult than anticipated. People who are getting loans are being forced to leverage large pieces of collateral, such as their homes. This adds a lot of risk to any type of business expansion because failure could mean the loss of not only your livelihood, but your home as well.
For buyers considering the purchase of another business – whether it’s a competitor or a business in a related industry – seller financing is proving to be one of the only ways to get a deal done. Seller financing is a loan provided by the seller of a business to cover an agreed percentage of the sale price. Consider how you will fund your expansion before taking any drastic steps.
Getting Started with Expansion
Once you have decided to take the initial steps toward expansion, consider how exactly you will make it happen. If it is only internal growth, put together a plan for how you will allocate resources and what you will do to make your current business bigger and better.
If your plan includes acquiring a new business, judge how well you feel you can take on that process yourself. There are several tools already in place, such as buyer acquisition programs that utilize the expertise of business brokers and intermediaries to set your goals, identify target businesses, screen the businesses, advise on offers and assist with negotiations and closing.
While there are countless considerations to make before deciding to expand your business, these three standard questions can help facilitate your decision-making process. Taking advantage of the downturn -- with its lower business-for-sale asking prices -- by buying up your competition can put you in a great position for when the economy bounces back.
Sunday, April 26, 2009
Time may heal all wounds.......but it Kills Deals
We recently represented a seller of a service-based business in the Chicago area. This was a good business with a proven track record, and our office secured multiple offers. Negotiations resulted in a strong offer with a financially sound buyer. We commenced due diligence within forty-eight hours from deal acceptance by providing operational and financial data on the business. There were a half dozen due diligence items to clear, and the process took six weeks for the buyer to get satisfied enough to proceed with a closing. The parties were both eager to consummate the deal and it was time to turn it over to the attorneys for final closing documents. We strongly recommended that the parties utilize the services of a closing attorney, which is the business equivalent of a real estate title attorney. The presence of a closing attorney has multiple benefits, such as efficiency and lower costs, BUT by far the most significant is that these deals have a higher closing ratio.
In this case, the seller decided to forgo a closing attorney and engage an attorney who was not very familiar with business sales and closings. It took four weeks, an eternity in deal time, for the seller’s attorney to produce a woefully inadequate set of closing documents. Conversely, the buyer had a very savvy attorney who saw the opportunity to exploit this weakness by slowing down the process, requesting more operational and financial data, and raising additional deal issues. The timing was unkind, as the business was going through a short yet unexpected soft period. This caused the buyer to re-think the entire acquisition, which resulted in a renegotiation that reduced the price by more than twenty percent. A terrible outcome, but completely avoidable had a closing attorney been engaged for this transaction.
In the sale of a business, a mortgage lender is usually not involved. That should not prevent the same approach from working. A closing attorney – someone experienced in buying and selling businesses - is engaged to provide transaction documents and other services. This person does not represent either the buyer or the seller, instead this attorney’s role is to provide efficient documents intended to be “fair” to both sides and bring the transaction to a quick close.
A closing attorney does not replace the need for legal counsel for either side of the transaction. Both sides must continue to be represented by a qualified lawyer who can review the documents and represent their client’s interests. This may be counter-intuitive, but by having an independent resource to document the transaction, the time and cost required to bring the transaction to a quick close can be greatly reduced and, most importantly, secure a successful transaction.
In this case, the seller decided to forgo a closing attorney and engage an attorney who was not very familiar with business sales and closings. It took four weeks, an eternity in deal time, for the seller’s attorney to produce a woefully inadequate set of closing documents. Conversely, the buyer had a very savvy attorney who saw the opportunity to exploit this weakness by slowing down the process, requesting more operational and financial data, and raising additional deal issues. The timing was unkind, as the business was going through a short yet unexpected soft period. This caused the buyer to re-think the entire acquisition, which resulted in a renegotiation that reduced the price by more than twenty percent. A terrible outcome, but completely avoidable had a closing attorney been engaged for this transaction.
In the sale of a business, a mortgage lender is usually not involved. That should not prevent the same approach from working. A closing attorney – someone experienced in buying and selling businesses - is engaged to provide transaction documents and other services. This person does not represent either the buyer or the seller, instead this attorney’s role is to provide efficient documents intended to be “fair” to both sides and bring the transaction to a quick close.
A closing attorney does not replace the need for legal counsel for either side of the transaction. Both sides must continue to be represented by a qualified lawyer who can review the documents and represent their client’s interests. This may be counter-intuitive, but by having an independent resource to document the transaction, the time and cost required to bring the transaction to a quick close can be greatly reduced and, most importantly, secure a successful transaction.
Tuesday, April 21, 2009
Maiden Voyage
The goal of this blog is to infuse the conversation of buying and selling businesses with REAL-TIME, REAL-WORLD scenarios. In my experience, stories and illustrations are the most potent form of translating a message, and after visiting blogs covering this topic, I concluded that I could introduce unique dialogue about small business mergers and acquisitions.
I have been sweating the decision to start this blog given the inevitable time commitments. I am hopeful, however, that the cascade of material generated by our business brokerage firm will keep the blog posts flowing for many years.
My aspiration is that this format causes an interaction amongst the visitors that advances our collective deal making. I look forward to receiving your comments and thoughts.
I have been sweating the decision to start this blog given the inevitable time commitments. I am hopeful, however, that the cascade of material generated by our business brokerage firm will keep the blog posts flowing for many years.
My aspiration is that this format causes an interaction amongst the visitors that advances our collective deal making. I look forward to receiving your comments and thoughts.
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