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Knowing The Value Of A Business
Determining the value of a business can be difficult and confusing. Many equations and opinions have convoluted the process. A few basic factors will allow you a clear understanding of the valuation process. Read More
Valuation 101 – Recasting
Recasting is the adjustment of the financial statements to truly reflect the actual financial benefits of that business ownership. Recasting is done to change the companies’ financial statements from tax basics to economic terms. Read More
How to Start a Business with a 401K
For small business owners, finding financial security can be a difficult feat that is often rife with many uncertainties and tough decisions. Business owners need to look at their overall financial situation and find out what will be the most beneficial plan for both their personal lives and their business in the long run. Read More
About Seller Financing
In a traditional property or business purchase, the buyer pays for a property using a loan from a bank or other institution. However, when obstacles such as lower credit ratings block the way, a creative solution may be seller financing. Read More
Do The Due Diligence
What is Due Diligence?
Statistics show that nine out of ten people who begin the search to buy a business never actually complete their transaction. While there are many contributions to this, one of the biggest reasons buyers back out is because of the fear of uncertainty. Read More
Structure of a Confidential Business Review
When creating a confidential business review for a client it is imperative to maintain proper structure and formatting. A properly structured business review will convey all of the necessary information in a clear and concise way to the client whereas a review that is sloppily formatted can not only confuse and frustrate a client, but it can also misrepresent information. Read More
How to Sell a Business – How to Sell Your Business in 5 Easy Steps
https://www.youtube.com/watch?v=PZ479pMCaq0
Clueless as to how you can sell your business? Then, read on and find out how!
- Know your business’ worth. Obviously, this is the first thing that you need to do. You will need to know how much you are going to sell your business before you do anything else. Hire a business appraiser and a certified public accountant who can help you determine the right price tag.
- Hire a lawyer. This isn’t necessary if you are selling a very small business but this is crucial if there is a huge money involved. Hire the best lawyer in town who can help you prepare your documents and draft the selling contract. This is very important in making sure that you will land a great deal.
- Hire a business broker. Again, this might not be necessary if you are selling a very small business. However, if your business is selling for several thousands or millions of dollars, you may want to hire a business broker who can help you find the best clients. You will need to pay this person 10% of the selling price.
- Find the best clients. If you opt not to hire a business broker, you can go ahead and sell your business by yourself. You can run an ad on newspaper, TV, or radio. You can also use the internet as your marketing medium.
- Prepare. Do necessary preparations before you meet with your potential buyers. Anticipate all their questions and have ready answers for them. Also, prepare all the documents like business income tax return within the last 3 years.
How to Sell Your Business – 3 First Things to Consider When Selling Your Business
https://www.youtube.com/watch?v=3ylMM2kW25U
Here are the things that you need to do first before you go into the selling process:
- Right timing. Is it the best time to sell? If you want to be able to sell your business for higher prices, you need to sell it during its peak or when it is coming out from its lowest low. You would want your potential buyers to think that buying your business will give them profit in the future and this will not happen if they see that you are making too little sales.
- Find the best people. You may need to hire some people especially if you are selling a big business. Scout for the best business appraiser, certified public accountant, business broker, and lawyer. You will need to hire those people who have relevant experience and who have proven track record in selling business to make sure that you’ll land a better deal.
- Exit plan. This is very important. Do not enter the selling process unless you have an exit plan in place. Don’t worry as doing this is relatively easy. I recommend that you spend a couple of days figuring out the things that you can do after you sold your business. You may want to retire and spend more time with your family or with the things that you love the most. You can also start a new business that is closely relevant to your areas of expertise and interest. If you have an exit plan, there is a slim chance that you’ll back out from the selling process.
Understanding the Importance of a Certified Business Broker
https://www.youtube.com/watch?v=NlS8j6s-938
When you are considering selling your current business and perhaps pursuing an opportunity to buy a business, a business broker will help you find a potential buyer or seller as well as help you with all the necessary paperwork. The certification lets you know that your broker is well-qualified and professional. Also called business transfer agents, certified business brokers analyze the value of businesses, conduct transactions for buyers and sellers, promote the business to potential buyers and schedule any meetings to take place between buyer and seller.
Even though you may opt to go with a broker who works at this particular job only part of the time, many prefer to work with full-time certified brokers. Furthermore, you need to carefully judge the discretion of your potential business broker to prevent any negative repercussions with employees and suppliers. It is important that you perform thorough checks on the broker’s background, credentials and experience. It may also help to check with the Better Business Bureau, especially if the potential broker is involved in any lawsuits or the subject of complaints. You need to understand the circumstances of any upcoming negative actions against potential brokers.
Likewise, you can look to the International Business Bureaus Association, or IBBA, to help you find certified business brokers. Furthermore, you can study businesses similar to yours or the one you are interested in acquiring to see who brokered their deals. You can then ask for recommendations and suggestions on who would be the best option for handling your transaction. An especially skilled broker can sell a business at a favourable value for you or get a great bargain on the business you want to acquire. He or she will also provide a smooth transaction process so that you get the maximum out of the business.
It is very important that you know what type of business you want to acquire or need to sell when you choose your broker. For instance, if you are going to get involved in an international transaction, you want to find a broker that specializes in international deals. In this case, you can look at an organization such as the International Brokers association to find certified business brokers who understand how to communicate on an international level where business is involved. It is critical not to underestimate the importance of certified business brokers when you are embarking on a business endeavour.
Why Hire A Certified Business Broker When Selling Your Business?
https://www.youtube.com/watch?v=VsmceRhfVE8
5 Reasons to use a Certified Business Broker?
On average, selling a business can take between 6 to 9 months. Here is a list of 5 reasons why using a Certified Business Broker will greatly benefit the seller when selling their business.
- Maintain Strict Confidentiality.
Strict confidentiality is imperative when selling a business. When a business owner decides to sell a business, there is a risk of losing key clients, vendors and/or employees if word of the sale gets out. We have all potential buyers sign a Non-Disclosure/Confidentiality Agreement before we release any information about the business. We will also find out more about the buyer’s financial ability and his business acumen before releasing any confidential information. Brokers will also shield owners from being inundated with lookie-loos or callers trying to suss out information.
- Let the Owner Run His Company.
It is imperative that the business owner continues to run the business at the highest level possible and to continue an upward trend of the revenues or they will risk a decline in the final sale price. There are hundreds of variables in selling a business and it’s the Broker’s job to pay close attention to these details. We handle the entire sales transaction, from the beginning, all the way to the close of escrow. With the broker handling all of the details, this will allow the business owner to focus on keeping the revenues on an upward trend. Buyers do not like to purchase a business with a downward trend of the revenues.
- Provide a Valuation of the Company.
Certified Business Brokers will review the business financials, recast the Profit & Loss Statements to show the true profitability of the company, and to produce an effective Cash Flow Analysis to show the true viability of the company. A Broker will explain how the valuation was formulated and will suggest and explain a viable listing price. Business Brokers work closely with the owner and their CPA/accountant to receive the proper information on the financial strength of the company. Buyers like to see financials that are straight forward and transparent, they don’t like to see too much “creative accounting.”
- Assist with All Negotiations.
Having a Certified Business Broker as an intermediary during the negotiating process can ease a lot of tension between the two parties. A seller that is selling his own business can actually end up killing his own deal. Business Brokers help during this very important step in the sales process and we understand that the seller wants to sell high, and the buyer wants to purchase low. Our strategy is to negotiate fairly and have an end result that both parties can be happy with.
- Manage all Contracts & Documents.
Business Brokers will manage all of the numerous contracts, documents and paperwork associated with the sale of a business. This process is very time consuming but also very important and should be managed by a competent business broker.
Using a Certified Business Broker will help tremendously in selling your business.
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