Tip #99 – “I’m Totally Ready To Sell, But My Business Isn’t!”

The Business Is Not Ready To SellOwning a business is usually a very big part of the owner’s life. But over time, managing the business can take a toll on the owner.

There are so many issues to take care of — employees, customers, products, services, equipment, leases, etc. And a decreasing energy level can make it even harder to cope.

Even though most business owners know they will exit their business one day, many don’t do the planning necessary to create the maximum […]

2017-10-03T14:45:41+00:00 October 3rd, 2017|Maximizing Business Value|

Tip #98 – Selling A Business Can Take Time!

European VacationSelling a business can take more time than is anticipated. For some businesses, it can take months just to find a motivated, qualified buyer.

Due diligence examination can create lots of questions where the answers are not readily available and will take time to produce. Obtaining any financing for the transaction and working with attorneys on the agreements will take additional time.

And unfortunately, at some point, a buyer might walk away, and the process must be repeated to find that perfect buyer.

2017-08-15T09:49:15+00:00 August 15th, 2017|Maximizing Business Value|

Tip #97 – Is There A Minority Shareholder That Must Be Considered When Selling The Business?

Minority ShareholderIf there is a minority shareholder in a business, he or she may need to be consulted before selling the company.

It depends on the arrangement that was made. There may be a right of first refusal for the minority shareholder, or other provisions in a buy-sell agreement, or even timing issues to close a deal.

Business owners who have minority shareholders need to review their agreement and consult with their attorney before going to market.

Here are some insights on “

2017-07-11T14:16:10+00:00 July 11th, 2017|Maximizing Business Value|

Tip #96 – Updated Technology In A Business Can Help Its Value And Salability.

Updating Technology Is CriticalWe all know that technology is moving so fast it can be overwhelming. And it is impacting many businesses in a way that business owners just can’t ignore.

The business must keep up with the competition and the marketplace for its products or services. And when it comes time to sell the business, buyers will be concerned if the technology is too outdated.

That could mean lower offers or buyers just turn away if they feel they have to invest the […]

2017-06-06T10:03:41+00:00 June 6th, 2017|Maximizing Business Value|

Tip #95 – Does The Business Generate Enough Cash Flow To Justify The Price?

Cash FlowBuyers will make an acquisition of a business only when it makes financial sense.

There are a few ways to make that justification, but in general terms, the acid test is to compute the cash flow to cover debt service, a salary to the new owner, and a return on investment.

A professional advisor can be helpful in determining cash flow and how to justify the price of a business.

2017-05-09T09:01:03+00:00 May 9th, 2017|Maximizing Business Value|

Tip #94 – Is The Business Sellable, Right Now?

Ready To SellIt is wise when starting and growing a business to have the objective of selling it someday at maximum value. That means that the company should be built with good profit margins, large available markets and the ability to grow for a long period of time.

The products or services should have an edge in the market. It also means the systems, policies, and procedures should be easy to understand and would make sense to a buyer. And it needs to be appealing […]

2017-04-04T09:42:39+00:00 April 4th, 2017|Maximizing Business Value|

Tip #93 – Why Use An Experienced Mergers & Acquisitions Professional?

No Payback On Shareholder LoansSelling a business is usually not easy. It can be a complicated process because of all of the many elements to a business – location, leases, equipment, employees, receivables, payables, etc., etc.

The price of a business is obviously important, but so are the terms – how and when the payments are made. And there are the many issues in which the seller doesn’t always realize the ramifications of what can happen after the closing.

It is critical for business […]

2017-03-07T10:59:25+00:00 March 7th, 2017|Maximizing Business Value|

Tip #92 – Business Valuations – Understanding “Add Backs.”

No Double DippingBusiness owners don’t always understand how business valuations are performed, and they oftentimes don’t agree with the number.

They first need to understand how their company’s cash flow is computed. It starts with determining the “Add Backs” – expenses that are added to the profits to derive EBITDA (earnings before interest, taxes, depreciation and amortization) or SDE (Sellers Discretionary Earnings – used for smaller businesses).

Find out more: “What Add Backs Are Legitimate in an […]

2017-02-07T13:28:03+00:00 February 7th, 2017|Maximizing Business Value|

Tip #91 – Does The Company Have A Customer Concentration Issue?

Losing Our Biggest CustomerIn many types of businesses, “customer concentration” can be a real concern, with a few big customers that make up a substantial portion of the company’s revenues.

Buyers, of course, are concerned that if any of those big customers leave after the sale closes, the Buyer is not getting the company’s present value.

If a company has too much customer concentration, business Seller needs to try to diversify the customer base or be willing to accept a flexible method of payment […]

2017-01-10T15:28:42+00:00 January 10th, 2017|Maximizing Business Value|

Tip #90 – Clean Up The Financials!

Clean FinancialsBusiness owners can manage their financials as they wish – within standard accounting principles. But when it comes time to sell their company, it becomes a whole new ball game.

Buyers and lenders will scrutinize everything, especially questionable items on the financials. If there are items that do not make sense to outsiders, it can affect the value and the pricing of the business.

It is a good idea to have a professional such as a mergers & acquisitions advisor or a business […]

2016-11-08T08:52:11+00:00 November 8th, 2016|Maximizing Business Value|