Who Is the Buyer?

Buyers buy a business for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses: Laid-off, fired, being transferred (or about to … [Read more...]

How Earn-Outs Impact the Sale of a Business

Earn-Outs and how they impact the sale of a business By Matt Slappey CBI, BCI Certified Business Intermediary; Mergers and Acquisitions (M&A) Advisor Former GABB President Matt Slappey gave a presentation on earn-outs, what they are and how they can be used in the sale of a business. For those who missed this valuable presentation, the … [Read more...]

GABB Affiliates Discuss How to Reduce Risk in a Transaction

Those who attended the August GABB meeting got to hear an excellent panel discussion of how brokers can reduce risk in a deal. Audio recording of the GABB Affiliate Panel Discussion on Risk. GABB President C. David Chambless moderated the panel of GABB Affiliates. The panel included: Dan Browning, JD, of DB Consulting, Inc., has 20 … [Read more...]

What a Buyer May Really Be Looking At

Buyers, as part of their due diligence, usually employ accountants to check the numbers and attorneys to both look at legal issues and draft or review documents. Buyers may also bring in other professionals to look at the business’ operations. The prudent buyer is also looking behind the scenes to make sure there are not any “skeletons in the … [Read more...]

What is the Value of Your Business? It All Depends.

The initial response to the question in the title really should be: “Why do you want to know the value of your business?” This response is not intended to be flippant, but is a question that really needs to be answered. Does an owner need to know for estate purposes? Does the bank want to know for lending purposes? Is the owner entertaining … [Read more...]

A “Pig in a Poke"

Once a buyer has negotiated a deal and secured the necessary financing, he or she is ready for the due diligence phase of the sale. The serious buyer will have retained an accounting firm to verify inventory, accounts receivable and payables; and retained a law firm to deal with the legalities of the sale. What’s left for the buyer to do is to make … [Read more...]

Growth in Jobs, GDP Not Yet Accompanied by Rise in Purchasing Power

ATLANTA – On the surface, the news is good. October non-farm numbers from the Bureau of Labor Statistics show 204,000 total job gains, and job revisions were revised upward by 60,000 for the two prior months. The third-quarter GDP report showed 2.8% growth, a marked contrast to the paltry 0.1% growth in the fourth quarter of 2012. Is it time to … [Read more...]

Company Weaknesses

Take two seemingly identical companies with very similar financials, but one of the companies was worth substantially more than the other company.  One company will sell for $10 million “as is” or some changes can be made and the same company can be sold for $15 million. Following is a partial list of potential company weaknesses to consider in … [Read more...]

Using Pratt’s Stats To Sell More Businesses

One obstacle to selling a business is an unrealistic asking price. GABB members can obtain access to Pratt’s Stats which can help sell more businesses by helping to price a business accurately. While Pratt's no longer offers GABB members complimentary access, if a broker submits the details of a sale, they can obtain access to the database for a … [Read more...]

Buying or Selling a Business: The External View

There is the oft-told story about Ray Kroc, the founder of McDonalds. Before he approached the McDonald brothers at their California hamburger restaurant, he spent quite a few days sitting in his car watching the business. Only when he was convinced that the business and the concept worked, did he make an offer that the brothers could not refuse. … [Read more...]