Selling a business is a complex process that boils down to this: Finding the right buyer. In a recent Forbes article, “Ready to Sell Your Business? Follow These 3 Tips to Find the Best Buyer,” author Serenity Gibbons, a former assistant editor of the Wall Street Journal, outlines the multifaceted process of selling a business.
Gibbons cautions small business owner to thoughtfully consider when, how, and to whom you sell your stock. “Create a for-sale plan that sets up the business for long-term success,” she recommends. To sell your business the right way, have a coherent and well thought out exit strategy in place. In fact, many experts feel that you should have an exit strategy in place even when you first open your business.
If you’re like most small businesses, a large percentage of your wealth is tied up in your business. Unfortunately, studies indicate that only estimated 20% to 30% of businesses on the market actually find buyers. This important fact means that business owners are vulnerable if they can’t sell. It is vital for business owners to make their businesses as attractive as possible to buyers for when the time comes to sell.
To make a business attractive for sale at the best price, “the owner’s role has to be relatively easy to transfer, ” says Michael Lefkowitz, author of the exit planning book “Where’s the Exit.” “Before you make your exit, you have to take some time to step away from daily operations, polish the appeal of your brand, update your books, and build up the capability of your subordinates,” Lefkowitz says. In short, you have to become replaceable.
Gibbons notes that “not every buyer with cash in hand is the right buyer for your company.” Three key variables must be addressed when looking to find the right buyer: consider your successor, explore your broker options and find a pre-qualified buyer.
In the end, working with a business broker is the fastest and easiest way to check off all three boxes. An experienced professional knows the importance of working exclusively with serious, pre-qualified buyers. Since a good business broker only works with serious buyers, that means business brokers can greatly expedite the process of selling your business.
“Assuming you choose wisely, this person will know how to craft a unique and compelling narrative about your business to inspire people to pony up the necessary dough—all the while helping you navigate the emotional ups and downs that accompany the selling process,” says James Moran, founder and managing partner of ValueStreet Equity Partners, a San Diego-based small business investment firm.
Those looking to get their business sold and reduce an array of potential headaches along the way, will find that there is no replacement for a good business broker.
Georgia has been named the “Top State for Business” by Area Development, a leading publication covering corporate site selection and relocation, for the sixth year in a row, according to Governor Brian P. Kemp. The results are determined by the publication’s poll of site consultants.
“I am exceptionally proud that Georgia has once again been named the Top State for Business by Area Development,” said Gov. Kemp. “This announcement serves as a powerful testament to what we all know to be true: Georgia is the best place to live, work, and raise a family. Our efforts to cut red tape and ensure our business environment leads the nation continue to lure world-class companies to the Peach State from every corner of the map.
“Our world-class workforce is a direct result of our top-ranking colleges and universities, and Georgia Quick Start, the best workforce development program in the nation. The state’s innovative and comprehensive logistics network makes Georgia a gateway to the global economy by land, air, and sea.
Area Development’s 2019 Top States for Doing Business results reflect the rankings that states receive based on weighted scores in the following twelve categories: overall cost of doing business, corporate tax environment, business incentives programs, access to capital and project funding, competitive labor environment, shovel-ready sites program, cooperative and responsive state government, favorable general regulatory environment, speed of permitting, favorable utility rates, leading workforce development programs, and most improved economic development policies.
“The 10th Annual Best States for Doing Business rankings are drawn from our editor’s poll of leading site location, supply chain, 3PL, real estate, and corporate business consultants maintained in our proprietary consultant database,” said Area Development publisher and president, Dennis J. Shea. “We poll those consultants who are actively responsible for guiding scores of corporate site location project decisions, billions of dollars in capex, millions of square feet in new construction, and most importantly, creating thousands of new jobs across all fifty states. For the sixth consecutive year, Georgia ranked No. 1 overall in Area Development’s highly regarded annual Best States for Doing Business poll, including top rankings in four of the twelve critical categories measured.”
Along with the Top State ranking, Georgia was ranked No. 1 in cooperative and responsive state government, leading workforce development programs, competitive labor environment, and speed of permitting.
“We are honored to receive the title of Top State for Business for the sixth year in a row,” said Georgia Department of Economic Development Commissioner Pat Wilson. “Each day, our team is out on the front lines working with companies to spread the good news of Georgia’s top-ranked business climate.” Wilson said “Whether it is our logistics infrastructure, workforce, or pro-business climate, there are so many factors that play into an honor like this one, and none of it would be possible without the tremendous support we have from our economic development partners in every community throughout Georgia.”
Gov. Kemp said his “administration is committed to building our state’s economic development toolbox so that we continue to attract leading companies in manufacturing, FinTech, information technology, and other industries ready to invest in a state that values their business and positive impact on local communities.”Read More
The simple but undeniable fact is buying a business is one of the single greatest financial decisions a person can make. Buying a business can lead to great financial success or great financial failure. This fact helps to underscore why it is so important to work with an experienced broker who can help guide you through the often labyrinthian process of buying a business.
In a July 2019 article from Smallbusiness.co.uk, author Kyle Carins explores three key factors that everyone should consider before they buy a business. The first factor covered in Carins’ article, “3 Things to Consider When Buying a Business,” is appeal vs. viability.
Appeal Vs. Viability
Not surprising, the most important variable for most prospective owners is that the business is indeed viable. Not being able to differentiate between an appealing business and one that is viable can lead to financial disaster.
As Carins points out, “Do you want to make money or do you want to fulfill a dream?” Sometimes those two variables can intersect, but not always and not often. In the end, it is vital to know whether a given business is, in fact, potentially lucrative.
However, as Carins points out, it is also important that you choose a business that you will enjoy. Nothing can be more spirit crushing than running a business that you truly hate, even if it is lucrative. Selecting the right business for you is something of a balancing act that must take in a variety of often competing variables.
Considering Hidden Costs
The second factor that Carins looks at is the issue of “hidden costs.” One of the key reasons that it is so important to work with a business broker is that a business broker understands these kinds of factors that you might otherwise overlook. Due diligence is amazingly important. For those who have never bought a business before, working with a business broker offers substantial protection against making a potentially serious mistake.
The third factor examined in Carins article is “Getting a second opinion.” For Carins, getting a second opinion is actually linked to due diligence. He feels that additional opinions regarding a given business should go beyond working with professionals and should also include talking to friends and family who know you well. Additional opinions can help one see angles that might otherwise be missed.
Again, buying a business is complicated and will take up a good deal of one’s time and mental energy. Your friends and relatives, understand your personality and your wants and desires. Their input can be particularly beneficial.
Finding an experienced business broker can help you do more than simply establish whether or not a given business is a “good deal.” Brokers with years of proven experience can also help you determine whether or not a specific business is a good fit for you and your lifestyle.
ATLANTA–Trade tensions, a reduction in business investment and an earlier than usual presidential election swoon are contributing to a lowered growth path for 2020-21, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business.
“Economic growth will take an oscillatory path, known as transition economics, to reach this lower level,” Dhawan wrote in his “Forecast of the Nation,” released Aug. 28, 2019.
“There is never a single reason for a downgrade, but the chief culprit for this one and its zigzag is the evolution of business investment from mid-2018 until now,” Dhawan said. “Investment contractions are a bad sign for future growth unless there are mitigating circumstances.”
One such mitigating circumstance affecting equipment investment was the March grounding of Boeing’s 737 MAX, which has spread downstream to suppliers such as General Electric (engines) and numerous parts makers across the country.
“This investment category will rebound at some point, but don’t count on help from those parked planes before early next year,” Dhawan said.
Also in retreat: investment spending on structures (commercial buildings, mining and fracking wells) dropped 10.6 percent in the second quarter of the year.
“The commercial sector seems to be pulling back on its building desire, despite good consumer spending,” Dhawan said. “The reason is the future seems more uncertain today than a year ago, when tariffs were a negotiating ploy and not a reality, as they are now.”
As for fracking, low oil prices are keeping well below the breakeven price per barrel, which Dhawan attributes to lowered demand from China.
“It seems unlikely that U.S.-Chinese trade tensions will ratchet down anytime soon,” he said. “And corporations, with their globally integrated supply chains, are spooked by the tit-for-tat tariff game. Investment is not expected to rebound to its mid-2018 high following the December 2017 tax cuts.”
Dhawan expects the Federal Reserve will cut rates in September, and then pause to observe concrete evidence of the anticipated growth slowdown. He then expects the Fed will decrease rates again in December, leading to a limited boost in home refinancing activity.
“A sharp drop in the 10-year bond rate since the Fed’s rate cut of July 31 is mostly due to global capital seeking a safe haven,” Dhawan said. “What cannot be forecast is when this fear-motivated flight to safety will end. If the move to 10-year bonds persists it will further depress the growth trajectory and keep the yield curve inverted longer, which would require deeper (emergency) rate cuts by the Fed.”
Highlights from the Economic Forecasting Center’s National Report
- Overall GDP growth will be 2.3 percent in 2019, 1.7 percent in 2020 and 2.0 percent in 2021.
- Investment growth will be 2.9 percent in 2019, 1.7 percent in 2020 and then rise to 3.2 percent in 2021. Monthly job gains will moderate to 153,000 in 2019, drop to 118,600 in 2020 and gain 116,900 new monthly jobs in 2021.
- Housing starts will average 1.225 million in 2019, 1.228 million in 2020 and then increase to 1.265 million in 2021. Vehicle sales will average 16.7 million in 2019, 15.9 million in 2020 and 16.0 million in 2021.
- The 10-year bond rate will average 2.1 percent in 2019, 2.2 percent in 2020 and rise to 2.5 percent in 2021.
- percent in 2019, decline 6.0 percent in 2020 and fall another 3.0 percent in 2021.
ATLANTA–Stuttering global growth and escalating trade tiffs that are affecting national economic prospects are also being felt in Georgia across many employment sectors, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business.
In his quarterly “Forecast of Georgia and Atlanta,” Dhawan wrote that he expects two Federal Reserve rate cuts before 2019 ends, asking, “Will these extra cuts help us negate the fallout from our trade spats? And what relief will it provide at the state and Atlanta metro levels?”
The forecaster’s answer to these questions is mixed. Yes, lower rates should help with interest-sensitive sectors such as home refinancing, vehicle sales and small business loans.
“But, these rate cuts cannot overcome the hesitation of big corporations to undertake the capital expansions that determine future job growth,” said Dhawan in the report released Aug. 28, 2019. “These firms are global in scope and dependent on external markets for a big proportion of their revenues.”
A case in point is Delta Air Lines. The state’s largest corporate employer collects 30 percent of its passenger revenue from international operations. In the second quarter of 2019, its global sector grew by 5.2 percent, compared to 8.7 percent for the same period in 2018.
The Port of Savannah, another transportation crown jewel, is largely responsible for driving the economic growth of the Savannah metro area. In mid-2018, Savannah’s job growth was 2.7 percent, outpacing the state’s job growth rate of 1.9 percent when global trade volumes were good. But by June 2019, Savannah’s growth rate dropped to 1.2 percent, putting it below the state’s 1.7 percent growth as the global economy cooled.
“Globally connected sectors and areas grow higher than average when the world economy is booming, but they decelerate sharply when the tide turns,” Dhawan said.
The global health of Fortune 500 companies headquartered in Georgia determines the hiring of managerial jobs in Atlanta, which has a multiplier effect on downstream sectors.
Domestic demand sectors are performing better than globally connected ones, particularly hospitality (historically high occupancy rates), education (growing due to population growth), healthcare (overall population growth and aging) and construction (new hotel, office and apartment developments).
“Fed rate cuts will alleviate the pain somewhat, and relatively clear skies will emerge, but without a rainbow,” said Dhawan.
Highlights from the Economic Forecasting Center’s Report for Georgia and Atlanta
- Georgia employment will add 65,200 jobs (11,400 premium jobs) in 2019, gain 53,500 jobs (9,400 premium) in 2020 and increase by 48,200 (9,700 premium) in 2021.
- Nominal personal income will grow 4.3 percent in 2019, then increase by a better 5.1 percent in 2020 and 2021.
- Atlanta will add 45,300 jobs (7,900 premium positions) in 2019, moderate to 37,900 jobs (7,200 premium) in 2020 and 35,600 jobs (7,300 premium) in 2021.
- Atlanta housing permitting activity will fall 18.9