GABB Class: Recasting Financials and Accounting Fundamentals for Business Brokers, March 1
Learn how to recast financials and accounting fundamentals in a March 1 class to be taught by Georgia Association of Business Brokers Board Treasurer Jon Roman.
The class Recasting Financials and Accounting Fundamentals for Business Brokers will be eligible for three hours towards the GABB’s Board-Certified Broker credential, and is eligible for continuing education credit under Course #73934 approved by the Georgia Real Estate Commission.
This class, which will earn credits towards the Board-Certified Broker Credential, will cover what business brokers need to know about basic accounting as well as how to recast the seller’s financial statements. Recasting is the accepted accounting principle of removing or adjusting items on a business’s financial statements that are unrelated to the ongoing business.
Recasting financial statements demonstrates to a buyer the financial results of the business “as if” it was owned by the buyer, taking into account tax-motivated or other discretionary transactions that reduce corporate earnings. Recasting typically involves the adjustment of certain expenses recorded on the income statement of the Company that are considered to be discretionary or non-recurring in nature.
The class will be held on March 1 from 1 p.m.-4 p.m. at the Georgia Association of Realtors classroom: 6065 Barfield Road NE, Atlanta, GA 30328-4402
- How to understand different Types of Financial Statements.
- About the Balance Sheet, Income Statement (Profit & Loss) and the Cash Flow Statement
- How to recast financials.
- How to analyze the EBITDA, or earnings before interest, taxes, depreciation, and amortization
- How to analyze tax returns and why you must review them.
Is Your Deal Really Done?
Once you get to the stage of your deal where you have a signed letter of intent, you may already be feeling a sense of relief that your deal is near finalization. But remember that the due diligence stage is typically yet to come. This stage includes everything from financial and legal investigations to a review of specific information regarding how a business is run.
The due diligence process can be quite comprehensive and it often reveals some surprises. Because it is important for sellers to know what to prepare and for buyers to know what to look for, let’s examine some of the categories that are reviewed during this process.
Trademarks and Copyrights
Will assets like trademarks, patents and copyrights be transferred? This is a point that has certainly interfered with some deals being successful. Due to the fact that trademarks, patents, and copyrights are often essential parts of a business, they cannot be overlooked.
Products and Industry
Due diligence will likely include analysis of product lines and the respective percentage of sales that they make up. If the business in question is a manufacturing business, then all aspects of the process will be examined. For example, buyers will be looking for age and value of the equipment, information about suppliers, etc.
Financial Statements
It goes without saying that financial statements should be poured over during due diligence. Current statements and incoming sales should be carefully reviewed. Review of financial information will also include balance sheets. Is there bad debt? Is there work in progress? These kinds of issues will be evaluated.
Customer Lists
If you are selling a business, you should be prepared to share lists of major customers. Buyers may also want to compare your market share to that of your competitors.
Key Employees
Buyers should be looking for information on key personnel, as well as data on any potential employee turnover. If you are selling a business, it’s important to try to fix any staffing problems that might interfere with a buyer’s ability to properly run the business.
A key goal of the due diligence process is to find potential problems, such as liabilities and contractual issues. But on the upside, due diligence also includes investigation into assets and benefits. The end result should be that the selling price of the business is justified and both parties walk away satisfied. As stated above, it is very common for problems and issues to pop up during due diligence, so it’s important to stay proactive and be open to negotiation until the deal is finalized.
Copyright: Business Brokerage Press, Inc.
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Questions to Ask When Negotiating a Deal
Almost every sale of a business involves a high degree of negotiation between buyers and sellers. In this article, we share some of the questions you can ask yourself to prepare for this part of the process. After all, optimal outcomes are typically only achieved through proper negotiation strategies. Keep in mind that one of the key strengths possessed by Business Brokers and M&A Advisors is expertise and skills in negotiating deals.
Can Both Parties Split the Difference?
If the buyer and seller can’t agree on a number, one negotiating tactic is to have them split the difference. This is a tactic that is simple to understand, and it shows both parties that the other is willing to be flexible. This reveals a good degree of goodwill and can serve to not only keep both parties talking, but also lower any pre-existing tensions. When both parties are still at the table, there is still hope that a deal can be reached. This tactic serves to continue the discussions and can often be highly beneficial.
Can the Buyer and Seller Better Understand One Another?
When it comes to good negotiations, one of the goals is for both parties to seek to understand one another. Sometimes a buyer or seller’s needs don’t even involve the numbers on paper. Instead, they may be seeking to adjust terms to make them more conducive to their overall goals. If you can keep an open mind and seek to better understand what the other party is ultimately looking for, it can go a long way in making the deal happen.
Can You Bring in a Professional?
There is an old saying that says “Never negotiate your own deal.” One of the benefits of bringing in a brokerage professional is that this third party won’t have the same level of emotional investment. This means that he or she can keep a neutral perspective and be more apt to see things from both sides. Sometimes a new perspective can work wonders. Further, a brokerage professional will understand the myriad of complex factors that must be successfully resolved before the deal is finalized. A Business Broker or M&A Advisor will have tips and techniques that can only be gained from years of first hand exposure to making deals happen.
Copyright: Business Brokerage Press, Inc.
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How Can You Tell If a Potential Buyer is Really Serious?
When you’re trying to sell your business, the last thing you want is to waste time dealing with buyers who aren’t qualified and are unlikely to actually make a purchase. After all, you will not want to reveal details about your business to someone who may be looking to take advantage of the situation. Let’s take a closer look at how you can weed out legitimate buyers from those who are just kicking the can down the road.
Legitimate buyers will ask the right questions. They will have a keen interest in your industry and are seeking to gain more information. They will also be likely to ask intelligent probing questions about your customer base and the strengths and weaknesses of your business.
The best buyers will also ask logistical questions about your inventory and cash flow. It goes without saying they will want to know details about profits that are generated. Real buyers will also be concerned about wages and salaries. Their goal will be to ensure that your employees are taken care of and will be unlikely to quit.
Another area that you can expect serious buyers to ask about is capital expenditures. They will evaluate any equipment and machines involved in the business. They will also likely inquire about inventory that is unusable due to the fact that it is outdated or problematic. After all, if they are truly planning to buy the business, they would inherit any headaches.
A good rule of thumb is to imagine yourself in the shoes of the prospective buyer. What kinds of questions would you ask? If you find that a buyer is only asking the bare minimum of questions that only scratch the surface, odds are that they are not really interested. You can expect the legitimate buyer to ask about everything from environmental concerns to details about your competitors.
The best way to evaluate buyers is to turn to the experts. Your Business Broker or M&A Advisor will have years of experience in talking to buyers and will have a leg up on evaluating who is worth your time and energy.
Further, you would likely be overwhelmed with the process of handling buyer inquiries while you are still trying to effectively run and manage your business. A good brokerage professional will handle your incoming inquiries and only notify you of buyers who are suitable, qualified candidates. They will ensure that the highest standards of confidentiality are held along the way.
Copyright: Business Brokerage Press, Inc.
The post How Can You Tell If a Potential Buyer is Really Serious? appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
Mims, Wochele to lead Georgia Business Brokers in 2022
Judy Mims, Qualifying Broker for Childcare Properties, will be the 2022 President of the Georgia Association of Business Brokers, the state’s only professional organization dedicated to buying and selling businesses and franchises. Matt Wochele, founder of Preferred Business Brokers, Inc., will be the GABB’s Vice President.
Other officers of the GABB include Treasurer Jon Roman, CCIM, CEPA Transworld Business Advisors and Secretary Pam Walker, Senior Business Consultant with RamBizGroup, LLC. Members of the 2022 GABB Board of Directors will be Greg DeFoor, founder of DeFoor Business Services, Inc.; Jeffery Merry, founder of the BUSINESS HOUSE, inc.; GABB Affiliate representative Kim Eells, Senior Vice President, SBA Business Development at Georgia Primary Bank; and GABB Past President Dean Burnette, the founder of Best Business Brokers (B3) in Savannah.
“The Georgia Association of Business Brokers is dedicated to improving the professionalism of our members through education, through the Board Certified Broker program, and through our Code of Ethics,” explains GABB President Judy Mims. “Our members have the opportunity to network with others in this field and in supporting professions, which ensures smoother transactions.”
GABB broker members have represented thousands of business sellers and buyers, and the group has a dedicated membership of lenders, attorneys and other professionals to assist business buyers and sellers at every step of the process.
The GABB’s website lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
Find a professional business broker today at https://gabb.org/gabb-business-brokers/.
JUDY MIMS formed Childcare Properties in 2014 to provide the highest levels of integrity, experience and service for the childcare industry in the greater Atlanta metro area. Childcare Properties, LLC focuses exclusively on the sale of childcare facilities, preschools, Montessori and private schools. She is an active member of the Atlanta Commercial Board of Realtors (ACBR), the National Association of Realtors (NAR), the Georgia Child Care Association (GCCA), the National Association for the Education of Young Children (NAEYC), and the Southern Early Childhood Association (SECA). She is a member of the Atlanta Commercial Board Million Dollar Club with more than $5 million in sales in 2016 and 2018; a member of the GABB’s Multi-Million Dollar Club in 2017, 2018, and 2019; and GABB’s Top Producer in 2019. Prior to her career in commercial real estate, Judy worked as an independent publisher’s representative, selling advertising space in various trade magazines. Judy holds a Bachelor of Arts degree in history from Scripps College, Claremont, CA. She is married to Hugh Mims, lives in Brookhaven, and has three grown children and seven grandchildren.
MATT WOCHELE, CBI founded Preferred Business Brokers, Inc. in 1996 after a successful 17-year career in the investment banking industry. He is a Life Member of the GABB’s Million Dollar Club, Vice President of the GABB board, a GABB Phoenix Award recipient and a member of IBBA. As President and Managing Broker of Preferred Business Brokers, Inc., he has had the opportunity to be personally involved in hundreds of private business sales. The combined personal experience in the public sector with the private business sales has positioned the company to handle both the smaller main street business deals and the larger middle-market business acquisitions. Matt and his wife, Kathy, a professional artist, have five daughters and live in Sandy Springs.
JON ROMAN CCIM, CEPA, CM&AP is the owner of Transworld Business Advisors of Atlanta North, an award-winning group of five seasoned agents, an office manager and marketing staff. Mr. Roman is a former banker with experience in a variety of transactions. For nearly 18 years, prior to Transworld, he had helped entrepreneurs to obtain funding for acquiring and/or growing businesses. He also founded, acquired, operated, and sold his own businesses for more than 25 years. Since 2015, his agency has sold more than 150 businesses and has won many awards throughout the industry. Jon is a multi-million-dollar lifetime member of the Georgia Association of Business Brokers (GABB) and is currently serving as a treasurer for GABB. Among other qualifications, Jon is a CCIM (Certified Commercial Investment Member), a member of The Exit Planning Institute and a Certified Mergers and Acquisitions Professional. Jon lives in the city of Lawrenceville, with his family: his wife, Laura, his two children 16-year-old Ryan and 13-year-old Emma, their German Shepherd, Maximus, and toy poodle Sophie.
PAM WALKER, Senior Business Consultant with RamBizGroup, LLC, has an affinity for sales transactions that produce a mutually beneficial outcome. Her training in Information Technology involved working in software development, project management, system support, and analysis. There, she developed solid technical and business skills that are useful as a Business Broker. She grew up in Atlanta and went to Mercer University of Atlanta and DeKalb Technical College. She has a solid track record of successful business sales across multiple industries and enjoys bringing value to the partnership with her clients on both the sell and buy side. Pam believes a good deal is when both sides win.
GREG DeFOOR is a business broker, CPA, and Certified Fraud Examiner. He became a business broker in 2002 after working in public accounting followed by private industry experience as an accounting and financial executive in the healthcare and retail automotive industries. While in private industry, he was engaged in business transactions and decided to use that knowledge and experience to start his own firm. He has a unique blend of accounting, tax, corporate finance, business advisory and transaction experience to use for the benefit of his clients. He has an active Georgia real estate broker’s license. His firm, DeFoor Business Services, Inc., specializes in the sale of small and middle-market privately owned businesses in a diverse mix of industrial classifications. Mr. DeFoor is a past President and current board member of the GABB. He holds a Bachelor of Science in Business Administration degree with a concentration in accounting from Auburn University. He resides in Cobb County.
JEFFERY MERRY, Sr., M.B.A. J.D., past president of the GABB, has been the GABB’s top producer many times and has been a part of the Million Dollar Club since its inception in 1999. He is a GABB board member and will continue to be on the GABB board in 2022. Mr. Merry, owner and founder of the BUSINESS HOUSE, inc., is also a member of the International Business Brokers Association (IBBA) and the Business Brokers of Florida Association. For more than three decades, his firm has specialized in serving the manufacturing, distribution, technology, service, veterinary and medical industries. As a business intermediary, Certified Exit Planner, and consultant, Mr. Merry has been involved in mergers and acquisitions that have ranged in acquisition price from $60,000 to more than $15 million. He is a member of the Advisory Board at the University of North Georgia and is a past adjunct instructor for their MBA program. Mr. Merry holds a bachelor’s degree from Mercer University in Macon, a Master of Business Administration from the University of Illinois Edwardsville, and a Juris Doctor degree from Atlanta Law School. Mr. Merry is a licensed Real Estate Agent in several southeastern states, a Senior Business Analyst, and a member of the Exit Planning Institute. Mr. Merry and his wife, Mary, reside in Suwanee. He has five children and five grandchildren and enjoys traveling, reading, and riding his motorcycle.
KIM EELLS is Senior Vice President and Small Business Administration (SBA) Business Development Officer for Georgia Primary Bank. Kim has 25+ years of SBA lending experience and enjoys helping borrowers achieve their dreams of acquiring, opening and growing their businesses with the assistance of SBA and USDA guaranteed loans. She joined Georgia Primary Bank in August 2019 and has more than 20 years of banking experience. Kim’s responsibilities include establishing relationships with SBA borrowers and managing their loan process from beginning to closing. Asked what she enjoys about her job at Georgia Primary Bank she answered, “I love helping small business owners start, buy or improve their businesses. The backbone of this awesome country is made from small businesses.” Kim is active in Georgia Lenders Quality Circle (Board Member), Georgia Association of Business Brokers (Affiliate Board Member) and the Southern Heartland Art Guild. Outside of the office she enjoys spending time with her family, watching football (college and professional), working in her garden and putting up the vegetables that she grows, and painting.
DEAN BURNETTE is the founder of Best Business Brokers (B3) in Savannah. More than three decades of business ownership and management experience in various industries have given Mr. Burnette a wide range of experience and business knowledge. These experiences contribute to his abilities to help identify and qualify appropriate buyers, put together sales prospectuses, negotiate terms of a sale, and recognize the importance of confidentiality in these types of business transactions. He has been a member of the GABB Multi-Million Dollar Club many times. Mr. Burnette, a past president of GABB, is excited about the many opportunities that the current economic conditions and recent economic events have created in Georgia. He is a sponsor of the Georgia Logistics Summit; a past president of the Savannah Small Business Chamber; and a member of the Savannah Traffic Club, Savannah Real Estate Commercial Alliance, GAR, and NAR. Mr. Burnette also serves on the Education Advisory Committee for the Georgia Real Estate Commission and on the Board of Directors for Maritime Bethel Savannah. He is married and has two children and four terrific grandchildren.
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