If You’re Selling Your Business, Expect the Unexpected!
Many experts say the best time to prepare to sell your business is when you start your business. Few business owners reach that level of preparedness. Most business sales are event-driven. Factors such as problems with a partnership, health issues, burnout or even divorce can drive a business owner to sell.
Once you’ve made the decision to sell your business, know this: Unexpected events and factors will always rise to the surface. In this article, experienced business brokers offer advice on four key questions that you’ll need to answer before selling your business.
1. What is the Value of Your Time?
Meeting with prospective buyers can be a serious time sponge. One of the key benefits of working with a business broker is that a broker can take some of the pressure off of you. They can interact with buyers on your behalf.
A large percentage of business owners are also deeply involved in the day-to-day operation of the business. Business owners don’t have time to meet with every interested party or take the time to weed out the qualified prospects from the window shoppers.
2. What Do You Want Your Level of Involvement to Be?
Working with prospective buyers is obviously time consuming, but so is knowing every detail about a prospective buyer’s visit. A seasoned business broker can sift through what information is essential and what information is extraneous. In this way, you only hear about what is relevant and can skip the rest.
It is important for business owners to keep in mind that buyers expect that the business will continue to run successfully not just during the sales process but through closing as well. For this reason, you’ll want to stay as focused on the day-to-day operations of your business as possible; after all, if a deal falls through the last thing you want is to have a dip in revenue.
3. Are There Other Decision Makers?
Determining whether or not there are any other decision makers is a very smart move. Part-owners and silent partners will have to be addressed when it comes time to sell. They likely will have to agree to terms of the sale before the deal can go through. Be sure to talk to them before finalizing any deal. Professional business brokers can help you negotiate with these decision makers.
4. Just How Important is Confidentiality to You?
Confidentiality is important when it comes to selling your business. The more active your selling process, the greater the chances are that you’ll have a leak if you’re not extremely careful. Leaks unfortunately occur more than you might think.
How much will this issue negatively impact your business if it does occur? You should have a “leak plan” ready to go. In your plan, you should have in place what steps you should take to minimize the damage caused by the leak. Being ready to deal with key customers, employees and distributors is the cornerstone of dealing with any leak. Business brokers are experts at helping clients maintain confidentiality. This can save you a great deal of time and effort on many fronts.
By answering these four questions fully, you will save yourself time, stress and effort. Selling a business is a complex process. But with the right planning, you can minimize your effort and maximize your results.
Copyright: Business Brokerage Press, Inc.
Read MoreGearing Up for the U.S. Economic Census
Every five years, the U.S. Census Bureau collects extensive statistics about businesses that are essential to understanding the American economy. This official count, better known as the Economic Census, serves as the foundation for the measurement of U.S. businesses and their economic impact.
This is free data you can use for your business.
As part of the Census Bureau’s mission to provide timely information on the health of the U.S. economy, this “business” census serves as the most extensive collection of data related to business activity. Nearly 4 million businesses, large, medium and small, covering most industries and all geographic areas of the United States will receive surveys tailored to their primary business activity.
The data produced from the Economic Census are important for your industry, your community and your business:
- Statistics from the Economic Census provide policymakers with the evidence based information used to make sound programmatic decisions.
- Federal agencies rely on the data as the basis for key measures of economic activity, such as the Gross Domestic Product (GDP), National Income and Product Accounts (NIPAs), and the Producer Price Index (PPI).
- Trade and Business associations, along with Chambers of Commerce, rely on Economic Census data to measure key business facts they can use to gauge organizational structure and product trends.
- Individual businesses use the data from the Economic Census to make decisions about operating sites, capital investments, and product development.
The extensive and comprehensive data products include over 950 detailed industries across 18 industrial sectors classified using the North American Industry Classification System (NAICS). Geographic Area Series reports containing general statistics will be produced for nearly 21,000 geographic areas including the U.S. Territories. Additionally, over 7900 goods and services products will be released for the first time on the new North American Product Classification System (NAPCS) basis.
The key statistics produced for the Economic Census include Total Number of Establishments; Value of Sales, Shipments, Receipts, Revenue; Primary Business Activity; Total Number of Employees; Total Annual Payroll; Total First Quarter Payroll; and industry specific statistics.
Starting with this Economic Census, respondents will use an online, secure portal to respond making filing easier while at the same time improving data quality and reducing costs. Small companies located in the U.S. territories will have a paper option available, including a Spanish version for Puerto Rico.
To find out more about the Economic Census and how you can use Census data for your business, visit the U.S. Census Bureau’s Economic Census page.
GABB 2017 Fall Conference: Science of Negotiation & Number Crunching
Tuesday, Sept. 26, 9:00 a.m. to 4:00 p.m.
Atlanta REALTORS® Center
Enjoy a day of professional training, earn up to six hours of professional education credits, and network with other business broker professionals. All for the low price of $99 for GABB members, or $149 for non-members. But, if you join GABB, you can attend the conference at the member price and enjoy membership through the end of 2018!
The courses will include:
Financial Analysis of Commercial Properties: All about number crunching
This course introduces commercial property financial analysis. It identifies the tangible benefits of investing in real estate and explains what investors want. Students will be introduced to investment analysis and terminology regarding income and expenses; comparison of investments on both a before-tax and after-tax basis. A summary of the key calculations such as capitalization, cash-on-cash, gross rent multiplies, equity rate of return, internal rate of return and financial management rate of return will be reviewed with hands-on applications by students. The impact of leveraging on the return will be reviewed.
Upon completion of the course, through though the uses of lecture and case studies, the student will be able to:
- Identify four advantages to investors of commercial property.
- Distinguish the difference between net operating income and cash flow.
- Recognize the components of investment analysis.
- Complete a case study to calculate before tax cash flow, after tax cash flow, deprecation and tax consequences.
- Grasp the importance of leverage.
- Compare seven property evaluation methods.
The Science of Negotiation
This course explains what negotiation is and identifies the basic principles of negotiation. The instructor will help students identify the tangible benefits of negotiation and understand distinct types of negotiating tactics. Students will be introduced to two types of negotiations and identify the key substance in a commercial negotiation. Skills and strategies for successful negotiation will be identified and explained focusing on critical concepts of a win-win negotiation. Using a case study, students will ascertain five steps of negotiation which include BATNA, Reservation Price and ZOPA. The importance of body language and personality types will be reviewed.
Upon completion of the course, through the use of lecture, case studies and group discussion the student will be able to
- Demonstrate an understanding of the basic principles of negotiation.
- Identify the benefits of negotiation.
- Distinguish negotiation tactics and how to handle them.
- Contrast two types of negotiations and identify the key substance of a commercial negotiation.
- Ascertain key negotiating skills and tips.
- Recognize key concepts of a win-win negotiation.
- Summarize key steps in negotiation and gain knowledge of BATNA, Reservation Price and ZOPA through the use of an actual case study.
Instructor:
Ann Cyphers, president of Cyphers Brokerage Associates, Inc., is a recognized leader in the Atlanta commercial real estate market. During her 30-year career, Ann has successfully negotiated and closed hundreds of leases for local and national clients in the Atlanta market. Ann has represented institutional owners and developers in the leasing and marketing of trophy office buildings in the Buckhead, Central Perimeter and Northwest submarkets.
Ann is a CCIM (Certified Commercial Investment Member), a designation held by only 6 percent of the estimated 125,000 commercial real estate practitioners nationwide. The CCIM is one of the most coveted and respected designations in the industry. CCIM members are recognized experts in the disciplines of commercial and investment real estate.
The Georgia Association of Business Brokers conference will be offered at the Atlanta REALTORS® Center, 5784 Lake Forrest Drive, Atlanta, GA 30328.
Breakfast will be provided by Kim Eells, Vice President and Business Development Officer for Government Guaranteed Lending at the BrandBank.
Corporate attorney Germaine Curtin, LLC, of Curtin Law will be the lunch sponsor.
Register online:
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Top Ten Must-dos When Selling a Business
By Loren Schmerler of Bottom Line Management, Inc.
Are you ready to sell your business? Thinking about starting new adventures? Certain changes you may make now can help you increase your business value. Below are top 10 tips on how to prepare your business for sale from expert, Bottom Line Management, Inc. founder, Loren Marc Schmerler, a Certified Professional Consultant and Accredited Professional Consultant.
Top Ten Must-dos When Selling a Business
- Know why you want to sell your business. Make sure it’s a good reason and not just to dump your problems into someone else’s lap.
- Give some thought as to what you will do with your time after your business sells. Finding yourself with nothing to do can be very demoralizing.
- Make certain that your taxes are current. This includes sales taxes, unemployment taxes, payroll taxes, state income taxes and federal income taxes.
- Document all your policies, procedures and controls. Not only will this help during the transition period when you train the buyer, but this will make your business more appealing to the corporate buyer who is accustomed to formal documentation.
- If possible, develop and train a strong “second in command” who can fill in for you when necessary. The buyer might be hands-on or hands-off, and having a strong assistant provides flexibility. Many business sales are lost when there is no depth of management.
- Review each employee’s strengths and weaknesses and show when they were last reviewed and when they next need to be reviewed by the new owner. Not reviewing an employee on time can cause anxiety and diminish loyalty.
- Make sure your financial statements and tax returns are “bullet proof.” You do not want the transaction to fall apart when the buyer or buyer’s CPA finds discrepancies.
- Prepare a business and marketing plan that will help a new owner understand where the opportunities for growth exist. This plan should include an Executive Summary that explains why the business was started, how it progressed to its current status and what a new owner should do to take it to the next level.
- Select an asking price that is based on reality – not fantasy. Be able to justify it based on a multiple of Owner’s Discretionary Cash Flow. Bad reasons include “it’s what I want”, “this is what I have in it”, “this is what I owe the banks” “I have put blood, sweat and tears over x years into the business.”
- Be willing to be flexible on price, terms or both. Deal structure can make or break a transaction. When each party to the transaction is willing to bend, there is a higher probability of success.
Sales Guru To Lead July 25 GABB Peak Performance Workshop
International sales guru Mark Antonio will lead a Peak Performance Workshop at the July 25 meeting of the Georgia Association of Business Brokers.
Mark Antonio is one of America’s leading authorities on sales training, social media marketing, and peak performance. He’s traveled the United States, Canada, and South America conducting workshops for the Who’s Who of the Corporate World: Bank of America, RE/MAX, Morgan Stanley, ADP, Nissan, Berkshire Hathaway, and Aflac, to name just a few.
The GABB is the state’s only association of professionals who work to facilitate the purchase and sale of businesses and franchises. The group includes business brokers as well as lenders, attorneys, business appraisers, insurance agents, environmental specialists and other professionals. GABB’s member business brokers work with businesses of all sizes to help them through all steps of selling their company: valuation, marketing, financing, and closing. Aspiring business owners also work with business brokers to purchase existing businesses at a fair price.
GABB meetings start at 10:30 a.m. at the Atlanta Realtors Center at 5784 Lake Forrest Dr. NW, Atlanta, GA 30328. The meeting will be preceded at 9:45 a.m. with a free networking session with coffee and pastries sponsored by Stuart Oberman of the Oberman Law Firm. Photographer Roger Easley will be at the meeting to take professional head shots of GABB members.
GABB meetings are free and open to the public, but we ask that you let us know you are coming by filling out this form.
Mark is a former Senior National Trainer for the leading authority in the personal development industry and a Certified NLP Practitioner. He’s traveled to over 35 different countries and is fluent in 3 languages. He advises and consults with executives, sales professionals, and entrepreneurs in the areas of sales, social media marketing, and leadership mastery.
Directions to the GABB meeting location at the Atlanta Realtors Center:
From the South: I-75 north to I-285 east or I-85 north to I-285 west. Exit at Roswell Road south and turn right onto Northwood Drive. Turn right onto Lake Forrest. The Atlanta REALTORS® Center on the left at the stop sign (intersecting Allen Road).
From the North: Take GA 400 south and change to I-285 west. Continue as above via Roswell Road.
From East or West: I-285 to Roswell Road. Continue as above.
There is no charge for parking.
For more information about the GABB, contact Diane Loupe at georgiabusinessbrokers@gmail.com or GABB President Mike Ramatowski at 770-634-0428.
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