Being our own boss is a dream many of us have had since first entering the workforce. Maybe it’s because we know we could implement processes that would produce better results, or we would like more flexibility in scheduling work time, or we want to leave something of lasting value to our heirs.
Whatever the driver, it is important to carefully consider many aspects of this critical decision. Here are five issues we suggest you carefully explore before taking the steps towards purchasing a business.
1. Taking out the Trash. Too many business owners only want to be CEO of their business. But, especially in the beginning, the demands of the business owner could be many – from stocking shelves to emptying trash to figuring out why the web site crashed. To keep the wheels on the bus you will most likely have to assume some duties that are not very glamorous.
2. “Show me the Money,” as they say in the movies. Before you begin exploring businesses, know your funding options and your qualifications for borrowing additional funds should you need them.
3. Get to know the Owner. As you look at businesses to buy, you will be evaluating someone else’s “baby.” The current owner has built, nurtured, and developed this company so it is important to help him/her feel comfortable with you, your approach, and your intentions.
4. The Art of Price Negotiation. Pricing is often a function of timing. If a business is doing well, the price will seem inflated. When the economy is slow, buyers will want to buy a business for less than its value. Also, timing can be a function of the seller’s circumstances. There is a right time to buy and a right time to sell.
5. Businesses Are Risky. Are you looking for a “sure thing?” If so, buying a business might not be for you. There is no such thing as a sure thing in business. With so many variables affecting business performance, there is no way to always predict results. Buying (and owning!) a business is all about risk…
These are just a few examples of the issues to consider before buying a business. A professional and experienced business broker can help you negotiate these and other issues in the successful purchase of a business.
C. David Chambless, a past president of GABB, is President of Abraxas Business Services and a lifetime member of the GABB’s Multi-Million Dollar Club.Read More
ATLANTA–Mike Chriszt, Vice President of Public Affairs, of the Federal Reserve Bank of Atlanta, spoke about the Federal Reserve and its role in Georgia economy at the June 26 meeting of the Georgia Association of Business Brokers (GABB), the state’s only professional association of professionals who help in the sale and purchase of businesses and franchises.
His powerpoint presentation is here: GABB June 26
The GABB meets at the Atlanta Realtors Center at 5784 Lake Forrest Dr. NW, Atlanta, GA 30328. The monthly meeting begins at 10:30 a.m. and is preceded at 9:45 a.m. by a free light breakfast and networking session sponsored by Bob Smith, Health Insurance Advisor with North American Health Plans.
The GABB is composed of professionals who work with owners of Georgia businesses. Many of today’s business buyers are individuals who have decided not to re-enter corporate America, but are ready to control their own destiny by purchasing and operating a Georgia business.
In his role as a vice president and public affairs officer in the Federal Reserve Bank of Atlanta’s Public Affairs department, he is responsible for the Bank’s communications, which include media relations, publications, websites, conferences, and outreach activities such as speeches, economic education, and corporate citizenship. He also oversees the Bank’s internal communications and the Knowledge and Information Management function.
Prior to assuming his current responsibilities, Chriszt was a vice president in the Research department. There, he was responsible for the Regional Economic Information Network and the Center for Real Estate Analytics. From 2008 to 2010, Chriszt served as assistant vice president in the Research department. He was director of international and regional analysis from 2004 to 2008. In these roles, he oversaw the analysis of economic conditions in the Sixth Federal Reserve District and of international economic developments. Chriszt joined the Bank in 1989 as a public information specialist and moved to the research department in 1990.
While at Miami University in Ohio, Chriszt earned two bachelor’s degrees, one in history and one in diplomacy and foreign affairs. He also earned a master’s degree there in political science with emphases on international economics and comparative politics. Chriszt received a certificate of study of the European Union and is a graduate of executive education programs at Duke University’s Fuqua School of Business and the University of Virginia’s Darden Graduate School of Business Administration.
Chriszt is a member of the National Association of Business Economists and the Atlanta Economics Club, where he served as the group’s president. He also serves on the board of the Georgia Council on Economic Education. A native of Cleveland, Ohio, Mr. Chriszt is married to Maxine and they have five children.
For more information about the GABB, contact GABB President Mike Ramatowski at 770-634-0428 or email@example.com call Diane Loupe at 404-374-3990 or email firstname.lastname@example.org.
If you are NOT a GABB member, please fill out this form to let us know you plan to attend our meeting.Read More
The value of the term sheet shouldn’t be overlooked. From buyers and sellers to advisors and intermediaries, the term sheet is often used before the creation of an actual purchase or sale agreement. That stated, it is important that the term sheet is actually explained in detail. Let’s take a closer look at its importance.
What is a Term Sheet?
Even though term sheets are quite important, they are rarely mentioned in books about the M&A process. In the book, Streetwise Selling Your Business by Russ Robb, a term sheet is defined as, “Stating a price range with a basic structure of the deal and whether or not it includes real estate.”
Another way of looking at a term sheet, according to attorney and author Jean Sifleet, is that a term sheet serves to answer to four key questions: Who? What? Where? And How Much?
Creating the Right Environment
A good term sheet can help keep negotiations on target and everyone focused on what is important. Sifleet warns against advisors, accountants and lawyers who rely heavily on boilerplate documents as well as those who adopt extreme positions or employ adversarial tactics. The main goal should be to maintain a “win-win” environment.
At the end of the day, if a buyer and a seller have a verbal agreement on price and terms, then it is important to put that agreement down on payment. Using the information can lead to a more formalized letter of intent. The term sheet functions to help both parties, as well as their respective advisors, begin to shape a deal, taking it from verbal discussions to the next level.
Make Sure Your Term Sheet Has the Right Components
In the end, a term sheet is basically a preliminary proposal containing a variety of key information. The term sheet outlines the price, as well as the terms and any major considerations. Major considerations can include everything from consulting and employment agreements to covenants not to compete.
Term sheets are a valuable tool and when used in a judicious fashion, they can yield impressive results and help to streamline the buying and selling process. Through the proper use of term sheets, an array of misunderstandings can be avoided and this, in turn, can help increase the chances of successfully finalizing a deal.Read More
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.
Georgia’s SBA loan professionals will lead a panel discussion at the Feb. 27 GABB meeting about SBA lending rules and change of ownership requirements.
The Georgia Association of Business Brokers, the state’s only association of professionals who work to facilitate the purchase and sale of businesses and franchises, meets at 10:30 a.m. at the Atlanta Realtors Center at 5784 Lake Forrest Dr. NW, Atlanta, GA 30328. The meeting will be preceded by a free breakfast and networking session sponsored by Mark Jones of Franchise Systems Advisors.
The Feb. 27 SBA panel will discuss “SBA’s SOP for Change of Ownership,” led by Carolyn Robinson, Vice President of Acclivity-Citizens Bank and Brian Harper, Senior Vice President of Atlantic Capital. After their presentation, several other GABB affiliate members will join Kim Eells, Vice President and business development officer at the Brand Bank, for a question and answer session. If you have any questions at all about SBA financing for the purchase or sale of a business or franchise, this session is for you.
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 are free and open to the public, but we ask that you let us know you are coming by filling out this form.Read More