If you own or operate a Georgia business, you can get free confidential consulting services including helping with business plans, buying businesses and leasing space. Find out how on Sept. 25 when two experts with the University of Georgia’s Small Business Development Center speak to the Georgia Association of Business Brokers.
Area Director Jeff Patterson and Business Consultant Aysha Cooper will speak to the GABB at their Sept. 25 monthly meeting. The meeting is free and open to the public and will be held at the Atlanta Realtors Center at 5784 Lake Forrest Dr. NW, Atlanta, GA 30328. The meeting begins at 10:30 a.m., preceded at 9:45 a.m. by a free light breakfast and networking session sponsored by GABB affiliate and board member Kim Eells, Vice President and Business Development Officer of Government Guaranteed Lending for Renasant Bank.
The Small Business Development Center, a Public Service and Outreach Extension of The University of Georgia, is funded in part by the U.S. Small Business Administration (SBA). It provides tools, training and resources to help small businesses grow and succeed. Designated as one of Georgia’s top providers of small business assistance, the SBDC has 17 offices ranging from Rome to Valdosta to serve the needs of Georgia’s business community. Since 1977, the SBDC’s network of partners has helped construct a statewide ecosystem to foster the spirit, support, and success of hundreds of thousands of entrepreneurs and innovators. The University of Georgia Small Business Development Center is nationally accredited by the Association of SBDCs.
Mr. Patterson, an area director with the Small Business Development Center at Georgia State University, has extensive financial industry experience that includes leadership roles in credit administration, commercial lending, operations management, regulatory compliance, and audit administration. His expertise includes loan proposal and business plan preparation, cash flow management, budgeting, and customer satisfaction. He also has brokerage and financial planning training. He has an MBA from Brenau University, was President and Board member of the Bank of Hiawassee, Senior Vice President at Nantahala Bank & Trust and Executive Vice President of United Community Banks. He is the past Lt. Governor and Past President of the Rotary Club, past Local Board Chair of North Georgia Technical College and past Chairman of the Board of the Habersham County Chamber of Commerce.
Ms. Cooper has 20 years of experience either working with small business owners or being a small business owner herself. Prior to joining the SBDC, Ms. Cooper was an advertising representative in the yellow page and radio industry. In 2005, after moving to Georgia, she opened her first business in Duluth, Ga., with the guidance and expertise of the SBDC. She has attended GrowSMART and been a client of the SBDC throughout the start-up and expansion phase of her adult care facility. In 2011, she was recognized by Access to Capital for Entrepreneurs (ACE) Entrepreneur of the Year and in 2017, Outstanding Woman of the Year. Aysha has been an active member of her community as a graduate of Gwinnett Neighborhood Leadership Institute, a board member for Snellville Tourism and Trade and Friends of Gwinnett County Seniors. Her interests include marketing, operations and franchising.
The GABB is an organization of experienced professionals who work with Georgia business owners to help them in the process of evaluating, marketing, financing and selling their businesses. They also work with business buyers including many individuals who have decided not to re-enter corporate America, but want to become their own bosses by purchasing and operating a Georgia business.
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’ll be attending the meeting.Read More
By Peter Siegel
If you want to become your own boss, but are having trouble finding the right business to buy, there’s another option. Find an enterprise to buy that appealed to him, but was not openly being offered for sale.
Peter Siegel, the Founder & Senior Advisor at California’s BizBen.com, described the experience of Steve, who was retiring from his accounting job and wanting to leverage his retirement savings into an income so that he and his wife could maintain their standard of living.
He decided to buy a small business but was concerned that responding to ads might take several months to a few years to produce results.
So how DO you buy a business that isn’t openly for sale.
Steve started by looking at the companies with which he did business, which led him to his oil-change franchise. The company looked successful and efficiently run and the owner appeared to be about ten years older than Steve. Those were good signs.
Here’s what Steve did to clinch the deal.
Gather Information on the Business
He learned from the franchisor that there were no other franchises that could be opened or purchased in his immediate area. And he got some basic information about the franchise company’s stores-typical gross sales, basic cost factors as a percent of gross, what the owners expect to earn, and an idea about the rules of thumb used for pricing the businesses. Next, he offered to save the time and trouble for friends and neighbors who needed to have their cars serviced. He would do it for them, always bringing the cars to the company he had targeted, and the car owners would reimburse him afterward for the cost of the oil, filters and service.
Contact the Owner
Then, with the business owner now recognizing him as a good customer (and curious why he showed up so frequently and always with a different car), Steve invited the man to lunch.
After assuring the owner that their discussion would be treated with complete confidentiality, Steve explained what he had in mind and learned that the owner had been thinking about selling, but had been so busy he hadn’t gotten around to doing anything about it. Steve presented document he’d prepared, called his “buyer’s resume.” It listed the money Steve had available, the assets on which he could borrow and it detailed his business experience.
The owner was immediately put at ease. He liked Steve’s professional approach and was impressed that this prospective buyer had done his homework and had some understanding of what was involved in running the company. Clearly, Steve was not there to waste his time.
The two met a few times afterward, and then sat down with their lawyers to start a negotiating and contracting procedure that culminated weeks later, in a successfully completed campaign for Steve, the new owner of the oil-change franchise.
There were buyer candidates who’d put their name on the list for a local franchise with the parent (franchise) company. And there were buyers asking their business brokers if there were any automotive service companies in the area that had been newly listed. In other words, Steve had competition among others who wanted what he wanted. But he wound up with the business.
And the way he went about it can be instructive for anyone wanting to purchase a good company and impatient because nothing appropriate has yet been found.
Prepare a Buyer’s Resume
Steve’s buyer’s resume is a very useful tool, not only to show to brokers and to prospective sellers selling a business who’ve been formally introduced by an intermediary, but also to business owners who are being directly approached about selling. It shows that the prospective buyer is serious, up-front and business like. And it lets the seller know what the buyer can and cannot do-a time saver for everyone involved.
Learning about a business of interest is another way the buyer demonstrates that he or she is being professional. That’s what Steve did by obtaining and studying the franchisor’s literature. And it also saves time, since the prospective seller does not need to go over the basics of the industry. The smart buyer-candidate can discover plenty of information that will help him or her be prepared, by contacting local business groups such as the Better Business Bureau or Chamber of Commerce, the associations representing the business’s industry, and by conducting a key word search on the Internet. And, of course, if the targeted company is a franchise, the interested buyer can find out from the franchisor much of what’s needed to know for initial discussions.
The smart buyer also is prepared by knowing the importance of exploring this idea with prospective sellers in a way that is private, respecting an owner’s usual need for confidentiality. Even if a business owner is interested in speaking with people who might want to purchase the company, anyone approaching that owner in a way that might expose the topic of conversation to others, is bound to get a negative response. Very few prospective sellers want customers, employees or vendors to learn that they are considering the idea of getting out of the business. If any outsiders hear someone ask a business owner “Do you want to sell?” they most likely will hear this answer: “No.” Even if that’s not the case.
Steve’s experience makes this process sound easy-a lot easier than it is in most cases. Of course his idea of checking out companies with which he did business is just one of many strategies a buyer can employ to find an appropriate business with a willing seller that isn’t officially for sale. A productive part of the network involves vendors in any industry of interest-people who know all of the owners in the market area for the businesses they sell to.
Furniture, gift and housewares wholesalers may know of customers-owners in the retail end of their business– who seem ready to retire. Commercial washer equipment sales people know all the owners of coin laundries in their territories, and may even want to encourage a less active owner to sell out to someone who may be more involved in the operation, particularly if the new owner is likely to purchase new equipment from that sales person. Similarly, route drivers calling on food and liquor stores have a pretty good idea about what’s going on with their customers. If someone is getting ready to sell out-perhaps because the next generation in the family doesn’t want to take over the business from aging parents-the guy, or gal, who makes deliveries to that business several times a month, is probably pretty well informed about the situation.
Speaking with these people is an excellent way to get tips about an owner who is getting in the mood to sell, before that owner contacts a business broker or posts a for-sale notice. The offer of a finder’s fee to people in a network might encourage them to pass along valuable information about likely sellers in their industry. They might even be willing to arrange the introduction, telling an owner about someone who might be a prospective buyer for the business, if the owner is so inclined.
Part of the network, of course, are the social, community and religious groups in which a buyer is involved. While visiting with other parents at a PTA meeting, or enjoying beers with fellow players on the local amateur soccer team, or chatting in the locker room at the gym or yoga center, a person who wants to find a small business to buy can put that fact into the “grapevine” in hopes the word will reach someone, who knows someone, who is getting ready to sell a good business. And the professionals who advise small business owners-lawyers, accountants and insurance brokers-represent a productive network. These people often are the first to learn when a client is planning a life change that involves selling a business. The buyer wanting to take advantage of this network should make sure to distribute a “buyer’s resume” with a carefully worded cover letter to some of these professionals. Days or weeks later, that information may come out of the counselor’s desk or file drawer to be shown to a client who begins expressing an interest in retiring or moving on to another enterprise.
Hiring a Business Broker
An effective strategy followed by some prospective buyers is to hire a business broker to approach specific business owners, or all business owners in a particular industry and market area. The arrangement between buyer and broker can vary, but usually is based on the understanding that the broker represents the buyer-the reverse of the typical circumstances-and the buyer pays the broker a specified fee-or percentage of the purchase price-upon completion of a successful transaction. Business Brokers will also know of businesses in your area that are for sale.
Once a buyer identifies an interesting business headed by a cooperative seller, and negotiations begin, it is useful if that buyer has planned out the steps that will lead to a completed transaction. What if the seller resists the offered price, expressing the idea that the business might command more money if exposed, through a listing broker, to the full marketplace of potential buyers? One intelligent response to that objection is to remind the seller that dealing here and now, with a ready, willing and able buyer, eliminates both the need for the seller to pay a broker’s commission, and the risk that the seller’s confidentiality will be compromised.
Most buyers are not likely to adopt the strategies suggested here-not when there are many brokers willing to help in the search, and a number of resources that list businesses for sale. But for the more impatient buyers, these comments suggest actions they can take today.
About This Contributor: Peter Siegel, MBAis the Founder & Senior Advisor (ProBuy & ProSell Programs) at BizBen.com (established 1994, 8000+ California businesses for sale, 500 new & refreshed postings/posts daily) works with business buyers, sellers, business brokers, agents). Reach him direct at 866-270-6278 to discuss strategies regarding buying a California business.Read More
Many people know that owning a business isn’t for them. But for others, the appeal and lure of owning their own business can be powerful indeed. If you are uncertain as to whether or not this path is for you, there are a few simple questions you can ask to gain almost instant clarity. In this article, we will explore those key questions and help you determine if owning a business is in your future.
1. Are You Dedicated to Growing Your Income?
Quite often people like the idea of making more money, at least in the abstract. But when presented with what it takes, many people realize that they don’t want to do what is involved. Owning and operating a business can be a lot of work and it’s not for everyone. Yet, those who embrace it can find it rewarding in a variety of ways.
Being a business owner is radically different than being an employee. As an employee, you simply don’t exercise much control. Summed up another way, your financial fate is clearly in the hands of someone else: your employer.
However, owning a business means that you can take steps to control your own financial destiny. You can make decisions that will, ultimately, boost the success of your business and in turn increase your own income.
As an important note, statistics from 2010 show that the longer you own your business the more money you, as the business owner, will make. It is typical for those who have owned a business for ten years or more to earn upwards of six figures per year. If you have had more than one year of experience in running an organization, the yearly salary will likely range from $34,392 to $75,076. However, if you’ve owned your business for more than a decade, you will likely earn more than $105,757 per year.
While there are no guarantees, owning a business can be a path to growing one’s income and wealth.
2. Would You Like Greater Control Over Your Life?
Many opt to start their own business because they want more control. Business owners realize that unless they own their own business their financial fates rest in the hands of someone else. Some people are comforted with this feeling or don’t see a way around it and others are not so comfortable with the realization. If you want greater control over your life, then owning a business might be for you.
Owning a business increases the amount of control a business owner has over his or her life in many ways, not just financial. For example, business owners have more control over how they spend their time, where they work, when they work and who they work with on a daily basis. Instead of being part of a business, you help create, mold and shape it. Clearly, this is a lot of work and it isn’t for everyone, but again the rewards can be diverse and great.
3. What is Your Personality Like?
Owning a business translates to great control, but that control comes with a degree of risk. In the end, you’ll have to determine how comfortable you are in dealing with risk. As a business owner the “buck” stops with you. You’re risking your time, effort and, of course, money. You also don’t get a paid vacation, sick days or any of the other benefits so often associated with being an employee.
Other traits identified during a study by the Guardian Life Small Business Research Institute showed there are other ideal personality traits for business owners. These traits include collaboration, curiosity, focus on the future, and being self-fulfilled, tech savvy and action oriented.
Thinking about these three key questions is the perfect place to start when contemplating opening a business. Additionally, working with a business broker can help you gain clarity and determine if owning a business is right for you.Read More
Are you looking for a way to perfect your presentation? Understanding what the typical serious buyer wants will help you get your business ready for selling.
Let’s turn our attention to looking at what these types of individuals and entities really want. After all, your time is precious.
1. An Interest in the Industry
First, prospective buyers will want to have a better understanding of your industry. Any serious buyer will want to understand the industry as a whole, as well as your existing customers, prospective customers and the strengths and weaknesses of your business. Key factors, such as threats from competition, will also be a major factor for prospective buyers.
2. Seeking Knowledge about Discretionary Costs
Secondly, expect buyers to take a long look at discretionary costs. Sellers will often look to reduce their expenses in a range of discretionary areas including advertising, research and development and public relations; this is done to help make a business appear more attractive to a buyer. However, it is important to note, that a savvy prospective buyer will notice reduction in discretionary expenses.
3. Inquiries about Wages and Salaries
Wages and salaries is another area that receives attention from buyers. If your business is paying minimum wage or offers a limited retirement program then employee turnover is likely to be high. Buyers may be concerned that employee stability may be low, which, of course, can potentially disrupt business.
4. Questions about Cash Flow and Inventory
No serious buyer will ignore the issue of cash flow. Any prospective buyer will want to know that the business they are considering buying will continue to generate profits both now and in the future.
Inventory is another area that will not be ignored. If your business is carrying a large amount of antiquated, unsalable or simply unusable inventory, then expect that to be factored into a prospective buyer’s decision-making process. It is best to disclose such inventory instead of hiding it, as it will be discovered during due diligence.
5. Seeking Capital Expenditure Details
Finally, capital expenditures will be examined by buyers. You can expect buyers to carefully evaluate machinery and equipment to ensure that there will be no expensive surprises looming on the horizon.
These give areas are definitely not the only areas that buyers will explore and investigate. Everything from financial agreements and environmental concerns to government control will be examined in depth. You should invest some time thinking about the situation from the perspective of a buyer, as this will help you discover many potential problems and try to secure viable workarounds. Working closely with a business broker is another way to ensure that you can successfully anticipate the needs of buyers.Read More
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