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Goodwill and Its Importance to Your Business

What exactly does the term “goodwill” mean when it comes to buying or selling a business? Usually, the term “goodwill” is a reference to all the effort that a seller puts into a business over the years that he or she operates that business. In a sense, goodwill is the difference between an array of intangible, but important, assets and the total purchase price of the business. It is important not to underestimate the value of goodwill as it relates to both the long-term and short-term success of any given business.

According to the M&A Dictionary, an intangible asset can be thought of as asset that is carried on the balance sheet, and it may include a company’s reputation or a recognized name in the market. If a company is purchased for more than its book value, then the odds are excellent that goodwill has played a role.

Goodwill most definitely contrasts and should not be confused with “going concern value.” Going concern value is usually defined as the fact that a business will continue to operate in a fashion that is consistent with its original intended purpose instead of failing and closing down.

Examples of goodwill can be quite varied. Listed below are some of the more common and interesting examples:

  • A strong reputation
  • Name recognition
  • A good location
  • Proprietary designs
  • Trademarks
  • Copyrights
  • Trade secrets
  • Specialized know-how
  • Existing contracts
  • Skilled employees
  • Customized advertising materials
  • Technologically advanced equipment
  • Custom-built factory
  • Specialized tooling
  • A loyal customer base
  • Mailing list
  • Supplier list
  • Royalty agreements

In short, goodwill in the business realm isn’t exactly easy to define. The simple fact, is that goodwill can, and usually does, encompass a wide and diverse array of factors. There are, however, many other important elements to consider when evaluating and considering goodwill. For example, standards require that companies which have intangible assets, including goodwill, be valued by an outside expert on an annual basis. Essentially, a business owner simply can’t claim anything under the sun as an intangible asset.

Whether you are buying or selling a business, you should leverage the know how of seasoned experts. An experienced business broker will be able to help guide you through the buying and selling process. Understanding what is a real and valuable intangible asset or example of goodwill can be a key factor in the buying and selling process. A business broker can act as your guide in both understanding and presenting goodwill variables.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

Copyright: Business Brokerage Press, Inc.

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How to Break Up With Your Business Partner

How do you place a fair valuation on your company when only one partner wants out, and the other is ready to continue? The answer – for Judith Nowlin and her partner Amanda – wasn’t a matter of calculating how far they’ve come, but rather how far they would go.

Nowlin, co-founder of iBirth™, a daily pregnancy, postpartum and baby tracker app, found herself in a complex situation when her co-founder and good friend was ready to step down from the business.

While most would be left perturbed, for Nowlin, it pushed her to evaluate the company’s potential valuation and helped lay the foundation of transforming iBirth™ toward a B2B model with a stream of recurring revenue — and ultimately finding a strategic buyer to acquire the business.

In this episode, you’ll learn:

  • How to handle a business partner who wants out – and ways you can keep them as an investor and advisor
  • The difference between a financial buyer and strategic buyer, and how to approach the latter
  • How a recurring revenue stream can transform your business
  • One easy way to determine if your B2C business can evolve into a B2B model

Listen now

Do you want to improve the value of your business?

If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at (443) 982-7332.

 

 

 

Selling a Business in 2019: Three Important Things to Keep in Mind

from Inc.com, credit: Getty Images

With profitable businesses fueling the market and an election year on the horizon, 2019 could be a pivotal year.

Luckily, rising sale prices for healthy businesses have presented sellers with a good time to take the leap. In fact, 60 percent of owners are confident that they would receive a favorable sale price if they sold their business today.

With such optimism, it can be tempting for antsy owners to jump into a sale. However, it’s important to have a clear and well-thought-out exit strategy to guarantee the best sale price and a smooth sales process. While some of these strategies are evergreen, others require more insight.
To find out more, we consulted with a panel of small business experts on what they believed sellers should consider when developing their exit plans:

Take action now. While the 2019 market is promising, the sunny weather won’t last forever. The GDP is expected to slow its pace approaching 2020, which also falls on an election year — known historically to soften sales. For owners waiting for the right time to sell, it might be wise to accelerate the process and make 2019 your selling year.

At the same time, baby boomers business owners are fueling the market with a steady supply of inventory. In fact, it’s estimated that retiring baby boomers will sell or transfer nearly $10 trillion of assets in the coming decades.

“Baby boomers are entering the marketplace at a faster rate than in the past, and pricing may start to have some downward pressure,” said Andrew Cagnetta, CEO of Transworld Business Advisors. For now, reports still indicate that small business sale prices are rising, but the impending effects of a retiring generation are important to keep in mind.

Invest in your business. Deciding to sell doesn’t mean ownership duties take a backseat. It’s critical that owners don’t fall into the “last day of school” mindset and neglect their responsibilities. In fact, once deciding to sell, it’s more important than ever for owners to invest in the business.

“Be proactive in preparing your business for sale,” said Matt Coletta, co-founder and managing partner at M&A Business Advisors. “Understand the key items that motivate a buyer in choosing your business over other businesses on the market.” Upgrading equipment, increasing marketing efforts and removing excess or obsolete inventory will not only increase the value of the business but prove to buyers that the business has not been neglected.

Prepare your financials. In addition to interest rate hikes, rising labor costs and other overhead expenses have the potential to cause declines in revenue. Small businesses across the board are struggling to compete with the salaries and benefits offered by larger corporations; in the third quarter of 2018, labor costs increased nearly one percent.

With such a large number of healthy businesses on the market, buyers are doing their due diligence and evaluating the long-term profitability of each opportunity. While revenue declines may not be significant, it’s important to have a good explanation for these variances and how they relate to fluctuations in the economy.

“Clean up your financials and have consistent reports,” said Ron Johnson, chairman of ABI Business Sales, Mergers and Acquisitions. “Have profit and loss statements and balance sheets for at least three years — five years is better.”

A strong, favorable market is motivation enough for owners to sell. Yet, it’s difficult to predict the future. With profitable businesses fueling the market and an election year on the horizon, 2019 could be a pivotal year. While these are only predictions, sellers should consider taking advantage of this high point rather than risk having to wait longer to sell. Following the advice from our experts, owners who take action now, invest in their businesses and prepare their financials can be confident they’re securing the best possible sale.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

 

The Sale of a Business May Actually Excite Employees

Many sellers worry that employees might “hit the panic button” when they learn that a business is up for sale. Yet, in a recent article from mergers and acquisitions specialist Barbara Taylor entitled, “Selling Your Business? 3 Reasons Why Your Employees Will Be Thrilled,” Taylor brings up some thought-provoking points on why employees might actually be glad to hear this news. Let’s take a closer look at the three reasons that Taylor believes employees might actually be pretty excited by the prospect of a sale.

Taylor is 100% correct in her assertion that employees may indeed get nervous when they hear that a business is up for sale. She recounts her own experience selling a business in which she was concerned that her employees might “pack up their bags and leave once we (the owners) had permanently left the building.” As it turns out, this wasn’t the case, as the employees did in fact stay on after the sale.

Interestingly, Taylor points to something of a paradox. While employees may sometimes worry that a new owner will “come in and fire everyone” the opposite is usually the case. Usually, the new owner is worried that everyone will quit and tries to ensure the opposite outcome.

Here Taylor brings up an excellent point for business owners to relay to their employees. A new owner will likely mean enhanced job security, as the new owner is truly dependent on the expertise, know-how and experience that the current employees bring to the table.

A second reason that employees may be excited with the prospect of a new owner is their potential career advancement. The size of your business will, to an extent, dictate the opportunities for advancement. However, if a larger entity buys your business then it is suddenly possible for your employees to have a range of new career advancement opportunities. As Taylor points out, if your business goes from a “mom and pop operation” to a mid-sized company overnight, then your employees will suddenly have new opportunities before them.

Finally, selling a business could mean “new growth, energy and ideas.” Taylor discusses how she had worked with a 72-year-old business owner that was exhausted and simply didn’t have the energy to run the business. This business owner felt that a new owner would bring new ideas and new energy and, as a result, the option for new growth.

There is no way around it, Taylor’s article definitely provides ample food for thought. It underscores the fact that how information is presented is critical. It is not prudent to assume that your employees may panic if you sell your business. The simple fact is that if you provide them with the right information, your employees may see a wealth of opportunity in the sale of your business.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

Copyright: Business Brokerage Press, Inc.

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A Look at Divestopedia’s Article, “The Myth of Fair Business Valuation”

In Divestopedia’s article, “The Myth of Fair Business Valuation: What Professional Valuations Don’t Tell You,” author Chak Reddy is quick to point out that the “type of buyer and method of sale are two important (yet often overlooked) value determinants when finding a starting price for your business.”

Reddy brings up some excellent points. One notion in particular that every business owner should be aware of is that there is “NO fair value for illiquid assets.” He points to the fact that between January 2007 and March 2008, the historic Bear Stearns went from a value of $20 billion dollars to just $238 million. In a mere 14 months, Bear Stearns lost most of its value.

Additionally, the article points to the fact that business owners often suffer enormously from “dramatic valuation compression.” In Reddy’s view, this compression is the direct result of poor planning and a failure on the part of business owners to select the right advisory teams.

Reddy believes that professional valuations can be quite lacking. He feels that they are “contingent on multiple assumptions,” and that the valuations are only as good as the assumptions upon which they are based. In other words, professional valuations can be limited and flawed. In particular, he points to the fact that two of the most important factors in valuations, future growth rate and operational synergies are “highly subjective and no two views on these topics are likely to be identical.” Summed up another way, valuations are inherently a matter of opinion and perspective. Reddy feels that a seller will be “lucky” if the real sales price comes within 10% to 20% of the professional valuation.

In the end, as always, it is the market that determines value. It is the acquirer who will determine the value more than any other factor. The perception of the buyer will play a key role in the process and, further to the point, no two buyers will perceive the business exactly the same way. In other words, valuations can be tricky and certainly do involve a personal element of the individual who is appraising the business’ value. Adding to this point, Reddy states, “From our experience, the type of buyer and the type of sale skew the valuation to such an extent that it is unwise for a business owner to not be familiar with these variables and their impact before the beginning of the sales process.”

Ultimately, finding the right buyer is essential and this is where a business broker can prove simply invaluable. And finding that right buyer may take time.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

Copyright: Business Brokerage Press, Inc.

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7 Advantages of Buying an Existing Business

With 28 million small businesses open today, now may be the perfect time to invest in your own. As you begin taking the first steps to business ownership, it’s wise to think about the benefits of buying an existing company. Continue reading to discover the advantages of buying an existing business compared to starting your own.

Benefits of Buying an Existing Business

Before becoming a business owner, explore the benefits of buying an existing business to ensure you make a well-informed decision.

1. Low-Risk Investmentanalyzing the advantages of buying a business

Buying an existing business is considered a low-risk investment compared to starting your own business from scratch. With a new company comes costs from real estate, hiring new employees, education and training, equipment, furnishings, marketing, and more. Unlike a new business, an existing business may include most of these in the asking price, depending on the transaction. Plus, banks see buying an established business as low-risk because the company is a proven success, unlike new businesses that can be experimental.

2. Current Staff

When buying an existing business, the employees that are loyal to the company will most likely want to see it succeed. You won’t need to train them, and they can help you along the way if you are new to the industry. In addition to a well-trained staff, existing employees can also provide key intel into the overall business operations. Their experience working with the previous owner can shed light on the positives and the negatives of the company.

3. Expertise

If you’re not already an expert in the company’s industry, buying an existing business is a great way to learn the ropes. Both the staff and previous owner are excellent sources of information and insight, so it’s best to keep an open line of communication when going through the process.

4. Established Clientele

Along with the employees, loyal clients and customers will want to see the business succeed as well. These customers will have the insight to help you improve the company, so be sure to research their experiences to see how you can enhance their future ones.

5. Furnishings and Equipment

In most business deals, the transaction includes the real estate as well as furnishings and equipment. If a deal doesn’t include these items or if you’re starting a new business, expenses can add up quickly. The best way to ensure you’re making a wise investment is to consult with a business broker or another professional to help explain the listing details.

6. Thriving Business

For new business owners, the first 18 months of ownership is the most critical. By purchasing an existing business, you are investing in one that has likely already made it past this point. Your company’s success depends on multiple different factors, but knowing you’re investing in a business that beat these odds is a tremendous advantage to any new business owner.

7. Entrepreneurial Freedom

Buying a business may not sound as thrilling as starting your own from the ground up, but you can still implement all of the creative ideas you have. Once you invest in a business and the deal is done, you can make it into your own.

Buying an existing business can be just as challenging and rewarding as starting your own. Be sure to do your research when thinking about investing in a business to discover your best options.

Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

Around the Web: A Month in Summary

A recent article from Divestopedia entitled “7 Fundamentals to Due Diligence You Need to Know” explains the due diligence process and what it means regarding sellers and buyers and their roles in the process.

Whether a company is being sold or it is merging with another company, it is standard practice to go through the due diligence process. Therefore, they should be aware of all the factors involved with the due diligence process. The fundamentals of due diligence can be broken into 7 categories:

  1. Historic and Projected Financial Information
  2. Technology Developments and Intellectual Property
  3. Customers and Revenue Streams
  4. Contract Agreements and Insurance
  5. Key Staff and Management
  6. Legal and Compliance
  7. Tax Issues

In each of these 7 critical areas, the buyer and the seller each have to do their part in order to see the deal make it to the finish line. The seller has to be open and honest with the attorneys, their advisory team and the potential buyer; and the buyer has to be thorough in examining and combing through all of the information provided.

Click here to read the full article.

A recent article from NuWire Investor entitled “How to Find the Right Broker to Sell your Business” explains the most important characteristics a seller should be looking for in a business broker when deciding who to hire.

When it comes to hiring a business broker to sell your business, you want to ask the following questions to ensure that you’re choosing a broker who will improve your experience and increase the chances of selling your business:

  • What do they know about major players, important trends, insider terminology or future industry projections? It’s important that a business broker is well acquainted with and well connected in your specific industry.
  • What have they sold before, and what is their success ratio? Beware of a business broker who isn’t transparent with you on these things.
  • How do they charge for their services and when are they expecting to be paid? A good business broker will set these expectations up front, very clearly in the agreement between the seller and broker. Typical commissions are between 8 and 12%, paid after the business is sold.
  • How is the business broker planning to market your business? As a buyer, you want to make sure that the broker you choose to work with has plans to engage their network and actively seek out connections who would be interested in your business.

When it comes to choosing a business broker to work with, who you choose to handle the sale of your business matters tremendously. It is better to take your time and find someone who makes you feel comfortable and has the proper knowledge and connections than it is to miss out on a favorable deal.

Click here to read the full article.

A recent article from Inc.com entitled “Selling a Business in 2019: Three Important Things to Keep in Mind” discusses the factors that sellers should consider when developing their exit plan, according to small business experts.

While sales prices are rising and 60 percent of owners are confident that they would receive a favorable sales price if they sold their business today, it’s understandable that some owners would be tempted to jump into a sale. With the baby boomer generation fueling the market at a rate that is faster than ever, and GDP expecting to slow its pace as we approach 2020, entering the market now becomes even more enticing. However, experts warn sellers not to prematurely jump into a deal and to have a clear and well-thought-out exit strategy to guarantee an optimal sales price and a smooth sale.

Two critical parts of a well-thought-out exit strategy are investing in your business and preparing your financials. Once you’ve made the decision to sell your business, experts suggest determining any key items that will either motivate or deter a buyer from choosing your business over the other businesses on the market. Use these key items to invest in your business and make it more appealing on the market. 2019 is expected to bring multiple increases in the overhead expenses associated with running a business. When preparing your business for sale, make sure you address these concerns and clean up your financials. Be prepared to have a good explanation for any revenue declines.

Click here to read the full article.

A recent article from Entrepreneur.com entitled “3 Reasons Buying a Franchise Might Be Better Than Starting Your Own Business” explains how purchasing a franchise provides exceptional support and guidance when it comes to getting your business up and running. There are 3 key advantages to purchasing a franchise:

  1. Carrying the name of an already established business makes it easier to gain new business from startup.
  2. Cost Benefits: When purchasing a franchise you have to pay a franchise fee, which may increase your initial costs, but it gives you access to many resources that can help your business turn a profit faster than if you were to start up a business from scratch.
  3. The ability to sell at a higher price when it comes time to exit: A well-known brand and business operations consistency combined with a detailed transition manual provided by the franchisor allows for a smoother transition and a higher chance of profitability for the buyer.

Click here to read the full article.

A recent article from Divestopedia entitled “How Do I Attract a High Multiple for My Business? – The Sales Process” explains how the sales process impacts a company valuation.

While you cannot transform an average business into a high multiple business, there are a few guidelines you can follow to encourage a higher enterprise value at the closing date. The first of these guidelines is that the ideal time to sell is when there are positive trends in revenue and earnings. A positive trend means that there has been consistent growth over the past two years (keyword: consistent) and that there are future prospects on the horizon.

The second important factor in the sales process is who you’re selling to. It’s crucial to not only thoroughly screen your buyers, but to keep as many options open as long as possible. When there are multiple buyers interested, you have leverage as the seller.

The third and final piece affecting the end value of your business in the sales process is why you’re selling it. Who you choose to sell the business to and how long you remain after the sale is highly dependent upon this answer.

Click here to read the full article.

Copyright: Business Brokerage Press, Inc.

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A Small Giant Makes A Great Exit

Tyler Tringas was adamant on establishing his SaaS business without the help of external capital.

He founded Storemapper—a business that provides small businesses with a platform to showcase the location of their products in store for curious consumers—in 2012.

By 2017, Storemapper was seeing $50,000 in monthly recurring revenue. Ready to build his next business, Tringas made moves to sell the company, including moving himself away from day-to-day business operations, learning critical questions to ask potential buyers and maintaining radical transparency to accelerate the sale.

In this episode, you’ll learn:

  • How to know when it’s time to sell
  • The importance of asynchronous communication and how to integrate it into your hiring processes
  • How Tringas used radical transparency to attract buyers and accelerate the sale process
  • The subjectivity of Seller’s Discretionary Earnings (SDE) and how it can impact your value
  • Defining strategic and financial buyers for your company

Listen Now

Do you want to improve the value of your business?

If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at  (443) 982-7332.

How to Get Started When Selling Your Business

So you’ve decided to sell — now what?

There’s no time like the new year to list your business for sale. However, selling requires more than just posting an ad. If you are adequately prepared, the actual listing can be a quick process. But, if you have only recently decided to sell your business, it can take as long as a year before you are ready to list it.

Still, the new year is a great time to make changes and future plans, so there’s no need to panic if the second scenario sounds familiar. Instead, consider the following steps to get the ball rolling:

Seek professional assistance

Now that you’ve decided to sell, consult with a professional to determine the next steps. The type of professionals you enlist depends on the complexity of your business and the amount of time you are willing to devote to the sale.

Reputable and experienced professionals are necessary for avoiding legal and financial roadblocks during the sale. They can also help you reach a more favorable outcome. A professional sales team is typically comprised of several players, including accountants, attorneys, business brokers, appraisers, and consultants. That may seem like a long list, but depending on your needs, it may not be necessary to recruit them all.

Determining which professionals you need on your team requires a deeper understanding of how each professional fits into the selling process. This insight, as well as a clear understanding of your own business needs, will help you select the right players for your team.

Define your goals

Before you pull the trigger on exiting your business, stop and ask: “why am I selling?” It might seem like a useless question, but believe it or not the success of your sale hinges on the answer.

There are many reasons why owners decide to sell — retiring, moving, diversifying and burnout are the most common. Your answer and how you present it influences potential buyers’ view of your business. For example, if you are clearly frustrated and burned out, buyers may hesitate to put themselves in a similar situation. The answer can also determine the speed and potential profit of the sale — a lower price will likely result in a quicker sale versus waiting out for the highest bid.

There are also after-sale goals to consider. Are you concerned about what happens to your business after you leave? What do you plan to do next?

While some sellers prefer to maintain contact and stay on as an employee or consultant, others walk away without turning back. It’s up to you to decide whether or not a significant change will have a negative impact on the business and whether or not you want to alleviate this by staying on.

If you decide to offer seller financing, you could attract more buyers and receive a higher sale price. You could also profit from collecting future interest. Yet, if the business fails under the new owner, you would lose interest income and incur expenses trying to collect on the debt.

Research the Market

Research is necessary to understand the current market and secure a fair price for your business. Luckily, the current market is strong and presents sellers with an opportunity to receive top dollar for their businesses. However, it’s still necessary to evaluate the market and see where your sale fits. Compare your business with others in your industry to avoid misvaluing the sale. While undervaluing your business is an obvious disadvantage, overvaluing your business can delay and even prevent a sale.

Fluctuations in the market will provide insights about the best time to sell in your industry. A professional broker can help with this, outlining the trends and providing you with more precise timing and an accurate asking price.

Boost Value

After investing years of blood, sweat and tears in their companies, owners are often disappointed to learn that the real market value falls short of their expectations. To avoid this shock, get a realistic assessment of your business and then take the time to increase its value and make it more attractive to potential buyers.

Your business’s value is directly tied to its profitability. Boosting sales, reducing costs and eliminating inefficiencies leading up to the sale will increase profitability and attract more qualified buyers.

Value is also tied to your business’s tangible and intangible assets (goodwill). Not only is there value in you furniture, fixtures, inventory, and equipment, but also your intellectual property, branding, customer/vendor relations and reputation.

A fresh coat of paint can add value to your business, but so can a strong Internet presence. Because websites are often the first online impression you make with potential buyers, they should always look professional and up-to-date, including links to your social media pages. Consider doing a Google search of your business and check for any information that needs updating.

Are you ready to sell?

The decision to sell your business is exciting, but it shouldn’t be made in haste. An impulsive urge to sell can blind owners to the fact that a beneficial sale takes time, research and preparation. It also requires guidance from the right professionals. The more time you invest in outlining your goals, making your business desirable and enlisting the right assistance, the more likely you are to experience a smooth sale process — and receive a higher price for your company.

Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

Obtaining a Fair Market Value for Your Business

Divestopedia published a rather insightful article, “Letting the Market Bridge the Valuation Gap.” In this October 2018 article, Dave Kauppi dives in and explores how fair market value can be used as a way for business owners to “bridge the gap between the valuation they feel they deserve and that which they’re likely to receive.” This, of course, increases the chances of a deal actually taking place. Let’s turn our attention to some of the key points in Kauppi’s informative article.

Understanding the Reality of Selling a Business

One key point is that only a low percentage of businesses actually sell on their first attempt. The article points out that a mere 10% of businesses that are for sale are actually sold three years later; this is a simply brutal fact. Few facts, if any, help underscore the value of working with a business broker more than this point. Selling a business can be difficult under even the best of circumstances. The process is complex, and most sellers have never actually sold a business before.

Divestopedia believes that it is critical for business owners to have realistic expectations regarding valuation. As the article points out, the market doesn’t care “how much money you need for retirement,” or how much you’ve invested.

Four Points to Consider

According to the article, it is important that business owners understand that a few business characteristics will ultimately drive the sale. There are four key factors to consider: contractually recurring revenue, durable competitive advantage, growth rate, and customer concentration.

There is a lot packed into these four points, but here are a couple of big takeaways. In terms of customer growth, if a large percentage of your business is derived from a single customer, then that is going to be seen as a problem. As Divestopedia points out, if your company is dependent and partially dependent on a single customer, then you can expect a lot of pressure for you, as the business owner, to stick around a lot longer to ensure that this key customer isn’t lost. If intellectual property, such as software, is involved, then things can get even more complex. In the end, determining value in technology-based companies can be more challenging.

In the end, working with a seasoned business broker, one that understands valuation and how best to get there, is a must. You want to receive the best possible price for your business. An experienced business broker will help you understand how to navigate the complex process of determining a price. However, and most importantly, a business broker will help you achieve a fair market value so that your business doesn’t remain unsold for years.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Call Colonial Business Brokerage today at (443) 982-7332.

Copyright: Business Brokerage Press, Inc.

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