By: Trevor Crow, Dufford & Brown, P.C. Time is the biggest deal killer, so being prepared is the best way to put your business in a position to sell when the opportunity comes knocking. Selling a business is a time sensitive process. When a potential buyer is ready to pull the trigger, the business owner must be prepared to close the deal quickly or the buyer may lose interest or find another potential target. I believe it’s one of Newton’s laws of motion that says things in motion tend to … [Read more...]
When Is The Right Time To Sell?
July 24, 2013 by
The right time to sell a business essentially means that it is the best time to sell for both the owner and the business. In other words, both parties will profit from the arrangement to a greater degree than they would if they carried on in the same vein. Owners may find themselves in a position where they can now pursue other interests that bring them greater satisfaction in terms of time, energy and capital, while the business benefits from an injection of new blood. In order to ascertain … [Read more...]
Buying or Selling a Business: The External View
July 12, 2013 by
There is the oft-told story about Ray Kroc, the founder of McDonalds. Before he approached the McDonald brothers at their California hamburger restaurant, he spent quite a few days sitting in his car watching the business. Only when he was convinced that the business and the concept worked, did he make an offer that the brothers could not refuse. The rest, as they say, is history. The point, however, for both buyer and seller, is that it is important for both to sit across the proverbial street … [Read more...]
What Would Your Business Sell For?
July 3, 2013 by
There is the old anecdote about the immigrant who opened his own business in the United States. Like many small business owners, he had his own bookkeeping system. He kept his accounts payable in a cigar box on the left side of his cash register, his daily receipts – cash and credit card receipts – in the cash register, and his invoices and paid bills in a cigar box on the right side of his cash register. When his youngest son graduated as a CPA, he was appalled by his father’s primitive … [Read more...]
Burnout: An Ever-Present Threat
June 28, 2013 by
Burnout is an often-used reason for an owner selling his or her business. Potential buyers may have trouble accepting this as a valid reason for sale. However, burnout is a valid reason for selling one’s business. A business owner can experience burnout even with a business that’s successful and growing. Many independent business owners feel they’ve worked hard, made their money, and now is a good time to cash out and move on, before burnout endangers the health of the business. The following … [Read more...]
Five Top Tactics For Selling And Negotiation
June 28, 2013 by
Entrepreneurs who function using Occam’s razor to determine their strategic decisions inevitably fail to see the three-dimensional world of corporate business behavior, ultimately leading to results that are as superficial as the guidelines they use to build profitability. For those who favor simplicity as the solution to tactical problems, profitability is seen as the determinant of a business’ sales value. In the real world, valuations are far more profound, yet even strategic, open minded … [Read more...]
When to Create an Exit Strategy
May 3, 2013 by
There is the old saying that the time to develop an exit strategy is the day you open for business. Sounds good, but it’s not very realistic. Further, it also isn’t very optimistic. On the day you open for business, thoughts about how you get out of it aren’t pleasant, or helpful, thoughts. However, as you get the business to a place where you have a bit of extra time to plan, you will find that the things you need to do to improve your business are some of the very things you will need to work … [Read more...]
Five Kinds of Buyers
March 25, 2013 by
Buyers are generally categorized as belonging to one of the following groups although, in reality, most buyers fit into more than one. The Individual Buyer This is typically an individual with substantial financial resources, and with the type of background or experience necessary for leading a particular operation. The individual buyer usually seeks a business that is financially healthy, indicating a sound return on the investment of both money and time. The Strategic Buyer This buyer is … [Read more...]
Why Deals Don’t Close
March 14, 2013 by
Sellers Don’t have a valid reason for selling. Are testing the waters to check the market and the price. (They are similar to the buyer who is “just shopping.”) Are completely unrealistic about the price and the market for their business. Are not honest about their business or their situation. The reason they want to sell is that the business is not viable, it has environmental problems or some other serious issues that the seller has not revealed, or new competition is entering the … [Read more...]
