pdakin

Year end is a great time to be prepared for the next year.  This is no different for the owner preparing for the sale of a business, though the strategy and focus may be a bit different. A business owner preparing to sell should also be prepared to run the business forever.  It may not sell or sell as fast as the owner prefers.  If it does not sell, the owner wants the [...]

Inventory is a key portion of many business-for-sale transactions.  Brokers handle it differently.  Some include it in the value of the business and others conclude the value does not include the inventory and add it on top.  I am one of the former though have listed business with inventory on top of the value determined from a weighted value of cash to owner and assets.  However,  when this latter is the method, adding [...]

Just how many times in a business sale transaction does one want to utter "Because I'd have to kill you."  Lots.  Confidentiality is very, very important. Yesterday I was off to pick up a package from a client.   The very most efficient way of getting the material was to pick it up at his place of business.  We talked about the plain white envelop with just my first name on it.  (Note my [...]

A number of people are asking "Aren't there a lot of businesses on the market now?"  Their further comments suggest that many business owners are likely selling because they are not doing well.  This could make business buyers nervous. It just is not so.  Entrepreneurs are smart.  They know that their business will sell for more if it is performing better than the current enconomy allows and that their investment will produce more [...]

I meet with prospective business sellers routinely.  We get chatting about the value of the business.  They give me the materials to value their business.  I come back with a proposal, a likely formula might be terms of 1/3 down by the buyer and the seller finances 2/3.  Two of three sellers then say, "Oh, I won't sell my business and finance the buyer.  I must have all cash." The usual concern is [...]

Certainly in the art of buying and selling businesses, financing can be a key component, perhaps one of the larger features needing attention, often of both buyer and seller.  This year of economic downturn, financing has become in some cases very complex and in others much more simple.  The latter "simple" is reflective of the ONLY way a buyer will be financed is with a willing buyer.  Typically when I meet with a [...]

When I take a break from selling and working with businesses, my husband and I often take a walk past some horses.  On each of these outings we get all the way to where the horses are and THEN remember we should have brought carrots.  Now the horses will likely never forget they like carrots even if we don't bring them every time or bring too few.  Likewise, entrepreneurs are not going to [...]

Business sellers like most folks really don't enjoy paying taxes.  Yes, really. A wise business buyer, uncertain about the true revenues of a business for sale, can get a sense of reality by examining sale tax and federal income tax filings.  Usually sales tax filings include a record of revenues received and are usually filed close to the end of the reporting period.   Likewise federal income tax reporting shows total revenue, though often [...]

Both a business and house for sale need cleaning. In fact the business for sale may have more cleaning to do than the house.

When is it too soon for preparing a business for sale? Is the buying stage too early? Perhaps not.