pdakin

Recently a business owner was asked directly by the buyer of the business for a current year cash flow.  The seller produced a cash flow and gave it to the buyer. The buyer was elated as it showed more cash flow than the profit and loss statement demonstrated. Unfortunately the business owner did not know about this particular form of cash flow and the buyer was misleading himself.   The term cash flow means [...]

Always, if I can buy local, reasonably, I do. It happened that yesterday, while in Albuquerque, I needed to make a small purchase, $1.95. The purchase was of a miniature skein of yarn to repair the dreaded moth holes in my lovely sweater. I have never before been to the Yarn Store at Nob Hill.  The place was hopping.  The owner was taking care of my minor need.  If you know yarn, the [...]

Entrepreneurs come in the not-so-detailed, detailed, and everything in between definitions.  Just like the rest of the human race. One of my clients has an office in their house.  Each hard-copy document is neatly placed in just the right three-ring binder.  The documents range from every sale ever made, to photos of the inventory, the past umpteen years of financial performance.   The computer has sections for this and that and the other. Another [...]

Once I ran medical office businesses.  Some were urgent care facilities.  After several years, it became clear that there was no rhyme or reason to the revenue flow.  The only thing that was clear was on the days I would visit any specific location, there were no patients.  They had either come the hour or day before or would after my visit.  This period of  my professional life was when my first gray [...]

Many entrepreneurs dream of developing their business to a point where they can add staff and other assets, relieve the pressure of doing everything, and focus on managing. Then the point comes when just one more customer has arrived and it makes sense  (perhaps) to take the next expansion step.  Judging the time for this is difficult…not too soon and not too late.  Following are considerations for operational/cost expansion as well as those [...]

Business Owner:  My business is starting to recover after the economic downturn. There is no single answer to this question “Do I sell now.”  Many business brokers are reporting that their sales are up this year.  This swing from low sales to higher sales is not necessarily based on greatly improved business-for-sale values.  Instead the brokers report that the improved sales are because owners are deciding to reduce the sale price and take [...]

Recently one owner of a business died, the father.  He and his wife had started and operated the business together.  He became ill and after a long health crises, one with ebbs and flows, he died.  His role with the business also ebbed and flowed as his health demanded.  The wife was increasingly responsible. Knowing he was ill, they took steps to put a will in place.  His share of the business was [...]

Recently, at lunch with business owners, I was asked what are a couple of must dos for business owners that eventually want to sell. The first thing that slid off my tongue was “don’t be sloppy.” You know what a sloppy business looks like.  It could have one or more of these characteristics: Records are messy. Taxes are not filed. The facility is not neat. The attire is not attractive. The way people [...]

Thank you to Jacqueline for her guest entry. Most articles I have read tell the business owner considering the sale of his or her business to focus on tax, accounting, income, and legal aspects of preparing for a sale. The value of the company, customer data, and assets and real estate are all equally important.  Key to success is involving a business broker, CPA and lawyer. But when determining the value of the [...]

  It is not true that declining businesses never sell. They do.  But, key is whether there is opportunity for recovery. A buyer needs to evaluate the business for opportunities to improve, change the model, enhance the product, etc.  Counter to improvement is whether the industry has reached its peak and recovery is possible.  Is it merely the economy that is dragging this business down. The seller needs to understand that a bargain-basement [...]