Good Grief! Why did I buy THAT business for sale?
As in any big purchase, buyer’s remorse is not so unusual in business-for-sale transactions. Buyer’s remorse should, however, dissipate after a month or so and the new business owner gets into the rhythm of the business. For purposes of this discussion, lets assume that the price paid was fair for all. When exploring a business for sale, one of the first questions a prospective buyer should ask is “can I [...]
Buyer’s Liquid Money – Business For Sale
Some months ago, I asked a prospective buyer of a business for sale transaction "What liquid cash do you have to invest in a business." The answer was, $200,000. The business for sale was priced well and likely eligible for financing with the right buyer. $200,000 would have been 1/3 down plus enough working capital. As time went on, the buyer spent his time and the time of the seller, [...]
Buying a business for sale? Picture yourself there.
Prospective business-for-sale buyers should be able to picture themselves as the owner. This can be different pictures for different buyers. Lets say the business is an engineering firm and the current owner is an engineer. The firm is large with plenty of engineers. One new owner could replace the owner as the lead engineer. Because of the size of the firm and the depth of engineering strength, another new owner [...]
Business for sale: non-compete
Your business is for sale and you are planning your next adventure. What is reasonable for a buyer to expect you to not do? In a boilerplate offer I have, the text reads "COVENANT NOT TO COMPETE. Seller hereby agrees not to engage in any business or activity anywhere in the United States, directly or indirectly, as an owner, employee, consultant, or otherwise, which competes with Purchaser’s operation of the [...]
Want to sell your business? Grow the business.
My editor husband would say, “You don’t grow a business. You develop a business.” One of the goals a business owner might explore is that of selling the business for more than it was purchased for. Buying right, at a discount, or increasing the net to owner can achieve this. Since selling a small business is usually based on cash flow to owner, to sell it for more means you [...]
Go into business to sell a business
Dakin Business Group, co-sponsoring with Cole Financial Services and Kanaly Trust, recently held a seminar focused on the business owner's business investment as a piece of their entire portfolio...looking for balance. At the beginning of the seminar, we asked the participants to identify why someone wants to own their own business. Psychic reasons: Satisfaction of building and owning your own: Love it and have fun! Be part of the community: [...]
Pre-business-for-sale inventory -whew!
Don't underestimate the inventory process in a business-for-sale transaction. It can be daunting, contentious, and a deal-breaker. The inventory process can be done by any number of people. It can be seller and buyer, employees, hired counters. The more vested the individuals in the process, the more accurate the count. Having people count in twos, one calling out and one writing down is a handy method, helping to speed the [...]
Business-for-sale closing gone to the attorneys!
Got your attorney and accountant all ready, do you? In any transaction business-for-sale transaction, the closer you get to having a transaction completed, the more time you may want to spend with your personal business attorney and accountant and more need there is for asking well in advance for their time. As due diligence is performed, documents created, closing approaches with the myriad of forms to sign, it is likely [...]
Cows in Escrow – Business for Sale
In a (real estate/business) sales class, the example of cows for escrow came up. The lecturer used cows as an example of possible escrow. It was a true story. This is New Mexico after all. In fact a number of things can be escrowed. In the example being used in class, the cows’ owner wanted to buy something and had to put up escrow. He did not want to sell [...]
Buying a business – off to the close
When you are buying / selling a business, when are you ready to close? Sometimes the answer is NEVER! In some cases, everything seems to be moving just as it should and then the littlest but most significant piece is undone and can not be gotten over. Perhaps it is the transfer of the phone number. The buyer obviously wants, and usually needs, it and the seller can't part with [...]
Buyers of businesses for sale – be cautious.
Today I was speaking to a gentleman looking for a business to buy. He was lamenting his experience of having to dig out the problems during due diligence in case after case. Then walking away from the deal because it was not as it originally appeared. On the one hand he was apologizing for all of his questions but knowing that he had to ask. A business broker typically appraises [...]
Selling your business? Three Tips
When a buyer looks at a business for sale they really want to know three things. What is the business for sale for and what financial performance substantiates that price? The business that can show year after year of growth, the longer the better and net to owner that also demonstrates growth will be more successful at achieving a great price. What is the outlook for the company? Is there [...]