The amount of cash on the table and the asking price are directly related. Businesses involve some level of seller financing. It is typical for both sellers and buyers to have doubts about this kind of financing; after all, sellers do not want to take the business back from the buyer. The buyer wants to make enough money to help the business flourish and prosper.The best way to ensure the profitable sale of a business is to look to the experts. Screen out Window Shoppers Choosing to work with professionals can streamline the entire sales process. Many business owners are quite busy and don’t wish to waste time with people who aren’t serious about buying. They also do not want to tell their trade secrets to people who can’t afford to buy. Business brokers and M&A advisors know that most prospective buyers are just dreamers or will ultimately fail to qualify. When you work with experienced brokers you have a shield to protect you and your valuable time. Experienced brokers … [Read more...]
The Main Street Lending Program
There is no doubt that the COVID-19 situation seems to change with each and every day. The disruption and chaos that the pandemic has injected into both daily life and business is obvious. Just as it is often difficult to keep track of the ebbs and flows of the pandemic, the same can be stated for keeping up to speed on the government’s response and what options exist to assist companies of all sizes. In this article, we’ll turn our attention to an overlooked area of the government’s pandemic response and how businesses can use a whole new lending platform to navigate the choppy waters. As the pandemic continues, you will want to be aware of the main street lending program, which is a whole new lending platform. It was designed for businesses that were financially sound prior to the pandemic. Authorized under the CARE Act, the main street lending program is quite attractive for an array of reasons. Let’s take a … [Read more...]
Why Does Your Business Need Google Reviews?
In today’s business climate, reviews are the differentiator. Years ago, people commonly asked for references when they were vetting a product or service. But these days when people are searching for a local business to work with, they are likely to conduct research on their own and read online reviews. Google reviews can give businesses a big credibility boost without having to spend a dime. Let’s take a look at some of the key benefits. Increased Credibility & Trust According to statistics, approximately 91% of consumers read reviews to determine credibility of a local business. In fact, 84% of consumers say the positive reviews have helped them gain trust. Without the reviews, that level of trust would not have been established. Needless to say, people trust Google. The fact that these reviews are on a 3rd party website increases transparency. These reviews have much higher value than testimonials posted on the … [Read more...]
Seller Financing: It Makes Dollars and Sense
An important component of selling a business is, frequently, seller financing. Many potential buyers don’t have the necessary capital or lender resources to pay cash and, even if they do, they are often reluctant to put large sums of cash into what, for them, is a new and untried venture. This is particularly true in the age of Covid-19 with an extra degree of uncertainty. Seller financing has many advantages: Seller financing greatly increases the chances that the business will sell. The business will command a significantly higher price. Industry statistics show that seller financing results in an average 30% higher price. The interest on a seller-financed deal can add substantially to the selling price. (For example, a seller carry-back note at eight percent carried over nine years will double the amount carried. Over a nine-year period, $100,000 at eight percent will result in the seller receiving $200,000.) With interest rates currently the lowest in years, … [Read more...]
Dealing with COVID-19’s Economic Impact: Planning and Communication are Key
At the top of the list that you should have to deal with the COVID-19 pandemic is to be proactive. Now is the time to think about how to best position your business after the economy has returned to something near normal. Now is not the time for self-pity. In fact, not preparing for the relaunch of the economy will cost you. In author David Finkel’s recent Inc. article “10 Things Every Small-Business Owner Needs to Do to Deal with the Impact of COVID-19 on Their Business,” he outlines 10 key steps business owners should take immediately. Finkel has written 12 business books and is CEO of Maui Mastermind business coaching company. There is no way of knowing how long the COVID-19 fueled economic downturn will last, and that means time is of the essence. Business owners, regardless of their particular sector, need to prepare as though the economy could relaunch tomorrow. Finkel’s 10 Things: Take steps to protect your staff and customers from getting sick. Tell your … [Read more...]
Tips for Telework
Rajshree Agarwal, Professor of Strategy and Entrepreneurship at the University of Maryland, explores how to get the most out of telework in her April 20th, 2020 Forbes article “Three Keys to Engaged, Productive Telework Teams”. This timely article covers some very important territory for many companies dealing with the COVID-19 pandemic. We explore Agarwal’s key points so that you can help your team get the most out of telework. Agarwal notes that people may shy away from sharing personal information and feelings while in the office. But via video conferencing, the story can be different. This is one reasons it is necessary for employers to keep in mind that the dynamic between you and your employees is often different when using video conferencing. This will also be the case when your employees speak with one another. She prudently cautions business owners against taking a “business-as-usual” approach to the COVID-19 situation, as it can make them look both unnecessarily … [Read more...]
It’s Time to Exit. Are you Ready?
Thinking about whether or not you are ready to exit is an important question. It’s something that every business owner will have to address at some point. Importantly, you don’t want to wait until the 11th hour to prepare to sell your business. There are far too many pieces in this particular puzzle to wait until the last minute. You’ll want to begin the process sooner by asking yourself some key questions. Determining Value First, you’ll need to determine the actual value of your business. It is a harsh truth, but what you think your business is worth and what the market feels that it is worth may be two very different things. This point serves to underscore the importance of working with a business broker or M&A advisor early in the process. An experienced broker knows how to go about determining a price that will generate interest and seem fair. Remember that at the end of the day, it will be the … [Read more...]
What You Need to Know About the Golden Age of Business Acquisitions
Business acquisitions are red hot, and all kinds of businesses are being snapped up. Some people are under the impression that only large businesses are being acquired, but this is far from the reality of the situation. It would surprise many to learn that so much of the “action” is, in fact, small businesses buying other small businesses. In his Forbes article, “Take Advantage of the Golden Age of Business Acquisitions,” author Christopher Hurn explores the true state of the “acquisitions game.” His conclusions are quite interesting. In Hurn’s opinion, there has never been a more active time in the realm of business acquisitions. If you own a business and are looking to grow, then you may want to consider acquiring a competitor in order to consolidate the market. As Hurn points out, there are many reasons that you might want to consider acquiring a business in addition to consolidating the market. … [Read more...]
Determining the Right Time to Sell
Determining when it’s finally the right time to sell can be a tricky proposition. If you are thinking about selling your business, one of the best steps you can take is to contact a business broker. A good business broker will have years, or even decades, of proven experience under his or her belt. He or she will be able to guide you through the process of determining what you need to do in order to get your business ready to sell. One major reason you should contact a business broker long before you think you might want to sell is that you never know when the right time to sell may arise. Market forces may change, unexpected events like a large competitor entering your area, or a range of other factors could all lead you to the conclusion that now, and not later, is the time to sell. In a recent The Tokenist article, “When is the Best Time to Sell a Business?”, author Tim Fries covers a variety of factors in determining when is the best time … [Read more...]
Selling Your Business, Taxes & Tax Structures
It is never too early to start thinking about what tax structure you should use when it comes time to sell your business. A simple, but undeniable, rule of life is that taxes matter and they can’t be overlooked. Author Tim Fries at The Tokenist has written an excellent and quite detailed overview article on what tax issues business owners need to consider before selling their business. His article, “What Tax Structure Should You Use When Selling Your Business?” explores many aspects of a topic that many business owners fail to invest enough time in, namely taxes. As Fries astutely points out, the taxes involving the sale of a business can be complex and are usually unknown to those selling a business for the first time. Your tax structure can influence how much money you receive at the closing of your deal, so it’s a very good idea to pay attention to all aspects of taxation and your business. It is key to remember, “When you are selling your business – as far as taxes are … [Read more...]