Selling a Business -Its about Time

Selling a Business- It’s about Time

Selling a Business is a process.  Many factors go into a successful business sale.  I am an experienced Business Broker working with business sellers and business buyers in both South Carolina and Florida.

Below is a description of the role time plays when selling a business. And how one should take the time to plan a business sale and understand if the timing is right when selling a business,

Selling a Business Its about Time

When selling a business, setting the right selling price is important, finding a qualified interested buyer is important, finding the right deal structure is important and in the background of all of this is TIME.

The money involved with selling a business is the engine that that drives the deal forward but inevitably time is the steering wheel that affects where and when the deal goes through.

What affect does time have on the selling a business process?

  1. Is it the right time for the business owner to sell his or her business? Are they ready financially and emotionally?
  2. Is it the right time to try to sell the business according to the economy. A few years back during the recession (or whatever you call it) was it the right time to sell a business when business lending was significantly down and sales and business performance were down?
  3. Is it the right time for a business buyer? Is it the right time in the business buyer’s life?  In all my experiences most business buyers mostly, but not always, seem to fall in a certain age demographic of say 30-55 years old. So often someone under 30 may have the interest in buying a business yet may not have the financial means.  A business buyer over 55 may have the financial means yet may not have the energy or perceived time horizon to engage in the long term decision. Or family situation can also affect timing. (That being said I did personally buy a business when over 55 years old).  But the time needs to be right for the business buyer
  4. When selling a business, how much time is needed to sell a business. How much time will pass between the decision to sell, to signing documents at a business sale closing? I’ve sold a business that took 3 days to sell and sold another business that took 3 years.  An often misunderstood part of selling a business is how much time is involved in selling a business.  Yes it does happen sometimes when someone knocks on your door , offers to buy your business, and soon after a business sale occurs.  But that scenario is definitely not the norm.  Using a business broker is a decision that should strongly consider time.
  5. Most business owners I know have a full day handling their business. For many, this is an understatement.  But generally most business owners are busy running and growing a business.  How does a business owner find the time to add on the added responsibility of trying to sell their business.  Selling a business involves putting together a marketing package, marketing, vetting prospective prospects, trying to maintain confidentiality, securing NDA’s, etc..  All this occurs before meeting with prospective buyer.  Offers, Due Diligence handling, contracts, etc. are all elements that may occur after finding a buyer, and all of this requires time. (and a certain level of expertise)
  6. If the Buyer needs bank financing to buy a business- how long does it take to secure financing? If the Seller is offering to stay on during transition how much time is he/she willing to stay on for?
  7. More than likely the Seller will agree to a Non-Compete upon a successful business sale. How much time is the non-compete in effect for?

 

Is the time right for selling your business?  Is the time right for you?  Are you ready mentally and financially?  As a business owner selling a business- do you have the time?,   As a starting point take the time to seek some answers to these questions.  You may not have the time but must make the time to properly analyze this very important decision.

Scott Messinger is a Professional Business Broker working with business owners looking to sell their South Carolina Business or Florida Business.  Also working with business buyers throughout the South east USA, throughout the nation, and international business buyers as well.

Currently represent businesses for sale in Anderson South Carolina, Greenville South Carolina, Pendleton South Carolina, Pickens County, Jacksonville Florida as well as other areas of South Carolina and Florida.

For More information email  Scott@GatewayBusinessAdvisors.com or call (864) 210-8226

Selling a Business Current Market Information South Carolina Florida

Thinking about Selling a Business Or Buying a Business?   September 2017 Market Information

As a Business Broker Professional, I participate in Quarterly National Surveys along with over 300 other Business Broker professionals. The below are highlights of the most recent results and represents 293 Business Brokers and Advisors in 38 states and over 250 businesses sold in last 3 months. I focus working with Business Sellers in South Carolina and Florida, and work with buyer prospects througout the USA and international. Below are some highlights of these survey results.

What did these 250 + business sell for from April-June 2017?

selling a south carolina business

 

 

 

Businesses sell for a “Multiple” of SDE (Seller Discretionary Earnings)- which is similar to Adjusted Cash Flow- essentially what does the business make for an owner and what could it make for a new owner.
Again, the Multiple Paid for a Business is dependent on size (with some variation- some industries do get paid a higher multiple than other industries). The Multiples paid for businesses sold over the last several years have been somewhat consistent with the average multiple paid for a business that is valued under $1M is approximately 2 X SDE.
How Much Cash at Closing? –

Selling a business

 

 

 

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Some Seller financing is typical in business sales of all sizes.Furthermore business buyer rarely walk in with 100% of the Funds needed out of their own pocket. Very often for a business buyer to come up with the 75-86% cash at closing, financing from a bank (often SBA financing) or other financing is secured by buyer to complete the acquisition. For smaller businesses having the business meet the qualifications for an SBA loan can be a challenge and can make a sale difficult or worse.
Where Do Business Buyers Come From?

buying a South Carolina Business

 

 

 

 

As you can see above, the smaller businesses may find a buyer “down the street”. But the search for a buyer almost ALWAYS requires a search and marketing that includes local, regional, statewide, nationally and often international.

Who Are the Business Buyers?

Buying a South Carolina Business

 

 

 

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Again, searching for a Business Buyer includes marketing for 1sttime buyers, and experienced business owners for “smaller businesses”. But depending on business size contacting competitors, other strategic buyers, and larger investors are all active applicable business buying prospects.
Thanks to the survey information and IBBA, M&A Sources, Pepperdine Capital Markets Project, and the Graziadio School of Business and Management at Pepperdine University.
For more information please feel free to contact me- Scott Messinger
working with Business Sellers in Greenville South Carolina, Anderson, the entire Upstate and Florida and business buyers throughout the USA and internationally.

 

I am currently working for business buyers looking for:
:: Salon Greenville SC area
:: Aviation Parts Business S.Carolina
::Business earning $100k+ cash flow in Upstate
::HVAC Business
::Mfg Business w/$400k+ cash flow in Upstate
::Home Service Business
::Pest Control Business
::Multiple Buyers looking for businesses earning $1M+ cash flow
:: Janitorial Business in Florida
Pack and Ship ANderson SC

Businesses that Want to Sell

Business Owners Have recently Expressed Interest in Selling their business: ….
*Window Cleaning
*Auto Parts online and brick/mortar
*Computer Service
*Hair Salon/Spa –
*Metal Refinishing-
*Commercial Contractor
*Electric Contractor
*Sports Bar – SC
*Carpet Cleaning –
*Ethnic Rest.
*Printing Business

Contact me for any
further info on these or more information on selling a business in South Carolina.

September-2017-  “Whats Important When Buying or Selling a South Carolina  Business
How long does it take to Sell a Business??
I have sold a business in 3 days and one took 3 Years.
I would advise the “average time” to sell a business could be 9-14 months.
If wanting to sell your business next year…. start the process yesterday.

For More info on Selling a Business or Buying a business in SOuth Carolina – Anderson, Greenville, Spartanburg, Clemson, Easly, Greer, Pickens The Upstate and all of South Carolina Florida as well please contact Scott Messinger at:
Scott@Gatewaybusinessadvisors.com

SC- (864) 210-8226
FL (239) 770-2421

 

 

 

Selling My Business – How Much is my Business Worth

Selling My Business How Much is my Business Worth.  Almost all businesses are for sale to some degree. Lets say your business is not For Sale. Assume  Your business is worth $500,000.  You love what you are doing, someone contacts you with an offer to buy your business for $900,000.  Is your business now For Sale? The preceding is not a likely scenario for most business owners.  To successfully sell your business planning and preparation is needed.  But if you are now or at some point considering the sale of your business you may want to consider the following 3 points:Planning on Selling my Business

1.     Identify your honest interest level  when selling your business. Early in the decision process of selling your business consider what approach you may take towards selling your business.  As a Business Broker working in both South Carolina and  Florida I interact with the various interest levels by small business owners.

  • My business is not for sale but if someone walks in and offers me way more than what I think it is worth- I would consider selling my business
  • My business is not for sale but if you run across someone that would want to buy it please let me know.
  • I want to pursue selling my business but I won’t sell it for less than…( A somewhat inflated price) .  I am willing to accept that it may take 1-2 years to sell my business, and if priced too high I can accept the fact that my  business may not even be sold.
  • I want to pursue selling my business and after significant due diligence I feel the price I am seeking is consistent to what other like businesses have recently sold for.
  • I want to sell my business and I want out now.  I will set my price aggressively and set a lower price than price currently sought for businesses similar to mine.  I will expect this aggressive pricing to both help me sell my  business and decrease the amount of time it will take to sell my business.

If you do have a true interest in selling your business as suggested in above  last 2 points you do need to  exercise due diligence to gain understanding of what the value of your business may be.

2.    You can expect that the  perceived value of your business to you and the value of the business to a potential buyer will probably be 2 different values.

  • Ultimately the price of your business is what a willing and able buyer is prepared to pay to buy your business.
  • Seek “reasonableness” to your price that you will seek to sell your business for. If similar businesses to yours are sold at 1 1/2 times adjusted cash flow, why is yours worth 3 times adjusted cash flow?
  • Ask yourself what you honestly would pay to buy your business.
  • Do a free Search on my website http://sellabusinessadvisors.com  0r similar sites to research what similar businesses to yours is asking to sell their business for.  Remember – all businesses are different, but use such a search as part of your due diligence.  A business for sale asking price and the price a business sold for can be greatly different, but asking prices can provide some basis-while current  Businesses Sold information is more pertinent
  • Speak to your trusted advisers.  A business broker may be able to help with non-public info on sold businesses in your area.  Your accountant or attorney also  may or may not be aware of such sales as well.  A Professional Business Valuation specialist may benefit you.

3.    Whether it  is part of your exit strategy to sell your business or not, you should have an exit strategy.

  • Most small business owners do not have an exit strategy. “I haven’t thought about Selling my Business”
  • We all desire to exit our business on our own terms rather than an exit forced by health, business downfall, or other life changing situations.
  • If you own a business you should have an exit strategy.  Do some planning, perform some due diligence. Know what you have or may have.
  • Even if you are not planning to sell your business there is value in knowing  approximate value of this potentially large asset.  You know what your house is worth, you car, your other assets. Understanding the value of your business can be a significant piece of information when planning ahead.

Selling my business  in South Carolina or Florida can be a rewarding experience when done properly.  Understanding  a proper value for your business can set the stage to a successful sale of your business..

For more information or interest in a confidential meeting please contact me Scott Messinger  at Scott@GatewayBusinessAdvisors.com.  Business Broker Licensed in both South Carolina and Florida

Number One Reason For Selling Your Business

What is Number 1 Reason for Selling your Business

– Thinking about Selling your South Carolina Business?

What is the Number 1 Reason I hear when speaking to Business Owners about selling their business?-  Why are you looking to sell your Business?  — ” Because  I Am Ready”.     For those of you who have owned a business for any period of time this is a response that is fairly easy to understand.

Selling Your Business

 

I am a business broker working in both South Carolina and  Florida (and business owner)  and speak to many prospective buyers and sellers of business and understanding  the “Why” for both parties is so important in assisting the buyers and sellers of businesses.  I really think that most people that have given a fleeting thought to buying a business believe that business owners want to sell their business and therefore something must be wrong with the business.  Actually I am currently working on selling a Landscape Business in Florida.

The business owner has a  good quality business for sale, good cash flow, a comfortable lifestyle.  He has owned the business for x years and is “ready to do something else”.  He will be relocating out of state, he owns a successful business he is looking to sell. Recently we spoke about the potential purchase of another business in an unrelated field and his hesitancy about buying a business because why would someone sell a “good” business- .  And this comment is coming from someone selling a “good business”.

I also am currently helping an owner of a Computer Service Store For Sale who`s revenues are up 30% over last year, Profits are up 20% plus and is seeking to sell his business at less than 1 times annual adjusted cash flow.  He also is anxious to start a new business opportunity with a close friend, and that endevor is awaiting the sale of his business.  A good business at a good price and the owner is “ready to move on”.

Solid Reason For Selling Your Business

What is the number one reason for selling your business?

Good businesses get sold for very good reasons.  Being “ready to do something else” is a good reason.    A seller of a business needs to be ready to sell.  Really- you only really exit your business by 2 means.

1. By your choice-your timeframe, your plan.

2. Not by your choice– closing due to business failure, business conditions, bankruptcy,Forced Sale.

Granted there may be certain undesirable business or personal events that prompts one to “be ready”.  A business owner may have additional employee problems and decide that enough is enough and that is the impetus to sell ones business.  New frustrating regulation, customer problems, and any one of numerous  problems a business owner may face may be  the “final straw” and induce a business owner to pursue the sale of the business.

But again for any  business owner that has owned and managed a business for an extended period of time problems such as these come and go.  Business can be going quite well and the owner may just be ready to move on.  Actually selling a business while the business is doing well is a well thought out exit strategy for a business owner.  And yes problems can and, do come along with the business.  Problems within the business does not make a business a bad business.

A business owner may “just be Ready” to:

  • retire
  • try  something new- a second career
  • want to move or relocate
  • Just be done running the business I have been running for the last 20 years

I am not aware of the existence of a Perfect Business. Even the best of business opportunities will likely contain issues and or undesirable situations.  But if you truly want to own your own business and move into the role of business owner- Understand that good business are being sold by business owners that are just ready…. to move on.

Scott M Messinger is a Business Broker in Anderson South Carolina and Florida as well.  I work with both business sellers and buyers.  Looking to sell your Anderson South Carolina business or Selling your Upstate business?  Contact me for a free confidential discussion.

Selling With Your Ears -a Business Broker Perspective

SellaBusinessAdvisors.com

Selling with Your Ears – a Business Broker Perspective.

“Nothing happens in this business until somebody sells something.”

Are you a salesperson?  If you are in a small business or a startup I would be stunned if you said no.   I have  been with several companies throughout my business career, small, medium, and a large Fortune 100 company, some as an employee and some as an owner.   My role currently as a business broker is to help people with the process of buying and selling businesses in Anderson South Carolina, Florida, and Southeast USA. .  How do you find people wanting to buy a business or sell a business- prospecting.

Whats The First Thing I Do When Meeting This Prospect- Listen.

My job of working with those in the buying and selling of businesses is really really a job of listening.  I recall one of my first jobs out of college I was hired by a Fortune 100 company, and they would send all new employees off to corporate headquarters for 45 days of fairly intensive training.  Training as a salesman/woman for that company involve quite a bit of technical knowledge on their products along with sales/marketing/time management skills.  I studied the technical aspect of this product extensively.  I felt when I got in front of a prospective client I just had to let him know all I had learned about this product without really slowing down to hear what they wanted to know.  It seems a little silly to me now, but then I felt it was my job to tell them all I knew.

Today, to me, selling is listening to a customers needs and proposing a solution.  Today I listen/work as a South Carolina Business Broker.  I work with those buying and selling businesses.  There is so much that goes into such a complex process that include the emotional side, the financial side, the timing, family, friends, employees, loyalties, that without listening to what a persons true interest is seems so mis-guided.

Overall, I’ve found Salespeople can seem to be looked at in a negative way by other departments within an organization, can be looked at disparagingly thru movies and stories, but my perspective on sales process or the sales person is a little different.  I have a strong admiration of those involved with the sales process.  The sales process can be defined in many different ways from taking orders over the phone to the full cycle process of identifying a target market, prospecting that target market, approaching that target market, and ultimately trying to parlay those contacts into gainful customers. The production department, or the service department may not like all the actions of the sales department, but very often the jobs in the production department or the jobs in the service department are dependent upon the sales department.  I guess  its ok to not like the salesmen or saleswomen in your company but from a business perspective you can not discount their value.

Some thoughts on Selling:

  1. Were not selling stuff, were selling solutions
  2. Selling is not trapping a prospect in a room or on the phone and subjecting them to our “pitch”, selling is maybe 80% listening 10% asking followup questions and 10% wondering if you have asked all the pertinent questions
  3. When selling are we telling them what we want to tell them?, or responding to what they are asking for
  4. The true full selling cycle from development to implementation to closing a sale is an admirable achievement.  Most that are successful at this can find many successes in business.
  5. Many (maybe most)  Presidents,  CEOs, Vice-Presidents  began their careers as a salesperson
  6. All in the company should have a role in sales from CEO/President to receptionist- Do you think Steve Jobs- Apple, Bill Gates- Microsoft sells? – Absolutely
  7. Listening is a skill…  and maybe a salesperson biggest potential asset. – Like many others,  I was fortunate to be born with 2 ears and just one mouth.
  8. STOP- and pretend you are the buyer of your product or service- what do you want to hear?

I cant imagine meeting a person that wants to buy a business and not asking them what type of business do you want to buy?, where do you want to buy that business?, how much do you want to spend on that business?, what is important to you when buying a business? and so on.

When a person wants to meet with me regarding selling their South Carolina  business, or Florida business- I would like to know why do you want to sell your business?  When someone runs a business for 5,10,20 ,30 + years the why can be a pretty compelling answer.  I continue to ask more questions and listening. It almost doesn’t even sound like selling, and I think there is nothing wrong with that.   Maybe listening is a byproduct of experience, or maybe it is taught, or maybe some people are just better listeners than others.  And maybe that’s what makes one a  better salesperson than others.

Scott Messinger is a Business Broker based in Anderson South Carolina and working with business Sellers in South Carolina and Florida.  Also working with business buyers throughout USA and Internationally.