How to Sell Your Business for More

How to Sell Your Business for More

How to sell your business for more.  At some point a business owner considers selling their business.  Sometimes it is just a fleeting thought.  Sometimes its a thought of  “I don`t need this anymore, get me out”.  Other times its a well planned out progressive process.  You want to sell your business- how do you sell it for more.

This sounds like a fairly straight forward approach, but just as the selling of a business process can be very involved, the question of how to sell it for more firstly needs definition.  I am a business broker based in Anderson South Carolina, focus on businesses for sale in Florida and South Carolina,  and speak to many many business owners about the potential sale of their business.  I also sold my own business several years ago.

Selling Your Business When The Time Is Right

Selling my Greenville SC Business

Just consider the simple analogy of having a rusty bike in the garage with flat tires that you want to sell today.  You put it out at the end of the drive way put a For Sale sign on it- what do you think it will sell for?  How can you sell that bike for more tomorrow than you can today?

Selling Your Business For More:

  • Selling your business for more can be a very good thing and very reasonable goal.
  • Trying to sell a business for more than it is worth can ultimately result in your business not being sold at all.
  • Setting the Goal today to improve your business, prepare it for sale so that it is worth more after your improvements is probably your best approach
  • Wanting to sell your business for more than “what you heard a local competitor sold for” can also be a mis-guided path.

Preparing Your Business For Sale

So selling your business for more is a reasonable and understandable goal.  How do you get more for your business?  Start today preparing your business for sale.  Like so many of your other important business decision, prepare yourself a to-do list and systematically address those items.  Below are some items you will want to include on your to-do list to help ready your business to sell for more. Ask and honestly answer these questions about your business.

When looking at how to sell your business for more, ask yourself -How  are your financials?  Are there some unusual entries on your P/L that have escaped needed adjustment?  Are all sales accounted for?   Do you have a good clean P/L statement?  For smaller businesses Do you have a P/L and Balance sheet?

Again, when looking to sell your business for more, determine, how reliant is your business on you.  What can you do today to help your company be more about your company and less about you.?

How documented are your systems, procedures, policies, pricing structure?

Is your customer base as diverse as it should be?  How reliant is your business on a few key customers.  And again do those customers do business with you the business owner or with the company?

Do you have the opportunity to add recurring revenue streams to your business, but elected to not pursue?  Do you have some contracted customers that you just haven’t updated contracts with?

When analyzing how to sell your business fore more, Spend some time to meet with some of your trusted advisers.  Dont rely on information you hear through the grapevine about this person selling their business for this amount.  Talk to your attorney, your accountant , or visit with a business broker start to really learn the marketplace.   Have you scraped the rust off your bike?, painted it ? oiled the chain? pumped up the tires?  put an ad in the newspaper? on the Internet?- Is your bike worth more today than it was yesterday?

How do you sell your business for more tomorrow or next year  than it is worth today?  Start today preparing your business for sale.

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 or to discuss how to sell your business for more, email  Scott@GatewayBusinessAdvisors.com or call (864) 210-8226

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 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.

Steps Involved with Selling a Business

Steps Involved with Selling a Business

There are many steps involved with selling a business

Steps Involved with Selling a Business

Steps Involved with Selling a Business

Buying or Selling a Business is a process.   The below provides a framework to define the steps involved with selling a business in South Carolina, Florida or SE USA..  The size and type of business that one may be buying or selling will influences the complexity of each of these steps.  I am a Business Broker based in Anderson South Carolina.  I work with Business Sellers in South Carolina, Florida and Business Buyers locally, throughout the US and International as well.  Every Business Sale transaction is different but share some similarities as well.

1)  INITIAL INFORMATION REVIEW– Gathering needed information and protecting that information ensuring Confidentiality and Non-Disclosure Agreements are signed to assure confidentiality related to this  private matter.  Irreparable harm can occur if the confidential content of discussions and negotiations are improperly disclosed. Seller reserves right to approve potential buyers and may require that additional buyer information/capability be submitted before confidential information is released to the  buyer of the business.

2)  THE INITIAL MEETING: At the first meeting, the potential   buyer of the business  will want to know specifics from the owner potentially including  seller’s motives for selling the company as well as more detailed information about the business.  Conversely, the seller will want to know how if  the buyer is the type of person to whom he wants to sell the company. If the results of the initial meeting warrant further consideration of the deal, the buyer will next begin to evaluate the company and develop a financial structure for the proposed business purchase.

3)  THE LETTER OF INTENT/PURCHASE CONTRACT: Either a contract with

contingencies or a letter of intent will be presented. A letter of intent may have an ” escape clause”  in it to allow one or both parties the opportunity to withdraw from the deal if certain conditions are not met.  The letter of intent will address :

  • The purchase price/ consideration – Selling price of cash, notes, equity, or some combination of these.
  • What is being purchased — Assets, liabilities, and operations that are being transferred to the buyer and those being retained by the seller should be identified.

    Structure — The parties need to agree about whether the sale will be a sale of assets, a sale of stock, a merger, or some other structure. Whether the SBA, bank, or owner takes back a note, the company cash flows must be able to support that loan.

  • The definitive purchase agreement — As the buyer begins its detailed evaluation of the company, the attorneys will be preparing the purchase agreements. The Sales Purchase contract is usually drafted by the buyer’s attorney.
  • Due diligence — The seller will need to have ready his financial records, all corporate records,pertinent  contracts and all pertinent other  documents  that the buyer of the business will be requesting for review once the letter of intent or contract is signed. This will allow the buyer of the business to analyze the company in greater depth to determine whether everything has been represented properly, whether he wants to buy the company, and, if so, the appropriate price to pay. A purchase price is usually negotiated based in part on historical financial information. and future potential earnings.
  • Escrow — The buyer will establish an escrow account  into which his initial  Good Faith deposit of monies shall be deposited and handled by a 3rd party escrow agent .
  • Other significant items-  non- compete terms,  and employment contracts.   leases and long-term purchase contracts, and any other pertinent business agreements shall be addressed.
  • Professional fees – Usually the buyer and seller will bear their own costs for attorneys and accountants.
  • Conditions and Timing for closing. Usually the closing is within two weeks after all contingencies have been completed, and like most steps in the buying or selling of a business this time is negotiable.

4)  CLOSING– Once all issues have been resolved, the documents are signed, and the consideration exchanges hands, the deal is in condition to close. The actual closing marks the conclusion of the process.

Again buying or selling a business is a process and depending upon the size of the business and type of business this process from start to end can take several months or even longer.  There are many steps involved with selling a business.  Due diligence when buying or selling a business is a very important part of this process. Negotiations are made at most every step of the process as new information becomes available and additional analyses are performed.

In a successful negotiation, both the buyer and the seller need to be flexible and to understand which points are important  and which ones may be “deal breakers”.  Most people may buy or sell a business maybe once in his or hers life.  Following  the advise of a trusted advisor such as a business broker can help increase the likelihood of a successful business sale or business acquisition. The steps involved with selling a business can vary and each business is different yet the above is intended to provide basic framework.

 

Scott Messinger is a business broker based in Anderson South Carolina and work with business sellers in South Carolina including Anderson, Greenville, Spartanburg, Clemson and the Upstate areas.  Also work with Business Sellers in Florida and business buyers throughout the USA and Internationally. many areas of USA.