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.

Selling Your Business Not to Donald Trump

Selling Your Business Not to Donald Trump

selling a business or buying a business

selling a business or buying a business not thru a rearview mirror

Donald Trump has bought many businesses in his career. He has sold many as well.  Most business Owners looking to Sell a Business have not sold a business before.   Likewise the majority of those that buy a business have not bought a business as well.

Like with most statements there are exceptions to the rule.

There are many Strategic Business Buyers that make multiple Business purchases within a year.  Sometimes a business owner had sold a previous business as well.   But from all my experiences involved with business buying and business selling over the last 25 plus years the majority of business sellers are selling a business only once maybe twice in a lifetime.

As a prior business owner and a current business owner and a buyer of multiple businesses, and a Business Broker in South Carolina and Florida I recognize the benefit of hindsight.  We all know in running or growing a business, we make mistakes.  We dont know it all.  But we know more than we did 10, 20 or 30 years ago.   How good can one be when doing things for the first time?  Very often you just don’t know what you don’t know.

Buying or selling a business is not a perfect process.  Things can and will go wrong during the process of buying a business and selling a business.  Things can and will go wrong while running a business.

I have never witness a Perfect Business being sold by a Perfect business Seller to a Perfect Business Buyer.

The goal to buying or selling a business for the 1st or 2nd time in ones life should be to mitigate your situations of “I didnt know that”.   Surround yourself with people that you can trust that have been through the process before.   Ask questions. Seek answers .

Below are some common misconceptions I have come across from both business buyers and Sellers.

  1. Business Seller- ” I want 100% of my Selling price to be paid at closing. I do not want to offer any financing”- To that I say- We All Do.  We all want to be paid completely at closing-” How do I know Buyer will pay me”.   Buyer will say, “what assurances do I get that this business is what I think it is.  “Without looking at sales of businesses over last 5-10 years I would venture to say that 80-90% or more of all business sales involve financing from SBA Lender, Seller, or other 3rd party financing.  -As a business broker  I seek to secure “SBA Lender Prequalification” for a business I am representing to sell.  The quantity of Buyers willing to pay 100% cash for a business is minimal.  The amount of prospective buyers that are willing or in the position to pay a down payment and finance the balance is significantly greater.
  2. Business Buyer- “I’m buying a business, so either the Seller meets all my demands or I walk.”  Normally a business Sale involves some “give and take”.
  3. Business Seller- “Let the Buyer make an offer then I will provide that information.” – Certain information is needed in order to make an offer. Not all request are reasonable- the responsibility of an advisor is to “advise” on what may or may not be a reasonable request.
  4. Business Buyer- I found the right business, but I am going to wait to see if they reduce the price.- Finding the right business is not an easy task. If I find the business I am looking for, I am going to pull the trigger or else deal with the remorse of missing out on this opportunity.  I’ve done that before, and wont again.

So what are some key take-aways when looking at buying or selling a business for the 1st time?

Know what is important to you.  Know your timing.  Seek advice of trusted advisors.  Ask questions. Measure twice, cut once.  Mistakes can and will be made.  Not Doing your best to mitigate those mistakes could be your biggest mistake.

For More information on buying or selling a business, business value points or transition/exit strategy please feel free to contact me Scott Messinger at (864) 210-8226  or (239)770-2421 – Scott@GatewayBusinessAdvisors.com

 

Current Market for Selling a Business

Selling a Business

 

 

What is Current Market for  Selling a Business  (or Buying a Business). I’ve been involved with business sales for approximately 25 years.  Fifteen years as a business buyer and Seller during which I acquired 9 businesses and 9 years as a business broker representing business buyers and sellers.

As a business broker working with business Sellers and Buyers in South Carolina and Florida we are afforded access to a lot of market information as it relates to business transactions, what businesses are selling for, and trends.  Sales Data and terms  on these private transactions are not readily available to the general public.

 As a business owner or potential business buyer it is not unusual to “hear about someone that sold his business of $X “.  But often that information is incomplete or erroneous.

Below is some market information showing charts and trends relating to business sales throughout the US.  I believe it can provide some insights to both potential business sellers in South Carolina or Florida as well as Business Buyers.  Also below I’ve highlighted my insights to what I believe some of this information means and what may be worth noting.

A review of over 7000 businesses sold during 2015 show:

 

  • The median asking price grew 12.5 percent from $200,000 in 2014 to $225,000.
  • The median sale price also increased a solid 7.6 percent year-over-year, from $185,000 to $199,000.

 

What is my business worth?

 

 

 

 

 

What Does this graph say about Businesses Sold?

A significant determinant of a business sales price is “Multiple of Cash Flow” or “Multiple of SDE (Sellers Discretionary Earnings).  But this “Multiple” does vary based on business size ( Sales and Cash Flow).  Businesses Sold with Sales of $1M-$5M will generally sell at a different multiple than business sold with Sales of $100k-$1M .  Above graph shows as the cash flow of a business increases the multiple of cash flow also increases .  This graph shows a business with approx. $150k of cash flow sold for 2.5 x that cash flow (CF). Whereas a business with  $1M in cash flow sells for 3.1 times that cash flow (CF).

 

What is Value of my Business

 

 

 

 

 

 

What does above graph say about Business Value  and or Business Selling Price. ?

 

Above Graph depicts that The price of businesses sold ( as a multiple of cash flow ) has remained fairly steady over the last 4 years.  Going forward, I expect this to remain consistent thru 2016.

types of businesses for sale

 

 

 

 

 

 

 

 

 

What type of businesses are being sold?  Above chart shows the types of businesses sold throughout the US in 4th quarter of 2015.

Are you looking to buy a business in South Carolina or Florida?   Are you looking to sell your business.  A business is not bought or sold in a vacuum.  How does your business measure to other like or similar businesses?   No two  businesses are the same, but similarities do exist.  Understanding value or potential value may be one of the more important steps that goes into the process of buying or selling a business.

Thinking about buying or selling a business?  Please feel free to contact me Scott Messinger Business Broker to discuss any questions you may have on the process.  And it is a process.  Also, feel free to search on businesses for sale on my site  at:

www. SellaBusinesssAdvisors.com.  or contact me at Scott@GatewayBusinessAdvisors.com

or call direct at (864) 210-8226 or (239) 770-2421.

 

A Word on Buying or Selling a Business

Considering Buying or Selling a Business?

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