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

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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.

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.

Selling My Business Next Year

I was thinking about selling my  business next year….   last year, but didn’t take any steps … yet.  And now another year is gone and 2017 is approaching.  I do plan on selling my business next year. Getting a business ready for sale is both advisable and prudent.  Waking up one day and deciding you want to sell your business tomorrow may not be a good idea.  Deciding that you would like to sell your business as an exit strategy and putting together a plan is likely to maximize your gain from the sale of your business.

Selling My Business Next Year

Selling My Business Next Year

You could easily Google Preparing your business for sale and find many many articles/list and sources of information.   I had written a related article in the past as well.  But beyond the list- what of these methods are most important?  Are all of these measures necessary or are they just guidelines?

I had sold my own business of 20 years, I had considered several offers over the years, I went thru various stages of decisions as to how I would exit my business.  At some point I realized that my exit strategy would be to sell my business if I could find the right situation.  But from my perspective the most important part of my approach was to commit to running my business as if I would own it  perpetually.

So many businesses that try to sell- don’t sell.  A business owner needs to realize this and allow this fact to influence their thought process.  Currently I am a business broker in Anderson South Carolina and work with business sellers and business buyers in South Carolina, Florida , and South east USA.

Be Realistic When Deciding On Selling Your Business

Many components and aspects of your business should be looked at from a realistic standpoint, critiqued,  and adjusted as needed when preparing your business for an eventual sale.  Often its easy to think “selling my business next year”,  but the months and years can go by and next year never happens. When Selling My business next year, steps should be taken this year… or now.   Some important areas to address when looking to sell your business include:

  • Either develop, establish, or refine your business operational procedures, practices, and methodologies and have them documented
  • Does your business rely on you the business owner?  If so, make changes to reduce that reliance.
  • Clean financials-  Does your Income statement and Balance Sheet make sense ?

But the question to pose is what of these measures is most important or essential as it relates to preparing for the sale of my business?

In my opinion it is accurate , sensible, reliable Financial records.

The Importance Of Reliable Financial Records

Typical financials involved with the sale of you business can include Profit/Loss or Income Statements, Balance Sheets and   Tax Records.  Further into the due diligence process of your business good  Sales Journals, Customer Information, Inventory Info,   all can go a long way to maximizing the value of your business.

Clean financial records are so essential to all parties involved with the acquisition of a business. And all involved includes the Seller, the buyer, and possibly a bank, lender or third party investor.

So when looking to Sell your business-

  • If you have a great business that is producing great margins, produces a great bottom line, and a very high owner benefit- but the financial records do not support this – what do you have?
  • If you have a business that you own and run it semi-absentee, great systems, increasing sales, good industry but poor financial records- what do you have?
  • If you have the nicest looking, shiniest looking store, website, equipment, office or vehicles, but your financial records don’t make sense- what do you have?
  • Looking to sell your business next year?  Start working on your financial records today.

Scott Messinger is a Business Broker and Business owner based in Anderson South Carolina.  He has personally purchased 8+ small businesses and currently works with both business sellers and business buyers in both South Carolina and Florida. For a free consultation call Scott in South Carolina at (864) 210-8226 or Florida (239) 770-2421.

 

Fear-Unspoken Emotion when Buying or Selling a Business

 

How much is the business worth?  How much can I make if I buy that business?  What is the value of the Inventory?  What is the  rent the business pays?  What is the Revenue per Sales Channel?  What can I sell my business for?  What will it cost me to start a business?

These are all financial question that very often get discussed during the process of buying or selling a business.  So often the perception of buying or selling a business… or starting a new business is all about the financial elements surrounding the transaction.  The emotional and psychological elements in my opinion are under-served and often minimized.

Selling a South Carolina Businessl

I am a business broker based in South Carolina  and in my profession I work with both buyers and sellers and can have rather intimate conversations regarding the goals and  desires of these current or future business owners.  I cant pretend to always know what truly is going thru the mind of someone I represent that is buying a business or someone I represent that is selling their business.  But I can speak of my experiences that I realized personally as I both bought several businesses as a business owner and also sold my business of 20 years.

Should You Ignore Emotions When Buying Or Selling A Business?

The money is a very important component that cant be minimized, but the emotional side should not be minimized as well.  What emotions did I experience as I personally was the buyer and seller of a business?

  • Concern,
  • Trepidation
  • Joy
  • Satisfaction
  • Worry
  • Relief
  • Uncertainty
  • Fear

Is there a book written that states these are the emotions one should realize when going thru the thought process of buying a business, selling a business or starting a business? If so I am not aware of it.  Is it ok to worry 24/7, to have some fear when making the substantial investment of buying a business?

Is it ok to have a certain level  fear when evaluating the decision to sell a business that you may have started and or been owning running for 10, 20, or 30 or more years.   I personally think all these emotions are both acceptable and normal. I feel if there isn’t a certain level of fear then possibly the enormity of the situation may not be fully understood.

When working with business buyers and those selling a business, and also in consulting for several starting a business, I do not attempt to advise that certain emotions are right, wrong, or indifferent.  My approach is to share my experiences and suggest that these emotions may be realized in the process of buying or selling a business.   I have many conversation with business owners that may want to be selling their Business.

The Fear Of Selling Your Business

They want to sell their business but the uncertainty that is so intertwined with the process can create fear,  fear can create in- action.  Business owners may want to sell or exit their business, but their business is a known entity.  The business owner knows what to expect with running his business-relatively.  Selling ones business can create so many unknowns that uncertainty,trepidation, concern worry and fear can result in just taking the path of least resistance which may mean to just keep running your business- even though you may not want to.

But a properly analyzed and thought out approach to buying or selling a business can produce some very desired emotions like relief, joy, and satisfaction.  In my opinion emotions are a big part of the process of buying or selling a business.  But you should not let your emotions get in the way of pursuing your desired goals.