Buying a Business -What is a good Deal?
Buying a Business -What is a good Deal?
Buying a Business is not an easy process. Selling a business is not an easy process. Knowing what is a good deal for a business buyer and what is a good deal for the seller greatly assist in achieving the goals of a business buyer or business seller. Understanding what may be the components of a “Good Deal” as a business buyer or a business seller is both important and necessary. I am a business broker and have been involved with business acquisition and sales for over 25 years as broker representing business buyers and business sellers and as a business buyer and business seller of multiples businesses for my own personal gain.
I work with Business Sellers in South Carolina and Florida. I also work with prospective business buyers in Florida, the Upstate, South Carolina, USA and internationally.
There are many components to a successful business purchase and or business sale.
A discussion I always have when working with a prospective business buyer or one looking to sell a business is to make and keep the “Totality of the Deal” a top priority. There are many aspects of a business sale that make up the totality of the deal. It’s easy to just look at Price and go into the process thinking Price is the goal/target of a successful business sale or successful business acquisition. A business sale involves Price, timing, conditions, terms including non-compete, transition, seller post sale involvement, financing, handling accounts receivables, handling payable if applicable, and the list can go on. I define the totality of the deal as how all the components of a business sale meet the goals of a business buyer or business seller. Consider the following scenario –
A business seller may want to sell his/her business for $1M. As a business broker I engage with 2 prospective business Buyers: In this scenario both buyers are willing to make an offer on this $1M Business for sale. Prospective Business Buyer A offers $1M but requires Seller to stay on for 2 years and wants to pay 60% Down and pay balance over 5 years and wants to keep all Accounts Receivables that are on books at time of closing. Also Buyer A demands to know and meet with top 5 major customers before consummating sale. Prospective business Buyer B offers $900k, willing to have Seller stay on as long as Seller wants, has financing setup so Seller gets entire amount at closing, and Seller keeps all Accounts Receivables.
SO what deal is better for the seller? What Buyer believes their offer is most likely to get accepted by the Seller? While a lot of business acquisitions share commonality every business sale is different. What is important to one business buyer may not be important to another business buyer. What is important to a Business seller is ultimately best determined by that business seller. A business selling for $300k may be considered overvalued by some and a business selling for $5M may be considered “cheap” or a good value by others. But setting the goal of trying to achieve a deal that carefully weighs the entire totality of the deal greatly increases the odds of reaching what may be a good deal for you as a business buyer or a business seller.
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
