Selling Your Business- What You Dont Know

By Scott | February 27, 2019 - 3:00 pm |November 13, 2019 Main

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Selling your Business is a complex process. If someone says its easy, I would suggest either it’s a very very small business (which can also be complex) or that someone has not gone through the process. I am a business broker with primary focus on South Carolina and Florida. I have personally sold my business that I started and built, bought and built multiple other businesses, and assisted other business buyers and business Sellers as an advisor and broker. As with all of my articles, these thoughts, ideas, suggestion are based on my personal experiences.

Business Owner know their business. Much of this knowledge is based on familiarity. The longer one owns and runs a business, the less you experience situations that are new. But selling your business is a new experience even to the business owner that’s been operating for 20, 30 ,40 plus years. When trying to sell your business, You don’t know what you don’t know.

Selling your business you need to:

Know how to get your business ready to sell
Speak to trusted advisors significant others including spouse, lawyer, CPA, business broker and others. While maintaining circle of confidentiality.
Plan on the process taking X amount of time. ( So often its longer than anticipated)
Plan on the process to produce some unknowns and situations to address
Plan on running your business while business selling process is undergoing. One of the biggest reasons a business owner hires a business broker it that the owners schedule is already full and selling your business is almost like adding another fulltime job to an already full day.
Plan on what you will be doing after selling your business.. Plan on the financial changes, lifestyle changes, and most often the least understood emotional changes. You will feel different after selling your business. Its hard to imagine that feeling until they occur, but foremost the responsibility that follows you as a business owner for multiple decades slip away. That should be a very good feeling.

Every business sale has unique problems and situations. The ability to work through those situations often are the difference between deals that consummate and those that don’t. You as a business owner may not know what you don’t know when selling your business, but you can surround yourself with people that have been through the process.

Scott Messinger is a Professional Business Broker working with business sellers and Business Buyers in Anderson South Carolina, Greenville, the Upstate South Carolina, Florida, the USA, and internationally. For further infomation email at Scott@GatewayBusinessAdvisors.com

Buying a Business -What is a good Deal?

By Scott | January 19, 2018 - 3:09 pm |January 19, 2018 Main, South Carolina Business Broker

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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

Selling a Business Current Market Information South Carolina Florida

By Scott | October 4, 2017 - 3:07 pm |March 10, 2018 Main, Selling a South Carolina Business

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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

What is My Business Worth

By Scott | November 8, 2016 - 8:57 am |November 8, 2016 Main, South Carolina Business Broker

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What is my business Worth?

Getting accurate information on Private businesses sold can be difficult. Below I am sharing information on businesses sold during the 2nd Quarter of 2016. This information comes from a survey that includes over 375 Business Broker and Business Professionals involved with buying and selling businesses. I am a 10 year Business Broker working with Business Sellers and Business Buyers in South Carolina Florida and Southeast USA.

If you are considering the sale of your business, planning or preparing an exit strategy from your business or considering buying a business the below information provides valuable insight.

There are many valuable points to be gleaned from the below but a very important underlying point is that businesses are different. You can see the information surrounding what a business sells for, why a business owner sells, who the business buyers are, where a buyer comes from , and why a business buyer buys a business. The size of the business affects all these aspects are very dependent on the size of a business.

A $1M business may sell for a multiple of cash flow of 3,4,5 x- but this doesn’t necessarily mean that a $400k business would sell for a similar multiple.

What is My business Worth? Below chart shows what businesses recently sold for. Please note Buyers Paid a higher multiple of EBITDA (Earning before Interest Taxes Depreciation Amortization ) for larger businesses. A business of say $200K of Ebitda may get 2.5 x that Ebitda, whereas a business with $500k of ebitda may get 4 x ebitda. Cash flow, adjusted cash flow, ebitda, owner benefit, seller discretionary earnings or other related measurement of earnings are a significant factor when determining business value.