Category Archives: South Carolina Business Broker

Selling My Business Next Year

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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.

 

What is My Business Worth

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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.  

South Carolina Business Broker

South Carolina Business Broker

 

 

 

 

 

 

Why did Business Owners Sell their Business.  Are you a South Carolina or Florida Business Owner considering the sale of your business?

Upstate South Carolina Business Broker

South Carolina Business Broker

 

 

 

 

 

 

 

 

 

 

Who were the Business Buyers during the 2nd Quarter of 2016?

South Carolina Business Broker

South Carolina Business Broker

 

 

 

 

 

 

 

 

 

 

Why did Business Buyers Buy a Business in South Carolina Florida  and the rest of the  US?

South Carolina Business Broker

South Carolina Business Broker

 

 

 

Where did the Business Buyers come from?   Usually they come from somewhere else.  For me as a South Carolina Business Broker and Florida Business Broker the last 10 business I sold the buyers on all of them came from distances of 200-1000 miles away.

South Carolina Business Broker

South Carolina Business Broker

 

 

 

Scott Messinger is a Business Broker Based in the Upstate South Carolina with main offices in Florida and working with South Carolina Business Sellers, Florida Business Sellers, and business buyers and Sellers throughout USA.

For more information Please contact me at  (864) 210-8226  or (239) 770-2421 or Scott@GatewayBusinessAdvisors.com

 

 

Current Market for Selling a Business

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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.

 

Fear-Unspoken Emotion when Buying or Selling a Business

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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.

The Right Time to Sell My Business

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BusinessBroker

The Right Time to Sell My Business?

 

 

When is the right time to sell my business.  Timing is Everything.  As a business owner this is a question I faced and as a business broker I realize many business owners have this same very important decision.

The answer on the right  timing is different for most all business owners.  Furthermore the answer may lie more in the question(s).

Do I want to sell my business…. or do I want to transition it to family or just close the doors or other?

Do I sell it when the business is not doing well?

Do I sell it when the business is doing well?

Do I sell my business when the economy is down?  Economy is doing better is now the time?

How do I even begin looking at the process and time involved to sell my business?

Health. life, age, family, money,  are all factors that go into this very important decision. A business sale does not occur within a vacuum .

What is going on in my business , in my industry, in our current economy, in our  economy going forward  all affect value.

What effect does the aging Baby Boomer population have.  Estimates I see are we have approx. 75 Million Baby Boomers in the US which is almost 25% of our population (born between 1946 and 1964 so current age group of  54-70).  Many of those will exit business over the next several years.

Will there be a “glut of available businesses for sale?  Will this drive down the prices?

I don’t know but do believe it could affect values.

While running my business I had interested unsolicited parties come forward with an interest in acquiring my business, discussion were had and we even got to the points of an LOI (Letter of Intent) and Purchase offer being presented.  The offers were reasonable but I was “not ready”.  When consulting with my CPA, his advice to me is “You will know when you are ready”.  I continued to run my business for another 10 years and hit a point  when “I was ready”.

Selling ones business involves a lot of moving parts.  I do believe it is prudent to sell your business under your terms, not based on terms dictated to you.  (health, divorce, legal matters or other negative event forcing a sale)

As a business owner we deal with risk.  We do our best to mitigate risk but the risk of owning a business is carried with us until we know longer own that business.  Mitigating the risk of  having to sell your business under terms not dictated by you should be a priority.  So if you are “not ready”  Is it time to start getting ready ?

  • Gain knowledge about the process
  • Have a realistic view about the “salability” of your business.
  • Know that selling a business when that business  is doing well is significantly more doable than a business  in a lesser state.
  • Know that not all businesses that try to sell DO NOT and or maybe sell for a fraction of perceived value.
  • Have a plan

 

A lot go into the decision of the “Right Time” to sell a business. And part of my job as a business broker is sharing my experiences with the process.  But being ready psychologically, emotionally, financially is a timing question that only you can answer.    “Are you Ready ?” or are you “Ready to start getting Ready”.

Scott M Messinger is a Business Broker working with Business Sellers and Buyers focused in South Carolina Florida and Southeast USA.  For more information go to SellaBusinessAdvisors.com