Tag Archives: how to buy a business

A Word on Buying or Selling a Business

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Considering Buying or Selling a Business?

 Taxes Transition Risk Future Asset List Owner Benefit  Working Capital License transfer CHANGE Liabilities  Seller Financing SBA,  Trucks, Intellectual Property EBITDA Cash Flow Inventory Debt Depreciation Goodwill  Money  Customer Base When to Tell Employees    Balance Sheet             Business Broker  Attorney  How?    Accountant    Marketing  Adjusted Net  Non Compete     Negotiation  Training  Management  Offer to Purchase  Confidentiality Lease  Accounts Receivable    Franchise Valuation Multiples   NDA      Revenues             Net Income  Depreciation   Earnout  Closing Agreement  Job  Deposits  Employees Trademarks       Fear       Trade Name Retire  Security     Promissory Note  CPA     Personal Guarantee Timing Work UCC  Family Business  Exit Plan   Website   When?  Partner      S-Corp  Clients    Relationships  Price    Payment     real estate  Assignment  Plan    Help!   

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What Did Businesses Sell For 1st Quarter 2018

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What Did Businesses Sell For 1st Quarter 2018

                                     May 22, 2018
What Did Businesses Sell For 1st Quarter 2018  and Why?                        Email Scott today for More Info                   
Information gathered by a survey of over 270 Professional Business Brokers reveal the current information of the market defining what businesses are selling for AND why. This information is based on the sales of hundreds of business during Q1 2018 and some behind the scenes info of the hows and whys-What Did Businesses Sell For? – and what does it mean? – Businesses sell for a multiple of cash flow. The multiple it sells for is dependent on the industry, the size of the business and other factors. As you can see below businesses are selling for the same multiple of cash flow in Q1 2018 as they were in Q1 2018.  Yet most businesses have improved from 2014 so many  businesses are selling for more……

Who is Buying a Business? and Why? – the below results from the survey of 270 business brokers show that the reason and the type of buyer varies based upon the size of business bought.  Still almost 50% of businesses that attempt to sell do not sell.

 

What Did Businesses Sell For first quarter 2018

****  Buyers Looking For- HVAC Businesses, Pest Control, Businesses with cash flow of $1M+                                                                                            C- Stores , Self Storage                                  

 Email Scott Today For More Info

Scott M. Messinger is a former and current business owner that has personally purchased 8 + businesses. Former owner of successful production/manufacturing/distribution business of 20 years that was successfully sold and transitioned. Member of Gateway Business Advisors serving South Carolina Florida and Southeast USA. Member of the Business Broker of Florida Assn. For a FREE current listing of Businesses FOR sale see: www.SellaBusinessAdvisors.com call South Carolina (864) 210-8226 Florida (239) 770-2421

 

Is EVERY Business For Sale at “Right Price”

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As a Business Broker based in Anderson South Carolina and work in both South Carolina and Florida,  I spend ample amount of time prospecting/marketing for prospective business sellers and prospective business buyers. I work with many qualified buyers looking for a business for sale.   I use various marketing methods to market to both buyers and sellers.  While in the process of  prospecting for business owners considering the exit or sale of their business it is not uncommon to hear “I would be interested in selling my business  if I can get the right price”.

Business For Sale – The Right Price

In a past discussion with a business owner- the owner told me he would very much like to sell his business and start a new somewhat unrelated business if the could get the right price for his business.  I then asked what he felt may be the right price and he followed up with “I don’t know”.

South Carolina Business For Sale

Business For Sale

The “right price”  may not equal to the business value, or the price a qualified interested buyer is willing to pay. When looking to put a business for sale understanding value may be the best first step.

For an actual transaction to be consummated,  the right price needs to resemble actual business value.  If the “right price”  is actually 2-3 times what estimated value of the business is, it is probably best for all parties involved to spend their time elsewhere.

But is every business for sale?  What if a “sweetheart deal” is presented to  a small business owner in Anderson South Carolina?  If you had a business that is not “For Sale” , and you know it to have an approximate value of $500k  and someone walked in and made you a cash offer of $800k cash is your business now for sale to that party?

Is now the time to Sell My Business?

From my personal experience of business ownership, I think yes most businesses are for sale if the “price is right”.  But not all businesses.  While owning my previous business in the 10th year  I had gotten a significant offer for the business, but I had long terms plans and  aspirations for the business.  At that point in time I had made several acquisitions and made several other offers on other related businesses and was comfortable with valuations, synergy calculations,  and felt I knew what the value of  my business was.

There was a lot of merger and acquisition activity that was occurring in my industry at that point in time and I was presented with a cash offer from a  very strong company, and was at about a 25% premium to what I and my CPA viewed as current value.  So I had a very strong cash offer from a well qualified business- do you take the money and move on.?

Business For Sale – The Value

In my opinion business values are affected by both  macro and micro economics.  What is the state of the economy, what is the state of the merger acqusition economy and what is the state of your industry/your business?  These elements effect what sort of multiple of cash flow your business may be worth.  If the economy is such that valuations were/are  running high do you look to exit your business because valuations, and or those high multiples may not come around again?

In my situation I consulted with my “trusted advisers” around me my CPA, my attorney, my wife.  Yet ultimately the decision was mine.    My CPA did tell me something that strongly influenced that decision.  He had told me “You,ll know when you are ready”.  It was a great price great offer, but I wasn’t ready and ultimately sold my business 10 years later and got fair value for the business. So is every business for sale if the “right price” comes along.  I think that most businesses are for sale if the right price comes along, but not all businesses.  Are you looking to buy a South Carolina Business or looking to Sell a South Carolina Business?

Scott Messinger

(239) 770-2421 (864) 201-8226

Scott@GatewayBusinessAdvisors.com

 

 

 

Buying a Business -What is a good Deal?

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Buying a Business -What is a good Deal?

Buying a Business -What is a good Deal?

Buying a Business

 

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

 

Number One Reason For Selling Your Business

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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.