A Word on Buying or Selling a Business

Considering Buying or Selling a Business?

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You Want to Sell Your Business Someday How to Prepare Today

Every Business Needs an Exit Strategy.  Do you want to Run Your Business Forever?  Do you Want to Sell your business?  Do you want to leave your business to your children?  Do you want to sell your business to Your Employees?  Do you Just want to close your doors and Move on?  How do you want to exit your business ?- And when?

I had a good friend of mine that is a successful business owner contact me about the prospect of selling his business in a few years. He asked me to contact him regarding what he may want to be doing now to prepare his business for sale.  He has a successful growing business, he has grown his number of employees from 10 to 50+ over a 2 year period.  He is effective at gaining new contracts and growing revenue, but like so many  businessmen, he has never attempted to sell his business.  How do you plan to sell your business.

Devising An Exit Strategy For Selling Your Business

Normally during the startup of a new business the thought of an exit strategy is not even a consideration.  Then small business owners get so involved with the day-to day operation of their businesses that again an exit strategy is either not even thought of or possibly just put on the back burner.  Taking some time to put some thought into your exit strategy can go a long way to increasing your odds of exiting your business the way you desire to.

Planning, gaining knowledge, and preparing  may be the 3 most important measures you can take when considering an effective exit strategy.

If your exit strategy involves an interest in trying to successfully sell your business in several years, what sort of measures or actions should a business owner take today make this effort successful:

  1. Make sure your financials are in order. Clean understandable Income Statements and Balance  Sheets will add value to your business.  Unexplained/old accounts, entries, or line items ,  should be addressed and handled.
  2. Systematize and document your operations and procedures.  Well documented policies, procedures and practices are a sign of a well run company and  probably would help your company run better, and add value. If you got hit by a truck tomorrow could someone use your documented practices to help continue run your business?
  3. Move your business towards a business that does not rely on you.  Do your customers do business with your company or do customers do business with you.  When you go to sell your business are you selling a business that is dependent on you the owner or a self-sustaining business based on a solid philosophy, solid customer service and reliable employees and practices. Or when you go away, does your business go away?
  4. Speak to your trusted advisers- let them know your intentions see if  they have any input suggestions that could help move you towards this goal.  Trusted advisers may include your attorney, CPA, financial advisor, business brokers.
  5. Learn by speaking to your trusted advisers what are the most important aspects that affect your business value.  How does one value your business? What is most important to business buyers?-  Your Assets, your cash flow, your sales, your number of customers, your patents, trademarks, your competitive advantage.  Learn what the real driving factors are behind raising the value of your business and work on them. Understand that not all businesses that attempt to sell actually do find a business buyer and sell.
  6. Running your business and concurrently, preparing your business for sale is a viable  approach towards business transition. It is not a” one or the other approach”.  Preparing your business for sale does not need to get in the way of running your business, and most measures improve your business. If you make needed improvements to your business and or operations and decide not to sell your business or exit your business, you still most likely will have a better business on your hands.
Planning to sell your business

For planning purposes try to learn what the potential value of your business may be. Also educate yourself on the business buying or selling marketplace.  It is not always the same.  Selling a business during the 90’s was different than selling a business in 2018 and will be different when selling a business in 2020.

If you think you want to sell your business in 5 years for $1M, attempt to understand what realistically your approximate value may be today.  If your business may realistically only be worth $500,000-  change your expectations,  change your time frame, or maybe more importantly get to work on making necessary changes to your business.

Scott Messinger is a Professional Business Broker working with Business Buyers and Sellers in South Carolina and Florida.  For more information contact Scott at Scott@GatewayBusinessAdvisors.com

What Did Businesses Sell For 1st Quarter 2018

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”

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

 

 

 

How to Sell Your Business for More

How to Sell Your Business for More

How to sell your business for more.  At some point a business owner considers selling their business.  Sometimes it is just a fleeting thought.  Sometimes its a thought of  “I don`t need this anymore, get me out”.  Other times its a well planned out progressive process.  You want to sell your business- how do you sell it for more. It can just start with a phone call -How to sell my Greenville business?

This sounds like a fairly straight forward approach, but just as the selling of a business process can be very involved, the question of how to sell it for more firstly needs definition.  I am a business broker based in Anderson South Carolina, focus on businesses for sale in Florida and South Carolina,  and speak to many many business owners about the potential sale of their business.  I also sold my own business several years ago.

Selling Your Business When The Time Is Right

Selling my Greenville SC Business

Just consider the simple analogy of having a rusty bike in the garage with flat tires that you want to sell today.  You put it out at the end of the drive way put a For Sale sign on it- what do you think it will sell for?  How can you sell that bike for more tomorrow than you can today? How to sell my Greenville business for More?

Selling Your Business For More:

  • Selling your business for more can be a very good thing and very reasonable goal.
  • Trying to sell a business for more than it is worth can ultimately result in your business not being sold at all.
  • Setting the Goal today to improve your business, prepare it for sale so that it is worth more after your improvements is probably your best approach
  • Wanting to sell your business for more than “what you heard a local competitor sold for” can also be a mis-guided path.

Preparing Your Business For Sale

So selling your business for more is a reasonable and understandable goal.  How do you get more for your business?  Start today preparing your business for sale.  Like so many of your other important business decision, prepare yourself a to-do list and systematically address those items.  Below are some items you will want to include on your to-do list to help ready your business to sell for more. Ask and honestly answer these questions about your business.

When looking at how to sell my Greenville  business for more, ask yourself -How  are your financials?  Are there some unusual entries on your P/L that have escaped needed adjustment?  Are all sales accounted for?   Do you have a good clean P/L statement?  For smaller businesses Do you have a P/L and Balance sheet?

Again, when looking at how to sell my Greenville  business for more, determine, how reliant is your business on you.  What can you do today to help your company be more about your company and less about you.?

How documented are your systems, procedures, policies, pricing structure?

Is your customer base as diverse as it should be?  How reliant is your business on a few key customers.  And again do those customers do business with you the business owner or with the company?

Do you have the opportunity to add recurring revenue streams to your business, but elected to not pursue?  Do you have some contracted customers that you just haven’t updated contracts with?

When analyzing how to sell your business fore more, Spend some time to meet with some of your trusted advisers.  Dont rely on information you hear through the grapevine about this person selling their business for this amount.  Talk to your attorney, your accountant , or visit with a business broker start to really learn the marketplace.   Have you scraped the rust off your bike?, painted it ? oiled the chain? pumped up the tires?  put an ad in the newspaper? on the Internet?- Is your bike worth more today than it was yesterday?

How to sell my Greenville business  for more tomorrow or next year  than it is worth today?  Start today preparing your business for sale.

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