Tag Archives: South Carolina Business Broker

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

 

 

Selling a Business 2 Most Important Elements

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Selling a Business- 2  Most Important Elements

 Thinking about Selling your Business? 

selling a business

Selling a business very often involves many many moving parts and finding the right Buyer for your business can be a very involved process. Do you use a business broker to sell your business? Do you try to sell the business yourself? These are just a couple of the initial questions a business owner must answer to begin the process of selling ones business.

When selling a business it is easy to think that I will sell my business to “the first person to comes along with enough money to pay my asking price.” The sale of a business involves many terms and conditions by both the buyer and seller that must be met to consummate in a sale. Very often as you go through the process of due diligence by both the buyer and seller, wants and needs are uncovered, and potential roadblocks to completing the sale can occur.

Two important elements have a very strong impact on increasing the likelihood of a successful sale of a business. When trying to sell your business are you working with:

  1. An Interested business buyer
  2. A Qualified business buyer

As a  business broker , with focus as a South Carolina Business Broker and Florida Business Broker one of my more important responsibilities when I represent a business owner selling a business is to qualify or “pre-screen” the various inquiries on the business for sale. There are many people that inquire/ask about a business for sale and probably less than 5% , 4%,  2% of those buyer prospects actually buy a business at all.

A Qualified buyer can mean many things, but having the adequate available cash, equity, financing, special skillset, proper personal family and life situations are important to establish.

An Interested Buyer is one that wants to buy the business. They have seen basic information on the business and based on that, if no significant negatives or unknowns surface, they want to buy the business.

There will always be a lot of due diligence, verification, questions and answers, but this buyers desires to see the process move forward. If my wife and I were looking to buy a new home, and she finds a home that she likes- I am pretty much transformed into an Interested Buyer. I may turn from looking to buy a home to working to buy this certain home. Issues may occur when doing the due diligence on buying the home but I task these as issues to overcome, not reasons to get out of the deal- If I am a truly interested buyer (and or my wife really wants the house.)

When going through proper due diligence many discoveries, questions, and uncertainties can be uncovered. When you have a Seller that is truly interested in selling a business and you are working with an interested and qualified buyer, issues uncovered in due diligence are not “Gotcha” moments but rather are business related issues that both parties seek equitable resolution and or explanation on. Issues that surface become hurdles but not roadblocks.

Buying and selling a business is a process. When Selling your business at some point in the process you ascertain that you are working with an interested qualified buyer. From my perspective, having an interested Seller and recognizing that you are working with a truly interested qualified buyer are two important ingredients towards a successful sale of a business.   Having just one of those elements will likely have bad results.  When Selling a business remember the 2 most important elements to look for – a Qualified and Interested Business Buyer.  Now the question is- How do I find one?   For More information contact Scott Messinger  Business Broker serving South Carolina Florida and Southeast USA.

How to Sell a Business – What Matters

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How to Sell a Business – What Matters

How to Sell a Business What Matters

 

Selling a business  can be a difficult process.  Knowing How to Sell a Business and what matters greatly increase your chances of a successful Sale and transition.  Someone may walk in your office one day and offer you 100% cash  at an elevated valuation but that is not very likely at all.  I had owned a business in a very fast growing industry and I was presented with a couple very strong cash offers at fairly lofty valuations but these offers where based on the growth curve of the industry and market conditions overall.  I wasn’t ready to sell my business at that time and several years later when I was ready to sell,  the process of selling  the business and  finding the right buyer and transition for my business  presented a much different challenge.

Ive been involved with the business acquisition  process for over 25 years as a Business Buyer of Multiple businesses, a business Seller, and as a Business Broker assisting others.  I find the following to be important when both Selling a Business and Buying a Business.

  • The quality of the business is important- “We are the highest rated Window Washing business in Jacksonville”
  • The quality of the industry is important – Are you in a growth industry? or a Mature  industry ?    “A rising tide raises all ships”
  • The quality or the overall marketplace we all conduct our business in is important. During our recently experienced recession obtaining money to finance an acquisition was difficult and overall number of business sales were down significantly.
  • The timing of when your business may be best ready to sell and when you as a business owner are ready to sell may not coincide.

 

As you can see some aspects that affect the likelihood of successfully selling your business may reside out of your immediate control.  But knowing more about the process, How to Sell a Business and What Matters, and the current market can only aid in your decision making process.

A Recent survey of fellow business broker professionals involving 100’s of business broker professionals denote  consolidate information regarding Buying a Business in South Carolina, Florida and the entire US as well as Selling a Business in South Carolina, Florida and the US.     Topics in this survey included information regarding who is likely to buy your business,  why will they buy your business and what will they pay for your business.  All businesses have differences yet many businesses share similarities:

Why Will You Sell Your Business?

SellaBusinessAdvisors.com

 

 

 

 

 

 

 

 

 

 

 

Who will Buy your Business?

SellaBusinessAdvisors.com

 

 

 

 

 

 

 

 

 

 

Why will they Buy your Business?

SellaBusinessAdvisors.com

 

 

 

 

 

 

 

 

 

 

What will they Pay For Your Business?

whats my business worth

 

 

 

 

 

 

 

 

 

 

Business Sold for Multiples

 

 

 

 

 

The amount that Buyers are paying for Businesses ( as a multiple of earnings or cash flow  has remained fairly constant over the last few years.)

SDE- Sellers Discretionary Earnings

EBITDA – Earnings Before Taxes Interest Depreciation and Amortization

So, Timing, knowing who you may best market your business to, what sort of value expectations  you can expect all affect the likelihood of a successful business sale and transition.  There is a lot to knowing How to Sell a Business but getting ready to sell your business and knowing  when you are ready are  are a couple of the very important 1st steps.

Above data  provided by survey of over 300 business brokers throughout the USA coordinated thru International Business Brokers Assn and M&A Source and Graziadio School of Business.

Looking to Sell a Business in South Carolina Florida or SE USA or looking to Buy a Business in South Carolina Florida or SE USA please contact me Scott M Messinger  at Scott@GatewayBusinessAdvisors.com or directly at   for more info see www. SellaBusinessAdvisors.com

How to Prepare a Business For Sale

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How to prepare Business For Sale

 

How to Prepare a Business For Sale – 5 Steps

I  am a business broker based in South Carolina.  I work with business buyer and business sellers in both South Carolina and  Florida. I also owned my own business of 20 years and sold it.  A business owner interested in selling a business needs to know how to prepare a business for sale.

FACT-  Many businesses that try to sell  do not actually sell.

Looking at the reasons that a business does not sell can be guidance towards measures a current business owner can make to prepare a business for sale. Selling a business has a lot of moving parts.  How can one  increase the likelihood of a successful sale?   The answer can be in preparing  for your business sale.

What are some of the top reasons businesses Don’t Sell?

  • Price
  • Business Performance
  • Business has poor records
  • Business completely dependent on Business Owner
  • other liabilities encumbrances

 

The value of a business is ultimately defined by what a willing capable buyer (s)  is willing to pay for that business.

What could possibly be the best approach to preparing to sell your business is to look at your business as a Business Buyer rather than a Business Seller.   Would you buy your business?  If so how much would you pay for your business?

What steps can a business owner do today to prepare  a business for sale?

How to Prepare a Business For Sale

  1. Have realistic expectations. Stories circulate about “Google buying this business for 10-20x cash flow”.

Sales like this are not the norm.  Businesses with Sales of $5M + sell for a higher multiple of cash flow than businesses with $800k of Sales- Generally.  Try to research what other similar businesses my be selling for or have sold for.  A qualified Business Broker may assist with this step.

  1. Ensure your financials are concise and clean.  Are there any outdated entries on any of your financials. Can you readily reconcile any differences between tax records and Income Statements?    Furthermore a business that is doing better is more likely to sell than a business with declining sales or margins.
  2. Have documented business operational procedures or business practices and procedures. If you already have them, review and update them. Consider if it is time to archive or throw out records from 5- 10-15 years back.
  3. Make big and small steps to have less reliance on you as a business owner. Ask the question- “Does your business rely on you ? Delegate if possible.  Sometimes it’s hard to let go of the idea that “only I can do that”.   I’ve personally experienced a long stretch of illness while owning a business and quickly learned of the many activities that I was doing that could be done by other members of my staff.
  4. Clean up your business. Your office, your trucks, grounds, facilities, equipment, tools and employees appearance can all add value.  Equipment involved with the sale that is well maintained and in order provides to the “Peace of Mind” a business buyer is seeking.  Again envision yourself as  business buyer  and looking at your trucks and most of the tires are bald, and smoke is coming out of the exhaust and they look like hell.  It may only take a few thousand dollars to improve this conditions, but a prospective buyer may mentally devaluate business value by tens of thousands or more.  It may create more doubt and uncertainty about other components of business.

 

Again- not every business that tries to sell actually find a buyer that is a fit.   There are steps you as a business owner can make to increase the likelihood of a successful business sale and transition.

Preparing your business for sale is a very important step in the process of selling your business.  Working with a trusted advisor,  finding prospective business buyer candidates is highly important as well.  Finding the “right” buyer candidate  to transition your business to is the end goal that begins with preparing your business for sale.

For More information on Selling a Business or Buying a  Business contact   Scott Messinger- Business Acquisition and Sales-   Gateway Business Advisors      www. SellaBusinessAdvisors.com

 

 

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.