Archives for January 11, 2012

A Look at Today’s Business Buyers

Once you've decided to sell your business, you'll quickly learn there are a variety of possible investors.  Let's take a look at some of the categories of  investors that you may encounter. Family Members as Buyers You may find that you already know potential buyers in the form of your family members.  Many sellers really see this as being a major advantage due to continuity.  Often a family member buying a business encompasses years of preparation. While having a family member take over your business can be ideal, there are some potential hurdles as well.  For example, what if your family member doesn't have enough cash?  Also you may find that it is more difficult to leave behind your responsibilities.  These types of issues can cause serious disruptions.  If an outside party buys your business, you will avoid these types of "I told you so" situations. The key to deciding on a family member should incorporate three aspects: ability, family agreement, and financial … [Read more...]

Why Should You Consider Selling Your Company?

There is more often than not a tremendous emotional attachment to one's business.  In fact making sure a seller is ready emotionally to sell is a key role for a professional intermediary.  So when should you consider selling your company.   Let's take a look at some of the key reasons. -Retirement Owners should have a plan for their eventual retirement and then be prepare to execute that plan with the help of a seasoned business broker. -Fatigue and Burnout According to industry experts, many owners sell their company due to burnout.  After all, running a business can mean 7 day weeks and long hours.  If you feel a sense of fatigue and burnout when you think of your business, it may be time to sell. -Personal Issues Every now and again life events like illness, divorce, and partnership issues do cause people to sell.  Emergency sales will almost always bring in less money.  As a result, be sure to plan in advance so you could potentially handle such … [Read more...]

Who Is the Buyer?

Buyers buy a business for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses: Laid-off, fired, being transferred (or about to be any of them) Early retirement (forced or not) Job dissatisfaction Desire for more control over their lives Desire to do their own thing A Buyer Profile Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial … [Read more...]

Rating Today’s Business Buyers

Once the decision to sell has been made, the business owner should be aware of the variety of possible business buyers. Just as small business itself has become more sophisticated, the people interested in buying them have also become more divergent and complex. The following are some of today's most active categories of business buyers: Family Members Members of the seller's own family form a traditional category of business buyer: tried but not always "true." The notion of a family member taking over is amenable to many of the parties involved because they envision continuity, seeing that as a prime advantage. And it can be, given that the family member treats the role as something akin to a hierarchical responsibility. This can mean years of planning and diligent preparation, involving all or many members of the family in deciding who will be the "heir to the throne." If this has been done, the family member may be the best type of buyer. Too often, however, the difficulty … [Read more...]

Today’s Business Buyer: A Profile

Today's independent business marketplace attracts a wide variety of buyers eager for a piece of ownership action. Buyers of small businesses are most likely replacing lost jobs or searching for a happier alternative to corporate life. Buyers of mid-sized and large operations are, typically, private investment companies seeking businesses to build and eventually sell for a profit. This is the broadest possible look at the types of buyers out there. Business owners considering putting their business on the market should be aware of the finer "distinctions" among buyers, as well as what they are looking to buy, and why. 1. Individual Buyer This is typically an individual with substantial financial resources and with the type of background or experience necessary for leading a particular operation. The individual buyer usually seeks a business that is financially healthy, indicating a sound return on the investment of both time and money. If these buyers do not have the amount of … [Read more...]

Why Do Deals Fall Apart?

In many cases, the buyer and seller reach a tentative agreement on the sale of the business, only to have it fall apart. There are reasons this happens, and, once understood, many of the worst deal-smashers can be avoided. Understanding is the key word. Both the buyer and the seller must develop an awareness of what the sale involves--and such an awareness should include facing potential problems before they swell into floodwaters and "sink" the sale. What keeps a sale from closing successfully? In a survey of business brokers across the United States, similar reasons were cited so often that a pattern of causality began to emerge. The following is a compilation of situations and factors affecting the sale of a business. The Seller Fails To Reveal Problems  When a seller is not up-front about problems of the business, this does not mean the problems will go away. They are bound to turn up later, usually sometime after a tentative agreement has been reached. The buyer then gets … [Read more...]

Are You Buying (or Selling) a Business?

Are you considering purchasing a business? Here are some basic pointers to get you started.  Incidentally, this article should also be of interest to anyone thinking of selling their business. At Provest Properties, we've found that the process becomes easier when both the buyer and seller have information and knowledge. What's the Profile of a Typical Buyer? The typical small business buyer is often looking to get out of an uncomfortable job situation or deal with a lost job.  Most of these buyers have never owned a business. A buyer will more than likely have less than $100,000 in which to invest in the purchase of a business.  More than 70% of buyers will have less than $250,000 to invest.  A buyer's funds will usually come from personal savings and additionally from family members. Potential buyers are looking to do their own thing and they want to break free from the cycle of working for someone else.  While making money is on their priority list, this typically isn't the … [Read more...]

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