Sellers Don’t have a valid reason for selling. Are testing the waters to check the market and the price. (They are similar to the buyer who is “just shopping.”) Are completely unrealistic about the price and the market for their business. Are not honest about their business or their...
For a business to sell, there has to be a seller - and a buyer. The buyer of today is a bit different than the one of yesterday. Today's buyer is not a risk-taker, is concerned about the financials, and seems to be overly concerned...
Most prospective business buyers really don't know from the outset the exact type of business they want to buy. Experienced business brokers and intermediaries know that many business buyers end up with what is sometimes a far cry from what first captured their imagination. Take, for...
Statistics reveal that out of about 15 would-be business buyers, only one will actually buy a business. It is important that potential sellers be knowledgeable on what buyers go through to actually become business owners. This is especially true for those who have started their...
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...
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...
“Deep-pocketed investors often set aside money to buy into private equity funds. Such investments tend to be riskier but can generate higher returns than stocks or bonds. Here are some of the key players and terms in the world of private equity investments. • Private equity firms:...
If there were any doubt that women owners are an ever-growing force on the independent business scene, new studies of leading female entrepreneurs around the world supplies incontrovertible proof. The National Foundation for Women Business Owners (NFWBO) has been hard at work, researching the small...
The telephone rings, the caller receives a message welcoming them, then she is asked to dial the extension of the person she wants to talk to. Since she doesn’t know the extension, she has to wait and listen to the office directory; then presses the...
The following appeared in a study, Financial Difficulties of Small Businesses and Reasons for Their Failure, prepared for the Small Business Administration (SBA). They are statements made by individuals whose business was in financial difficulty and subsequently failed. Their comments are listed under the stated...
As the federal government and the state governments look for more ways to bring in money, the independent contractor status is a likely place for them to look. After all, by using independent contractors rather than employees, employers don’t have to withhold taxes, provide workers’...
A recent article in the Boston Globe reported that although more attention is on the large, primarily publicly held companies, more and more people are making their living by operating their own businesses. In fact, nationally, over 500,000 new businesses are started every year. What...
Small companies are the innovators. The need for large companies to acquire small companies is necessary in order for the former to capture new products and services. According to Fortune magazine, "Big companies almost never innovate. This is unfortunate because innovation is one of the...
The median sales of a company going public has gone from an average $15 million in 1999 and 2000 to $164 million in 2004. Smaller companies have decided not to go public as often as in years past, and they reap the quick – and...
In most jurisdictions, a board of directors is not required for privately held companies. However, many of these companies have appointed what might be termed advisory boards. Although they may not have any legal authority, owners of these privately owned companies have discovered that this...
The deal is getting down to the wire, the price differential is close, but the parties are not yet in agreement. Following are some ideas that might get the ball rolling and help bring the parties together. Let the seller retain the real estate and rent...
A recent article in M&A Today offered some observations concerning current and future M&A trends. “The business world is constantly changing. For the first half of the 20th century, vertical integration was the objective in which, oil companies, for example, owned the entire process from drilling...
We suspect that the answer to this question depends on who you ask! The Internal Revenue Service (IRS) reports that they received some 24.8 million business tax returns for the year 1999. We can hear the joyful sounds emanating from new business brokers and those considering the...
Here is a common and much-used breakdown by the federal government: Small Business Administration (SBA): Very Small Business = 19 or fewer employees Small Business = 20 to 99 employees Medium-Size Business = 100 to 499 employees Large Business = 500+ employees ...
1. Start with the business - Value Drivers: Size, growth rate, management, niche, history - Value Detractors: Customer concentration Poor financials Outdated M&E Few assets Lack of agreements with employees, customers, suppliers Poor exit possibilities Small market Potential technology changes Product or service very price sensitive 2. Financial analysis: Market Value - comparables Multiple of Earnings - based on rate...
“There are many reasons for valuing an entity, and those circumstances can lead to different outcomes…For instance, a business’s value for sale on a going-concern basis will differ from its value for liquidation purposes. It similarly makes a difference if the valuation is for an...