Gaining a Better Understanding of Leases

Leases can, and do, play a significant role in the buying or selling of businesses. It can be easy to overlook the topic of leases when focusing on the higher profile particulars of a business. However, leases are a common feature of many businesses and simply can't be ignored. Leases and Working with Your Attorney Whenever a small business is sold, it is common that leases play a major role. In general, there are three different types of leasing arrangements. (If you have any questions about your lease, then you should consult with your attorney. Please note that the advice contained in this article shouldn't be used as legal advice.) Three Different Lease Options In the next section, we will examine three of the most common types of leases. The sub-lease, new lease and assignment of lease all function in different ways. It is important to note that each of these three classes of leases can have differing complicating factors, which again underscores the value and importance of … [Read more...]

Very Successful Restaurant – True Gem

Asking Price: $600,000 Revenues:   $1,200,000 Profit:  $240,000 (Year after year) Business Description: New Price!  Motivated Seller - retiring. This well-known restaurant is a true gem.  Very desirable business.  An icon in the community.  The history of steady revenues and profits year after year speaks for itself.  Profits reach $240,000 to $265,000 year after year. Very profitable. Food is excellent as is the service.  This one stands out from the competition.  A very desirable area of town, on a busy street and area is still growing.  Owner has built up a loyal customer base. This establishment has been around for a number of years and is very well established.   Food is superb. Includes a 3-way liquor license.  Very attractive restaurant with separate dining room and bar area.  Great curb appeal, plenty of parking and easy access.  Turnkey operation.    . Operational Strengths: Well established with excellent reputation and name in the industry. Facility: … [Read more...]

What is Really in the Mind of Your Buyer?

It is always important to try and put yourself “in the other person's shoes.” This fact is of paramount importance when dealing with prospective buyers. Thinking like a prospective buyer could, in fact, be the difference between selling your business and not selling your business. Yet, it is important to continue to put yourself in your buyer's shoes during the entire sales process. It is easy to think that because everything is going smoothly with the sale of your business that the tough part is behind you. That may be true, but then again there could still be problems ahead. Issues can come up at a moment's notice when either your prospective buyer or his or her advisor raises a red flag. Additionally, the larger the business, the greater the complexity. This translates to the greater the risk of problems arising. The “Little Things” that Could End Up Quite Big Financial statements are of considerable importance. Quite often you'll see contingencies regarding financial … [Read more...]

Does Your Asking Price Truly Matter?

It is no great secret that sellers often aim high. The logic sellers use is simple, “I can always reduce my price.” While that is true, sellers do need to remember that if the asking price is initially too high, buyers won't even take a serious look. In short, your selling price must be bound by reality and what the market will bear. Pricing Does Matter When an asking price is too high buyers will simply move on. But in the meantime, you may have lost a qualified buyer that would have been very interested at a lower price. Pricing isn't a factor that should be played with, instead it should always be treated in as professional of a manner as possible. Instant Millionaire? Maybe and Maybe Not Some sellers want to become instant millionaires and sell their business for top dollar. Sometimes this is warranted and sometimes the numbers don't support lofty valuations. Every situation and every business is different. It pays to be realistic. Studies have shown that there is usually … [Read more...]

Strong Selling Points: Let Your Strengths Work for You

“Independent business owner” is a phrase with two meanings. Of course, it means being the owner of an independent business. But another way to look at “independent business owner” is to let this phrase define the very personality of the person at the helm. Independent. Confident. Self-assured. Strong-willed. These are vital entrepreneurial attributes, but, ironically, they can sometimes work against the business owner when it comes time to sell. Since business owners are the type who know about selling — either products or services– and about making deals — haven't they had to cope with suppliers, customers, and competitors throughout their business careers? — it's not surprising that owners approach selling their businesses with these tried-and-true tactics and ideas. Sellers who have spent years building a business are often unaware of how completely different the process of selling a business is. Savvy sellers, realizing the importance of a selling approach equal to this very … [Read more...]

What Are Your Company’s Weaknesses?

Every company has weaknesses; the trick is to fix them. There is a saying that the test of a good company president or CEO is what happens to the company when he or she leaves. Some companies–on paper–may look the same, but one company may be much more valuable due to weaknesses in the other company. Not all problems or weaknesses can be resolved or fixed, but most can be mitigated. Fixing or lessening company weaknesses can not only significantly improve the value, but also increase the chances of finding the right buyer. Here are some common weaknesses that concern some buyers, causing them to look elsewhere for an acquisition. “The One Man Band” Many small companies were founded by the current president, and he has made all of the major decisions. Since he has not developed a succession plan, there is no one in place to take over if he gets hit by the proverbial truck. He is the typical one man band; and, as a result, the company is not an attractive target for … [Read more...]

Bed & Breakfast – Historic in Downtown Indianapolis

Business Description Beautiful B & B with lots of History. The B & B has been completely renovated keeping the historic integrity. Includes lots of amenities, updates plus much more. Just a beautiful building adding to Indianapolis's history. The historic renovations in downtown Indianapolis keeps on growing and continues to increase in value. Includes several rooms throughout the facility including quarters for the owner to reside. This property is best suited for a retired or semi-retired couple that is looking for an income producing property in a quiet, historic setting. Easy access to interstates, close to restaurants, downtown events and conventions. Ideal for an alternate experience to your everyday hotel stay. Appeals to a growing segment of travelers. New owner could just move in and take over. Actual identity & location will be disclosed with a non-disclosure agreement. Be sure to ask about other Bed & Breakfast’s that are also available. Contact us for more … [Read more...]

Downtown Restaurant Excellent Food & Reputation

Asking Price: $360,000 Business Description: This is a well established restaurant with an excellent reputation. Repeat customer base with great food. This restaurant has a fun atmosphere making an ideal place for a night out, and still good destination for the family. Been around for about ten years. Easy to run, high customer tickets and low overhead to operate. A large catering business goes with the business, including a catering truck. It is anticipated the staff and the chef will stay on.  Seller is motivated, but prefer the new owner has chef experience.  Very Profitable. Operational Strengths: Well established with excellent reputation and name in the industry. Facility: Fully Equipped restaurant. Excellent condition. Upscale atmosphere and dining experience. Reason for Sale: Moving out of state. Opportunity: Turnkey operation with growth potential. The Transaction: Owner will stay on for a transition period 30 days and/or as needed.   Furniture, … [Read more...]

Be a Winning Seller: Good Negotiation is the Key

You've made the big decision to put your business on the market. Your reasons for selling are valid, carefully-considered, and “good” – the kind that won't make a prospective buyer shy away. Now, you may tell yourself, comes the fun part. You'll come up with a price – maybe a little high, but why not? – and let gut instinct (an attribute common to successful business owners) lead the way. Wait just a minute. Or maybe a quarter of an hour; however long it takes you to bone up on your negotiation skills with the following steps as a guide. Being a smart negotiator is tantamount to effecting the successful sale of your business. Gather Your Forces The first step is to engage the help of a business broker professional. He or she understands the sales negotiation process as well as tactics for marketing the business. Before sitting down with your business broker, however, you should gather the following information: profit and loss statements (for three years), current federal income tax … [Read more...]

Points to Ponder for Sellers

Who best understands my business? When interviewing intermediaries to represent the sale of your firm, it is important that you discuss your decision process for selecting one. Without this discussion, an intermediary can't respond to a prospective seller's concerns. Are there any potential buyers? When dealing with intermediaries, it always helps to reveal any possible buyer, an individual or a company, that has shown an interest in the business for sale. Regardless of how far in the past the interest was expressed, all possible buyers should be contacted now that your company is available for acquisition. People who have inquired about your company are certainly top prospects. Lack of communication? It is critical that communication between the seller, or his or her designee, and the intermediary involved in the sale, be handled promptly. Calls should be taken by both sides. If either side is busy or out of the office, the call should be returned as quickly as possible. Does the … [Read more...]