There is no underestimating the importance of negotiation when you are buying or selling a business. Let’s take a look at some of the most often used strategies and our recommendations. The Direct Approach One approach in negotiations is what we often refer to as the “take it or leave it” strategy. In this scenario, the buyer makes an offer, and the seller then counters that offer. There is little negotiation work necessary, as both parties are direct and simple about the numbers and terms they propose. The drawback to this approach, however, is that when it doesn’t work, there is little to no recourse. When this “direct approach” offer isn’t accepted by one of the parties, there is little opportunity for flexibility on either side. Therefore, the direct approach can be somewhat of a risk. Focusing on Influential Details There are typically certain aspects of a deal where a buyer or seller is unwilling to compromise. Sometimes this aspect isn’t even financial in nature. It could be … [Read more...]
How Leases Factor into Business Sales
If you’re planning to buy or sell a business that involves a lease, this can lead to an extra level of complication. Oftentimes, such as in the case of a restaurant or retail establishment, the location is essential to the success of the business itself. That means that if you’re buying a business, you’ll have to make sure any lease issues you might encounter are straightened out before you sign on the bottom line. But even if you’re buying a business that isn’t location-sensitive, you’ll still want to iron out all the details about your lease ahead of time. Negotiating a Lease If you’re buying a business with a lease, one word of advice is to have a clear way out of the lease in the near future. After all, with a business so new to you, you might make changes in the short term. The general recommendation is to negotiate a one-year lease that has an option for a longer period of time. In many instances, the buyer of a business with a lease will find that he or she doesn’t have too … [Read more...]
Long Term Very Profitable Indianapolis Auto Salvage Yard
Asking Price: $1,300,000 including $600,000 to $800,000 in Inventory Adjusted EBITDA $468,000 Revenues $2,000,000 + Furniture, Fixtures, and Equipment $450,000 included Real Estate Value $1,900,000 for Sale or Favorable Lease This is a very profitable Auto Salvage and Used Auto Parts Business in the Indianapolis area. Hard to find licensed salvage yard for sale. Well run and very profitable. Stands out over the competition. This is one of a kind operation and ideal opportunity for an individual or business looking to get into the business. And still growing. Business can be purchased with or without the real estate. This business sells salvage and used auto parts. With the possibility of a recession and continued supply chain issues, individuals will keep their cars longer and will need replacement parts. On the flip side, when economy picks up, it is still projected that business in this industry will also … [Read more...]
Printing-Promotional & Stationery Industry
Business Description: The Company serves the Personalized Printing, Promotional Product & Stationery Industry. They offer many types of products, with most personalized as requested by their customers. Niche. They have quality products which has created a loyal, nationwide customer following. They have proven promotional capabilities which bring repeat and referral customers. Opportunity: The business has been around for decades, is well branded, and a turnkey business opportunity. The facility has capacity to grow. It needs new leadership. Operational Strengths: The Business has a great employee base and an efficient production facility. It’s located in a smaller town in the Midwest. Financial. Annual Revenues have been over $10,000,000. Management; Employees. The Owner will retire after any reasonable transition period. There are experienced and capable department managers. Employees … [Read more...]
How Can You Identify a Serious Buyer?
No one wants to waste their time and energy trying to sell their business to someone who isn’t actually planning to buy. That’s why it’s so important for you and your business broker or M&A advisor to focus on the most qualified and serious buyers. But how can you really make these kinds of assessments about a buyer’s viability until they sign on the dotted line? Let’s take a look at some signs that will help you figure out your buyer well in advance. Do they have a history of ownership? When someone has owned a business in the past, they have a firm understanding of what is involved. As a result, they are more likely to be a serious buyer. It also means they are more likely to move forward. You will also find that they have the ability to make a substantial down payment and financing options. While they might want you to help them with financing, you should still be looking to ensure they will put their own capital at risk as well. Are they seeking information about your cash … [Read more...]
Are You Cut Out to Own a Business?
There are clearly qualities that make a person an ideal candidate to be a business owner. On the other side of the coin, however, it’s clear that owning a business isn’t for everyone. Let’s take a look at some of the unique personality aspects that help motivated individuals identify owning a business as a good fit for them. You Seek to Guide Your Destiny A common reason people become business owners is that they want to have more control over their lives. After all, if you’re working for someone else, your fate is never truly in your own hands. You can always be fired or let go. When you are a business owner however, not only do you have control over your job itself and the tasks you accomplish on a daily basis, but you can also determine who you work with and where you work. You also need to have optimism to keep working with the belief that things are moving in a positive direction. You are Comfortable with Risk When you take the role of business owner, you invite a certain degree … [Read more...]
Can You Buy a Business Without Collateral?
If you’ve ever gotten any type of substantial loan, chances are that you’re already familiar with the concept of collateral. This is when something of value is pledged as security. As a result, the lender has something of value that they could potentially take if the loan is not repaid. Collateral is designed to protect the lender. Of course, the most common example of collateral is your house when you have a mortgage. Oftentimes, those looking for a loan to buy a small business wonder if they can do so if they have no collateral. Let’s take a closer look at some of the most popular options in this situation. The 7(a) Loan Assistance Program If you’re lacking collateral and looking for a business loan, it’s a good idea to check with the Small Business Administration. The SBA 7(a) loan is one of their most popular programs. While it can be used for establishing or acquiring a new business, it’s also commonly used for long and short-term working capital, refinancing business debt, or … [Read more...]
What is a Partnership Agreement?
A partnership agreement is a legal document that provides an outline of how a business will be run. This agreement will often be used by small for-profit businesses when two or more people are involved. It’s an essential document to have, especially in the case when a dispute arises between partners. Even if you have gone into business with a friend or relative, you should have this document in place to make sure everyone is protected. Let’s take a look at some of the key elements that should be in this document. The Basics It goes without saying that your partnership agreement should include the basics, such as the name of the business and the names of key parties involved. You’ll also want to outline the goals of your partnership and how long it will last. Rules and Responsibilities When you create your partnership agreement, you’ll want to make sure it offers a lot of clarity on different points with an eye to everyone’s responsibilities. Think through what concerns or … [Read more...]
What Are Your Flaws?
As a business owner, your natural inclination is likely to be considering the strengths of your business and how to perform even better in the future. However, the truth is that sitting back and thinking about your flaws can actually benefit you in the long run. When you have a full understanding of where you are lacking, it will empower you to make the best strategic decisions for the future. These changes, in turn, will help you receive top dollar when you go to sell your business. Here are 4 areas you should be evaluating: 1. Your Products How diverse are your products? If you rely upon the sale of just one product, that puts your business in jeopardy. You should be thinking about additional products you could add. This will also open you up to new opportunities for customers and revenue. 2. Your Workforce There has been much publicity about the current trends in businesses struggling to find staff. Further, there are a variety of trades, such as tool and die, where there is a … [Read more...]
BizBuySell Insight Report for 2022
BizBuySell has issued their latest insight report, which summarizes market growth and trends from last year. In this report, they have several interesting areas to report including a summary of how lower sales prices and rate hikes impacted the value of businesses in recent months. The report can be found at https://www.bizbuysell.com/insight-report/#reportArchive. Overall Trends in 2022 Buyers currently appear to have some leverage when it comes to the prices of businesses on the market. When comparing 2022 with 2021, we see a 4.7% increase in closed transactions. Comparing it to the year prior, there is a 19% gain. Obviously, 2020 sales were negatively impacted by COVID. While sales grew substantially in the first half of 2022, there was a decrease in momentum in the second half of the year due to inflation and interest rate increases. The number of transactions recorded by BizBuySell.com in 2022 are actually fairly comparable to 2021, with numbers of 9054 and 8647, respectively. … [Read more...]