Asking Price: $1.2 Million Business Description: The Business brokers well-known brand name Snacks, Candy, beverages such as Soft Drinks, Gatorade and Energy Drinks, Water, and other items with a long shelf life. They have vendors that offer the best prices and customers that will buy in trailer load quantities; some sales are smaller quantities. Trailer loads will sell for $20,000 to over $100,000. A somewhat typical transaction: Customer orders a trailer load, Business purchases and has it shipped. Customer pays within 48 hours, in many cases before the product is received. Business pays the vendor quickly – everyone is satisfied. Operational Strengths: The Business has a long history of locating what is needed at competitive prices. Customers and vendors are loyal. Facility: The Business has a small office; a part time Administrative person assists the Owner. The Business could operate from a home office. Reason for Sale: The Owner has been in the food related business … [Read more...]
Furniture Gallery
Asking Price: $60,000 Real Estate: $245,000 Business Description: The Gallery displays distinguished and uncommon furniture, accent pieces, prints and accessories allowing their customers to create spaces that reflect their individual character. It has a highly recognized name in the Greater Cincinnati & Dayton area. Products are upscale and affordable – value is paramount. For over twenty years the business has furnished over 40 Homearama homes – they understand trends and traditional styles. They also participate in the Cincinnati Home and Garden Show. Awards from magazines such as “Design” and “Cincinnati” are a testament to what they have and how they treat customers. Facilities: The building is in good shape with old world flair. It is owned by the Owners of the Business. A sale is preferred, a lease will be considered. It’s in the perfect location, an area known for stores that are everything the big box retailers are not – offering unique high … [Read more...]
What Are Buyers Looking for in a Company?
It has often been said that valuing companies is an art, not a science. When a buyer considers the purchase of a company, three main things are almost always considered when arriving at an offering price. Quality of the Earnings Some accountants and intermediaries are very aggressive when adding back, for example, what might be considered one-time or non-recurring expenses. A non-recurring expense could be: meeting some new governmental guidelines, paying for a major lawsuit, or adding a new roof on the factory. The argument is made that a non-recurring expense is a one-time drain on the “real” earnings of the company. Unfortunately, a non-recurring expense is almost an oxymoron. Almost every business has a non-recurring expense every year. By adding back these one-time expenses, the accountant or business appraiser is not allowing for the extraordinary expense (or expenses) that come up almost every year. These add-backs can inflate the earnings, resulting in a failure to reflect … [Read more...]
A Reasonable Price for Private Companies
Putting a price on privately-held companies is more complicated than placing a value or price on a publicly-held one. For one thing, many privately-held businesses do not have audited financial statements; these statements are very expensive and not required. Public companies also have to reveal a lot more about their financial issues and other information than the privately-held ones. This makes digging out information for a privately-held company difficult for a prospective purchaser. So, a seller should gather as much information as possible, and have their accountant put the numbers in a usable format if they are not already. Another expert has said that when the seller of a privately-held company decides to sell, there are four estimates of price or value: A value placed on the company by an outside appraiser or expert. This can be either formal or informal. The seller's “wish price.” This is the price the seller would really like to receive – best case scenario. The … [Read more...]
Selling Your Business
2/15t'2015 Selling Your Business- IBBA Selling Your Business When selling your business, you don't want just any buyer, you want the best buyer. With the market we're now experiencing, many sellers are getting multiple offers, but the buyers they choose aren't always the ones offering the most money. Would you consider a lower price for a buyer that fits the company's culture? Would you consider an offer that's a million dollars lower if it meant the difference between years of seller financing and cash at close? It's common for deal structures to include a variety of options which must be carefully considered and evaluated, long before you get to the negotiating table. You may not realize it, but you're positioning and negotiating from day one of a sale. Be sure your priorities are well thought out or … [Read more...]
Top Ten Mistakes Made By Sellers
Neglecting the day-to-day running of their business with the reasoning that it will sell tomorrow. Starting off with too high a price with the assumption the price can always be reduced. Assuming that confidentiality is a given. Failing to plan ahead to sell / deciding to sell impulsively. Expecting that the buyers will only want to see last year's P&L. Negotiating with only one buyer at a time and letting any other potential buyers wait their turn. Having to reduce the price because the sellers want to retire and are not willing to stay with the acquirer for any length of time. Not accepting that the structure of the deal is as important as the price. Trying to win every point of contention. Dragging out the deal and not accepting that time is of the essence. © Copyright 2015 Business Brokerage Press, Inc. Photo Credit: jppi via morgueFile … [Read more...]
Why Sell Your Company?
Selling one's business can be a traumatic and emotional event. In fact, “seller's remorse” is one of the major reasons that deals don't close. The business may have been in the family for generations. The owner may have built it from scratch or bought it and made it very successful. However, there are times when selling is the best course to take. Here are a few of them. Burnout – This is a major reason, according to industry experts, why owners consider selling their business. The long hours and 7-day workweeks can take their toll. In other cases, the business may just become boring – the challenge gone. Losing interest in one's business usually indicates that it is time to sell. No one to take over – Sons and daughters can be disenchanted with the family business by the time it's their turn to take over. Family members often wish to move on to their own lives and careers. Personal problems – Events such as illness, divorce, and partnership issues do occur and many times force the … [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 assistance from family … [Read more...]
Buying (or Selling) a Business
The following is some basic information for anyone considering purchasing a business. Is may also be of interest to anyone thinking of selling their business. The more information and knowledge both sides have about buying and selling a business, the easier the process will become. 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 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. More than 70 percent will have less than $250,000 to invest. In many cases the funds, or part of them, will come from personal savings followed by financial assistance from family members. He, or she, will never have owned a business before. Despite what he thinks he wants in the way of a business, he will most likely buy a business … [Read more...]
The Deal Is Almost Done — Or Is It?
The Letter of Intent has been signed by both buyer and seller and everything seems to be moving along just fine. It would seem that the deal is almost done. However, the due diligence process must now be completed. Due diligence is the process in which the buyer really decides to go forward with the deal, or, depending on what is discovered, to renegotiate the price – or even to withdraw from the deal. So, the deal may seem to be almost done, but it really isn't – yet! It is important that both sides to the transaction understand just what is going to take place in the due diligence process. The importance of the due diligence process cannot be underestimated. Stanley Foster Reed in his book, The Art of M&A, wrote, “The basic function of due diligence is to assess the benefits and liabilities of a proposed acquisition by inquiring into all relevant aspects of the past, present, and predictable future of the business to be purchased.” Prior to the due diligence process, buyers … [Read more...]