In a previous blog, we discussed briefly how risk can be shifted between the buyer and seller during negotiations to achieve the desired price. Visualize with me for a moment; every deal has a big bucket of risk and each deal has a different size bucket. That bucket is filled with perceived risk and real risk. At the closing table, the risk is going to be poured out between the buyer and...Read More
I have worked with well over 1,000 prospective buyers looking to purchase a business over the past 15 years and I would estimate that probably 80% to 90% do not have a particular business category in mind. I can also say that may who have called my office inquiring about a specific business often end up buying something very different from what they had initially called on. A common question...Read More
Have you heard the term “You set the price, I’ll set the terms”? The crux of this quote is simply reinforcement that when negotiating a deal, the two elements are inseparably connected. For this article, we will be referring to business transactions between $1M and $20M in selling price.
It is a compelling idea for a business owner selling his or her business to ask for the best of both...Read More
Selling a business can be a daunting and time-consuming task, particularly when planning has not occurred ahead of time as part of an exit strategy. When deciding to sell your business, some critical steps should be taken that can help to ensure the deal will go smoothly and that a strong value is obtained for the company. Often owners are not prepared until the time they are ready to sell and...Read More
When buying a new business, a lot of time and effort is spent searching for the right fit. Once the decision is made to pursue the deal there is even more work to do during the due diligence process. Finally, if the deal makes it all the way through to closing, it is now time to begin to run the company. To ensure an efficient transition and take over, there are some key steps that a new...Read More
When a seller decides to list a business, they are hoping to attract a lot of interest. If this occurs, the question will then be how to determine the best buyer from the pack. After going through the valuation process with a reputable source, the owner should have a clear idea of the company’s worth. Buyers may be willing to pay more or less than the valuation depending on what they are...Read More
The value of a business can be determined in a variety of ways and requires a thorough understanding not only of the actual business but also of the industry, competitors, as well as the current market. Like in residential real estate, in a buyers’ market there will be less competition for the buyer of a business which can drive down the multiple and overall sales price. On the other hand, in...Read More
When purchasing a business, buyers tend to fall into two categories, Strategic Buyers and Financial Buyers. Financial Buyers are made up mainly of investors, like private equity or venture capital firms. While Strategic Buyers tend to focus more on the synergies the potential acquisition can create. These synergies can fall into various areas and lead to increased revenues or costs savings...Read More
As a business owner, there will often come a time when the decision is made to sell the business you have worked so hard to create. For owners that have had a predetermined exit strategy in place and have met the target goals they set for themselves, this can be the final step in what has been a successful venture. Other times the sale may be out of a desire to pursue more exciting or...Read More
Many factors go into the valuation of a business. From industry type, to revenue and EBITDA totals, to longevity of the company. As a result, it can be an arduous process to get to the final number where both buyer and seller will be satisfied. Below are a few steps to consider that would help the cause:
1. Reduce Risk Through Semi Absentee Operation
Many businesses rely heavily on the owner’s...Read More
One principal concern a business owner has when deciding to sell a business is confidentiality, and rightly so. Selling a business is a time-consuming process that can take months depending on the level of preparedness the owner has put into their exit strategy. During this process, it is important that the company maintains discretion when getting the message out to prospective buyers or...Read More
One of the first significant steps in the route to buying or selling a business is the signing of the Letter of Intent (LOI). The purpose of the LOI is to express certain understandings and agreements between the buyer and seller of the prospective business and can be viewed as the first step in formalizing the negotiation process. The LOI is non-binding contract between the buyer and seller...Read More
When pursuing a potential business acquisition, a buyer should have specific criteria in mind in defining the ideal target company. Once a buyer has located the potential prospect, a low cost, high level due diligence should be performed. This initial act of uncovering information can be referred to as the preliminary due diligence process. In this stage the prospect will provide information...Read More
FOR IMMEDIATE RELEASE
(Los Angeles, CA) – Keystone Business Advisors recently announced that Alinea Medical Imaging, California-based medical imaging, and mobile mammography services company, retained Dave Richards, a Business Broker, of Keystone Business Advisors to represent them in simultaneous acquisition of Inner Images Services, Inc. and Mobile Mammography Screening, Inc. making...Read More
Often with a small to midsize company the owner has put a great deal of time and energy into the success of the business. The owners may see the company as an extension of themselves that they worked hard to build and as a result may be looking at it from an emotional or egotistical perspective. Some owners may know the ins and outs of the business like the back of their hand but may not take...Read More
As an owner, deciding to sell your business can be a difficult and time-consuming experience, and one that requires proper planning and awareness of marketability. When evaluating a potential business for purchase, it is important to understand the owner’s commitment to the sale. Many owners have prepared from the early stages of the life of the business and have developed a detailed exit plan...Read More
Is earnest money or a breakup fee required when selling or buying a small business? The answer to this question may surprise you depending on who you are. If you talk to a business seller or a business buyer, they may answer you the same, however as you dig in a little more into their answer you will see a glaring difference in the answer. A business seller will have a very different...Read More
Imagine your financial advisor telling you to invest 80% of your net worth into one stock. This may sound crazy, but small business owners are doing this every day.
It is well known that investment diversification is one of the more important ways to reduce financial risk to an investment portfolio. According to Investopedia, “diversification is a technique that reduces risk by allocating...Read More
A key question many business owners struggle with is…when is the right time to sell my business for its maximum value? This is often a very personal decision with several aspects to consider. There are 5 key questions to ask yourself.
Is my business growing, remaining flat or declining?
For business with sales and profitability that are growing at rates of 10% or greater, they...Read More