Getting the Best Deal For Your Business

You have worked hard to make your business successful and you have succeeded. Now you decide to sell the business. What should you do and how should you do it. The first suggestion is talk with the professionals that have worked with you through the years. Your accountant and lawyer would be a good place to start. If you live in a bigger city check to see if there is a local business broke you could talk with. You will need to immediately gather all pertinent information about your company. These include tax returns, P&L statements and significant bank records. Any long term lease agreements or loan obligations will have to be located for the business presentation.

Equipment leases or maintenance agreements are relevant too. If you have a union shop, the agreement with the union should also be part of the business’s full disclosure. All of this and more will be needed first to set a price and then negotiate the sale. Be prepared for an in depth look at every aspect of your business.

Get a certified evaluation from a certified business broker

To set the price, one of the choices is to use a certified evaluation broker who is in the business of valuing any type of business. These specialists in evaluation are used in court cases and IRS cases so their creditability is excellent and their proposed value for your business is very close to the mark. Many deals are based on just their number and the negotiation centers around terms of payment and if the owner will carry some paper. You can find evaluation software or your accountant could come up with a number, but you should consider an expert for this core piece of information about your business. You might want to check out our article on Evaluating your business for sale.

Check out industry prices

Another way to check out your company’s possible value is look at what other companies in your industry are worth in comparison to their sales. Industry associations and the Internet are good places to get this information. If the economy is strong, you may be able to get a better inflation rate than otherwise.

In any event find out what multiple of earnings seems to be in favor now or any other valuing method. Industry trends may be factored in to this price. Remember, industry trends are for the entire country and may need to be adjusted by a location factor. In any event the multiplier of profit can be from 10 to 1 times depending on the strength of the company.

The type of business also can be a factor. As you can see coming up with a sale price is complicated and maybe better left to an expert. This is where the CBB (certified business broker) comes into the picture. His training and experience will come into play when figuring what your business is worth.

Check out offers on the Internet

Offers in business sections of papers and trade magazines also will give some idea of a number for your business. There are many business brokers listed on the Internet. Talk to them about what a business like yours is being offered for in different parts of the country. These Internet sources are excellent places to get all kinds of information about selling a business. Reading articles on these sites will alert you to the fact that selling a business is far more difficult than selling a house. There are just more facts to deal with and probably more legal rules to worry about.

Cash price vs. terms price

Part of the deal to sell your business is setting an asking price for your business. Once this is done, then another decision must be made. Will you accept terms in order to sell the business? Terms mean you will wait for part of the purchase price to be paid at a later date. Many sellers will do this, but they sweeten the deal by asking for more money if terms are part of the purchase. So the seller has two asking prices. One price is a sale for cash and the other price is higher if terms are necessary in order for the deal to be made.

Actually this is a fairly easy negotiation as the higher price is not bothersome if the new owner is successful with running the purchased business. Both parties got what they wanted and the higher price is fair to both. Many negotiates have used this gambit for years to make deals. The old owner gets the business sold and the new owner while paying a little more for the business gets an existing business with an excellent chance of making the purchase work out over time. The actual terms of the wait and pay deal can be for one year or more.

There are some caveats that the seller should keep in mind. Where will the extra money come from in the future? This money will be needed to make the extended payment or payments. If it is going to come from the business cash flow, does the old owner believe this is possible? If not then this deal is a non-starter and must be turned down unless the old owner would not mind getting the business back through forfeiture.

Will you finance part of the purchase price

Financing part of the purchase price is common when selling a business. Many people will have a substantial down payment, but they want to keep back some money to run the business and not always be cash flow short. The old owner is an obvious source for this financing deal. They know the business to the bone and if they feel the new owner will be able to run the business, then they will seriously consider the financing deal in order to complete the sale. If you turn down this offer, then it may be a while before you get another serious buyer looking at your business. This decision is all about the feeling you have for the new owner. If they have other assets, then this is a no-brainer. If their credit checked out then this is another reason to do the deal.

Conclusions

Since an asking price has to be defended by solid information and company history, the hiring of a Certified Business Broker is a very good first step toward selling your business. This step provides a selling price that can be used with confidence and can be verified. After this price is set, it can be further used as a solid starting point for all other negotiating. Early on the owner needs to make a decision if the deal has to be all cash or terms or financing. With this in mind, this decision will speed up the discussions between the buyer and the seller or broker. If it has to be an all cash deal, the broker will know up front if the potential buyer can meet this requirement. If terms or financing are available, the deal is much easier to put together.

A clear presentation folder of all of the pertinent business information should be part of the opening discussion. If all facts are laid on the table, it makes for a better discussion situation as surprises are kept to a minimum.

If a broker is involved, let the broker handle the negotiating as they are more experienced at doing it right at either the seller or the buyer. The broker’s purpose in the deal is to expedite it and make it happen if at all possible.

All of this put together will help to get the best deal for the seller that can be obtained between this buyer and the seller. If it fails then the next negotiation will have to be played out on its own merits. Each deal has an optimum possibility and it is the job of an involved broker to help both parties come to a fair agreement.

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Role of Business Brokers in Selling Your Business

There is a role for a business broker in selling your business. Basically they will make it happen quicker and often at a better price than you could have received on your own.

There are many reasons to use a business broker when selling your business. The most basic reason is they are in the business of selling businesses. They will market your business and help to get prospective buyers to look at your deal. They will help in setting an asking price based on their knowledge and experience. If they have gone through the certification program their price would be considered expert testimony and therefore is given a great deal of creditability. Keeping the owner from underselling their business or over pricing their company is part of their legitimate function to their client. Since they know how to find buyers who are qualified and ready to deal on a business of their liking, they can help to cut down the time a business has to be on the market. Consistently a business broker will move a business quicker and usually at a very fair price.

What does a business broker do

They can help the seller get the information needed by the buyer to make a decision on buying the business. This role is critical as nothing happens until a price is established and the business facts are known. Presenting the facts in a professional form is another common service that a business broker will give a client. This service can be the difference between a seller making a deal and the deal going south. Professional presentation of pertinent facts about a business is necessary in order to attract potential buyers. It is this factual information that helps buyers make intelligent decisions about such a purchase. Since the business broker does this type of work year round, the information is shown in its most positive form. Practice does make perfect in this case.

The business broker is also the go-between for passage of information between the buyer and the seller. This enables better communication and cooperation between the buyer and the seller. The role of a disinterested third party is effective in letting the business broker move the dealing along on the sale of the business. The business broker must treat both sides fairly as his next clients are given existing clients as references for his work. It is imperative that the fairness issue is communicated to the next client. Since all aspects of the sale pass through the broker, this neutrality is important and also the advice given to both sides of the deal.

Marketing the business

Without a broker, the seller would have to market the property and would not have access to a pool of potential buyers. The buyer would not have access to the pool of sellers the broker has available. This need by both parties is the reason that most businesses are sold with the help of a business broker. Their expertise in helping to set the selling price cannot be overstated. A busy broker over time helps to sell many types of businesses and this real time experience is invaluable to the process coming to completion. A competent broker will also know the legal requirements for many types of businesses that the brokers in a geographical area. This prevents problems that can be prevented from taking place and decisions being made without all of the facts.

If he is not a certified broker as to setting a selling price, he will have referrals to brokers or CPAs that do have this credential. The advantage to the seller is the business will be set at a selling price that can be logically defended when questioned about how the price was set. It is not just a price that the seller picked from thin air of a wish list price.

Broker assisted negotiation

Since the broker will usually know what the buyer is willing to pay and what the seller is willing to accept, the broker can lead both sides to a price that is somewhere in the area that both are willing to live with. Without this outside force, either party may never approach this price.

A broker has another ability to deliver that makes their service worth the cost. Maybe the business is a one of a kind business and not one that comes to market every day. Businesses like this are hard to evaluate as to their market value and even more importantly there may be a need to come up with a unique marketing plan to sell the business. A good brokerage firm can do both and solve the problem with a greater chance of success than the owners of the business could do by themselves. They have access to a network of brokers who handle all types of businesses that are for sale.

The business may be unique in the geographic area it is located in, but there could well be one in another part of the country that was successfully marketed by a broker in that area. Use of the network is exclusive to the broker community and private individuals will not have access to the information that can be obtained from the network. Information is power, and this kind of help may be the only way the business could be successfully marketed. How other brokers sold a similar business can lead the broker in question to come up with a plan that has a good chance to work. This service to the seller is priceless and could make the difference between no-sale and sold. The seller could have wasted a great deal of time and money on an approach that would not work. Ferreting out potential buyers is the name of the game. The wrong approach could easily come up empty. All of this is sufficient reason to employ and expert when selling a business.

Conclusions

The fact that they will actively market your business is plus. The current owner does not have the time or knowledge to find buyers and set a fair price. They will usually set their price too high or too low. If they have a hard time coming up with any buyers, this can bring on frustration and an unneeded reduction of the selling price. It the wrong buyers are seeing the ad for your business, then only a bargain will attract their attention. A buyer who understood your business would readily see the value in a fairly priced offer. This is tricky and the result can be dramatically influenced by hiring a pro to help with the sale.

Another reason for the use of a pro is they can talk the language of professional people the buyers bring into the sale negotiation. If the terms that they communicate in are not understood, the buyer’s advisors will not be impressed and may kill the sale. Hiring the professional business broker can prevent lack of intelligent conversation. He will know the terms and their meanings and be able to give the needed answers to move the sale along. This knowledge and expertise is the reason that such a person should be hired to help you make the sale of your business. Their ability to use previous sales and how they were completed is a facet of their knowledge base. There is no way the current owner could bring that to the negotiating table.

Yahoo Small Business – The Many Benefits

When a person starts a small business, there are many preparations to be made to ensure the overall success of the business. Some of these preparations include setting up a webpage, developing a domain, implementing emails for the business, getting internet access that is appropriate to the needs of your business, as well as developing a marketing strategy. If you implement the use of Yahoo Small Business, you can get all of this and more! In this article, you will be introduced to a number of benefits when it comes to using Yahoo Small Business.

One of the main benefits of using Yahoo to assist you with your small business needs is the Yahoo Small Business Web Hosting service that is offered. With Yahoo, you can enjoy a multitude of wonderful features. The first being that you can design your website with a great deal of flexibility! You can also implement the use of the many professionally designed templates, or pull a template from a 3rd party.

In addition to this, Yahoo Small Business Web Hosting service gives you a lot of web hosting space for your products. Each month, you are permitted to have an unbelievable 200GB of bandwidth in which data can be transferred to your customers. You can also enjoy a large 5GB of web space to effectively design your website.

When you sign up for Yahoo Small Business Web Hosting, you can get a free domain name in order to brand your website. If you already have a domain name, that is no problem! Yahoo will allow you to bring your own name with you! In addition to outstanding features that come with your web hosting subscription with Yahoo, you can enjoy the comfort of knowing that there are specially trained professionals available to you every hour of the day of the week if you have questions, concerns, or issues with your service or website.

Many small businesses enjoy the Yahoo Small Business Web Hosting service because the subscription runs on a month to month basis, and there are no contracts involved in which you must commit to a certain term of service. Furthermore, the prices are quite competitive. You can have all the benefits of this service for as little as $7.77 for the first 2 months, and then $8.96 per month thereafter! This is an exceptional value!

When using Yahoo Small Business, you can enjoy a variety of marketing features. Marketing is a key component to the overall success of your business. One of the most popular methods that many business owners use is advertising in Yahoo! Local. You can display your business logo, describe your business, advertise your products, and more by implementing the use of this effective marketing strategy.

Individuals who take advantage of the marketing tools in Yahoo Small Business can submit their website to the Yahoo search engine. Many business owners also submit their website to the Yahoo Directory, and promote their products in Yahoo Shopping. By using these various marketing tools, a business can gain exposure, increase their search engine ranking, and potentially earn an outstanding income. Yahoo Small Business works to make every effort to ensure that each business is successful in their endeavors.

Internet access is often very important when it comes to the productivity of the small business. While there are numerous providers of internet service available today, if a business decides to use Yahoo as their one stop business solution, they can enjoy the collaboration of Yahoo and AT&T. This collaboration can provide you with an inexpensive way to ensure high speed internet access with great reliability. For as little as $14.95 a month, one can enjoy exciting features such as enhanced business security, effective and reliable connections, and many tools that allow you to communicate with your clients, customers, and coworkers.

Email is an essential part of every small business. When you utilize the email service that is provided by Yahoo Small Business, you can enjoy many features, which include:

- Unlimited Space on the Email Server

- Your Domain Name on Email Addresses

- Free Email Newsletter

- Spam Solutions

- Name Brand Antivirus Software

By using this Yahoo Business Email service, you can assign personalized email addresses to individuals that conduct work within your small business. If you want to create a professional, high-quality solution to your email needs, Yahoo provides outstanding services that make this possible.

As you can see, utilizing Yahoo Small Business can prove to provide many benefits to your small business. You can depend on this service to provide highly technological solutions for your business with outstanding reliability and customer service.

Create a yahoo web site for yourself and see the excellent benefits and features that you can have for a great price. The Site Solutions tool alone will amaze you with how easy it is to build a web site. These features are a great beginning on why anyone should choose Yahoo Small Business.