“As shocking as it may sound, I believe that most owners of middle market private companies do not really know the value of their company and what it takes to create greater value in their company … Oh sure, the owner tracks sales and earnings...
Before answering the question, it makes sense to first ask why people want to be in business for themselves. What are their motives? There have been many surveys addressing this question. The words may be different, but the idea behind them and the order in...
[caption id="attachment_1672" align="aligncenter" width="300"] Photo Credit: tallkev via Compfight cc[/caption] Owners are often asked, "do you think you will ever sell your business?" The answer varies from, "when I can get my price" to "never" to "I don't really know" to everything in between. Most sellers...
[caption id="attachment_1626" align="aligncenter" width="300"] Photo Credit: Jason Hargrove via Compfight cc[/caption] Know what your business is worth. Don’t even think about selling until you know what your business should sell for. Are you prepared to lower your price if necessary? Prepare now. There is an often-quoted statement...
[caption id="attachment_1621" align="aligncenter" width="300"] Photo Credit: Dave Dugdale via Compfight cc[/caption] In many cases, the sale of a small company is “event” driven. That is, the reason for sale is often an event such as a health decline or illness, divorce, partnership issues, or even a...
[caption id="attachment_1584" align="aligncenter" width="300"] Photo Credit: Instant Vantage via Compfight cc[/caption] A serious buyer should have the answers to the following questions: Why are you considering the purchase of a business at this time? What is your time frame to find a suitable business? Are you open-minded about different...
[caption id="attachment_1571" align="aligncenter" width="300"] Photo Credit: Victor1558 via Compfight cc[/caption] There is the oft-told story about Ray Kroc, the founder of McDonalds. Before he approached the McDonald brothers at their California hamburger restaurant, he spent quite a few days sitting in his car watching the business. Only...
[caption id="attachment_1563" align="aligncenter" width="300"] Photo Credit: Victor1558 via Compfight cc[/caption] There is the old anecdote about the immigrant who opened his own business in the United States. Like many small business owners, he had his own bookkeeping system. He kept his accounts payable in a cigar...
[caption id="attachment_1556" align="aligncenter" width="300"] Photo Credit: Lori Hersberger via Compfight cc[/caption] Burnout is an often-used reason for an owner selling his or her business. Potential buyers may have trouble accepting this as a valid reason for sale. However, burnout is a valid reason for selling one’s...
[caption id="attachment_1543" align="aligncenter" width="300"] Photo Credit: gadl via Compfight cc[/caption] Recent studies indicate that it now takes, on average, about eight to ten months to sell a small business. This figure seems to increase yearly. Why does it take so long to sell a business? Price and...