How To Sell Your Business and Make a Successful Exit

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Selling a business is a significant decision that requires careful deliberation and planning. The role that business brokers play can be indispensable, especially when you aim to sell a business in Philadelphia, PA. These professionals guide you through the complex process, helping you avoid common pitfalls and ensuring a smooth transition.

How Business Brokers in Philadelphia PA Can Help

Business brokers in Philadelphia can prove to be an invaluable asset when selling your business. They are well-versed in the local market and can provide invaluable insights and guidance throughout the selling process. They can help you determine the right price, connect you with potential buyers, and navigate the negotiation and closing processes.

Preparing To Sell Your Business in Philadelphia

Preparing your business for sale involves more than just deciding to sell. It requires a thorough business valuation, a deep analysis of your financials, and a well-crafted exit strategy. Business brokers in Philadelphia can assist with this process, ensuring that your business is presented in the best light to prospective buyers.

Finding the Right Buyer for Your Business

Finding the right buyer is crucial for a successful business sale. Business brokers can facilitate this process by leveraging their professional networks and marketing your business to a wider audience. They can also provide guidance on what to look for in potential buyers, ensuring a seamless transition.

The Negotiation Process

Negotiating the sale of a business can be complex and emotionally charged. Business brokers can play a critical role in this phase, acting as intermediaries between you and potential buyers. They can help secure the best possible price and terms, ensuring your interests are protected throughout the negotiations.

Finalizing the Sale

Finalizing the sale of your business involves a multitude of tasks, from drafting sales agreements to coordinating the transfer of assets. Business brokers in Philadelphia can help with these final steps, ensuring that all paperwork is correctly completed and that the deal closes successfully.

Conclusion

In conclusion, selling a business in Philadelphia can be a complex and challenging process. It involves multiple steps, from initial preparation to finalizing the sale, each of which requires significant time, effort, and expertise. This is where business brokers in Philadelphia, PA, truly shine. They guide you through the process, leveraging their knowledge, experience, and networks to secure the best possible outcome. Whether you’re contemplating selling your business or have already made up your mind, engaging the services of a professional business broker can make all the difference. So, if you’re ready to sell a business in Philadelphia, take the first step toward a successful sale by seeking the assistance of a reputable business broker.

Ready to take the leap? Make the decision today to partner with a top-tier business broker in Philadelphia, PA. Don’t navigate the complex process of selling your business alone; let our expert team guide you every step of the way. If you’re prepared to sell a business in Philadelphia, reach out to us and discover the difference a professional business broker can make. It’s time to turn your business into a successful sale. Contact us now!

Expert Insights: How Business Brokers Enhance Your Selling Experience

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Are you a business owner in New Hampshire looking to sell your company? If so, you may be wondering how to get the best value for your business and find the right buyer. This can be a daunting task, but luckily some professionals specialize in helping business owners through this process – business brokers.

What is a Business Broker?

Business brokers are intermediaries who assist business owners in buying or selling their businesses. They are experts in valuing a business, marketing it to potential buyers, and negotiating a successful sale. These professionals can provide guidance and support throughout the entire selling process, making it easier for business owners to focus on running their company while leaving the sale in capable hands.

Benefits of Working with a Business Broker

One of the main benefits of working with a business broker is their expertise in valuing a business. A business’s value can be difficult to determine, but brokers have experience in analyzing financial statements, market trends, and other factors to accurately assess its worth. This can help sellers avoid over or underpricing their business and ensure they get the best possible price.

Another advantage of working with a business broker is their extensive network of potential buyers. Brokers have connections with individuals and companies who are actively seeking to purchase businesses, making it easier for sellers to find the right buyer. This can save sellers time and stress in searching for interested buyers independently.

Additionally, business brokers can handle all the marketing and advertising efforts on behalf of the seller. They can create professional marketing materials, advertise on various platforms, and screen potential buyers to ensure they are serious and financially qualified. This can help attract more buyers and ultimately lead to a successful sale.

Furthermore, business brokers can also assist in the negotiation process. They have experience in negotiating deals and can help sellers get the best possible price for their business. This can be especially beneficial for inexperienced business owners who may not have the knowledge or skills to effectively negotiate a sale.

Lastly, working with a business broker can provide confidentiality during the sale process. Brokers use non-disclosure agreements and handle all communications between buyers and sellers to protect the business’s sensitive information. This is important for maintaining the stability and reputation of the business while it is being sold.

In conclusion, whether you’re looking to accurately evaluate your business for the best possible price, connect with a wide network of potential buyers, or navigate the complexities of negotiations, a New Hampshire business broker can provide invaluable assistance. They offer an all-inclusive service, from crafting professional marketing materials to screening financially qualified buyers, all while maintaining the utmost confidentiality. This ensures both the stability and reputation of your business remain intact throughout the selling process. So, when you’re ready to sell a business in New Hampshire, remember to consider the significant benefits offered by working with a seasoned business broker. When it comes to business valuation in New Hampshire, rest assured that these professionals can guide you toward an accurate assessment of your business worth, setting you up for a successful and profitable sale.

The Importance of Business Brokers and Business Valuation Services

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Starting a business can be challenging, especially when it comes to finding the right buyer or selling your business at the right price. This is where business brokers and business valuation services come into play. In this article, we will discuss the importance of these services in the world of business.

What are Business Brokers?

Business brokers are professionals who act as intermediaries between buyers and sellers of businesses. They help business owners sell their businesses by finding potential buyers and negotiate on their behalf. Business brokers have a vast network of contacts, which they use to find the right buyer for a business. They also handle all the paperwork and legal requirements involved in selling a business.

Why Do You Need a Business Broker?

Selling a business can be complicated and time-consuming, especially for first-time sellers. This is where having a business broker can be beneficial. Business brokers have the expertise and experience to handle all aspects of selling a business, including marketing, negotiations, and legal processes.

Some other reasons why you may need a business broker include:

Confidentiality: Business brokers maintain confidentiality throughout the selling process. They ensure that sensitive information about your business does not fall into the wrong hands.

Valuation: Business brokers can accurately determine the value of your business, considering factors such as assets, revenue, and market trends. This helps you price your business competitively and attract potential buyers.

Marketing: Business brokers have access to a wide range of marketing tools and strategies to promote your business to potential buyers. This increases the chances of a successful sale.

Negotiations: Business brokers are skilled negotiators who can handle difficult negotiations on your behalf. They have experience in dealing with different types of buyers, ensuring that you get the best possible deal for your business.

What are Business Valuation Services?

Business valuation services are professional services that determine the economic value of a business. Business valuation is important for various purposes, such as selling or buying a business, obtaining financing, or settling disputes between shareholders.

A business valuation typically takes into account numerous factors, including:

Financials: A business’s financial performance and stability are crucial in determining its value. This includes factors such as revenue, profits, and cash flow.

Assets: The value of a business’s tangible assets, such as equipment and inventory, is also considered in its overall valuation.

Market trends: Business valuations also take into account current market trends and industry conditions. This helps determine the potential for future growth and profitability of the business.

Intangible assets: Intangible assets such as intellectual property, brand value, and customer relationships also play a role in business valuation.

Competition: The competitive landscape of the industry in which the business operates is another important factor to consider. A business with a strong market position and competitive advantage may have a higher valuation than its competitors.

Industry benchmarks: Business valuations often use industry benchmarks to compare the performance and value of a business against its peers.

The Role of Business Brokers in Valuation Services

Business brokers play an essential role in the business valuation process. They act as intermediaries between buyers and sellers, facilitating the sale of a business at a fair price. As experienced professionals, they have extensive knowledge of market trends and industry conditions, which can help determine the accurate value of a business.

Here are some ways in which business brokers assist with business valuation services:

Providing Expert Advice and Guidance

Business brokers have a thorough understanding of the factors that contribute to a business’s value. They use their expertise to provide guidance and advice to both buyers and sellers, ensuring that the sale price accurately reflects the true value of the business.

Conducting Market Research

One of the primary responsibilities of a business broker is to conduct market research to gather relevant data and information. They analyze industry trends, economic conditions, competitor performance, and other factors that impact the value of a business.

Evaluating Financial Statements

Business brokers have the expertise to analyze financial statements in detail. They review financial records such as profit and loss statements, balance sheets, and cash flow statements to get an accurate picture of the business’s financial health. This information is crucial in determining the value of a business.

Utilizing Valuation Methods

Business brokers use various valuation methods to determine the fair market value of a business. These can include asset-based, income-based, and market-based approaches. They select the most appropriate method based on factors such as industry, size of the business, and nature of its operations.

Negotiating Sales Price

Once a business broker has determined the accurate value of a business, they use their negotiation skills to agree on a fair sales price between the buyer and seller. This helps ensure that both parties are satisfied with the final transaction.

Conclusion

In the complex world of business transactions, the role of business brokers in Los Angeles CA is pivotal. Their expertise in market research, financial analysis, and valuation methods is invaluable. Business valuation services in Los Angeles are particularly crucial, as they provide an unbiased assessment of a business’s worth, removing any guesswork or personal bias. Specifically in Los Angeles, CA, where the business landscape is highly diverse, having a business valuation conducted by professional brokers provides credibility and accuracy. This ensures a fair sales price that reflects true market value and satisfies all parties involved in the transaction.

If you’re seeking a professional business broker in Los Angeles, CA, or need a comprehensive business valuation in Los Angeles, don’t hesitate to reach out to us. Our team of experts is ready to provide you with a detailed, unbiased assessment of your business’s worth to ensure a fair sales price and seamless transaction. Trust our expertise to navigate the diverse business landscape of Los Angeles, CA, with confidence and precision. Contact us today and take the first step towards a successful business transaction.

Goodwill and Its Importance to Your Business

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What exactly does the term “goodwill” mean when it comes to buying or selling a business?  Usually, the term “goodwill” is a reference to all the effort that a seller puts into a business over the years that he or she operates that business.  In a sense, goodwill is the difference between an array of intangible, but important, assets and the total purchase price of the business.  It is important not to underestimate the value of goodwill as it relates to both the long-term and short-term success of any given business.

According to the M&A Dictionary, an intangible asset can be thought of as asset that is carried on the balance sheet, and it may include a company’s reputation or a recognized name in the market.  If a company is purchased for more than its book value, then the odds are excellent that goodwill has played a role.

Goodwill most definitely contrasts and should not be confused with “going concern value.”  Going concern value is usually defined as the fact that a business will continue to operate in a fashion that is consistent with its original intended purpose instead of failing and closing down.

Examples of goodwill can be quite varied.  Listed below are some of the more common and interesting examples:

  • A strong reputation
  • Name recognition
  • A good location
  • Proprietary designs
  • Trademarks
  • Copyrights
  • Trade secrets
  • Specialized know-how
  • Existing contracts
  • Skilled employees
  • Customized advertising materials
  • Technologically advanced equipment
  • Custom-built factory
  • Specialized tooling
  • A loyal customer base
  • Mailing list
  • Supplier list
  • Royalty agreements

In short, goodwill in the business realm isn’t exactly easy to define.  The simple fact, is that goodwill can, and usually does, encompass a wide and diverse array of factors.  There are, however, many other important elements to consider when evaluating and considering goodwill.  For example, standards require that companies which have intangible assets, including goodwill, be valued by an outside expert on an annual basis.  Essentially, a business owner simply can’t claim anything under the sun as an intangible asset.

Whether you are buying or selling a business, you should leverage the know how of seasoned experts.  An experienced business broker will be able to help guide you through the buying and selling process.  Understanding what is a real and valuable intangible asset or example of goodwill can be a key factor in the buying and selling process.  A business broker can act as your guide in both understanding and presenting goodwill variables.

Copyright: Business Brokerage Press, Inc.

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Determining Your Company’s Undocumented Value

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Business appraisals are not one-dimensional.  In fact, a good business appraisal is one that factors in a wide range of variables in order to achieve an accurate result.  Indisputable records ranging from comparables and projections to EBITDA multiples, discount rates and a good deal more are all factored in.

It is important to remember that while an appraiser may feel that he or she has all the information necessary, it is still possible they have overlooked key information.  Business appraisers must understand the purpose of their appraisal before beginning the process.  All too often appraisers are unaware of important additional factors and considerations that could enhance or even devalue a business’s worth.

There Can Be Unwritten Value

Value isn’t always “black and white.”  Instead, many factors can determine value.  Prospective buyers may be looking at variables, such as profitability, depth of management and market share, but there can be more that determines value.

Here are some of the factors to consider when determining value: How much market competition is there?  Does the business have potential beyond its current niche?  Are there a variety of vendors?  Does the company have easy access to its target audience?  At the end of the day, what is the company’s competitive advantage?  Is pricing in line with the demographic served?  These are just some of the key questions that you’ll want to consider when evaluating a company.

There are Ways to Increase Both Valuation and Success

No doubt, successful businesses didn’t get that way by accident.  A successful business is one that is customer focused and has company-wide values.  Brian Tracy’s excellent book, “The 100 Absolutely Unbreakable Laws of Business,” notes that it is critical for businesses to have a company-wide focus on three key pillars: marketing, sales and, of course, revenue generation.  Tracy also points out that trends can be seen as the single most vital factor and bottom-line contributor to any company’s success and, ultimately, valuation.  For 2018 and beyond, projected trends include an increase in video marketing, the use of crowdfunding as a means of product validation and more.

No Replacement for Understanding Trends

If a company doesn’t understand trends, then it can’t understand both the market as it stands and as it may be tomorrow.  Savvy business owners understand today’s trends and strive to capitalize on the mistakes of their competitors while simultaneously learning from their competitors’ successes.

Tracy accurately states that while there are many variables in determining value, finding and retaining the best people is absolutely essential.  One of the greatest assets that any company has is, in the end, its people.

Copyright: Business Brokerage Press, Inc.

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The Importance of Understanding Leases

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Leases should never be overlooked when it comes to buying or selling a business.  After all, where your business is located and how long you can stay at that location plays a key role in the overall health of your business.  It is easy to get lost with “larger” issues when buying or selling a business.  But in terms of stability, few factors rank as high as that of a lease.  Let’s explore some of the key facts you’ll want to keep in mind where leases are concerned.

The Different Kinds of Leases

In general, there are three different kinds of leases: sub-lease, new lease and the assignment of the lease.  These leases clearly differ from one another, and each will impact a business in different ways.

A sub-lease is a lease within a lease.  If you have a sub-lease then another party holds the original lease.  It is very important to remember that in this situation the seller is the landlord.  In general, sub-leasing will require that permission is granted by the original landlord.  With a new lease, a lease has expired and the buyer must obtain a new lease from the landlord.  Buyers will want to be certain that they have a lease in place before buying a new business otherwise they may have to relocate the business if the landlord refuses to offer a new lease.

The third lease option is the assignment of lease.  Assignment of lease is the most common type of lease when it comes to selling a business.  Under the assignment of lease, the buyer is granted the use of the location where the business is currently operating.  In short, the seller assigns to the buyer the rights of the lease.  It is important to note that the seller does not act as the landlord in this situation.

Understand All Lease Issues to Avoid Surprises

Early on in the buying process, buyers should work to understand all aspects of a business’s lease.  No one wants an unwelcomed surprise when buying a business, for example, discovering that a business must be relocated due to lease issues.

Summed up, don’t ignore the critical importance of a business’s leasing situation.  Whether you are buying or selling a business, it is in your best interest to clearly understand your lease situation.  Buyers want stable leases with clearly defined rules and so do sellers, as sellers can use a stable leasing agreement as a strong sales tool.

Copyright: Business Brokerage Press, Inc.

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The Deal Is Almost Done -- Or Is It?

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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 should assemble their experts to assist in this phase. These might include appraisers, accountants, lawyers, environmental experts, marketing personnel, etc. Many buyers fail to add an operational person familiar with the type of business under consideration. The legal and accounting side may be fine, but a good fix on the operations themselves is very important as a part of the due diligence process. After all, this is what the buyer is really buying.

Since the due diligence phase does involve both buyer and seller, here is a brief checklist of some of the main items for both parties to consider.

Industry Structure

Figure the percentage of sales by product line, review pricing policies, consider discount structure and product warranties; and if possible check against industry guidelines.

Human Resources

Review names, positions and responsibilities of the key management staff. Also, check the relationships, if appropriate, with labor, employee turnover, and incentive and bonus arrangements.

Marketing

Get a list of the major customers and arrive at a sales breakdown by region, and country, if exporting. Compare the company’s market share to the competition, if possible.

Operations

Review the current financial statements and compare to the budget. Check the incoming sales, analyze the backlog and the prospects for future sales.

Balance Sheet

Accounts receivables should be checked for aging, who’s paying and who isn’t, bad debt and the reserves. Inventory should be checked for work-in-process, finished goods along with turnover, non-usable inventory and the policy for returns and/or write-offs.

Environmental Issues

This is a new but quite complicated process. Ground contamination, ground water, lead paint and asbestos issues are all reasons for deals not closing, or at best not closing in a timely manner.

Manufacturing

This is where an operational expert can be invaluable. Does the facility work efficiently? How old and serviceable is the machinery and equipment? Is the technology still current? What is it really worth? Other areas, such as the manufacturing time by product, outsourcing in place, key suppliers – all of these should be checked.

Trademarks, Patents & Copyrights

Are these intangible assets transferable, and whose name are they in. If they are in an individual name – can they be transferred to the buyer? In today’s business world where intangible assets may be the backbone of the company, the deal is generally based on the satisfactory transfer of these assets.

Due diligence can determine whether the buyer goes through with the deal or begins a new round of negotiations. By completing the due diligence process, the buyer process insures, as far as possible, that the buyer is getting what he or she bargained for. The executed Letter of Intent is, in many ways, just the beginning.

Buying a Business – Some Key Consideration

  • What’s for sale? What’s not for sale? Is real estate included? Is some of the machinery and/or equipment leased?
  • Is there anything proprietary such as patents, copyrights or trademarks?
  • Are there any barriers of entry? Is it capital, labor, intellectual property, personal relationships, location – or what?
  • What is the company’s competitive advantage – special niche, great marketing, state-of-the-art manufacturing capability, well-known brands, etc.?
  • Are there any assets not generating income and can they be sold?
  • Are agreements in place with key employees and if not – why not?
  • How can the business grow?  Or, can it grow?
  • Is the business dependent on the owner? Is there any depth to the management team?
  • How is the financial reporting handled? Is it sufficient for the business? How does management utilize it?

What Do Buyers Really Want to Know?

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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 which they are listed are almost always the same.

  1. Want to do their own thing; to control their own destiny, so to speak.
  2. Do not want to work for anyone else.
  3. Want to make better use of their skills and abilities.
  4. Want to make money.

These surveys indicate that by far the biggest reason people want to be in business for themselves is to be their own boss. The first three reasons listed revolve around this theme. Some may be frustrated in their current job or position. Others may not like their current boss or employer, while still others feel that their abilities are not being used properly or sufficiently.

The important item to note is that money is reason number four. Although making money is certainly important and necessary, it is not the primary issue. Once a person decides to go into business for himself or herself, he or she has to explore the options. Starting a business is certainly one option, but it is an option fraught with risk. Buying an existing business is the method most people prefer. Purchasing a known entity reduces the risks substantially.

There are some key questions buyers want, or should want, answers to, once the decision to purchase an existing business has been made. Below are the primary ones; although a prospective buyer may not want answers to all of them, the seller should be prepared to respond to each one.

  • How much is the down payment?  Most buyers are limited in the amount of cash they have for a down payment on a business. After all, if cash were not an issue, they probably wouldn’t be looking to purchase a business in the first place.
  • Will the seller finance the sale of the business?  It can be difficult to finance the sale of a business; therefore, if the seller isn’t willing, he or she must find a buyer who is prepared to pay all cash. This is very difficult to do.
  • Why is the seller selling?  This is a very important question. Buyers want assurance that the reason is legitimate and not because of the business itself.
  • Will the owner stay and train or work with a new owner?  Many people buy a franchise because of the assistance offered. A seller who is willing, at no cost, to stay and to help with the transition is a big plus.
  • How much income can a new owner expect?  This may not be the main criterion, but it is obviously an important issue. A new owner has to be able to pay the bills – both business-wise and personally. And just as important as the income is the seller’s ability to substantiate it with financial statements or tax returns.
  • What makes the business different, unique or special?  Most buyers want to take pride in the business they purchase.
  • How can the business grow?  New owners are full of enthusiasm and want to increase the business. Some buyers are willing to buy a business that is currently only marginal if they feel there is a real opportunity for growth.
  • What doesn’t the buyer know?  Buyers, and sellers too, don’t like surprises. They want to know the good – and the bad – out front. Buyers understand, or should understand, that there is no such thing as a perfect business.

Years ago, it could be said that prospective buyers of businesses had only four questions:

  1. Where is the business?
  2. How much is it?
  3. How much can I make?
  4. Why is it for sale?

In addition to asking basic questions, today’s buyer wants to know much more before investing in his or her own business. Sellers have to able to answer not only the four basic questions, but also be able to address the wider range of questions outlined above.

Despite all of the questions and answers, what most buyers really want is an opportunity to achieve the Great American Dream – owning one’s own business!

Key Factors on the Acquirer’s Side

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There are several key factors on the acquirer’s side of a sale, most of which are necessary to achieve a successful closing. Just as a seller has to deal with quite a few factors, the acquirer must also. Some of the more important ones on the acquisition side are:

  • Sufficient financial resources to complete the deal as specified.
  • Depth of capable staff to run the existing business and also execute an acquisition at the same time.
  • A rational approach to the type, size and geographic location of target companies.
  • The willingness to “pay-up” for acquisitions such as 6x EBITDA and, if necessary, the willingness to pay 100% cash, whether the sale is one of assets or a stock transaction.
  • Assuming the acquisition search generates satisfactory deal flow, a willingness to stay the course for 6 to 12 months in the search process.
  • A confirmation by the board of directors of their commitment to complete a deal.
  • A “point person” in the search process, preferably the CEO, CFO or Director of Development who is reachable on a daily basis to discuss relevant matters.
  • Complete access to sales manager and others by the business intermediary to discuss suggestions of target companies.

Buying or Selling a Business: The External View

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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 when he was convinced that the business and the concept worked, did he make an offer that the brothers could not refuse. The rest, as they say, is history.

The point, however, for both buyer and seller, is that it is important for both to sit across the proverbial street and watch the business. Buyers will get a lot of important information. For example, the buyer will learn about the customer base. How many customers does the business serve? How often? When are customers served? What is the make-up of the customer base? What are the busy days and times?

The owner, as well, can sometimes gain new insights on his or her business by taking a look at the business from the perspective of a potential seller, by taking an “across the street look.”

Both owners and potential buyers can learn about the customer service, etc., by having a family member or close friend patronize the business.

Interestingly, these methods are now being used by business owners, franchisors and others. When used by these people, they are called mystery shoppers. They are increasingly being used by franchisors to check their franchisees on customer service and other operations of the business. Potential sellers might also want to have this service performed prior to putting their business up for sale.