It’s Time to Exit. Are you Ready?

Thinking about whether or not you are ready to exit is an important question.  It’s something that every business owner will have to address at some point.  Importantly, you don’t want to wait until the 11th hour to prepare to sell your business.  There are far too many pieces in this particular puzzle to wait until the last minute.  You’ll want to begin the process sooner by asking yourself some key questions. 

Determining Value

First, you’ll need to determine the actual value of your business.  It is a harsh truth, but what you think your business is worth and what the market feels that it is worth may be two very different things. 

This point serves to underscore the importance of working with a business broker or M&A advisor early in the process.  An experienced broker knows how to go about determining a price that will generate interest and seem fair.  Remember that at the end of the day, it will be the marketplace that determines the value of your business, but working with a seasoned professional is an excellent way to match your offering price with what the market will ultimately bear.

Going Within

Secondly, you’ll want to consider whether or not you truly want to sell.  It is not uncommon for business owners to begin the process of selling their business only to realize a few hard facts.  Wanting to sell and the time being right to sell are often two different things. 

Upon placing your business on the market for sale, you may learn that you’re not emotionally or financially ready.  If this happens to you, consider it a learning experience that will serve you well down the line.

Get Your Ducks in a Row

If you have done a financial assessment, a little soul searching and have begun working with a business broker or M&A advisor to determine that now is a good time to sell your business, then there are several steps you’ll need to take.  You can be sure that any serious prospective buyer will want a good deal of information regarding your company. 

At the top of the list of items potential buyers will want to see are three years of profit and loss statements as well as federal income tax returns for the business.  Other important documents ranging from lease and lease related documents, lists of loans against the business and a copy of a franchise agreement, when applicable, are all additional documents that you will need to provide.  You should also have a list of fixtures and equipment, copies of equipment leases, lists of fixtures and equipment, and an approximate amount of inventory on hand.  A failure to not have this information organized and ready to present at a moment’s notice could be a costly mistake.

Working with professionals, such as accountants, lawyers, and brokers, is a savvy move.  Owning and operating a business can be a complex process, and the same holds true for selling a business.  Investing the time to seek out experienced and professional advice is the first step in selling your business.

Copyright: Business Brokerage Press, Inc.

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How to Assemble a Talented Remote Team for Your Business

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The right team of workers can really take your business to the top. When it’s time to bring in a little extra help, opting for remote workers over in-house employees will give you access to a much larger pool of amazing talent. Not only that, but Forbes states that remote teams are more productive without the time-wasting distractions common to office environments. When you’re ready to put together your remote team, the following tips can help you find the right workers and keep everything running smoothly.

Consider Hiring Freelancers

Although you may be looking to fill a few company positions with permanent employees, freelancers are an excellent choice for those short-term tasks. Hiring a freelancer means avoiding costly employee expenses. If you need someone to help take phone calls, schedule meetings, prepare reports, and invoice clients, look to job boards to help connect you with well-reviewed, top-notch virtual assistant freelancers.

Plan Your Communication Strategy

Communication is a critical factor in the success of any remote team. Since your workers won’t be able to communicate in person as they would in a traditional office, it’s crucial to set clear expectations from day one. Be ready to face anticipated challenges with irregular time zones, varying worker availability, and misunderstandings.

According to eLearning Industry, one of the best ways to improve remote team communication involves taking advantage of modern communication channels and collaboration tools. These tools can help keep everyone on the same page. After team meetings, for example, you can have video or audio recordings transcribed by an automated service that immediately sends out transcripts to your team.

Other tools for remote teams, such as Trello and Slack, can keep your team communicating regularly and collaborating effortlessly. You’ll find many free and low-priced options for small businesses that are just getting off the ground.

Since some of your remote team may be outside your time zone (or in another country altogether), you may need to communicate with them during non-business hours. So it’s essential that you’re working with a smartphone that can handle any work-related items you need to take care of, whether that’s sending email or hosting video chats. The good news is that you may be able to purchase a next-generation smartphone at a discount from your wireless provider if you trade in your old phone.

Develop a Consistent Onboarding Process

Like communication, onboarding can get messy in remote teams. Be sure to set aside adequate training time for your new employees before you need them to start doing work. Remember to give them time to learn about your company and how they fit into the big picture.

Instead of answering dozens of questions from every new hire, draw up a comprehensive document with everything your workers need to know. Be sure to outline critical information about communication methods, company tools, deadlines, and company values. Avoid allowing your workers to do things their own way—this can lead to inconsistencies in your business projects. Provide your writers with styling and formatting directions and your developers with a company design book. That way, your employees will turn in work requiring few revisions.

Set Clear Expectations

Maintaining clear expectations for your workers will help ensure their success in your business. From the moment you hire them, your employees should understand exactly what you expect in terms of behavior, performance, and teamwork. Write down these expectations and keep them straightforward. Expecting your employees to “do a good job” is not clear enough. Again, it’s important to let your employees in on the big picture so they understand the justifications behind your expectations.

Evaluating your remote workers regularly can help you address any misconceptions or knowledge gaps that are preventing people from meeting your expectations. As you evaluate your employees, focus on the quality of their work and their project outcomes. Look at performance indicators like customer satisfaction and project completion instead of concerning yourself with the number of hours your employees are working.

Photo via Pexels

Article by Tina Martin

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What You Need to Know About the Golden Age of Business Acquisitions

Business acquisitions are red hot, and all kinds of businesses are being snapped up.  Some people are under the impression that only large businesses are being acquired, but this is far from the reality of the situation.  It would surprise many to learn that so much of the “action” is, in fact, small businesses buying other small businesses. 

In his Forbes article, “Take Advantage of the Golden Age of Business Acquisitions,” author Christopher Hurn explores the true state of the “acquisitions game.”  His conclusions are quite interesting.  In Hurn’s opinion, there has never been a more active time in the realm of business acquisitions.

If you own a business and are looking to grow, then you may want to consider acquiring a competitor in order to consolidate the market.  As Hurn points out, there are many reasons that you might want to consider acquiring a business in addition to consolidating the market.  These reasons include acquiring a new product or service, acquiring a competitor that has superior technology or even identifying a business that you believe is primed for substantial growth.

Yet, there are other forces at work that are combining to make this moment the “golden age of acquisitions.”  At the top of the list of why now is a good time to investigate acquiring a business is demographics.  According to a 2019 study by Guidant Financial and Lending Club, a whopping 57% of small business owners are over the age of 50.  The California Association of Business Brokers has concluded that over the next 20 years about $10 trillion worth of assets will change hands.  A mind-blowing 12 million businesses could come under new ownership in just the next two decades!  As Hurn phrased it, “The stars are aligning for the Golden Age of business acquisitions.”

This all points to the fact that now is the time to begin understanding what kind of acquisition would best help your business grow.  Hurn believes that turning to the Small Business Administration in this climate of rapid acquisition is a savvy move. 

In particular, he points to the 7(a) program and a host of reasons that the SBA can benefit small businesses.  Since the SBA lowered equity injection requirements, it is now possible to finance a staggering 90% of business acquisition deals with loan terms up to 25 years and lower monthly payments.  Additionally, the SBA 7(a) program can be used for a variety of purposes ranging from expanding or purchasing an existing business to refinancing existing business debt.

Hurn truly does have an important insight.  Baby Boomers will retire by the millions, and most of them will be looking to sell their businesses.  With 12 million businesses scheduled to change hands in just the next 20 years, now is a highly unique time not only in the history of acquisitions but also in the history of business. 

Business brokers understand what is involved in working with the SBA and acquisitions.  A seasoned business broker can point you towards opportunities that you may have never realized existed.

Copyright: Business Brokerage Press, Inc.

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What You Need to Know About the Golden Age of Business Acquisitions

Business acquisitions are red hot, and all kinds of businesses are being snapped up.  Some people are under the impression that only large businesses are being acquired, but this is far from the reality of the situation.  It would surprise many to learn that so much of the “action” is, in fact, small businesses buying other small businesses. 

In his Forbes article, “Take Advantage of the Golden Age of Business Acquisitions,” author Christopher Hurn explores the true state of the “acquisitions game.”  His conclusions are quite interesting.  In Hurn’s opinion, there has never been a more active time in the realm of business acquisitions.

If you own a business and are looking to grow, then you may want to consider acquiring a competitor in order to consolidate the market.  As Hurn points out, there are many reasons that you might want to consider acquiring a business in addition to consolidating the market.  These reasons include acquiring a new product or service, acquiring a competitor that has superior technology or even identifying a business that you believe is primed for substantial growth.

Yet, there are other forces at work that are combining to make this moment the “golden age of acquisitions.”  At the top of the list of why now is a good time to investigate acquiring a business is demographics.  According to a 2019 study by Guidant Financial and Lending Club, a whopping 57% of small business owners are over the age of 50.  The California Association of Business Brokers has concluded that over the next 20 years about $10 trillion worth of assets will change hands.  A mind-blowing 12 million businesses could come under new ownership in just the next two decades!  As Hurn phrased it, “The stars are aligning for the Golden Age of business acquisitions.”

This all points to the fact that now is the time to begin understanding what kind of acquisition would best help your business grow.  Hurn believes that turning to the Small Business Administration in this climate of rapid acquisition is a savvy move. 

In particular, he points to the 7(a) program and a host of reasons that the SBA can benefit small businesses.  Since the SBA lowered equity injection requirements, it is now possible to finance a staggering 90% of business acquisition deals with loan terms up to 25 years and lower monthly payments.  Additionally, the SBA 7(a) program can be used for a variety of purposes ranging from expanding or purchasing an existing business to refinancing existing business debt.

Hurn truly does have an important insight.  Baby Boomers will retire by the millions, and most of them will be looking to sell their businesses.  With 12 million businesses scheduled to change hands in just the next 20 years, now is a highly unique time not only in the history of acquisitions but also in the history of business. 

Business brokers understand what is involved in working with the SBA and acquisitions.  A seasoned business broker can point you towards opportunities that you may have never realized existed.

Copyright: Business Brokerage Press, Inc.

Grand Warszawski/BigStock.com

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Determining the Right Time to Sell

Determining when it’s finally the right time to sell can be a tricky proposition.  If you are thinking about selling your business, one of the best steps you can take is to contact a business broker.  A good business broker will have years, or even decades, of proven experience under his or her belt.  He or she will be able to guide you through the process of determining what you need to do in order to get your business ready to sell.

One major reason you should contact a business broker long before you think you might want to sell is that you never know when the right time to sell may arise.  Market forces may change, unexpected events like a large competitor entering your area, or a range of other factors could all lead you to the conclusion that now, and not later, is the time to sell.

In a recent The Tokenist article, “When is the Best Time to Sell a Business?”, author Tim Fries covers a variety of factors in determining when is the best time to sell.  At the top of Fries’ list is growth.  If your company can demonstrate a consistent history of growth, that is a good thing.  Or as Fries phrases it, “What never varies, however, is the fact that growth is a key component, buyers will look for.”  Growth will be the shield by which you justify your price when you place your business on the market. 

If your business is experiencing significant growth then you have a very strong indicator that now could be the time to sell.  Fries points to a quote from Cerius Executives’, CEO, Pamela Wasley who states, “When your business has grown substantially, it might be time to consider selling it.  Running a business is risky, and the bigger you get, the bigger the risks you have to face.”  Again, growth is at the heart of determining whether or not you should sell.

Knowing the “lay of the land” is certainly a smart move.  For example, have there been a variety of businesses similar to your own that have sold or were acquired recently?  If the answer is “yes,” then that is another good indicator that there is substantial interest in your type of business. 

Reviewing similar businesses to your own that have sold recently can help you determine how much buyers are paying for comparable businesses.  This can help you spot potential trends.  In short, you should be aware of market factors.  As Fries points out, everything from relatively low taxes and low interest rates to strength in the overall economy and an upward trend of sales prices can impact the optimal times for a sale.

Now, as in this exact moment, might not be the right time for you to sell.  Getting your business ready to sell takes time and preparation.  Fries points out that smart sellers “look for a good time, not the perfect time” to sell a business.  Working with a business broker is a great way to determine if now is the right time to sell your business and what steps you have to take in order to be prepared for when the time is right.

Copyright: Business Brokerage Press, Inc.

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Should You Sell Your Family Business?

When the complicating variable of family is added to the equation of selling a business, the situation can get rather messy.  Family usually complicates everything and businesses are, of course, no exception.  Ken McCracken’s recent article “Family business: to sell or not to sell?” 6 questions to help you make the right decision,” seeks to decode the complexities so often associated with family businesses. 

Consider the Market 

The foundation of determining whether or not now is the right time to sell must begin with market forces.  Determining how much your business is worth is a key variable in any decision to sell. 

The best way to determine the worth of your business is to have an outside party, such as a business broker, evaluate your business.  What you believe your business to be worth and what the market dictates could be very different.  You may discover that your business does not have the value that you hoped for.  If this is the situation, then selling simply may not be an option.

What is Next for You?

Tied to knowing your market value is understanding what you will do next after you sell your business.  For example, do you have a family member who can run the business without you?  What will you and any family members who work for the business do after the sale goes through?  You may discover that the sale could be very disruptive for you personally.  All too often, people fail to recognize the emotional and mental stress that comes along with selling a business.  Many owners begin the selling process only to discover that they are not emotionally ready to do so.  While everyone wants to be unemotional in making their business decisions, this is not always the case.

Due Diligence 

You will also need to deal with the issue of due diligence.  Working with a business broker is an excellent way to handle the due diligence process.  Business brokers usually vet prospective buyers ahead of time, which can save you a great deal of aggravation and wasted time. 

McCracken believes business owners should investigate how the prospective buyer handled previous acquisitions.  Specifically, McCracken believes that business owners should look to how well the prospective buyer honored previous commitments, as doing so is an indicator of how trustworthy a buyer may be. 

Planning for Negotiations

Finally, McCraken believes it is essential to know who will oversee negotiations.  It is key to note that many deals that could have otherwise been successful, fall apart due to poor negotiations.  A business broker can be invaluable in negotiations.  After all, who wouldn’t want someone with dozens, or even hundreds, of successful transactions advising them?

Selling a family business can be emotionally charged and can cause significant life changes for not just you, but for members of your family as well.  Often, family businesses were built up over a lifetime or even over generations, which can make the decision to sell quite emotionally charged.

Copyright: Business Brokerage Press, Inc.

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Why You Should Focus on Proper Exit Planning

If you are like many business owners, you are primarily focusing on building your business.  Yet, as we’ve covered here many times before, you should start thinking about what you’ll need to do to sell your business before you even officially launch.  Many businesses can take years to sell or even fail to sell all together.  For this and many other reasons, it is important to invest some time and energy into thinking about proper exit planning and strategies. 

Walker Deibel’s recent Forbes article, “How Proper Exit Planning Benefits the Buyer and Seller,” Deibel discusses his interview with Exit Planning: The Definitive Guide, author John H. Brown. Brown and Deibel both agreed that, when properly handled, exit planning can help both the seller and the buyer. 

Exit planning can make a business more transferable.  As Deibel points out, when buyers are evaluating businesses, transferability is a key factor.  A buyer must feel that he or she can walk into a business, take it over, keep it running effectively and even grow the business in the future. 

A key aspect of being able to buy a business and having that business be successful is that all relationships from vendors to customers are transferable.  A good management team, one that can step in and help a new owner thrive, is a must.  Building that team in advance is a savvy move for any business owner looking to sell his or her business.  Concerns on any of these fronts can spell doom for a seller.  If a buyer doesn’t feel that they can operate a business, then they probably shouldn’t be buying it.

Great exit planning most definitely benefits the seller as well.  As Deibel notes, when sellers engage in exit planning, they realize how much money they need in order to exit.  In turn, this forces sellers to become very focused and goal-oriented.  Sellers will take proactive steps to ensure that their business is as appealing to a potential buyer as possible.

Ultimately, proper exit planning is a win-win, one that benefits both buyer and seller.  Exit planning can provide sellers with much-needed clarity while simultaneously lowering the overall risk that sellers face.

Buying or selling a business is a multifaceted, and often quite complex, process.  The sooner you begin working with a professional, like a business broker, the better off you’ll be in finding the right business for you and your particular needs.  For most people, buying or selling a business is the financial decision of a lifetime.  Having a proven trusted partner, one that knows the lay of the land, is simply invaluable.

Copyright: Business Brokerage Press, Inc.

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