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Partnering with Crexi.

See attached article about my partnership with Crexi and how it lead to closing a scrap metal recycling facility with real estate for $5,000,000.

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Helping Buyers and sellers from around the world!.

Suncoast Business Consultants has helped people from the following countries buy and sell businesses in South Florida in all industries and price ranges. We can refer you to the appropriate professionals such as attorneys and accountants to assist in areas of immigration, business representation, due diligence, bookkeeping and taxes.

We also provide relocation assistance. Our team of professional real estate agents can assist you in renting or buying a home.

Check out examples of closed transactions to see the variety of industries in which Suncoast Business Consultants successfully completed multiple transactions.

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How to Prepare to Sell Your Business.

Introduction

In a competitive business landscape, business owners have to be strategic and prepared before selling their valued businesses. The truth is that you cannot have an exit strategy without proper planning. When the time comes to sell your company, failure to plan would have an impact on the value of your business.

Oftentimes, businesses owner wonders “how much is my business worth,” and the answer is simpler than most stakeholders realize. When it comes to buying a business in South Florida, there are more than enough investment opportunities in Miami

Keeping that in mind, let’s take a look at basic steps and considerations that would allow you to prepare and sell your business:

Incentive Employees and Build Business Relationships

It is crucial to make sure your most treasured employees and manger are incentivized. This would allow you to avoid basic conflict of interest and last-minute power plays. At the same time, make sure to establish your key business relationship with advisors.

In fact, better relationships with a lawyer, investment agency, and accounting firm will help you accelerate the selling process. You can count on your business advisors for up-to-date insights and an ideal timeframe to sell your business.

Ensure Successful Scale

You’ve probably worked hard for years to build and grow your business and now you should adopt a strategic approach to sell your company. Your first step should be to make sure your business is scalable enough for new buyers.

Review Administrative Items

Before you decide to sell your business, one of your main considerations should be to organize business records and ensure business operations are optimized. Naturally, you don’t want to make an impression that your business operations and administrative affairs are in shambles to potential buyers.

Eliminate Business Expenses

Most private companies operate to cut back on their taxes. Your end-game is to highlight high profitability to make a good first impression in front of potential buyers. Your objective should be to cut down expenses that are no longer critical to your business operations. When it comes to selling your business, make sure to compensate in the form of tax write-offs prior to negotiations.

Create a Suitable Growth Plan

On top of administrative control, optimized operations, and high-profit margin, make sure to create a realistic growth plan before selling your business. The trick is to highlight that your business has many opportunities in the coming years, and you’ll notice an increase in potential buyers. In terms of meaningful growth, make sure to highlight that your business has had market credibility for at least three years.

Final Thoughts

Whether you run a small or mid-size business in Miami, your first objective should be to understand the market value of your entity from the perspective of the buyer. Ordinarily, business owners often have preconceived notions about the specific sales price. Realistically, this is counterintuitive for sellers and often pushes away potential buyers.

So, find out how a potential buyer plans to use your business before official negotiations. On the surface, selling a business in Miami may seem like a daunting task, but you need to focus on essential considerations to ensure thorough preparation.

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How To Value A Small Business?

When buying a business in Miami or selling it, it’s critical to put your emotions aside to conduct an accurate business appraisal and determine a reasonable and competitive selling price. You’ll need to complete an objective analysis of the company, research the current market, and consider hiring a professional business appraiser. The sale of your business will demand quite some time, and once the work is done, you’ll need to figure out how to manage the earnings.

Business valuation isn’t easy unless you’re a natural-born business or numbers person (or, say, an accountant). However, here you will learn how to do business valuation before buying or Selling A Business In South Florida.

Do the correct valuation before Selling A Business In Miami

Even if you’ve never heard the word, if you’re aware of the EBITDA concept, you may already know about SDE or seller’s earnings. To refresh your memory, EBITDA stands for earnings before interest, taxes, depreciation, and amortization — in other words, it’s a company’s pure net profit.

Business owners calculate SDE to estimate the actual value of their company for a new owner, similar to EBITDA. SDE will include expenses such as income reported to the IRS, non-cash expenses, and whatever revenue your company truly earns. In contrast to EBITDA, you’ll factor in the owner’s compensation and benefits into your SDE estimate.

Because small-business owners frequently expense personal benefits, large businesses typically use EBITDA estimates to value their businesses, while small businesses commonly use SDE. Therefore, it’s also critical that potential customers comprehend SDE. Most likely, business owners will give you that amount. Therefore it’s crucial to understand how the owner arrived at that figure and what these figures mean for the actual company.

Start with your pretax and pre-interest earnings to calculate your company’s SDE. Then, as company expenses, you’ll bring any items that aren’t vital to operations, such as vehicles or trips. Your SDE can include employee outings, charitable donations, one-time expenditures, and your compensation. (When you provide a buyer your valuation, they may inquire about your discretionary cash flow, so be prepared to mention and value each significant spend or purchase.)

Finally, any current debts or future payments are deducted from net income, referred to as liabilities.

Learn about the concept of SDE multiples

Your SDE shows the genuine monetary value of your company, but it also values it several times based on industry standards. (If you value your company based on EBITDA, you’ll use an EBITDA multiple.) Small firms should use SDE for their business valuations more frequently because small-enterprise owners typically take a substantial percentage of their revenue for their salaries and living expenditures.

For each industry, there is a different SDE multiple. The SDE multiple for your firm will vary depending on market volatility, where it is located, its size, assets, and how much risk is involved in transferring ownership. As you can assume, the greater your SDE multiple, the more valuable your company is.

Conclusion

While selling a business in South Florida may seem like an easy feat, in the beginning, it can turn into a pretty overwhelming task. However, when you know the basic process of evaluating your business, the journey will become less difficult for you.

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3 Steps for Achieving Pricing Power

3 Steps for Achieving Pricing Power

3 Steps for Achieving Pricing Power: The simple fact is that most of us want to control our own fate.  This fact is especially true for entrepreneurs and business owners.  However, the truth of the matter is that for most business owners, their fate isn’t completely in their own hands.  For example, a variety of forces can prevent businesses from establishing their own prices. 

Knowing whether or not your company has pricing power is essential and can influence a range of decisions that you may make.  Let’s take a closer look at what steps you can take to control your own pricing.

What is Pricing Power?

This economic term describes the effect of a change in a product price on the demanded quantity of said product.  Your company’s pricing power is linked to the demand for your products or services.  If you have a high level of pricing power, you can raise your prices over time and maintain your customers. 

Who Has the Greatest Pricing Power? 

It is no great secret that the Amazons, Apples, Wal-Marts and auto manufacturers of the world exercise a tremendous amount of power.  Part of this considerable, and seemingly ever growing, power resides in the fact that the size of these companies now rivals and even surpasses many nation states.  This grand level of power is unique in human history in many ways.  Along with it comes the ability to exercise an almost god-like authority over suppliers. 

Today, these ultra-powerful companies commonly dictate to vendors what prices they are willing to pay, and the quasi-monopolistic nature of these companies often leaves vendors with no choice to comply.  In short, these 900-pound gorillas are telling companies both large and small exactly how much they will pay for a given number of bananas. 

Step 1 – Providing a Branded Product or Service

If you discover that your company doesn’t have pricing power, there are steps you can take.  One step is to produce a branded product or service.  In this way, you are able to offer something of greater value than your competitors.  Through having a branded product or service, it is possible to create a higher perceived value in the minds of not just the Amazons of the world, but in the minds of consumers as well.

Step 2 – Innovating 

Another path towards achieving pricing power is through innovation.  A great example of leading the way in innovation is Apple.  While few companies have Apple’s almost ethereal resources, that is not to say that you cannot find ways to innovate within your own sphere or industry.  Small innovations can often have an outsized impact and help a business stand out from a crowded playing field.  Innovation that leads to patent production is an excellent way to gain a degree of pricing power.

Step 3 – Offering Exceptional Service

A third option for achieving a degree of pricing power is to provide what could be called “mind-blowing” service.  By providing service that is truly a cut above what the competitors can match, your company is positioned to achieve pricing power.  Providing your customers with something they simply can’t get elsewhere is a key way to setting a price that is more in line with what you desire.

There are many marketplace variables that your business can’t control.  The trick is to evaluate your business, your business’s potential and the concrete and practical steps you can take starting today to achieve pricing power. 

Copyright: Business Brokerage Press, Inc.

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John Warrilow’s The Art of Selling Your Business

Art of Selling Your Business

 

Art of Selling Your Business: John Warrilow is the founder of The Value Builder System and an accomplished author.  While not a business broker himself, Warrilow has gathered considerable knowledge and expertise in the industry.  His previous book Built to Sell was listed as one of the best business books of 2011.  In this article, we will explore some of the key points in Warrilow’s latest book, which is entitled The Art of Selling Your Business: Winning Strategies and Secret Hacks for Exiting on Top.  This book was released on January 12th, 2021, and is proving to be invaluable for business owners. 

Selling When the Time is Right

One key focal point of the book is that business owners should skip trying to find the perfect “magical time” to sell their business.  Additionally, Warrilow notes, “I make the strong recommendation in the book that the best time to sell your company is not during some mysterious macroeconomic environment.  It is when someone is willing to buy it and you get an offer.  And that is because at that point, you’re in the position of strength.”

The DIY Approach 

This book reinforces the fact that business owners truly need to work with an intermediary if they are to achieve optimal results.  Warrilow even includes his six reasons for why every business owner should hire a business broker or M&A advisor.

Many business owners think that they can simply handle selling their business on their own.  But the simple fact is that business owners usually have no experience in selling a business.  Add this to the fact that selling their business is likely to be the most important financial decision the business owner ever makes, and it quickly becomes clear that business owners are doing themselves a considerable disservice when they opt to handle everything on their own.  

A Business Broker vs. a Lawyer

As Warrilow points out, oftentimes business owners think that rather than working with a business broker or M&A advisor, they can turn to a trusted lawyer who has served them in the past.  But this thinking is flawed when it comes to successfully selling a business.  As Warrilow states, “a lawyer, almost by default, is going to be very conservative as everything exposes a lawyer to risk.  And that is why using a traditional attorney is almost always a mistake.” 

If you are planning to sell your business now or in the future, a book like Warrilow’s The Art of Selling Your Business: Winning Strategies and Secret Hacks for Exiting on Top can serve as a uniquely valuable tool in your toolbox.

Copyright: Business Brokerage Press, Inc.

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Why Businesses Get Into Trouble

Why Businesses Get Into Trouble

 

Why Businesses Get Into Trouble: No two companies are quite alike, and this also means that there are many reasons why companies can fall into trouble.  While the number of variables involved in operating a company are practically endless, there are a handful of reasons why companies can fall on hard times.  Let’s take a closer look.

Lacking Focus

Companies that lack focus can often run into considerable trouble.  Not understanding their customers and what they need or want can lead to endless problems.  It is vital that companies frequently stop and assess who their customers are and whether or not they are properly servicing their needs.

Management Problems

Not too surprisingly, many companies can run into trouble because of poor management.  Management problems are not one-dimensional, but instead take a variety of shapes.  Management that isn’t focused, is incompetent, or simply doesn’t care about the business can translate into a business’s premature death. 

Under the umbrella of “management problems” also falls such missteps as poor financial controls, quality control problems, operational issues, and/or not keeping up with technological advancements.  At the end of the day, many of the problems on our list have at least some management issue missteps at their heart.

Loss of Key Employees or Clients

The loss of a key employee or a key client can spell serious trouble.  Of course, no management team can predict every eventuality.  However, when there is a loss of a key employee or client, and there is no plan for replacement, then management does shoulder at least some of the blame.  The savviest companies take steps to ensure that there are ways to replace the most important employees and clients.

Failure to Compete 

More than one business has been buried by the competition or failure to see a new wave of competition coming.  For example, countless mom and pop video rental stores were absolutely bludgeoned by the introduction of Blockbuster Video a generation ago. 

While it is true that sometimes market forces are so aligned against a business that survival is almost impossible, that is normally not the case for most businesses on a year-to-year basis.  The most effective and competent management can see the competition out on the horizon.  Or at bare minimum, they have an emergency plan in the event that the competition becomes more intense.

All too often by the time a business realizes that it is in trouble, it is already too late.  If the problems can’t be fixed, then it may be time to consider selling the business.  But such decisions must be made quickly in order to prevent additional bloodletting.

Optimally, a business is sold while it is doing well.  Regardless of whether a business is thriving or experiencing difficulties, a business broker or M&A advisor can be an invaluable ally in helping a business reach its full potential.

Copyright: Business Brokerage Press, Inc.

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Maximizing Your Time by Rating Buyer Seriousness

Maximizing Your Time by Rating Buyer Seriousness

 

Maximizing Your Time by Rating Buyer Seriousness: Your time is your most valuable commodity.  The simple fact of the matter is that many “buyers” are not truly buyers.  In contrast, they are often window shopping or acting out a fantasy of buying a business.  In other cases, they would only plan to buy if they were to find the “deal of the century.”  The last thing you want to do is waste your time trying to work out deals with people who aren’t serious or qualified buyers. 

The Plus and Minus System

The best way to find a serious buyer is to use a “plus and minus” system.  This system will help you weed out the window-shoppers from buyers that are truly worth your time. 

First, let’s evaluate factors for which you’ll want to deduct points.  If a buyer needed outside financing, then subtract 4 points.  Likewise, if a buyer has been looking for 6 months or more, you’ll want to also subtract 4 points.  If a buyer has no cash available, you should subtract 3 points.  Additionally, if a buyer is currently working in the corporate world, you should also subtract 3 points.  These are the 4 largest reasons to subtract points, but they are not the only reasons. 

Below are a few reasons to subtract 2 or 1 points from a buyer’s rating.

  • You learn the spouse is not supportive – Subtract 2
  • Prospective buyer uses a legal pad or clipboard and takes copious notes – Subtract 2
  • The buyer indicates that they are in “no rush” and want to find the perfect business – Subtract 2
  • The buyer is under the age of 25 or over the age of 62 – Subtract 1
  • The buyer is currently renting even though he or she has lived in the area for some time – Subtract 1

Factors to Add Points In

There are also many factors that would make a buyer fall onto the “plus” side.  If the prospective buyer does not currently have a job or has just resigned from their job, then add 3 points.  Likewise, if a prospective buyer acknowledges that books and records are not the only metrics by which to judge a business, add 3 points. 

Add 2 points if a buyer has enough money to buy the business and another 2 points if the buyer currently has no dependents.  If a close relative or family member currently owns or has owned a business in the past, then add 2 points.  If the buyer is between the ages of 25 and 62 add 1 point.  If he or she is a skilled worker or professional, add 1 point.  Finally, if the buyer does not consider location to be a prime consideration, add 1 point.

This streamline, straightforward and relatively simple system does work.  Use this system consistently, and you will quickly eliminate a large percentage of window shoppers.  While no system is perfect, this “plus-minus” system for accessing prospective buyers will save you countless hours and many potential headaches.

Copyright: Business Brokerage Press, Inc.

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Ownership Transition Survey Results on feedback and answers from family-owned businesses

Ownership Transition Survey Results on feedback and answers from family-owned businesses

 

Ownership Transition Survey Results: Mass Mutual Life Insurance produced an ownership transition survey back about a decade ago.  The survey results were based on feedback and answers from family-owned businesses.  It produced some very interesting results, and is worth examining even today.  While the survey at this point is quite outdated in terms of the timeline, there are still many valuable nuggets of information to be gleaned from it.  Let’s dive in and take a closer look at the numbers and what they can tell us for 2021 and beyond.

While the Mass Mutual Life Insurance ownership transition survey had a range of important points, the one that leaps right off the page is the fact that a whopping 80% of family-owned businesses are still being controlled by their founders.  A large percentage of those founders are Baby Boomers who will have little choice but to retire in the next few years.

The survey indicated that 55% of CEOs over the age of 61 or older have yet to choose a successor.  This fact serves to emphasize the fact that a “retirement wave” will hit family-owned businesses, and this will lead to some interesting shifts and opportunities.  And while the survey indicated that 13% of CEOs state they will never retire, the reality of the situation is that ownership will eventually change hands.  Business brokers can expect to see an unprecedented wave of interest in their services.  Additionally, prospective buyers will also have a highly unique opportunity to buy established businesses.

The survey also indicated that 30% of family-owned businesses will be changing leadership within the next five years.  Of course, with that change of leadership, many possibilities open up, including the possibility of selling.  However, it is important to note that while there will be a “retirement wave” amongst the Baby Boomers, not all businesses currently owned by Baby Boomers will be placed on the market.

The survey noted that 90% of businesses currently plan on remaining family-owned, and 85% of businesses plan on having their next CEO be a family member.  However, it is important to keep in mind that even if these numbers were to hold true, that means at least 10% of businesses will be up for sale.

It is likely that this number is far higher now than when the survey was conducted due to the aging nature of the Baby Boomer population and owners looking to sell because of pandemic related issues.  Simply stated, there will be no shortage of businesses for sale in 2021 and beyond.

Another important aspect of the survey to consider is the fact that family-owned businesses are not prepared to sell.  According to the survey, 20% of family-owned businesses have not completed any form of estate planning, and 55% of family owners do not have any formal company valuation for estate tax estimates.  Combine these statistics with the fact that 60% of businesses do have a written strategic plan, and it becomes clear that family-owned businesses, especially those considering selling in the future, are most definitely in need of professional assistance.  Many family-owned businesses are ill prepared for the future and have a range of vulnerabilities.  Business brokers and M&A advisors are uniquely positioned to provide those services.

Copyright: Business Brokerage Press, Inc.

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The post Ownership Transition Survey Results on feedback and answers from family-owned businesses appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

 

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Ownership Transition Survey Results

Ownership Transition Survey Results

 

Ownership Transition Survey Results: Mass Mutual Life Insurance produced an ownership transition survey back about a decade ago.  The survey results were based on feedback and answers from family-owned businesses.  It produced some very interesting results and is worth examining even today.  While the survey at this point is quite outdated in terms of the timeline, there are still many valuable nuggets of information to be gleaned from it.  Let’s dive in and take a closer look at the numbers and what they can tell us for 2021 and beyond.

While the Mass Mutual Life Insurance ownership transition survey had a range of important points, the one that leaps right off the page is the fact that a whopping 80% of family-owned businesses are still being controlled by their founders.  A large percentage of those founders are Baby Boomers who will have little choice but to retire in the next few years.

The survey indicated that 55% of CEOs over the age of 61 or older have yet to choose a successor.  This fact serves to emphasize the fact that a “retirement wave” will hit family-owned businesses, and this will lead to some interesting shifts and opportunities.  And while the survey indicated that 13% of CEOs state they will never retire, the reality of the situation is that ownership will eventually change hands.  Business brokers can expect to see an unprecedented wave of interest in their services.  Additionally, prospective buyers will also have a highly unique opportunity to buy established businesses.

The survey also indicated that 30% of family-owned businesses will be changing leadership within the next five years.  Of course, with that change of leadership, many possibilities open up, including the possibility of selling.  However, it is important to note that while there will be a “retirement wave” amongst the Baby Boomers, not all businesses currently owned by Baby Boomers will be placed on the market.

The survey noted that 90% of businesses currently plan on remaining family-owned, and 85% of businesses plan on having their next CEO be a family member.  However, it is important to keep in mind that even if these numbers were to hold true, that means at least 10% of businesses will be up for sale.

It is likely that this number is far higher now than when the survey was conducted due to the aging nature of the Baby Boomer population and owners looking to sell because of pandemic related issues.  Simply stated, there will be no shortage of businesses for sale in 2021 and beyond.

Another important aspect of the survey to consider is the fact that family-owned businesses are not prepared to sell.  According to the survey, 20% of family-owned businesses have not completed any form of estate planning, and 55% of family owners do not have any formal company valuation for estate tax estimates.  Combine these statistics with the fact that 60% of businesses do have a written strategic plan, and it becomes clear that family-owned businesses, especially those considering selling in the future, are most definitely in need of professional assistance.  Many family-owned businesses are ill prepared for the future and have a range of vulnerabilities.  Business brokers and M&A advisors are uniquely positioned to provide those services.

Copyright: Business Brokerage Press, Inc.

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