Most business owners fret about whether they are asking too much or not enough for their goods or services. This dilemma keeps many prospective sellers up at night. Ask too much, and you may fail to attract enough customers; ask too little, and you’re cutting yourself short. In this article, we’ll examine how to determine if you are charging the right amount for your goods and services. Many business owners begin working with an M&A advisor or business broker only to learn that a small increase in their pricing can lead to substantial increases in profit. Best of all, with the right pricing strategy, it is possible to raise your prices without your customers noticing. The fact is, you may be leaving a significant amount of money on the table right now. Having a coherent and well-thought-out pricing strategy is the first step to boosting your profits, and it can be done in surprisingly little time. In Rafi Mohammed’s book “The Art of Pricing,” he observes that a key fallacy in … [Read more...]
Positioned to Help the Growing Number of Women-Owned Businesses
According to a study performed by IBM and the National Association of Women Business Owners, between 1997 and 2014 the number of women-owned firms grew at one and a half times the national average. And revenue and employment growth among women-owned firms tops that of all other firms-except the largest, publicly traded corporations. What’s more, as of 2014 it is estimated that there are nearly 9.1 million women-owned businesses in the United States, generating over $1.4 trillion in revenues and employing nearly 7.9 million people. You can read the full IBM and NAWBO report here: LINK As business brokers invested in our clients’ success, we are thrilled to see these numbers continue to climb. We believe women-owned business will continue to succeed in the market place. We want to be part of the support network for women who are in the process of buying, selling, or growing a business. Our wide variety of services for women business owners or potential owners include: Help … [Read more...]
4 Reasons to Buy an Existing Business Rather Than Start a New One
If you’re considering owning your own business, there are generally two points of entry. One is to start your own business from scratch and the other is to buy an existing business. Although the idea of starting your own business is sometimes more appealing, buying an existing business definitely has some advantages. Here are four ways buying an existing business can offer new owners a head start: A Tested Idea Buying an existing business means walking into something with an established, working concept. Compare this to starting a business from scratch with an untested idea and the reduced risk becomes obvious. Business owners that start something from scratch have to ask the big questions like, “Will this idea really work?” When you buy an existing business, it’s obvious that the idea has been tested and the concept with all its variables does work. Predictable Cash Flow An existing business has proven and predictable cash flow. Unlike starting a business from scratch … [Read more...]
What Buyers Are Really Looking For In a Business
One of the key elements to successfully selling your business is understanding what buyers are looking for as part of their due diligence. Typically, buyers will employ accountants and attorneys to look at financial and legal issues. But the savvy buyer will also be looking behind the curtain to uncover any skeletons in the closet. Business owners who anticipate these questions and inquiries will be a step ahead. If you’re getting ready to sell your business, here are four major areas where you can and should anticipate buyers to look very closely: Finances A qualified, savvy buyer is looking for companies that have monthly financial statements and annual financials prepared on a timely basis. They are looking at bank credit lines and if a bank or creditor has issued any kind of credit watch on the company. Timely bill paying and checking the gross margins for the past several years will also give a potential buyer a clearer picture of how the company has handled … [Read more...]
Are You Really Ready to Sell?
Many business owners may logically acknowledge that it’s time to sell. And while they may know it’s time to sell, they may not be emotionally ready for what selling their business means. Selling a business affects every aspect of your life including finances, time, identity, and purpose. Sellers who are not emotionally ready to sell can inadvertently undermine the selling process. In our years of working with business owners, we’ve discovered that even sellers who feel they are not emotionally attached to their business can be caught off guard during the selling process. It’s often wise to step back and examine feelings in three specific areas. Employees Business owners often form long-term, close friendships with employees. While this loyalty is admirable and creates a wonderful company culture, it can allow emotions to interfere during the selling process. Are you overly concerned with future outcomes for your staff members? Are you worried about breaking up your team and … [Read more...]
Avoiding Deal Breakers During a Sale
Selling a business or buying a business can be an extremely stressful, tension filled journey. The last thing anyone wants is to have the deal end up falling through. Fortunately, arming yourself with a competent team of professionals and the right mindset can go a long way to ensuring a deal goes through. The right set of professionals includes a professional business broker/M&A specialist, the right attorney, and an accountant. Both the attorney and accountant should have previous experience in M&A sales and should be deal oriented. All parities should have the end goal of making a deal in mind and should not be constantly looking for reasons why the deal won’t work. No one likes surprises, so it’s essential for buyers and sellers to be up front from the start. Surprises are all but inevitable in a deal so being patient and staying at the table to work things out is key. Novice buyers and sellers often panic when unknown information comes to light, but a professional … [Read more...]
Maintaining Confidentiality During a Sale
One of every seller’s biggest concerns during the sale of a company is maintaining confidentiality. Understandably, sellers do not want the word to get out that the company is for sale until the business is sold. Potential leaks could affect employee status, customer loyalty, and revenue. When handled properly by a qualified business broker, leaks are rarely a concern. Nevertheless, a seller should take certain precautions to avoid any potential leaks and subsequent problems. Here are a few precautions that can be taken to reduce risks during the selling process: Enlist the help of a business broker to ensure each potential buyer signs a confidentiality agreement. Business brokers will also make sure potential buyers are qualified to avoid unnecessary questions from unqualified buyers. Keep in mind that more buyer inquiries can lead to more potential confidentiality breaches. Reduce the timeline between going to market and closing by gathering all necessary information for … [Read more...]