What Companies are Buyers Looking For In Orange County

Top Ten Businesses for October 2014:

  1. Restaurants
  2. Convenience Stores
  3. E-Commerce
  4. Bars
  5. Fast Food – Non Franchises
  6. CaféBars
  7. Sandwich Shops & Delivery
  8. Auto Repair, Service & Parts
  9. Liquor Stores/Off Licences/Wine Merchants
  10. Gas/Petrol Service Stations

Top Ten M&A Businesses for October 2014:

  1. Distribution Businesses
  2. Car Wash & Valet
  3. Gas/Petrol Service Stations
  4. Mining Businesses
  5. Fabrication Businesses
  6. Main Contractors
  7. Construction Businesses
  8. Manufacturing Businesses
  9. Wholesale Businesses
  10. Road Haulage & Freight Services

Free Broker Opinion of Value For Qualified Sellers In Orange County

M&A and Business Broker activity is very high due to a number of reasons.  The revenues and profits for most business have increased and therefore the valuation for these businesses has moved upward.  Business owners who put off selling their business due to the “great recession” are now contemplating a sale.  Another, even more significant trend, is the Baby Boomer generation who want to retire.  It is estimated of the approximately 700,000 Baby Boomers, about 12 million own privately held businesses.  These 12 million businesses are likely to change hands over the next 10-15 years.

Before a business owner, whether a Baby Boomer or not, sells the business, he or she needs to get an estimate of what the business will bring on the open market.  A formal Valuation can cost between $5,000 and $10,000 depending on the size and complexity of the business.  If a seller wants to know if his perception of the value of his business, he should either do a formal Valuation or ask a Broker to do a Broker Opinion of Value.

Before putting a business on the market, a seller (or a buyer) should get an idea of the worth of the business.  There are several ways to value a business but most are based upon the re-cast cash flow of the business.  One way is to value by “rule of thumb”  which is a shortcut analysis of a business’s value, usually expressed as a multiple of the annual re-cast earnings of the business or Seller’s Discretionary Earnings (SDE).  In general,  a small business with a full-time working owner is worth from 1 to 3 times its annual SDE, with businesses producing SDE under $50,000 falling closer to the “1x” and businesses producing SDE of $100,000 or more valued closer to the “3x.”  The value must be tempered by the risk assessment which can either increase or decrease the valuation.  Another way to value a business is to compare the cash flow of the business to the sales price of other businesses that have sold.  This market comparison approach will reveal the multiples of SDE on past business that have been sold which can then be applied to the business being sold. A good Broker will have sources to access to these “comps”.  The market comparison approach is more likely to yield a more accurate valuation.

Empire Business Solutions is offering a Free Broker Opinion of Value to all qualified business owners.  Empire believes you should have an estimate of the value of your business BEFORE you make the decision to sell.  Call us at 714-374-6430 to discuss the details.

Empire Business Solutions has been a leading Business Broker and M&A Specialist since 2005 in the Orange County and Los Angeles County area.  Empire specializes in representing sellers in Southern California who want to maximize the value of their business.

Which Businesses Get the Most Inquiries?

Hot Business List ~ September 2014

 

Below you will find the current “hot” business list courtesy of data from a leading Business For Sale website.  A  monthly ranking of business types based on the number of “hits” on their site. This ranking is not based on the actual sale of businesses.

TOP CATEGORIES BY IMPRESSIONS

Top Ten Businesses for September 2014:

  1. Marketing Businesses
  2. Convenience Stores
  3. Printing & Typesetting Services
  4. Restaurants
  5. E-Commerce Businesses
  6. Fast Food – Non Franchises
  7. Auto Repair, Service & Parts
  8. Liquor Stores/Off Licences/Wine Merchants
  9. Bars
  10. Gas/Petrol Service Stations

Top Business For Sale Inquries

Here is last months “hot” business list courtesy of data from a leading website.  These business types based on the number of “hits” on their site. This ranking is not based on the actual sale of businesses.

TOP CATEGORIES BY HITS

Top Ten Businesses for August 2014:

  1. Restaurants
  2. Bars
  3. Cafes & Diners
  4. Convenience Stores
  5. E-Commerce Businesses
  6. Marketing Businesses
  7. Fast Food – Non Franchises
  8. Card & Gift Shops
  9. Aquatic & Marine Related Businesses
  10. Advertising Businesses

Top Ten M&A Businesses for August 2014:

  1. Distribution Businesses
  2. Car Wash & Valet
  3. Gas/Petrol Service Stations
  4. Mining Businesses
  5. Manufacturing Businesses
  6. Wholesale Businesses
  7. Fabrication Businesses
  8. Food & Drink Wholesalers
  9. Main Contractors
  10. Construction Businesses

Other Factors Which Effect Buyers Value of Companies in Orange County

Of course, buyers can evaluate all objective measures of the value of a business–EBITDA, Profit margins, and growth trends.  However there are other things which most buyers take under consideration for drivers of valuation.  Here is a list of subjective variables which can effect the way a buyer values a business.

1.  Buyers are looking for a strong management team with a vision for the growth of the business.  Unfortunately most entrepreneurs like to run mean and lean to create monetary value for themselves but this creates a management vacuum which a buyer must address.  Other questions are about the transition period and what the staffing will look like post sale.

2.   Industry Trend’s impact the value of a business and will be scrutinized by a buyer.  Questions asked by the buyer will be “Is the business growing faster or slower than the industry”, “Is the growth sustainable”, “How is the growth being driven and what is the reason for the growth”.

3.  Concentration Of Supplies and Customers.  Sellers must be able to articulate what makes them comfortable in transitioning these relationships to a new owner.

4.  Is There Room for Growth?  A buyer will need to evaluate at what rate of capacity is running at and what elements (building, equipment, people) are necessary to expand.  Also at what cost, cap ex, would be necessary.

Businesses which have answered these questions positively are in much better position to be valued at a higher multiple than those companies which have not addressed these subjective variables.

For an evaluation of your particular business, please contact us to discuss.

Business For Sale in Orange County, CA

Empire Business Solutions, a leading Business Broker and M&A Specialist in Orange County is please to announce it has been retained to represent and bring to market this business in the specialty trades space.

Commercial Flooring Dealer

Long established full service design and commercial contract flooring dealer which services all of Southern California.  One of the main assets the company enjoys is a very experienced staff, many with over 25 yrs experience in the industry.  Company enjoys an enviable reputation for providing high quality product and service.  The company has excellent relationships with General Contractors, Hospitals and Property Management companies.   Company has access to all the major carpet mills and flooring manufactures.

Owner wants to retire and will stay on for a short time through a transition period.

If you or anyone you know is interested in more information on this opportunity, please contact Roy Moss at 714-374-6430

What Are the Hot Businesses for Sale

Hot Business List ~ July 2014

Below you will find the current “hot” business list courtesy of data from leading business for sale website.     They publish a  Businesses For Sale  monthly ranking of business types based on the number of “hits” on their site. This ranking is not based on the actual sale of businesses.

TOP CATEGORIES BY IMPRESSIONS

Top Ten Businesses for July 2014:

  1. Restaurants
  2. Convenience Stores
  3. Bars
  4. E-Commerce Businesses
  5. Fast Food – Non Franchises
  6. Motels
  7. Liquor Stores/Off Licences/Wine Merchants
  8. Sandwich Shops & Delivery
  9. Fast Food Franchises
  10. Pizza Delivery Businesses

Top Ten M&A Businesses for July 2014:

  1. Car Wash & Valet
  2. Distribution Businesses
  3. Manufacturing Businesses
  4. Gas/Petrol Service Stations
  5. Mining Businesses
  6. Fabrication Businesses
  7. Wholesale Businesses
  8. Food & Drink Wholesalers
  9. Main Contractors
  10. Construction Businesses

Empire Business Solutions Awarded “Best Solutions Provider of the Year-USA”

Empire Business Solutions, a leading Business Broker and M&A Company in Orange County, California is please to announce that Acquisitions International, Inc has awarded Empire Business Solutions its 2014 “Best Solutions Provider of the Year-USA.”

Acquisitions International Magazine, has since 2010, been selecting and recognizing excellence in various categories.  They have been celebrating excellence, innovation and performance across the business, legal, financial and investment communities.

Each award series is designed to reward those most deserving in this global and very challenging business space. They give a comprehensive analysis of the industry and a complete run through of the best of the best in terms of industry experts.

Acquisition International prides itself on the validity of its awards and its winners. They are given solely on merit and recognize leaders in their respective fields.

Methodology

According to AI, the award winners are determined through a rigorous process, which starts when we open the ballot boxes and distribute the voting forms through our partners within the industry.

They combine the votes received – alongside supporting evidence – with their own in-house research to arrive at the final winners list. This comprehensive

selection process ensures that the awards are a true representation of the market and that our winners are truly at the cutting edge of their fields.

AI understands that bigger does not necessarily mean better. Our awards are broken down first by region and then into wider categories, ensuring that every firm has an equal chance – from local to global, niche to full-service.

About Acquisitions International

 “Acquisition International is a monthly magazine brought to you by AI Global Media Ltd, a publishing house that has reinvigorated corporate finance news and reporting. As an editorially driven magazine, its topical news articles make it a highly enjoyable read, and this readability ensures that advertisers will benefit greatly from their investment.

AI works alongside leading industry analysts to ensure we publish the most up to date figures and analysis. Through our regular features our regional, sector and specialist reviews, we thoroughly research and  publish today’s corporate finance news in cooperation with the leading professionals in the industry.

AI is global which brings together all parties involved in deal making and in an increasingly global deal market we are uniquely positioned to reach the deal makers that matter. We communicate to our readers not just through the magazine but also through a number of alliances.

AI also recognizes and honors the leading dealmakers in our awards supplement, in which we combine votes alongside in-house research data and industry expertise to finalize the shortlists and the overall winners. AI’s awards are given solely on merit and not handed out like confetti.”

Empire Business Solutions is a leading Business Broker and M&A Specialist in the Orange  and Los Angeles Counties since 2005.

 

Business Valuations

When the owners of private businesses in Orange County finally make the decision to sell their business, the first question on their mind is “what is the value of the business” when it goes to market.  Reality is that the market place will determine the actual value of the business.   It is not a perfect market and five different buyers will bring five different offers as  each buyer will assess the risk associated with future earnings differently.  The predictability of earnings going forward is critical to the valuation of the business but the certainty of the forward looking earnings is subject to risk.  The buyer will consider each of the following aspects of the business to determine the risk;

1.  Business Model

2.  Uniqueness in the market

3.  Products/Costs

4.  Competition in market and reputation of business

5.  Management in place and their strengths

6.  Gross Profit Margins

7.  Operation Strengths and Weaknesses

8.  Location

9.  Asset Strengths

10.  Customer Concentation

11.  Barriers to entry

12.  Intangible Assets

13.  Size of business.  Size does matter

14.  Financial Performance (past and projected)

 

These issues contribute to a company’s risk profile  which will impact the multiplier of pre-tax earnings  used to determine value.

Ultimately a buyer looks at valuing a business based upon “return on investment”  (ROI).  A buyer looks at the value of a business by determining a reasonable rate of return based upon the risk.  Buyers looking for a low risk  might be happy with a 5%-10% ROI.  Buyers with a higher risk tolerance might go for 30%-50% ROI because of the risk involved.  Privately held companies would generally be considered in the middle to high risk part of the scale. Expected annual returns for these acquisitions would be in the 15%-30% range.  Valuation if determined by dividing the expected rate of return by 100%.  For example, if a buyer wants a 20% return, then the multiple will be 5. (100% /20%=5).  The multiplier times the recast profits equal enterprise value for the business.   Why so some businesses have a value based on a multiple of 2 or 3 while other businesses have much higher multiples (5-6 ).  Low multiples may apply when a buyer is buying a job.  Much higher multiples apply to larger companies with much lower risk, proprietary products or processes, intangible assets no reflected on the  Balance Sheet or increasing earnings.

Empire Business Solutions offers a free Broker Opinion of  Value for owners who want to look at selling their business in Orange County.

 

Empire Receives Award as Business Broker Orange County

Empire Business Solutions, a leading Business Broker in Orange County,  is please to announce that the firm has named as the recipient of the “Best Solutions Provider-USA.

Empire Business Solutions, a leading Business Broker and M&A Company in Orange County, California is please to announce that Acquisitions International, Inc has awarded Empire Business Solutions its 2014 “Best Solutions Provider of the Year-USA.”

Acquisitions International magazine recognizes and honors the leading dealmakers in our awards supplement, in which we combine votes alongside in-house research data and industry expertise to finalize the shortlists and the overall winners. AI’s awards are given solely on merit and not handed out like confetti.”

Empire Business Solutions is a leading Business Broker and M&A Specialist in Orange County since 2005.