In many cases, the sale of a small company is “event†driven. That is, the reason for sale is often an event such as a health decline or illness, divorce, partnership issues, or even a decline in business. A much more difficult reason for selling is one in which the owners simply want to retire […]
Surprise #1: Substantial Time Commitment In the real estate business, once the owner engages the broker there is very little for the owner to do until the broker presents the various offers from the potential buyers. In the M&A business, there is a substantial time commitment required of the CEO/Owner in order to complete the […]
Take two seemingly identical companies with very similar financials, but one of the companies was worth substantially more than the other company. One company will sell for $10 million “as is†or some changes can be made and the same company can be sold for $15 million. Following is a partial list of potential company […]
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 […]
I am currently working with two buyers with two totally different motivations for buying a business. One buyer already owns a successful business and has the resources to purchase another in Orange County as an investment with either minimal involvement in day-to-day or hands off. The other buyer is from another state and wants to […]
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 […]
There is the old anecdote about the immigrant who opened his own business in the United States. Like many small business owners, he had his own bookkeeping system. He kept his accounts payable in a cigar box on the left side of his cash register, his daily receipts – cash and credit card receipts – […]
Burnout is one of the main reasons mentioned by owners selling his or her business. Potential buyers may have trouble accepting this as a valid reason for sale. However, burnout is a valid reason for selling one’s business. A business owner can experience burnout even with a business that’s successful and growing. Many independent business […]
Recent studies indicate that it now takes, on average, about eight to ten months to sell a small business. This figure seems to increase yearly. Why does it take so long to sell a business? Price and terms are the biggest reasons! It is very important not to overprice the business at the beginning of […]
There is the old saying that the time to develop an exit strategy is the day you open for business. Sounds good, but it’s not very realistic. Further, it also isn’t very optimistic. On the day you open for business, thoughts about how you get out of it aren’t pleasant, or helpful, thoughts. However, as […]
