Empire Business Solutions Forecasts 2015

Empire Business Solutions, a leading Business Broker and M&A Company in Orange County, California is forecasting a robust market  activity for the sale of small businesses in 2015.  Continuing the trend of positive economic and market activity that closed out 2014, more privately owned businesses have been able to grow their revenues, cash flow, and balance sheets. This has led to making them more attractive to buyers and lenders.  The buyers for these business are poised to grow their business through strategic acquisition to meet their growth projections.  A combination of low interest rates, record highs in the stock market, improving employment, and a lot cash on hand with drive the deal the market in 2015.  Additionally, Private Equity is sitting on a lot of “dry powder”.

Empire has already experienced this forecasted trend in the first Quarter of 2015.  Empire was able to close its first deal of the year in early February, transitioning a manufacture/distributor to a new owner, a small Private Equity firm in a deal that was closed within 30 days, almost at lightning speed as the PEG was closing another deal the following month.

Another example of this trend in the M&A activity of small business is the two new engagements Empire brought to market in January and February.

Manufacture of Performance After Market Auto Parts

This company is a leading producer of performance parts for the automotive after market.  They have achieved consistent revenues growth since it inception in 2005 even through the Great Recession.  Quality and service has made this company a leader in its field and contributed to 2014’s 25% growth year over year.  Company markets it products world wide mainly through distributors and only products for imported cars.  Vast opportunity for growth by tapping into the domestic market.  Factory currently  only running a 1/3 capacity so growth can be achieved fairly quickly with a strategic partner with distribution channels.

Metal Working Equipment Dealer

This profitable Southern California metal working equipment dealer and service company is a long established dealer with an strong customer base.  This company provides equipment and machine shop services to businesses all over Southern California.  The company enjoys an excellent reputation for sales and customer service  from the customers and vendors  it serves.  This company represents a wide range of manufactures which provide the company with outstanding support for their products.

 

First Done Deal of 2015

Empire Business Solutions, a leading Business Broker and M&A Company based in Huntington Beach is pleased to announce the first successful transaction of  2015.  Roy Moss, President of Empire, said “We are quite excited about the prospects for a very active 2015 and this first “Done Deal” of the year is proof that we are off to a very good start.

Tombstone

This was a California-based manufacturer and distributor of plumbing and HVAC (heating, ventilation and air conditioning) supplies. The products are manufactured in China.  The company has one full time employee to oversee the Q/C and supply sourcing in China.   The company maintains an active inventory of 600 SKUs and caters to the wholesale market segment, maintaining a customer base of approximately 260 customers. Products are distributed throughout the United States. The company has inventory-stocking sales representatives in Texas, Massachusetts, and Colorado. Total revenue was $4.5million in 2014 with EBITDA at $600,000.

The Company was purchase for approximately $1.9 mil by a small investor driven PEG from out of state with seller financing and earn out part of the deal structure.

M&A activity from Main Street to Wall Street seems very active and most forecasts from the leading websites are pointing to increased transactions in 2015.

A recent report from a prominent  business for sale website confirms these growth projections.   Their survey of brokers revealed a record number of transaction for 2014 since they started keeping track in 2007.  The significant increase in the volume of closed deals can be attributed to couple factors.  First is the survey reported an increase in qualified buyers who have entered the market.  The second important factor was the overall improvement in the business environment.  Businesses are performing at a much higher level in terms of revenues and profits which improves their valuations.  The median asking prices are growing due to the higher financials being reported.  Additionally, as we have reported before, the number of business going to market continues to increase because of the Baby Boomers retiring and wanting to exit their businesses.  It is expected that more Baby Boomers will exit in 2015 than in 2014.

All of these factors lead all in our industry to believe 2015 will be a good one.

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.

Contact Roy Moss, President of  Empire Business Solutions at 714-374-6430 to discuss the process in selling or buying a business in Southern California.

 

Empire Business Solutions Celebrated Its 10th Anniversary

Empire Business Solutions, a leading Business Broker and M&A Company based in Huntington Beach is pleased to announce that 2015 marks the 10th Anniversary for this Southern California intermediary.   Started in 2005, Realestate Opportunities & Investments, Inc, dba Empire Business Solutions, opened its doors with the mission of helping business owners realize their dreams of financial security by selling their business.

As experienced M&A professionals, Empire completely understands the life span of a business.  From start up through acquisition, merger or to presenting your business for sale, Empire has established our principles for success;

*Strict confidentiality with free consultation

*Strong client representation

*Solid evaluation

*Energetic Marketing

As President of Empire with over 35 years experience in all aspects of the business and sales process, Roy Moss has  personally involved himself in every transaction.  Through continued education and experience, Roy Moss and Empire manage the complex M&A transactions along with its team of professional experts which range from environmental to legal.  The goal is to arrive at a successful transaction for buyers and sellers.

Over the last ten years of service to the Southern California and Orange County business community representing buyer and sellers, Empire Business Solutions has participated in

over sixty different successful transactions.  Here is a partial list of successful transactions:

Done Deals

(Partial List)

Beco Mfg

Eastman-Bell Mfg

EML Laboratories

D&A Coatings

Pastorello Construction

USECC

Virtuoso Video Productions

Business Opportunity Journal

Islander BBQ

Avant Garde Salon

Origins Massage & Bodyworks

Skin Rx

Pet Pantry

Lisa Belle Salon

Tommy Bahama Retailer

Spa World Mfg

Gauthier Spa and Salon

Pasadena Med Spa

Carpolicy.net

California Greetings

Bershea

Colton Radiator

Midas

Reliable Auto Care

Focus Medical

Hairfree

Studio Exchange

Shah Legal

Lincoln Institute of Massage

It’s A Grind

Bamboo & Beyond

Pura Vida

KG Spa

Photomakers

OC Spa

Lil Angels Photography

Advanced Laser Clinic

Spa  Del Mar Location

Midas-Barstow

Wright’s Automotive

The deals over the last ten years have ranged from main street businesses to lower middle market M&A transactions.   The experience and personally attention to our clients have made Empire Business Solutions 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.

Contact Roy Moss, President of  Empire Business Solutions at 714-374-6430 to discuss the process in selling or buying a business in Southern California.

Orange County Business for Sale Market

LOOK AT THESE FACTS…

The Baby Boomers (about 70,000,000 of them) are poised to make a great impact on the American economy.

  • Retiring Boomer business owners will sell or bequeath $10 trillion worth of assets over the next two decades.
  • These assets are held in more than 12 million privately owned businesses.
  • More than 70 percent of these companies are expected to change hands.
  • The sale of almost 12 million businesses over the next 10 to 15 years represents a significant increase in the annual number of businesses that will be sold.
  • These owners of businesses should have a valuation performed by a business broker, to map out a strategy for selling and structuring the sale of the business.
  • Planning ahead will enable business owners to achieve the best transaction possible during this Boomer-induced wave of business sales.
  • The 12,000,000 businesses likely to change hands over the next 10-15 years might involve a large number of boomer-to-boomer sales.
  • Baby Boomers ages 45 to 64 form businesses at a higher rate than other age groups.
  • 55 to 64 year olds form businesses at the highest rate of any age group.
  • Many of the Baby Boomers are too young to retire; they typically have ample capital through savings, investments or other assets; they have job-related skills accumulated through a lifetime of work; and many have lost faith (and money) as a result of large company layoffs and restructurings; and many will buy their own business in coming years.
  • Many Boomers find themselves unhinged from their traditional employment safety nets. This dislocation has fueled an intense desire and need to have control of their destinies.
  • Ironically, now small business ownership is seen as much more safe and secure than working for a large company.
  • So, in the coming decades, not only are we likely to see millions of Baby Boomers selling businesses they now own, we will also see additional millions of Boomers (who’ve spent their lives working for someone else), buying businesses.
  • The next two decades will see a significant increase in the number of small and mid-sized businesses being bought and sold by Baby Boomers, in addition to the other generations of Americans.

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