So what are buyers looking for in a business? Whether it’s their first purchase of a business or their 10th, buyers are looking for an ongoing income. Not surprisingly then, they’ll be attracted by businesses with a proven track record of consistent financial performance with solid, growing revenue and earnings.
Most of the people who come to us to buy a business are first-time buyers. And likewise, most of the business owners who contact us about selling their business have never gone through the process before. Buying or selling, there’s a lot for them to absorb. And while we do our best to guide them each step of the way, the subject matter can be a bit daunting for those unused to the terms that come up as we help them get to their goal line.
As a buyer, you are excited about the opportunity to purchase a business and confident you have enough money for its purchase. But do you have enough money to keep it "working?" If you plan to grow the business, do you have enough working capital to fund its growth? Growing businesses require more working capital than shrinking businesses as receivables are growing.
Raising kids doesn’t come easy. Neither does running your own business. Both provide significant life lessons and great rewards. So, what about combining the two? No, I don’t mean raising kids AND running your own business. Many of us do that already. I mean having your kids run their own business. Or at least learn the ropes of what being in business means.
Proper pricing is a must when you go to sell your business. And that means an asking price that is reasonable and correct. A reasonable asking price should factor the true earnings of the business and what the market is willing to pay. Business patterns, systems, competition, markets, quality of service or product, staff and operational factors are all predictors of future earnings that need to be taken into account.
Sunbelt and the Montreal Business Community have lost a great friend - Ron Greeley has left us too soon, taken by cancer on February 12, 2016. Ron, who worked in the Montreal West Island office of Sunbelt Business Brokers, was much loved by his peers and respected and appreciated by his clients. He leaves big shoes to fill and will be much missed by all of us at Sunbelt.
In a recent 2015 post, I noted that more mid-sized businesses in the Canadian market are turning to complementary acquisitions with fold-ins or add-ons that allow the buyer to add on the revenue of the acquisition without the costs the seller (and their smaller business) had. As we enter the New Year with renewed resolve and resolutions, I've been asked to say more about these financial benefits.
Flynn notes that in the U.S., "business for sale listings (mostly Main Street and often with less than $500,000 annual revenues) on the major transaction sites, as well as the middle market business brokerage firm listings are down in almost every North East state we track compared to five ago." Yet "the 2013-15 period was predicted to be the peak of the baby boomer selling boom."