Selling a Business

Thursday

04Feb2010

Business Valuation Report

Thursday, February 4, 2010 at 7:15AM

During the past several weeks, SCORE counselors have seen several clients who have asked for help in either buying or selling a business.

Most often the bottom-line question is "How much is this business worth?" This is an important consideration for both the buyer and the seller.

A Business Valuation Report
The potential seller looks back and remembers when he or she started the business and spent some time calculating how much their time was really worth as they determined how to price products or services. Now, they may be wondering how much the business that they've built is worth. They may have knowingly taken less "wages" out of the business than they would have liked because they wanted to invest in their enterprise and build the business. Is it now possible to recover some of that sacrifice?

At the same time, the potential buyer is looking at the business and wondering what the right price is for this established venture. What is its potential for giving a good return on investment of capital and effort?

Every week we see businesses that are bought and sold. There are some that are going out of business and others that are start-ups. As an owner, there are many reasons for determining the value of your business.

Extract taken from It's important to know what your business is worth by Dean Swanson. Read the full article at postbulletin.com.

BusinessesForSale.com Staff |

New York Brokerage Expands its Professional Affiliations

Friday, December 4, 2009 at 9:50AM

New York Business Brokerage Inc.(NYBB) , specialists in the confidential sale of privately held businesses, has expanded its professional affiliations—a move that significantly increases its existing network of M&A advisors and will help to ensure that clients who are selling their businesses get the highest possible price.

Anthony J. Citrolo Anthony J. Citrolo of NYBB

NYBB Principal Anthony J. Citrolo, CPA, CVA, CBI, has been named secretary of the New York chapter of the Alliance of Mergers & Acquisitions Advisors (AM&AA). This 11-year-old premiere international organization is comprised of more than 600 professional services firms and provides education, information and resources to the middle market M&A profession.

By accepting a leadership role with the AM&AA, Citrolo has immediate access to a broad range of M&A experts including top attorneys, certified public accountants and financial planners. “One of the best ways to optimize a business’s selling price is to locate multiple buyers who will compete for the acquisition,” Citrolo said. “Expanding my network of highly experienced advisors is one of the most effective ways of helping my clients maximize their selling price. These professionals provide valuable ties to the international investment community and create solid opportunities to connect clients wishing to sell their business to highly credible acquisition candidates.”

Dan Drage |

The Private Equity Industry is changing

Friday, December 4, 2009 at 7:42AM

Private Equity firms have been strong players in the middle-market M&A space over the last couple of years. They have aggressively bid on companies, therefore increasing selling prices. Whereas the newspapers carry reports of the larger cap deals, private equity firms had an impact in the middle market and the lower middle market as well.

It's big man versus little man Private Equity firms are on their way back

We are now witnessing a shift where private equity players are returning to the market. Most are using leverage, some deals even leveraged to the degree they were back in 2007. This will no doubt begin to push up business values.

The big difference is that there is a tremendous shakeout going on in the Private Equity Industry. The Deal Magazine recently wrote that as many as 20 to 30% of Private Equity firms are at risk. Almost all other data suggests that most of the deals for the foreseeable future will go to the largest private equity firms.

The reshuffling should be good news for the marketplace. An efficient marketplace is better for both sides. The process of selling a business will be significantly more efficient, and probably a better deal in the long run for the seller. “Real” Buyers will not be scared off as they have been in the past when a company was targeted by a PE firm.

In addition, the private equity firms that remain will be the PE groups that add value to the companies in their portfolio. They will have a much more vested interest in adding value to the firm, and seeing it grow. They will focus on areas within the firm they can improve, such as marketing, purchasing, etc. Their exit strategy will not be a quick flip, but more building long term value.

Click to read more ...

Ken Ducey |

Business Valuation Methods

Wednesday, December 2, 2009 at 6:58AM

Determining the value of a business can be a tricky process. But given the ongoing economic downturn, many small business owners across the nation are realizing the critical importance of understanding how to accurately assess the fair market value of their company in the event that they consider selling or want to purchase another existing business.

There are many approaches to valuing a business

There are three basic approaches for determining the value of a small business.

1. Market Approach. The market approach to valuation derives business value in comparison to historic sales, earnings, and/or assets of other similar businesses. Basically the business is worth the average of what comparable businesses in the same market are worth. This can be a dangerous approach to valuation, however, if your business is not "average."

2. Asset Approach. The asset approach to valuation determines the value of a business by assessing the fair market value of its assets. The basic thought is that no one will pay more for a company’s business assets than it would pay procuring similar assets on its own. While most tangible assets are already reported on the books, determining the value of intangible assets is more difficult.

Extract taken from How to Value Your Business by Steve Nielsen. Read the full article at BusinessWeek.

BusinessesForSale.com Staff |

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Wednesday

25Nov2009

Selling a Business Advice

Wednesday, November 25, 2009 at 7:20AM

Selling your business is usually a one-off event. Here are a few tips on making sure you get it right.

(1) Prepare yourself and your business: Make sure your house is in order before you even start. Any prospective purchaser will want to see accurate financial and other management information as part of the process, so make sure things are ready, well-presented and bang up-to-date.

Clean up your operationsThis will give would-be purchasers confidence that you’re in control of your business and run a tight ship. If you need help to sort things, get it – you only get one shot at convincing a potential purchaser. And prepare yourself too; you’re going to have to share information, justify things on which you wouldn’t normally be challenged, and take negative comments in your stride. You may even have to stick around to ease the transition – few business owners are able to walk away as soon as the ink is dry. The better prepared you are, the less stressful the experience will be. Many members of The Alternative Board (TAB) join several years before they intend to sell, specifically to learn from fellow board members who’ve already been through the sale process.