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Selling a Business - Timing

2009-11-12T15:15:21Z

Sometimes in life you have to do the inevitable and that includes selling your business. In most cases there are signs that tell you it's time to sell your business. This article will give you tips if it's time to put your business up for sale.

Time is of the essence

Running a business is a risk and sometimes to reduce the overall risk involved it's best to jump ship with a sale of the ship. In most cases it is obvious pain points that speak volumes and tells you it is time to sell your business, but often goes ignored. Analyzing your own business you should know if it is time to sell or if you have a fighting chance with your business.

Selling a business is never easy. You should never go into a deal head first, before you sell your business always have your business lawyer present and always have them okay any papers which require your signature. You should sell your business as you would a piece of real estate, put it on the market above your asking price and negotiate down to a fair price or your original asking price. When it is time to sell your business then be sure you list out the positives.

From BizLinkIn.com: 10 Ways to Know It's Time to Sell Your Business

Capital Gains Tax Changes

2009-11-03T10:42:05Z

The March Group, a private mergers and acquisitions firm specializing in the sale of middle-market companies, is advising business owners to sell their companies to do so before 2011, when capital gains taxes will take a steep rise.

Effective from January 1st, 2011, capital gains taxes on the sale of assets held longer than a year - and this includes a business - will increase from the current 15 percent rate to 20 percent for most taxpayers, according to the nonpartisan Tax Foundation.

Tax rules are changing

Rates will go up because a key piece of legislation - the Tax Increase Prevention and Reconciliation Act of 2006 (TIPRA) - will expire at the end of 2010. TIPRA extended tax breaks that were granted in the Jobs and Growth Tax Relief and Reconciliation Act of 2003 (JGTRRA), which lowered capital gains taxes to 15 percent for higher income taxpayers through 2008.

Business owners who sell their companies after December 31st, 2010, will pay 33 percent more in capital gains taxes (20 percent versus 15 percent) than those who sell before January 1st, 2011.

The March Group`s Sr. Vice President Mark Schwass advises, "Because it can take months, even a year or longer, to find a buyer and complete an acquisition, we're encouraging business owners to begin the selling process now, if the internal conditions of the business merit," He added, "The sooner your company is put on the market, the sooner the value of your business can be assessed, the sooner the right buyer can be found for your business, and the sooner you can begin negotiating for a mutually acceptable price."

View the March Group's businesses for sale on BusinessesForSale.com

Business Valuation - Young Companies

2009-10-29T09:55:03Z

From Forbes: How to Value a Young Company

Say you're lucky enough to find a willing investor in your young company. At some point (sooner rather than later), the guy will want to know: "How much do I have to pay for a slice of the pie--and how big a slice can I get?"

Placing a valuation on young companies is a tricky, subjective game, but it's one small-business owners have to know how to play, especially when investment capital remains stubbornly scarce. Quote too low a figure, and you'll give away the store; shoot too high, and the investor may blanch at your grasp of the underlying economics of the business.

Here are three techniques, some broken into parts, to help you put a value on your company. Your best bet is an amalgam of all of them. When it comes to impressing investors, the more ways you can speak their language, the better.

Technique No. 1: Asset Valuation

Of all valuation approaches, the asset approach--placing dollar values on all the assets on a company's balance sheet and adding them up--is the most concrete.

Start with physical assets, including machinery, office furniture, computers, inventory, prototypes (and the cost to develop them). Young companies tend not to have much in the way of physical assets, but add up what you do have.

Read the full article at Forbes

How Much is my Business Worth?

2009-10-22T14:43:13Z

The California Association of Business Brokers (CABB- a non profit trade organization) says if a small business owner is looking to sell their business but is waiting for the economy to turn around, use this time to start preparing. One of the most vital steps in this process is to understand what the business is worth.

Ron Hottes, president of CABB and of several Business Team Business Brokerages says that a business broker’s opinion of value can provide small business owners with an objective view of what a business is worth and is an important piece in determining the asking price. “A business broker’s opinion of value gives you a realistic starting point to work from and can give small business owners direction when determining the right time to sell.”

Selling a Military Defense Business

2009-10-15T15:37:04Z

With the United States fighting two wars simultaneously and continuing to improve homeland security, defense-related products and services are in high demand. The U.S is the principal determinant of the current world trend, as its military expenditure now accounts for just under half of the world total (41.5 percent).

Says CEO/President of The March Group Bob Scarlata, "Based on the defense-related deals we have active right now, we are seeing significant and solid interest from defense-related buyers - both strategic and financial. Essentially, any company involved in any way with defense - either military or homeland defense - is hot property right now.”

Business Sales Success Strategy

2009-10-14T09:36:54Z

The March Group, a private mergers and acquisitions firm, has recently brokered the sale of healthcare busness Accurate Homecare. Here's the story of how the deal unfolded:

Amy Nelson was only 18 years old when she started a Minnesota-based home health care business. In describing the events that led up to it, Ms. Nelson said, “I had previously worked for two other home care agencies and saw what they were doing wrong and had a passion to fix it. Because I wasn’t the owner in those two agencies, I didn’t have the power to do that.”

Her original plan was to first get her nursing degree, but, she explained with a smile,”[Starting the agency] happened a little sooner than that.”

Is the US Small Business Administration Limiting Goodwill?

2009-10-07T15:45:00Z

From The Small Business Channel: Limit on goodwill by SBA slowing small business acquisitions

Small business owners attempting to sell their businesses, along with business brokers are frustrated over the rules of the SBA concerning good will, which has stopped a lot of business deals from being completed because of the inability to get the financing to close the deals.

Starting in March the SBA capped the top loan amount for good will at $250,000, which has been the main detriment in owners being able to sell their small businesses, and prospective buyers to acquire them.

For those who may not know, good will refers to the intangible assets of a business, which could include things like its reputation, patents, trademarks, and other non-physical items that make a business what it is, aside from the usual things like buildings and equipment, among other tangible items we think of in relationship to a business.

Read the full article here.

How to Increase Value

2009-10-01T10:13:54Z

From The Boston Globe: Selling Your Business?

For many small business owners, their largest asset / investment is their business. Many hope to sell this asset and use the proceeds to help fund their retirement. However, due to lack of liquidity and other issues, the value of this asset is often indeterminate. These assets are not at all like stocks that trade on the NYSE or other markets. If an owner is not intending to sell his business anytime soon, then this is less of an issue. But the day always comes when the business needs to be transferred to new owners. The earlier an owner knows that they are exiting the business, the better they can prepare the company for its sale. Here are a few things that business owners can do to prepare their business for that day and get the maximum value for the business:

• Get your financial records in order - Buyers will want visibility into the financial numbers and having adequate documentation will help. By allowing potential buyers access to proper information, you can help them alleviate their concerns. Audited financial statements are another way to help alleviate this concern.

Read the full article here.

Selling a Business in 2010

2009-09-29T08:42:12Z

From The Small Business Channel: Planning to sell your business in 2010?

Are you thinking about selling your business? If so, there’s a good chance that you’re feeling overwhelmed and a little uncertain about how to get started? That’s how many entrepreneurs in your situation feel. John Couzens, Managing Partner with Trinity Capital Services, LLC shares his expertise with American Entrepreneurship readers in this exclusive expert interview.

Q: What factors need to be considered when deciding whether or not to sell your business?

Couzens: There are three primary factors to consider:

Read the full article here.

Selling Your Business

2009-09-23T09:00:05Z

From neBusiness.co.uk: How to sell your business

There are many articles about how to sell your business. Many start with an explanation of how the legal process works. More commonly you see articles discussing the preparation of a business for sale.

Frequently, this process is referred to as grooming the business.

Essentially this is a guide demonstrating how you should prepare your legal and financial matters to present your business in the most favourable way.

Read the full article here.