If you’re a business owner, you know that a certain amount of risk and uncertainty comes with the territory. Most of the time, that’s a good thing. It can keep you curious and motivated. Plus, it’s true that with uncertainty comes opportunity. However, there needs to be a balance. Ruminating in uncertainty can cause a level of stress that hinders growth. When you are running or selling a business, it’s important to develop a balanced relationship with uncertainty. Six Methods for Business Owners to Improve Their Relationship with Uncertainty Gather…
As most business owners are aware, competitors are a major force to contend with. No matter what type of company you run, competitors will be trying to take away your customer base. That’s why it’s important that your business offers something special that sets you apart from your competitors. This is especially important when you’re trying to sell your business, since buyers don’t want to take over a company that blends in with the rest. To increase your chances of selling your company for a nice profit, it’s a good…
In true entrepreneurial spirit, many business owners design their business with the intention of one day selling it. Others don’t give the sales process much thought until later on. However, even if your company is successful now, you may want to take your career in a different direction down the road or retire one day. It’s a great feeling to see your hard work pay off with your business selling at a good price, but it takes strategy to achieve that goal. One of the best ways to frame your…
A company operations manual can be very helpful in selling a business! No matter the size of your business, creating an operations manual is likely to benefit you. This living document contains important contact lists, checklists about functions of the business, how-to guides, and policies, making it a helpful tool for those unfamiliar with operations. Each business’s operations manual will be a little different. Some will need a 1000-page manual that is loaded with detail, while others will find that a binder or online document with just a few checklists…
When preparing to sell your business, you should be prepared to have your financials heavily scrutinized. A qualified buyer will be nothing if not thorough, so make sure your business looks good on paper. But keep in mind, papers that look good aren’t worth much if they don’t match up with reality. From a buyer’s perspective, a business is worth buying if it shows good profitability, margins, costs, and expenses, all of which need to be clearly visible from your financials. The documents act as a sort of road map…
If you’re planning to sell your business, you may think that it isn’t worth it to update or maintain your equipment. However, that is far from the truth! If your business requires equipment to run, the tools you have will add value to your company. However, don’t think that if you have a warehouse full of broken or outdated equipment, you’ll be raking it in. You’ll need to keep it in shape with regular maintenance and updates as needed. What is Considered an Asset? Most often, furniture, fixtures, and equipment…
Whether you’re selling your business in 12 years or 12 months, it’s important to be able to show your company’s worth on paper. Having thorough financial records is a key to making a sale. Qualified buyers are going to want to do their due diligence before they make a purchase, and that means they will want to see a solid cash flow. Even if selling is far from your mind, at least once every year you should review the following: Any additional documentation to substantiate financial representations 2-3 years of…
You know your business is valuable, but that isn’t enough when you’re selling. The profitability of your business sale is dependent on its value in the eyes of the buyer. While that idea may sound difficult to wrap your head around, it’s easy to comprehend if you break it down into the 10 main indicators that drive the value of your business. The 10 Best Drivers of Business Value Stable Cash Flow: The most important indicator of value is a steady pattern of cashflow. Obviously, a business that doesn’t generate…
No matter how complicated it seems, you have one goal when you buy a business: to sell your business for a good price to a qualified buyer. The vast majority of buyers fall into one of three categories, so it’s a good idea to educate yourself before the process begins. Deciding which type of buyer best suits your company will help you sell your business for the best price to the buyer who will be able to continue your legacy. Individual Buyers An individual buyer is someone who is looking…
Most sellers want their business to change hands as quickly as possible, but things don’t always go as planned. However, there are certain steps of the process that you have the power to shorten, like the rate at which the buyer’s loan is approved. Unless your buyer plans to pay cash, they will likely need to obtain a small business loan through the Small Business Administration (SBA). The SBA does not loan the money directly, but when you apply for an SBA-backed loan, you are essentially asking the SBA to…
