selling a corporation Warrenton Missouri

If you are a business owner in Warrenton Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Warrenton ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Warrenton business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

sell your business for an outrageous price

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Warrenton  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

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Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

how sell your business

The Best Warrenton Missouri  Business Brokers 

How to Structure a Deal for Selling Your BusinessThere are so many ways you can go about selling your business and it's another source of cash to fund your retirement. You can sell it outright to a buyer or you can merge with another firm. In either case, finding the right buyer is key.Why? Because if you sell your company to a buyer that doesn't share your values, your clients/customers will leave. And if you care about what happens to your clients after you're gone, then selling to a buyer who shares your values is really important.One great way to assure a smooth transition is to bring in a partner before you plan on selling your business. Another option is to make a key employee a partner by giving him/her equity. You could also work with a business broker. Or, you could spread the word through your contacts such as your attorney, CPA and any other trusted advisor who might know a buyer worthy of your business.Most business values are determined by the business results over the last 3 years. Before selling your business, there are some key things that will determine its value.Transition risk of client base: The easier you are able to transition your clients to the buyer, the more your business is worth. For example, say you do business with your clients on a face to face basis but you find out your potential buyer solely does business over the phone. Obviously this is not a good match. Your cash flow: Your revenue stream needs to be as predictable as possible. You also want to make sure that you do not have only a few clients who make up a big portion of your revenue. Also, the age range of your client base needs to be as diverse as possible. This creates a more long lasting revenue stream. Here is a possible math scenario for selling your business:Let's assume your last 12 months of sales are $250,000 and you are selling your business to a junior person at your company.Let's say the sales price is $500,000. You could ask for 20% down or $100,000. You could then issue a promissory note for $175,000. You are basically lending the buyer the $175k and he is making monthly payments, say at a rate of 6%, for a period of 4 years. So you now know exactly how much money you will get paid every month.A third and final phase of the deal is called an earnout. The buyer pays the seller a percentage of the future revenue for an agreed upon period of time. In this case, the buyer has paid $275,000 and is still on the hook for another $225,000.The buyer can pay the seller 10% of the seller's revenues after each year. This motivates the seller to successfully transition the clients to the new buyer. The use of this earnout may increase or decrease the final purchase price.The tax treatment in all of these types of sales varies. Many of these sales can allow the seller to use long term capital gains tax rates and not ordinary income tax rates on the sale. (Please consult your tax professional for more information.)Bear in mind that this is only one way that you could structure a deal for selling your business. There many, many other ways you can structure the transition to achieve the outcome you want.But here's the bottom line. Make your business a lucrative one that's attractive to potential buyers. Develop a plan to monetize the value of it. Your customers will continue to get taken care of and you could be handsomely rewarded.I see so many entrepreneurs close up shop and leave huge money on the table. If you have any questions about selling your business, please feel free to give me a call.

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biz to buy Pleasant Hill Missouri

If you are a business owner in Pleasant Hill Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Pleasant Hill ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Pleasant Hill business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

business broker directory

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Pleasant Hill  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

sell your publishing business

Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

sell your publishing business

The Best Pleasant Hill Missouri  Business Brokers 

You are contemplating on selling your business and want to understand how best to maximize the value of your business. You might have heard from your industry contacts that some businesses similar to yours sold for 3 times EBITDA and some others sold for 6 times EBITDA. This variation could mean a difference of several million dollars in take-home! What makes this variation possible?How can you get the best value for your business?The purpose of this article is to help you look at your business as an acquirer might in valuing your company. The more attractive you can make your business to the acquirer, the better chance that you will get a higher value for your business. Your M&A advisor will also play a big role in the valuation and we will cover this in a different article.Here is a list of key vectors acquirers use in evaluating business:1. Strategic Fit: Strategic fit occurs when some aspects of your business (products, services, distribution channels, location, etc.) are worth a lot more to another player in the industry than it is to you. When a strategic fit is established, the acquirer sees your business on a post acquisition basis and may be willing to offer much more than the going market multiples. Give careful consideration to who the strategic acquirers may be. This is one area where a knowledgeable M&A advisor can be of great help to you.2. Cash Flow: After strategic fit, cash flow is the single largest value driver for most businesses. Think of ways to improve your EBITDA on a sustainable basis. Acquirers are suspicious of short term jumps in cash flow. So, be careful not to delay hiring or equipment purchases beyond what you believe is reasonable. Once an acquirer starts doubting your credibility, the due diligence increases and the acquirer will make changes to valuation to adjust for the risk.3. Management Depth: Keep in mind that acquirers buy a business that they hope will be functional and growing after the sale. It is tough for the acquirer to place high value on your business if you are the sole decision maker in the company and the business depends largely on your skill set. Developing your staff so that they can run the business when you are gone can pay big dividends when it is time to sell. If you are concerned about your employees leaving once you are gone, it may be good idea to consider employment contracts, stock grants and other incentives that give them a reason to stay long term. If possible, start work on staff related issues at least a year before you plan on starting the sales process.4. Customer Diversity: Acquirers are nervous about businesses where a high percentage of business comes from a handful of customers. Ideally, no single customer should contribute to more than 10% of your revenues or profits. The best solution for this problem is to diversify the customer base. If that is not feasible, be prepared to accept part of the transaction price paid as earn-outs or plan on supporting the acquirer in an advisory role to ensure customer continuity.5. Recurring Revenue Stream: Acquirers love predictable and low risk revenue streams. Any long term contracts, annual service/licensing fees, and other recurring revenue streams make business more desirable and fetch a higher price in the marketplace. In service oriented business, converting predictable customer support calls into recurring revenue stream can turn a business liability into an asset.6. Desirable Products & Services That Are Difficult To Copy: Acquirers place higher value on a business with unique products, services, or distribution systems than a business whose offerings are considered generic. What is unique about your business? Think of ways in which your product/service is unique and why it should be valuable to an acquirer. Having an edge and having the ability to communicate the edge can do wonders to your business's valuation.7. Barriers To Entry: With so much competition all around you, why is your business difficult to copy? Why will the acquirer have as much success with the business as you have had? Is it because of intellectual property (patents, copyrights), regulation (permits, zoning), difficult to get contracts (you are one of the two or three qualified vendors at each of your major accounts), or something else? Having good answers to these questions indicates that there are barriers to entering your business. These barriers make your businesses more valuable than your competitor's with similar cash flow.8. Pending Upsides: You believe you are about to come up with a compelling new product or make major inroads into a premier customer. You expect these developments will double your business next year and do not want your company to be undervalued based on current financials. Delaying the sale has other consequences that make it unattractive for you to wait. So, what do you do? A good forecast backed up by management presentations with examples on why the company would achieve the forecasts is extremely powerful. However, keep in mind that any forecasts that do not materialize as planned during the sales process can have substantial negative impact on the sales price. Having a good understanding of your product/sales pipeline and having the ability to communicate it with your M&A advisor can help structure a deal where part of the sales price can be paid in earn-out to capture some of the upside.9. Industry Exposure: Perceived industry leadership is an intangible that can enhance your company valuation. Keep a record of newspaper stories, articles in trade magazines, mentions on local TV or any other mention of your company in print or any other media. Your business is more valuable, if your company is perceived as being a leader in the industry and sought after for its expertise. Asking your employees to write articles and keeping in touch with local and industry reporters not only enhances your valuation in the long term but also helps drive your business and image in the community.10. Strategic Plan: A written strategic growth plan that clearly documents the areas the company can grow can be an asset to acquirer. Length of the document is not as important as the content. A well written 2 or 3 page growth plan is sufficient. Acquirers will also find useful prior year plans that show the history of your ventures - along with their failures and successes.11. Record Keeping: To many acquirers, high quality book keeping reduces risk and also says a lot about how the business was run. Having a set of clean, easily auditable books inspires confidence and helps during the due diligence and negotiation process.12. Accentuate The Positive: Every business has its chinks and it is very important for the seller to identify these negatives and proactively offer solutions for turning the negatives into positives. It is important sellers take steps to put out any bad news on the table early and dealing with issues upfront. Unidentified negatives can haunt you during the negotiating process.The most important takeaway from this article should be that while EBITDA matters, EBITDA is not everything. Improvement along the key vectors mentioned above will give you and your M&A advisor a considerable upper hand during the negotiation process. If the EBITDA of your business is $1 million, a difference in a multiple of 3 and 6 would mean a difference of $3M in pre-tax earnings. Not bad for doing a little bit of homework!

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biz to buy Nevada Missouri

If you are a business owner in Nevada Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Nevada ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Nevada business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

after you sell your business

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Nevada  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

sell your business advice

Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

how to sell your janitorial business

The Best Nevada Missouri  Business Brokers 

When you sell your business your first meaningful discussion, and your first opportunity to qualify the small business buyer, will usually be by phone. It's important that you control this conversation by asking the buyer a series of qualifying questions.But in fairness, you will have to answer a few questions from the prospect as well. Otherwise they will not feel comfortable moving ahead with the process.Explain the absolute necessity of confidentiality and tell them you have prepared a Selling Memorandum which they are welcome to read after signing a confidentiality agreement.But you can give some general answers to the most basic questions now.Here are some questions you should be prepared to answer when you first talk with your prospect:1.) Why are you selling? 2.) What is your price? Will you finance? What down payment are you looking for? 3.) How long has this business been in existence? 4.) How long have you been the owner? 5.) Will you stay on for a training period? / Will you be available after the sale for consultations? 6.) How much income can a new owner expect in the first year? 7.) What are the opportunities for growth? / Why is this business unique or special?Much of this information will have already been provided in your advertisement, but if you are talking to a buyer who was referred by your account, lawyer or some other source, this may be new information to them. Still you should try to answer these most basic questions without divulging any confidential information.Question #1 is perhaps the most important question. A lot of the advice buyers read and hear tells them to be skeptical of an owner's reasons for selling. After all, why would anybody want to sell a thriving business?Buyers don't have the right to know all the details about personal issues like health or a divorce, but you do need to have some prepared response to this question (health, retirement, pursuing new opportunities) that sounds reasonable and positive.Hopefully question #7 will be the focus of the entire conversation. If you haven't already done so, take some time right now to list some of the positives about your business.Taking The Next Step:After answering a couple of questions, try to get an e-mail address or fax number where you can send the confidentiality agreement. Let them know that once you have received this form, you will send them your Selling Memorandum with more detailed information.Any viable, professional and reasonable candidate should be perfectly agreeable with this process.Anyone who wants you to give them detailed and personal information about your business without signing a confidentiality agreement is being unreasonable. If they are unreasonable now, they will be that way throughout the entire process.You can save yourself a lot of time and frustration by cutting them loose right now.One Other Piece Of Advice:In all your phone conversations take notes. Your prospects will give you clues on how to sell them - if you get them talking about their goals and priorities. It may be weeks before you actually meet in person and you'll forget too much valuable information in the interim if you don't take notes.Notes about what?Their goals, their aspirations, their experience, the names of their spouse and children, why they want to own their own business, those aspects of your business that most interested them etc. etc.The selling process begins the moment you first speak with your prospect. Start to learn as much about them and what makes them tick as you can. It will pay dividends as you move into the negotiating phase of the sale.

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selling a business privately Perryville Missouri

If you are a business owner in Perryville Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Perryville ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Perryville business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

why sell your business

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Perryville  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

sell your business and retire happy

Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

how to sell your green business

The Best Perryville Missouri  Business Brokers 

When you sell your business your first meaningful discussion, and your first opportunity to qualify the small business buyer, will usually be by phone. It's important that you control this conversation by asking the buyer a series of qualifying questions.But in fairness, you will have to answer a few questions from the prospect as well. Otherwise they will not feel comfortable moving ahead with the process.Explain the absolute necessity of confidentiality and tell them you have prepared a Selling Memorandum which they are welcome to read after signing a confidentiality agreement.But you can give some general answers to the most basic questions now.Here are some questions you should be prepared to answer when you first talk with your prospect:1.) Why are you selling? 2.) What is your price? Will you finance? What down payment are you looking for? 3.) How long has this business been in existence? 4.) How long have you been the owner? 5.) Will you stay on for a training period? / Will you be available after the sale for consultations? 6.) How much income can a new owner expect in the first year? 7.) What are the opportunities for growth? / Why is this business unique or special?Much of this information will have already been provided in your advertisement, but if you are talking to a buyer who was referred by your account, lawyer or some other source, this may be new information to them. Still you should try to answer these most basic questions without divulging any confidential information.Question #1 is perhaps the most important question. A lot of the advice buyers read and hear tells them to be skeptical of an owner's reasons for selling. After all, why would anybody want to sell a thriving business?Buyers don't have the right to know all the details about personal issues like health or a divorce, but you do need to have some prepared response to this question (health, retirement, pursuing new opportunities) that sounds reasonable and positive.Hopefully question #7 will be the focus of the entire conversation. If you haven't already done so, take some time right now to list some of the positives about your business.Taking The Next Step:After answering a couple of questions, try to get an e-mail address or fax number where you can send the confidentiality agreement. Let them know that once you have received this form, you will send them your Selling Memorandum with more detailed information.Any viable, professional and reasonable candidate should be perfectly agreeable with this process.Anyone who wants you to give them detailed and personal information about your business without signing a confidentiality agreement is being unreasonable. If they are unreasonable now, they will be that way throughout the entire process.You can save yourself a lot of time and frustration by cutting them loose right now.One Other Piece Of Advice:In all your phone conversations take notes. Your prospects will give you clues on how to sell them - if you get them talking about their goals and priorities. It may be weeks before you actually meet in person and you'll forget too much valuable information in the interim if you don't take notes.Notes about what?Their goals, their aspirations, their experience, the names of their spouse and children, why they want to own their own business, those aspects of your business that most interested them etc. etc.The selling process begins the moment you first speak with your prospect. Start to learn as much about them and what makes them tick as you can. It will pay dividends as you move into the negotiating phase of the sale.

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buying and selling companies Boonville Missouri

If you are a business owner in Boonville Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Boonville ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Boonville business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

business broker commission

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Boonville  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

sell your retail business

Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

business broker commission agreement

The Best Boonville Missouri  Business Brokers 

You are contemplating on selling your business and want to understand how best to maximize the value of your business. You might have heard from your industry contacts that some businesses similar to yours sold for 3 times EBITDA and some others sold for 6 times EBITDA. This variation could mean a difference of several million dollars in take-home! What makes this variation possible?How can you get the best value for your business?The purpose of this article is to help you look at your business as an acquirer might in valuing your company. The more attractive you can make your business to the acquirer, the better chance that you will get a higher value for your business. Your M&A advisor will also play a big role in the valuation and we will cover this in a different article.Here is a list of key vectors acquirers use in evaluating business:1. Strategic Fit: Strategic fit occurs when some aspects of your business (products, services, distribution channels, location, etc.) are worth a lot more to another player in the industry than it is to you. When a strategic fit is established, the acquirer sees your business on a post acquisition basis and may be willing to offer much more than the going market multiples. Give careful consideration to who the strategic acquirers may be. This is one area where a knowledgeable M&A advisor can be of great help to you.2. Cash Flow: After strategic fit, cash flow is the single largest value driver for most businesses. Think of ways to improve your EBITDA on a sustainable basis. Acquirers are suspicious of short term jumps in cash flow. So, be careful not to delay hiring or equipment purchases beyond what you believe is reasonable. Once an acquirer starts doubting your credibility, the due diligence increases and the acquirer will make changes to valuation to adjust for the risk.3. Management Depth: Keep in mind that acquirers buy a business that they hope will be functional and growing after the sale. It is tough for the acquirer to place high value on your business if you are the sole decision maker in the company and the business depends largely on your skill set. Developing your staff so that they can run the business when you are gone can pay big dividends when it is time to sell. If you are concerned about your employees leaving once you are gone, it may be good idea to consider employment contracts, stock grants and other incentives that give them a reason to stay long term. If possible, start work on staff related issues at least a year before you plan on starting the sales process.4. Customer Diversity: Acquirers are nervous about businesses where a high percentage of business comes from a handful of customers. Ideally, no single customer should contribute to more than 10% of your revenues or profits. The best solution for this problem is to diversify the customer base. If that is not feasible, be prepared to accept part of the transaction price paid as earn-outs or plan on supporting the acquirer in an advisory role to ensure customer continuity.5. Recurring Revenue Stream: Acquirers love predictable and low risk revenue streams. Any long term contracts, annual service/licensing fees, and other recurring revenue streams make business more desirable and fetch a higher price in the marketplace. In service oriented business, converting predictable customer support calls into recurring revenue stream can turn a business liability into an asset.6. Desirable Products & Services That Are Difficult To Copy: Acquirers place higher value on a business with unique products, services, or distribution systems than a business whose offerings are considered generic. What is unique about your business? Think of ways in which your product/service is unique and why it should be valuable to an acquirer. Having an edge and having the ability to communicate the edge can do wonders to your business's valuation.7. Barriers To Entry: With so much competition all around you, why is your business difficult to copy? Why will the acquirer have as much success with the business as you have had? Is it because of intellectual property (patents, copyrights), regulation (permits, zoning), difficult to get contracts (you are one of the two or three qualified vendors at each of your major accounts), or something else? Having good answers to these questions indicates that there are barriers to entering your business. These barriers make your businesses more valuable than your competitor's with similar cash flow.8. Pending Upsides: You believe you are about to come up with a compelling new product or make major inroads into a premier customer. You expect these developments will double your business next year and do not want your company to be undervalued based on current financials. Delaying the sale has other consequences that make it unattractive for you to wait. So, what do you do? A good forecast backed up by management presentations with examples on why the company would achieve the forecasts is extremely powerful. However, keep in mind that any forecasts that do not materialize as planned during the sales process can have substantial negative impact on the sales price. Having a good understanding of your product/sales pipeline and having the ability to communicate it with your M&A advisor can help structure a deal where part of the sales price can be paid in earn-out to capture some of the upside.9. Industry Exposure: Perceived industry leadership is an intangible that can enhance your company valuation. Keep a record of newspaper stories, articles in trade magazines, mentions on local TV or any other mention of your company in print or any other media. Your business is more valuable, if your company is perceived as being a leader in the industry and sought after for its expertise. Asking your employees to write articles and keeping in touch with local and industry reporters not only enhances your valuation in the long term but also helps drive your business and image in the community.10. Strategic Plan: A written strategic growth plan that clearly documents the areas the company can grow can be an asset to acquirer. Length of the document is not as important as the content. A well written 2 or 3 page growth plan is sufficient. Acquirers will also find useful prior year plans that show the history of your ventures - along with their failures and successes.11. Record Keeping: To many acquirers, high quality book keeping reduces risk and also says a lot about how the business was run. Having a set of clean, easily auditable books inspires confidence and helps during the due diligence and negotiation process.12. Accentuate The Positive: Every business has its chinks and it is very important for the seller to identify these negatives and proactively offer solutions for turning the negatives into positives. It is important sellers take steps to put out any bad news on the table early and dealing with issues upfront. Unidentified negatives can haunt you during the negotiating process.The most important takeaway from this article should be that while EBITDA matters, EBITDA is not everything. Improvement along the key vectors mentioned above will give you and your M&A advisor a considerable upper hand during the negotiation process. If the EBITDA of your business is $1 million, a difference in a multiple of 3 and 6 would mean a difference of $3M in pre-tax earnings. Not bad for doing a little bit of homework!

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companies for sale by owner Des Peres Missouri

If you are a business owner in Des Peres Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Des Peres ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Des Peres business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

sell your publishing business

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Des Peres  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

xclusive business broker

Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

business broker directory

The Best Des Peres Missouri  Business Brokers 

Whether to close up shop, or keep fighting for survival is a question that more business owners seem to be facing than ever before. The economy is in the tank, banks won't lend, and you haven't slept in 18 months. As much as you don't want to, if you are losing money month after month, perhaps you need to sit down and have "the talk" with yourself.Nobody wants to be a failure, but as they say, sometimes discretion is the better part of valor. Once you decide to take a hard look in the mirror, ask yourself the following:- What are the chances that this business will ever be able to pay all the bills, and then leave enough for me to make it worth while?Some business owners made purchase at the height of the market, when the economy was chugging along. Of course, things have changed since that time, so the historical cash flows that drove up the purchase price are no longer a reality. If you paid $1,000,000 for a business, and revenues have dropped by 50%, is it reasonable to expect to be able to service that much debt?- What are my alternatives?If the business went away, what do you have to fall back on? A college graduate who left a corporate job to start their own business could always dust off their resume (yes, the one they swore they'd never again) and start checking Monster.com. If you have options, why not cut your losses for the time being? There's nothing that will prevent you from trying again in the future. At least if you have a job, you'll get a paycheck while you attempt to figure out your next venture.- How much are you willing to lose?If you apply for a modification, the bank will inevitably look for more collateral. When the bank starts sniffing around for your house or your stock portfolio, are you willing to bet those items that your business will succeed? It would be one thing to have your business close, it would be another to have your business close AND lose your home to foreclosure.- Do you like what you do?10 years ago, the idea of working for yourself sounded great. Work your own hours, you call the shots, make all the decisions, and do things your way. Now you are tired of crabby customers, haven't had a day off since you had hair, and you don't trust your employees enough to leave them alone. Entrepreneurship is tough. Like, really tough. It's perfectly OK to want to just have a job with a regular pay check and benefits where you can eat dinner with your kids and sleep in every weekend.

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companies for sale by owner Richmond Heights Missouri

If you are a business owner in Richmond Heights Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Richmond Heights ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Richmond Heights business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

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So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Richmond Heights  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

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Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

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The Best Richmond Heights Missouri  Business Brokers 

Competent business attorneys are a great addition to your team of advisor's when buying or selling a business.Attorney's can cover your assets and help make a well structured deal, air-tight. When it comes time to draft agreements and close a deal you have to take precautions that you are not leaving any loose ends. You do not want any loopholes left open in your purchase agreements, stock sales, leases, or otherwise have any business liabilities that could come back to haunt you in the future.When looking for a business attorney to help you with the purchase or sale of a business it is a wise choice to use an attorney with acquisitions or corporate transaction experience.Oftentimes a party will have a relationship with the family attorney who does a great job handling matters of taxes, real estate, wills and things of this nature, but will end up winging-it when assisting a buyer or seller of a business. Buying or selling a business requires a specialist.Corporate transaction attorneys will help you with your letter of intent, employment agreements, and non-compete agreements. They will guide you in due diligence by reviewing loans and leases.The buyer's attorney will customarily draft a purchase and sale agreement and take care of the closing procedures for his party.If you're retaining a general practice attorney to handle this for you, you're really just paying for your attorney's education. Just like there are doctors that specialize in all forms of medicine. The vast areas and specialties of law keep any single attorney from being good at all of it.A real estate attorney will seem like a natural choice as well, from the sense of "Closing" a deal, especially in the case where smaller business a real estate broker is representing a party, but you still have to answer the question of competence handling the sale of a business or corporate entity.Use your best judgment.

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franchise listings for sale Sunset Hills Missouri

If you are a business owner in Sunset Hills Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Sunset Hills ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Sunset Hills business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

how to sell your manufacturing business

So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Sunset Hills  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

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Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

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The Best Sunset Hills Missouri  Business Brokers 

Some owners have a figure in mind of what their business is worth; often it's inflated because of their emotional attachment. On the other hand, many owners undervalue their business because they do not understand the technicalities of the various valuation methodologies and which of these is most appropriate for their specific business type.Experience has shown that there is also a large percentage of business owners who do not know what their business is worth, nor how to go about establishing its true market value. Link uses many of the established valuation methodologies, often using a range of different options in combination to establish the most accurate figure. This figure is then further scrutinised by comparing the theoretical value with current and historical sales information from the Link database. This ensures that the valuation appraisal accurately represents what a purchaser will pay in the current market.Profitability and RiskMost businesses are valued based on a combination of assets and the cash surpluses generated. The risk factor of the specific business is also taken into account. This is the degree of threat from existing or potential competitors, changes in technology or consumer trends and many other factors that may affect earnings or costs."Barriers to Entry" is another issue that is taken into account and involves evaluating the degree of difficulty or barriers a competitor may face should they decide to establish a similar business. For example, businesses which require minimal capital investment or technical knowledge are said to have a very low barrier to entry and consequently, may have a lower value.Most businesses are valued on a "going concern basis" rather than the value of company shares. Purchasers are reluctant to buy company shares for a variety of reasons including the unknown possible future tax, credit or legal liabilities, or the danger of inheriting contingent liabilities based on historical trading. The price of the business is usually made up of three components:1. Intangible assets.The future earning potential of the business reflective of historical earnings potentially including intellectual property (IP), right to products or services, benefits of a lease, contracts, techniques and procedures as well as goodwill.2. Tangible assets.The fixtures, fittings, plant and equipment used by the business to generate its income. This component is normally calculated according to its depreciated book value.3. Stock. Stock purchased by the business for resale or manufacturing purposes. It is valued at the historical cost price. An allowance may be made for old or obsolete stock.Valuation MethodologiesGenerally, two or more of the following methods are used to appraise the value of a business:1) Industry Ratios2) Asset Based3) Earnings Based4) Market BasedThe appraised value is then subjected to the "sanity test". Some businesses are in a growth industry where their track record is well established and their projections solid. Other businesses may be in what is known as a sunset industry where projections are less optimistic. Many factors affect the true market value of a business, including business sector, economic conditions, business cycles, interest rates, labour availability and a whole host of other influences. Similarly, the value of trademarks, brands, intellectual property and goodwill is not always easy to quantify. Balancing all these factors with the book valuation of businesses establishes the true market value.1. Industry RatiosThe value of the business is based on its sales record compared with industry averages. This method is often used for small businesses and franchises where there is an established track record within a specific industry. It may also use a formula of multiples of weekly sales or an average derived from sales of similar businesses.2. Asset BasedIn businesses where there is history of low earnings or perhaps even losses, the Asset Based approach is generally used. Using this method, the value of the collective assets (both tangible and intangible) will determine the value of the business. In many cases there will be an element of goodwill payable, even where a business is not trading profitably. Although the assets alone may be purchased on the open market, there is often value in purchasing assets as a going concern, which may include customer lists, relationships with suppliers, an assembled workforce, brand awareness and reputation, among others. Calculating intangible assets, including goodwill requires some subjective judgement coupled with experience and the use of market comparisons.3. Earnings BasedGenerally the earnings based approach is used for larger businesses and places emphasis on earnings rather than assets. There are various methods used when employing the Earnings Based approach to appraisals. Return on Investment (ROI) or capitalisation of earnings is common, as is the application of earnings multiples.Earnings Based value is determined by considering:A. The level of return that could be expected by investing in the business in question, taking particular account of the perceived level of risk and realistic costs of management.B. The "industry average" multiplier on true earnings. This multiplier is market driven and varies according to perceived industry risk factors, perceived earnings sustainability and historical comparisons. The multiplier used most often in this approach is EBIT (Earnings before interest and tax) but others are frequently used and it is critical that you are comparing "apples with apples" when discussing multipliers.C. The fair market value of the unencumbered tangible assets of the business e.g. plant, fixtures, fittings, equipment, stock and the tangible and intangible assets which may include intellectual property.EXAMPLE OF ASSETS BASED METHOD A dry-cleaning business has been breaking even and the owners would like to sell and move on. The business has tangible assets with a total book value of $135,000, $5,000 of stock (all saleable), no bad debts and will pay all creditors. The fair market value of the tangible assets has been assessed as $110,000 and intangible assets and goodwill at $15,000. Therefore the fair market value of this business is calculated as follows: $110,000 (tangible assets) %2B $15,000 (intangible assets and goodwill) %2B $5,000 (stock) = $130,000.EXAMPLE OF ROITom's manufacturing company produced an adjusted net profit of $160,000 (EBPITD). The net assets (Valuation of plant and stock) for the business were $240,000 and a fair salary for Tom (owner) is $70,000. If someone was looking to invest in this business they could expect a 25% ROI, as this business offers a low to medium-risk investment opportunity.To calculate the ROI value for Tom's business:Business profits (EBPITD) ...........................$160,000Minus owner's salary ....................................$70,000Profit ............................................................$90,000Return on InvestmentProfit of .........................................................$90,000Divided by desired return ......................................25%Valuation appraisal ...................................... $360,000 4. Market BasedThere will be certain instances where no amount of sound theory or application of complicated methodologies alone will suffice. It is not uncommon that a willing buyer and a willing seller will agree on a value that defies all traditional appraisal methodologies. In other cases the use of traditional appraisal approaches produce unrealistic values that have no bearing on market realities. It is important in any appraisal to overlay relevant market data and multiples achieved in similar businesses "in the real world". Unfortunately the level of information available in Australasia is not as sophisticated as that available in other parts of the world.How will taxes affect your pay out?There are tax issues you may need to consider when selling your business. For instance, if you sell the plant and equipment (or company car) for more than the depreciated book value, you may have to pay back some of the tax you claimed when the items were depreciated (depreciation claw-back). Other tax liabilities may be incurred on the profit of land and buildings if they are included in the sale. It is vital that you fully understand your tax position when selling your business, and professional advice should be sought."Any desktop valuation involves a substantial amount of subjective judgment. The real test of the value of a business enterprise, like any asset, is what a buyer is prepared to pay."

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buy sell companies Ladue Missouri

If you are a business owner in Ladue Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Ladue ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Ladue business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

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So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Ladue  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

how sell your business

Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

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The Best Ladue Missouri  Business Brokers 

One of the first questions business sellers ask me as a business broker in Toronto, Ontario is "what are your fees?" Business owners contemplating the sale of their companies generally consider fee structure a very important criterion for the selection of a broker to work with. The business brokerage/Intermediation/ Mergers and acquisition markets offer a variety of fee structures depending on the size of the transaction and the nature of the services offered.Businesses of less than $100,000 in value generally sell through Real Estate Agents who sell mostly real estate and a few businesses on the side per year. The service offered is merely putting an ad in MLS and showing potential buyers the business. The seller does most of the selling and answers buyers' questions. The Real Estate salesperson charges a flat fee of $10,000 or 10% of the value of the transaction on closing. A real estate agent can hardly make living selling businesses only because a large percentage (over 90%) of these small businesses never sell.Businesses between $100,000 and $1M in value generally sell through business brokers/Intermediaries. In the province of Ontario, Canada and some US states, business intermediaries need to be real estate licensed. These brokers tend to offer a wider range of services including, business valuation, exit strategy consulting, preparation of a sales package or an offering memorandum, buyer screening and confidential marketing etc. Their fees generally range from 8% to 12% of the price of the transaction and is generally paid on closing. Some intermediaries charge a non refundable retainer between $1000 at $10,000 after signing the listing agreement. Businesses of these sizes generally have higher probabilities of selling because they are more professionally prepared for the sale. Because of the absence or the small amount of retainer charged, the number of sellers changing their minds about selling in the middle of the sale process tends to be very high. Some sellers tend to simply taste the waters to see how much their businesses are worth with no intention of selling. This ends-up costing a lot of time to business intermediaries.Businesses between $1M and $5M in value tend to sell through business brokers/Intermediaries who specialize in the lower middle market segment. These are more sophisticated business brokers who generally have a good understanding of Finance and Business Strategy and have the necessary people/sales skills to help in the long and tedious negotiation process. These intermediaries generally help in the business evaluation and provide advice to business sellers to maximize the business value. Some intermediaries prepare a short business summery of a few pages with summarized business information and industry analysis. Some but not all of these intermediaries charge a non-refundable retainer between $2,000 and $20,000. The success fee/ commission charged on closing of transactions is generally 10% of the first million dollars and 1% to 5% of the balance. This segment of the brokerage industry has been impacted the most by the Internet and the profession has been open to new entrants who do not have deep connections within traditional industry players. Business listings are simply advertised through large business for sale websites and generally attract a large enough pool of buyers to locate a serious buyer.Businesses between $5M and $50M in value are sold through Mergers and Acquisitions Intermediaries/Advisors. Those professionals generally process more advanced finance skills and are capable of detailed business valuations. They also offer more extensive sales package for the businesses to be sold. The sales package involves an extensive interview with the business owner and some key employees and a determination of the key success factors for the business, a detailed industry analysis and potential synergies and/or opportunities for expansion for potential buyers. Because the sales package involves a large number of hours of work, most M&A (Mergers and Acquisitions) Intermediaries charge a non-refundable retainer between $10,000 and $50,000. Charging a retainer also insures that only serious business sellers will list their businesses. While this practice tends to reduce the number of potential listings that an Intermediary will have at a certain time, it does insure a much higher quality of listings, meaning motivated sellers and realistic prices. On top of the retainer, these intermediaries charge a success fee using the Lehman or Double Lehman formulas. These formulas consist of charging a declining percentage on each million dollar of value ( 5% of first million + 4% of the second million + 3% of the third million + 2% of the fourth million + 1% of any balance) or (5% for first and second million + 4% for third and fourth million + 3% of the balance).Businesses with over $50M in value generally sell through medium size and large investment banks and have more complicated fee structures.

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preparing to sell your business Park Hills Missouri

If you are a business owner in Park Hills Missouri, there will come a day when you look at “how to sell my business” as the main question you ask yourself and perhaps the first thing to type in the search box in Google or your favorite search engine. When you type in “how to sell my business in Park Hills ” I am sure you will find all kinds of information on just that. I have compiled 7 of the things most business owners don’t know about or don’t think about before that day (or the day of) that would certainly make the day you do sell your business a more profitable one. Most companies who visit with us are looking to find out what their business is worth first. Most business owners have no idea what their company is worth. Wouldn’t you like to know about what it is worth before you hire a Park Hills business broker (we’re not brokers, by the way)?Before I go into all that let’s look at the 7 biggest mistake business owners make when they get to the point of asking “how to sell my business”1. They assume they “know” what their company is worth and make up a price – Look the first problem with this approach is that your business is usually “your baby”. If you have owned your business for a long time you know that you have spent more time with it than perhaps even your family, spouse and kids! It’s always there, even in the back of your mind………and sometimes it is hard to understand why someone can’t see your business worth the way you see it. That’s okay, but it is better to have a certified 3rd party give a certified opinion or appraisal of your business.Look at it this way, if you and I were going to go downtown and buy the Hilton Hotel, we would find a qualified appraiser to give us his professional opinion, wouldn’t we? We certainly wouldn’t take the owner’s word for it or even their accountant’s word for it. We would want an independent opinion and official analysis.But you say, hey my business isn’t worth that much to justify the cost. What? Even if your business is only worth $25,000, at least you would have an official 3rd party appraisal and a “floor” price you could start at. And with the discounts available when you go through someone like valuationbroker.com, you could literally add thousands if not tens of thousands to your sales price, and only pay a small percentage to have it done.I would not even consider selling any business without this step, no way, ever.You see, most business buyers are smart, like you, they have done a lot of right things to get where they are and unless they have recently inherited the money, they are sophisticated to a degree and will do their homework when looking for a company to purchase. The real advantage to having your company appraised first (by an independent 3rd party certified appraiser) is that you are the one driving the appraisal, not the buyer.2. They ask their accountant what their company is worth and use that number – You accountant is probably a very smart individual, however when coming to valuing a business or having one in on the sales process, I have one rule. I make sure they have been in on at least 10 business sales in the past 12 months, no exceptions. I have seen more deals killed by well meaning accountants. Don’t make this mistake.I don’t care what your accountant thinks your business is worth. I don’t care what MY accountant thinks your business is worth. I want to know what the market tells me.

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So that’s why I want an independent look from a qualified third party to tell me the current “market value”. I have seen hundreds of business owners make this mistake and it can (and has) literally meant the difference of getting only half of what they could have! Half!What’s also most interesting about accountants is that they tend to favor using the book value of your business as a starting point and not the market value. Big big mistake. You’ll leave a ton on the table this way. Don’t do it!3. They take the number off their balance sheet and say that’s what their company is worth – You balance sheet tells you the hard value of the assets you have, that’s it! It doesn’t take into consideration what the value of your assets are that have already been depreciated or your blue sky value, or good name, or customer base……….all things that can add tremendously to the bottom line value of your business!4. They read a few articles in INC magazine and guess a number (even saying something like “companies in my industry are selling for 3 Times earnings”) They may even refer to their latest tax return for a number – Don’t be fooled by this! There are so many variables even with similar businesses in the same industry. The true value of your Missouri  business is NOT the same as the guy down the street, even if you do the same thing! The true value of your Park Hills  business is NOT like real estate, where you can compare with the property down the street.That is like saying the space shuttle is like a bicycle. True they are both forms of transportation, but one is a bit more complicated than the other. Again, have it appraised by a “market appraiser”. Best money you will EVER spend. Ask ANYONE who has EVER sold a business! 5. They trust a FREE tool on the internet to give them the value of their business – While these free tools are valuable to help obtain a “range of value” (we have one too), they are not the complete answer and you can’t use them to justify your asking price. If you have a properly done market appraisal, it will include a “justification of purchase price” section that says, “this is what your business is worth in this market, and here is why it is worth that”That is such an important step. Buyers are smart and want to know how you came to the price you did. Now you know what to do so you can stand behind your price.

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Plus you will know just what the market is doing. It isn’t the accountant or the balance sheet or your uncle attorney that dictates the price, it’s the market! So knowing this, it is important to know just what the market price is. I have seen market prices be twice what the accountant says the business is worth!6. They haven’t made their business run without them – This is a no-brainer, yet many business owners don’t think of it. Your business will be worth a lot more if it can run without you there. Otherwise whoever buys it will be buying a “job”. Nothing wrong with that, but realize, those businesses just are not worth as much when you go to sell them.7. They hire the wrong attorney to help them with the final paperwork (the wrong attorney could be their best friend) – This is just like the accountant, unless the attorney you use has closed 10 or more deals within the past 12 months, don’t use them! So many well meaning attorneys have killed countless deals, UNNECESSARILY!I wish you well and hope you take these things to heart (and action). I have seen so many sellers walk away with a lot less than they could have, had they JUST used these few tips!Good Luck, I wish you continued success! (don’t forget to get a certified third party, independent report for your business BEFORE you list it to sell) You’ll be glad you did! Buying a business? Use the same concepts! Cheers!

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Some owners have a figure in mind of what their business is worth; often it's inflated because of their emotional attachment. On the other hand, many owners undervalue their business because they do not understand the technicalities of the various valuation methodologies and which of these is most appropriate for their specific business type.Experience has shown that there is also a large percentage of business owners who do not know what their business is worth, nor how to go about establishing its true market value. Link uses many of the established valuation methodologies, often using a range of different options in combination to establish the most accurate figure. This figure is then further scrutinised by comparing the theoretical value with current and historical sales information from the Link database. This ensures that the valuation appraisal accurately represents what a purchaser will pay in the current market.Profitability and RiskMost businesses are valued based on a combination of assets and the cash surpluses generated. The risk factor of the specific business is also taken into account. This is the degree of threat from existing or potential competitors, changes in technology or consumer trends and many other factors that may affect earnings or costs."Barriers to Entry" is another issue that is taken into account and involves evaluating the degree of difficulty or barriers a competitor may face should they decide to establish a similar business. For example, businesses which require minimal capital investment or technical knowledge are said to have a very low barrier to entry and consequently, may have a lower value.Most businesses are valued on a "going concern basis" rather than the value of company shares. Purchasers are reluctant to buy company shares for a variety of reasons including the unknown possible future tax, credit or legal liabilities, or the danger of inheriting contingent liabilities based on historical trading. The price of the business is usually made up of three components:1. Intangible assets.The future earning potential of the business reflective of historical earnings potentially including intellectual property (IP), right to products or services, benefits of a lease, contracts, techniques and procedures as well as goodwill.2. Tangible assets.The fixtures, fittings, plant and equipment used by the business to generate its income. This component is normally calculated according to its depreciated book value.3. Stock. Stock purchased by the business for resale or manufacturing purposes. It is valued at the historical cost price. An allowance may be made for old or obsolete stock.Valuation MethodologiesGenerally, two or more of the following methods are used to appraise the value of a business:1) Industry Ratios2) Asset Based3) Earnings Based4) Market BasedThe appraised value is then subjected to the "sanity test". Some businesses are in a growth industry where their track record is well established and their projections solid. Other businesses may be in what is known as a sunset industry where projections are less optimistic. Many factors affect the true market value of a business, including business sector, economic conditions, business cycles, interest rates, labour availability and a whole host of other influences. Similarly, the value of trademarks, brands, intellectual property and goodwill is not always easy to quantify. Balancing all these factors with the book valuation of businesses establishes the true market value.1. Industry RatiosThe value of the business is based on its sales record compared with industry averages. This method is often used for small businesses and franchises where there is an established track record within a specific industry. It may also use a formula of multiples of weekly sales or an average derived from sales of similar businesses.2. Asset BasedIn businesses where there is history of low earnings or perhaps even losses, the Asset Based approach is generally used. Using this method, the value of the collective assets (both tangible and intangible) will determine the value of the business. In many cases there will be an element of goodwill payable, even where a business is not trading profitably. Although the assets alone may be purchased on the open market, there is often value in purchasing assets as a going concern, which may include customer lists, relationships with suppliers, an assembled workforce, brand awareness and reputation, among others. Calculating intangible assets, including goodwill requires some subjective judgement coupled with experience and the use of market comparisons.3. Earnings BasedGenerally the earnings based approach is used for larger businesses and places emphasis on earnings rather than assets. There are various methods used when employing the Earnings Based approach to appraisals. Return on Investment (ROI) or capitalisation of earnings is common, as is the application of earnings multiples.Earnings Based value is determined by considering:A. The level of return that could be expected by investing in the business in question, taking particular account of the perceived level of risk and realistic costs of management.B. The "industry average" multiplier on true earnings. This multiplier is market driven and varies according to perceived industry risk factors, perceived earnings sustainability and historical comparisons. The multiplier used most often in this approach is EBIT (Earnings before interest and tax) but others are frequently used and it is critical that you are comparing "apples with apples" when discussing multipliers.C. The fair market value of the unencumbered tangible assets of the business e.g. plant, fixtures, fittings, equipment, stock and the tangible and intangible assets which may include intellectual property.EXAMPLE OF ASSETS BASED METHOD A dry-cleaning business has been breaking even and the owners would like to sell and move on. The business has tangible assets with a total book value of $135,000, $5,000 of stock (all saleable), no bad debts and will pay all creditors. The fair market value of the tangible assets has been assessed as $110,000 and intangible assets and goodwill at $15,000. Therefore the fair market value of this business is calculated as follows: $110,000 (tangible assets) %2B $15,000 (intangible assets and goodwill) %2B $5,000 (stock) = $130,000.EXAMPLE OF ROITom's manufacturing company produced an adjusted net profit of $160,000 (EBPITD). The net assets (Valuation of plant and stock) for the business were $240,000 and a fair salary for Tom (owner) is $70,000. If someone was looking to invest in this business they could expect a 25% ROI, as this business offers a low to medium-risk investment opportunity.To calculate the ROI value for Tom's business:Business profits (EBPITD) ...........................$160,000Minus owner's salary ....................................$70,000Profit ............................................................$90,000Return on InvestmentProfit of .........................................................$90,000Divided by desired return ......................................25%Valuation appraisal ...................................... $360,000 4. Market BasedThere will be certain instances where no amount of sound theory or application of complicated methodologies alone will suffice. It is not uncommon that a willing buyer and a willing seller will agree on a value that defies all traditional appraisal methodologies. In other cases the use of traditional appraisal approaches produce unrealistic values that have no bearing on market realities. It is important in any appraisal to overlay relevant market data and multiples achieved in similar businesses "in the real world". Unfortunately the level of information available in Australasia is not as sophisticated as that available in other parts of the world.How will taxes affect your pay out?There are tax issues you may need to consider when selling your business. For instance, if you sell the plant and equipment (or company car) for more than the depreciated book value, you may have to pay back some of the tax you claimed when the items were depreciated (depreciation claw-back). Other tax liabilities may be incurred on the profit of land and buildings if they are included in the sale. It is vital that you fully understand your tax position when selling your business, and professional advice should be sought."Any desktop valuation involves a substantial amount of subjective judgment. The real test of the value of a business enterprise, like any asset, is what a buyer is prepared to pay."

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