SBA loans have a reputation for being hard to access, for good reason. SBA loans can be particularly tricky to secure if you’re using that capital to acquire a business. If you’ve never gone through the SBA financing process before, it can be confusing. Heck — it can be confusing even if you have gone through the process before.
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By Tom“Many business owners are jumping on the bandwagon to sell their companies, trying to take advantage of the current hot market and frothy multiples being paid by buyers…Some sources estimate that 80% of small and middle market business owners who put their businesses up for sale never close the transaction. From years of observation, I have found that most deals fall apart (i.e., fail to close) for 10 basic reasons.
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By TomI read an excellent article recently about how to sell your business, written by Brian Mazar, of American Fortune Mergers & Acquisitions. He described eight (8) critical factors that are required to sell a business. While the number of factors may well be more than eight, Brian did an excellent job of briefly and clearly explaining what makes these factors so important.
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By TomWhat is Retirement Asset Funding? The use of retirement assets [401K, SEP, IRA] for the cash to fund the purchase a business to operate and grow is known as Retirement Asset Funding.
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By TomI recently had a situation that a lot of business brokers experience. A business owner contacted me about his interest in selling his company, so we spent some time talking about how he got into the business, why he wanted to sell the business now, what he planned to do after he sold the business, etc. I wanted to hear his responses to some of the soft questions that buyers ask.
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By TomMost business owners drastically underestimate how much time and energy it will take to strategically position their business [to sell]. Most view selling like a light switch – when they’re ready, they’ll simply enter the market, close a deal, and walk away with a pile of cash.
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By TomAccording to Tim Barrett of exit-planning company, BluePrints for Business, “exit planning is more than thinking and talking. It is taking the actions necessary to enable you to reach all of your exit objectives. The Exit Planning process we describe in this White Paper was created over 20 years ago, and has been refined by the experience of thousands of owners and their advisors.”
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By TomThere are a number of factors which must be considered when answering this question, including: (i) the sellability of the business – is it in a highly desirable industry, has the owner crafted the company to make himself indispensable?; (ii) the asking price for the business – is the price based upon what the market will pay, or is it based upon what the owner needs to receive in order to retire?; and (iii) what’s been the trajectory of the business during the past three years – are sales going up, down, or sideways, and has cash flow been going up, down, or sideways?
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By TomWhat are your business goals for the year? If you’re like most owners, you have a profit goal you want to hit. You may also have a top line revenue number that’s important to you. While those goals are important, there is another objective that may have an even bigger payoff: building a sellable business!
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By TomThe process of selling a business, from the preparation of the marketing documents to obtaining a check at the closing table, usually takes about eight to twelve months. There are many steps involved in this process – so many steps that have to occur in a certain sequence – that many sellers are often surprised at the complexity. It’s sort of like elective surgery to correct a health problem. If you knew all the steps involved in the actual surgical procedure, you might not elect to go through with it. But, you keep your ultimate goal in mind, and just proceed through the steps – one at a time.
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By Tom