2016 is Heating Up – What is Your Business Worth?

We have already been busy the last few months  working with prospective buyers who want to acquire business properties and other investments in 2016. Here are some things we are seeing in the market.

1. Financing is readily available for good investments.

That is good news for sellers who are looking to “cash out”. While in the past brokers have prepared their sellers to see offers of of owner financing, we are easily able to package SBA financing for most buyers when we have good financials.  The key is making sure that your financials are up to date and showing the proper numbers for your business. We are often asked what the formula is for establishing the value of a business. Well, there are about 50 of them and every circumstance and every business is different.

If you truly want to know what your business is worth, give us a call and we can tell you. It will take about an hour of your time and the meeting is free. We promise you will be happy you spent the time to learn how your investment is paying off for you in terms of growth and equity.

2. Buyers are smart and want to know exactly what you’re selling.

You can sell your business as “an asset sale” which means that you sell the business name and assets, retaining your accounts payable (bills) and receivables (incoming cash flow invoiced up to the date of closing).  OR you can choose to position the sale as a “stock or entity sale” which would transfer those as well.

In either event, you can reserve certain assets or liabilities. Be certain you and your broker take careful inventory of your options and position your package to be most attractive to a typical buyer.

3. Buyers are shopping around, looking at franchise opportunities and hiring consultants to do their own start ups.  But overall, buying a business that they can walk right into makes the most sense for most buyers.

To that end, you should make sure your business is “turn key”.

Get your price right: There are several different business valuation methods ranging from asset-based to future earnings approaches. No approach should be used exclusively. A good broker analyzes all approaches and takes into account the current market as well as what has recently sold. You should never pay an upfront fee for this – it should be a part of what your selected Business Broker does to begin the marketing process. Part of the valuation also includes devising financing plans for potential buyers. Having your business SBA pre-qualified adds value and makes the business more marketable.

Make an assessment of the curb appeal of your business. This includes physical appearance of your business as well as the underlying paperwork infrastructure. This is the time to google your own YELP reviews, clean up your website and other social media. Make sure your books are up to date and in order. Again, a good Business Broker will make suggestions and help you become aware of improvements and tweaks that may make the business more marketable.

You’ll also want to be sure that you’ve reduced your liabilities as much as possible, doing things such as settling any lawsuits and making sure all tax payments are up to date.

Buyers are engaging  business brokers as a way to approach sellers. The local MLS is not the way to market a business. A broker who is focused on selling homes may not be the best choice when listing a business.  Some companies, such as BEACH STATE BROKERS, offer a variety of service with individual professionals engaged in specific concentrations: home sales, investment and business brokerage. That often allows the firm to reach more buyers through additional mediums and referral channels and can pair you with a team that knows their focus. Buyers purchase businesses globally. So focus on finding a Broker who understands that reach. Get professional help when selling a business.

Selling your  business is the first step to building a new business or reaching retirement. It is an even more complex transaction than selling a house and one that has even more emotional impact. A Business Broker who specializes in your type of business can help you maintain the emotional distance and objectivity you need to successfully sell your business.

At Beach State Brokers we do provide professional business brokerage in hospitality and tourism based business:  restaurants, bars and other types of businesses you would find here in Florida that derive some of all of their income from a tourism based economy.

We are here to help – and do not charge any consultation or evaluation fees. Call us today to begin talking about how how to get top dollar for your investment.