Buying a Business Selling a Business Using the Internet

SellaBusinessFlorida.com

I just sold a business last month and the buyer saw the business advertised on Craigslist and on one of the large “Businesses For Sale” websites.  I am a business broker that works with business owners with the process of buying and selling a businesses.  My profession of being a business broker is my own business. 

I have also owned another business of 20 years.  I am a business broker that has been trying to figure out this “Internet thing” for quite some time.  I think I am figuring out that I will never figure it out.

It seems that there are a lot of Internet marketing experts and this industry appears to still be somewhat at the early stages of a rapidly growing industry.  As a business broker and business owner, I recognize that utilizing the internet is integral in business success going forward. Maybe I know more about trying to maximize the Internet than some, but the question of asking a business owner (that is not in the Internet marketing business) if they understand Internet marketing is akin to asking someone if they are a golfer. The average golfer may have a handicap of 20-25, Some golfers shoot at professional levels- 0 handicap, some people have never golfed, some have golfed once or a few times, some golf a lot but are still a 30 handicap (the higher the handicap the worse the score).  In golf,  I am about a 12 handicap.  For Internet marketing maybe I am about a 12-20 handicap , I dont know.

What Does Selling A Business Online Involve?

I may know  more than some, but know there are a lot more that know a lot more than me.   My job involves many discussions with business owners regarding the state of their business as it relates to a potential sale of their business or a possibly buying another business. The  questions  I have about utilizing the internet as a business broker are also questions shared by the plumbing contractor, the print shop owner, the restaurant owner, the card shop owner and the small business owners scattered throughout the world.

10 Interent marketing observations from a Business Owner / Business Broker:

  1. The Internet today is so different than it was 10 years ago.  Ten years ago, so many businesses didn’t have websites.  Those that did had these fancy Home pages with lots of “neat stuff”. And the site just sat there.  Now-a-days it is known that a lot of that neat stuff gets in the way of search engines.    A few years ago it seemed if you didn’t show up on Google – you didn’t show up, and then came, Myspace (and went), Facebook, Craigslist, LinkedIn, Twitter,  Google+, Pinterest, etc. .  I am convinced the Internet 10 years from now will greatly different than it is now.  Trying to figure out where it is going is the challenge.
  2. To me , I see the value in Social Media marketing is that it decreases my reliance on Google.  With Social Media customer have another way to find you.  You don’t need to show up on page one of google to be found.  I may be wrong with this line of thinking but this is my perspective. 
  3. It feels like everything I learned yesterday, is almost outdated tomorrow
  4. I see the question asked so often online- Is anybody making any money on Twitter.  Twitter is growing at 1,000,000 new users per minute 🙂 doesn’t it just make business sense that some are making profit on Twitter- I am not yet,  are you? Does Twitter work for your product or service?  Does it help to sell/buy a business?
  5. Is Internet marketing another strong way to reach customers, market and advertise, or is it so much more?  As a business owner we know we need to advertise and market.  In the past and present we use the Yellow pages, direct mail, radio, maybe TV, trade shows, telemarket, direct sales, networking and other methods.  Is it proper to view internet marketing as a very strong means of marketing and advertising or view it as so much more.  I tend to think to view it as so much more.
  6. Is it true that if you can drive “mad traffic” to your website that is so effective that  you could sell ice cubes to an Eskimo?.
  7. Is blogging better than tweeting, is Facebook better than Twitter.  Do I need to post videos to Youtube?  How important is SEO, incoming links, adding more friends, social media buttons/widgets?
  8. Is email marketing dieing, improving, necessary, changing, or being somewhat replaced by social media?
  9. How do I do all that I should be doing on the Internet, without having to bear the cost of “sub contracting” that task out and still run my business.
  10. How will we be accessing the Internet down the road and how does that affect my approach today?  It seems a few short years ago accessing the Internet with ones cell phone was a novelty at best.

How Do You Find A Business Owner Who Is Selling A Business?

Selling A Business

Photo (c) mobivation.com

I am just a business owner who’s profession as a business broker requires significant marketing efforts.  How do you find a business owner that is looking to sell a business? This is a very confidential event. How do you find a business buyer that is looking to buy a   Jacksonville Towing company or a Florida HVAC Contractor,  Tampa Retail Business, or  Computer Repair shop?

My approach is  to try different things.  I Tweet the businesses I have for sale- I get some follow up questions, I blog about my business experiences- it has driven”some traffic” to my site, I am on Facebook- but pretty weak, I am on Linked-In and a few other social/business sites.  I personally feel value in writing a blog as it allows me control to provide SEO optimized current content to my site.  I do email marketing.  I certainly am not in a position to provide well grounded advise on this subject but my major point is- Are you a business owner confused about what you should be doing on the internet? – You are not alone.

 

A Word on Buying or Selling a Business

Considering Buying or Selling a Business?

 Taxes Transition Risk Future Asset List Owner Benefit  Working Capital License transfer CHANGE Liabilities  Seller Financing SBA,  Trucks, Intellectual Property EBITDA Cash Flow Inventory Debt Depreciation Goodwill  Money  Customer Base When to Tell Employees    Balance Sheet             Business Broker  Attorney  How?    Accountant    Marketing  Adjusted Net  Non Compete     Negotiation  Training  Management  Offer to Purchase  Confidentiality Lease  Accounts Receivable    Franchise Valuation Multiples   NDA      Revenues             Net Income  Depreciation   Earnout  Closing Agreement  Job  Deposits  Employees Trademarks       Fear       Trade Name Retire  Security     Promissory Note  CPA     Personal Guarantee Timing Work UCC  Family Business  Exit Plan   Website   When?  Partner      S-Corp  Clients    Relationships  Price    Payment     real estate  Assignment  Plan    Help!

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Is EVERY Business For Sale at “Right Price”

As a Business Broker based in Florida I spend ample amount of time prospecting/marketing for prospective business sellers and prospective business buyers.  I use various marketing methods to market to both buyers and sellers.  While in the process of  prospecting for business owners considering the exit or sale of their business it is not uncommon to hear “I would be interested in selling my business  if I can get the right price”.

Business For Sale – The Right Price

Recently I engaged in such a discussion- the owner told me he would very much like to sell his business and start a new somewhat unrelated business if the could get the right price for his business.  I then asked what he felt may be the right price and he followed up with “I don’t know”.

The “right price”  may not equal to the business value, or the price a qualified interested buyer is willing to pay.

For an actual transaction to be consummated,  the right price needs to resemble actual business value.  If the “right price”  is actually 2-3 times what estimated value of the business is, it is probably best for all parties involved to spend their time elsewhere.

But is every business for sale?  What if a “sweetheart deal” is presented to  a small business owner in Florida?  If you had a business that is not “For Sale” , and you know it to have an approximate value of $500k  and someone walked in and made you a cash offer of $800k cash is your business now for sale to that party?

Is now the time to Sell My Business?

From my personal experience of business ownership, I think yes most businesses are for sale if the “price is right”.  But not all businesses.  While owning my previous business in the 10th year  I had gotten a significant offer for the business, but I had long terms plans and  aspirations for the business.  At that point in time I had made several acquisitions and made several other offers on other related businesses and was comfortable with valuations, synergy calculations,  and felt I knew what the value of  my business was.

There was a lot of merger and acquisition activity that was occurring in my industry at that point in time and I was presented with a cash offer from a  very strong company, and was at about a 25% premium to what I and my CPA viewed as current value.  So I had a very strong cash offer from a well qualified business- do you take the money and move on.?

Business For Sale – The Value

In my opinion business values are affected by both  macro and micro economics.  What is the state of the economy, what is the state of the merger acqusition economy and what is the state of your industry/your business?  These elements effect what sort of multiple of cash flow your business may be worth.  If the economy is such that valuations were/are  running high do you look to exit your business because valuations, and or those high multiples may not come around again?

In my situation I consulted with my “trusted advisers” around me my CPA, my attorney, my wife.  Yet ultimately the decision was mine.    My CPA did tell me something that strongly influenced that decision.  He had told me “You,ll know when you are ready”.  It was a great price great offer, but I wasn’t ready and ultimately sold my business 10 years later and got fair value for the business. So is every business for sale if the “right price” comes along.  I think that most businesses are for sale if the right price comes along, but not all businesses.

 

 

 

Florida Business For Sale | 100 Facts on Sold August 2012

Florida Business For SaleFlorida Business For Sale | Business Broker

I am a Florida Business broker working with business owners selling their Florida  businesses, and business owners and individuals looking for acquisitions.  Prospective business buyers I work with are located in Florida, US., and Business buyers in Europe and throughout the world.

As a  member of Business Brokers of Florida, which is the largest state Association of Business Brokers in the United States we have access to significant data regarding businesses being bought and sold .   Thousands of businesses for sale are represented by over 1000 business brokers that are members of this Association.  These business brokers list their respective businesses for sale and prospective business buyers on a centralized listing site and buyers and sellers of businesses are brought together. Several thousand businesses for sale are listed, modified, and advertised thru this website.  Valuable information regarding Florida business for Sale and Florida Businesses Sold help me as a Business Broker Profesional  keep track of the ebb and flow of the Florida Business Acquisition Market.  Understanding a business to assist in selling that business requires an understanding of the numbers behind  that business.  And understanding the marketplace in which this business may be sold is furthered by a review of the data surrounding businesses being bought and sold in Florida. The below are 100 +-  facts, statistics, totals, and items of note surrounding the business acquisition and sales market in the State of Florida. Other businesses are bought and sold without the assistance of members Business Brokers of Florida, and that info is not included in this analysis. All of these numbers are as of today August 15th, 2012….

Florida Business For Sale | Thousands For Sale?

  • There are approximately 3020 Florida Businesses for Sale
  • There are approx. 100 Florida Business For Sale that have both a net income of $100k or more and require no more than a $100k Net income
  • Of the 3000 plus Florida Businesses For Sale 17 have a Net Income of $1M
  • Of the 3000 plus Florida Businesses for Sale 1142  have Net Income greater than $100k

Below are actual businesses currently for Sale in Florida-  in North Florida (Jacksonville Florida) , Central Florida (Orlando area) and South Florida (Miami area)

 

Automotive
Location Category Detail Price Adjusted Net Sales
Orange, Florida USA Fleet Service 290,000 172,108 301,166
Cleaning/Clothing
Location Category Price Adjusted Net Sales
Orange, Florida USA Dry Cleaners 325,000 118,650 548,952
Construction
Location Category Detail Price Adjusted Net Sales
Orange, Florida USA Contractor Electric 138,967 1,095,531
Medical Related
Location Category Detail Price Adjusted Net Sales
Orange, Florida USA Medical Equipment 265,061 1,332,620
Motorcycle
Location Category Detail Price Adjusted Net Sales
Miami-Dade, Florida USA Motorcycle Dealership 125,000 100,515 900,816
Restaurants
Location Category Detail Price Adjusted Net Sales
Orange, Florida USA Italian Restaurant 114,900 120,399 555,708
Orange, Florida USA Pizza Shop 114,900 120,399 555,708
Orange, Florida USA Breakfast Lunch 140,000 118,366 229,417
Orange, Florida USA Pizza Shop 150,000 104,901 331,710
Miami-Dade, Florida USA Ethnic Restaurant 159,000 116,000 540,000
Footwear
Location Category Detail Price Adjusted Net Sales
Duval, Florida USA Shoes Repairs 139,000 124,915 198,350

 

500 plus business have been sold  in Florida thru Business Brokers of Florida YTD

Averages of 500 plus Businesses Sold in Florida thru 8/15/2012
Sales Sold Price Adjusted Net Adjusted Net/Sales Sell Price Multiple Down Pmt % Days To Sell
568,938 210,785 108,003 0.255 1.478 81.30% 225

The days it takes to sell a business “Days on Market”  Does not include all businesses that attempt to sell and dont.  Not all businesses that attempt to sell do result in that business being sold.  The average Selling Price of the 500 + businesses sold in Florida was about $201k. What is Your business worth?Notes on these above numbers: 

Florida Business For Sale | A Good Deal?

  • The average of businesses sold-  sold at about 1.5x the annual adjusted Net.
  • The above averages include businesses (less than 10%) are businesses that may include real estate in the Sold price
  • The average business earned (their Adjusted Net ) was about 25% of their Sales-  What is yours?

Every Business is different.  Looking to Sell your Business?  Do you consider your business “average”?   Looking to Buy a Florida Business?  Should you pay an “Above average”  Price for a Below Average Business?

Source of current information above Business Brokers of Florida

Topic: Florida Business For Sale

 

7 Ways to Exit Your Business-Choose One

Ways To Exit Your Business

There are several ways one may exit their business.  Business Owners may want to exit a business they have owned for decades just because they just no longer have an interest.  Or a small business owner may “get out of their business” after a short period of time of just owning it a year or 2.  

Most all entrepreneurs and small business owners  think long and hard before they decided to buy a business or start a business.  So often so little thought goes into an exit strategy.  A small business may be the result  ones passion or burning desire to provide a certain service or product.

A small business can also be and usually is one of the largest asset a small business may own.  It can be a passion but it also is an investment. A significant investment.  Most investments one enters into an exit strategy should exist before the investment is made.

Exiting Your Business

Photo (c) advantagebusinessltd.com

You buy a commercial property to rent out with the intention to rent it for 10 years, hope for market appreciation and  plan to sell in 10 years.

You buy a stock.  You buy at $10 a share and plan to sell if stock goes to $15  (unless the company fundamentals change).

You decide to start or buy a business, it gets going and does well- is your plan just to run it forever? Well you cant, because none of us are here forever.

Emphasize On Making Plans For Your Business

If your plan is to start a business grow and run the business until you are 65 and then sell it- you have a plan and are ahead of most.  It is so easy to start and buy a business and spend a lot of time preparing for that acquisition or start up, then get wrapped up in the transition or start-up, then get wrapped up in the day to day, and then one day you get real sick, and you have no one in your business that knows how to run your business, and laying in bed decide that you may need a plan- it may be to late then.

I am currently a business broker  based in Florida and find my role of meeting with small business owners brings awareness to the need for an exit strategy.  I had owned my own small business for 20 years and realized how ensconced with the day to day one can get with their small business.  There are several ways to exit ones business- I primarily work with small business owners looking to sell their Florida business, but observe some of the other exit mechanism and have been personally involved with several of these methods.

These are a few methods a small business owner may utilize to exit a business.  Some are good, some not so good.

The Good, the Bad and Ugly Ways to Exit Your Business:

  1. Sell at profit- can include “merger with other companies
  2. Sell at Loss
  3. Close your doors-bankruptcy, long term negative cash flow.
  4. Poor Health, Significant Injury, Death
  5. LBO (Leveraged Buy Out)
  6. Successfully grow it to such a size and take it public
  7. leave to children

Or some combination of the above- one could die and leave the business to the children

But when you look at the above list you recognize that some of the exit strategies you choose on your schedule and others are “chosen for you” and you have less control over the time frame.  Your plans can change and often do, but I suggest you plan to have a plan