• They neglect to run their business during the sales process. – The owner of a business can get so involved in the selling process that they neglect the day-to-day operation of the business. • They don’t understand the “real” value…
Deals fall apart for many reasons – some reasonable, others unreasonable. For example: • The seller doesn’t have all his financials up to date. • The seller doesn’t have his legal/environmental/administrative affairs up to date. • The buyer can’t come up with the…
Your first question may be, “Just what is Corporate Social Responsibility (CSR)?” We see CSR demonstrated in a variety of ways in areas such as: THE COMMUNITY: o Contributing to local community programs through financial support and personal involvement THE ENVIRONMENT:…
Personal Goodwill has always been a fascinating subject, impacting the sale of many small to medium-sized businesses – and possibly even larger companies. How is personal goodwill developed? An individual starts a business and, during the process, builds one or…
Mass Mutual Life Insurance Company provided the following survey results based on family-owned businesses. Although the survey was conducted several years ago, the results are still quite insightful and applicable. • Four out of five companies are still controlled by…
New accounting rules may require that acquirers and acquiring companies report earnout agreements as liabilities. Joel Johnson, president of Orchard Partners Inc., in his article, “Earnouts,” published by Valuation Strategies, states: “In a given year, 2% – 3% of announced…
The following are situations where the price was not the deciding issue in the successful sale of a business. The final buyer may be the only one who really understands the situation. A business intermediary really understands the issues and…
Basically, there are three major negotiation methods. 1. Take it or leave it. A buyer makes an offer or a seller makes a counter-offer – both sides can let the “chips fall where they may.” 2. Split the difference. The buyer and…
Due diligence is generally considered an activity that takes place as part of the selling process. It might be wise to take a look at the business from a buyer’s perspective in performing due diligence as part of an annual…
A solid, factual and compelling information memorandum maximizes the chances of not only selling a business, but obtaining the highest possible price. An information memorandum is also referred to as the selling memorandum, a confidential descriptive memorandum, or simply as…
Important questions to ask when looking at a business or preparing to have your business looked at by prospective buyers. • What’s for sale? What’s not for sale? Does it include real estate? Are some of the machines leased instead of…
A January 2004 survey conducted by the DAK Group/Rutgers found the following breakdown of why businesses are for sale: Reasons To Sell Risk reduction 44% Competition or market changes 41% External pressures 27% Lifestyle factors (age, health, etc.) 14% Lack of capital 9% Ownership/management…