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How Can I Sell My Business Fast at the Highest Price?

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Introduction

“How can I sell my business fast and for the best price?” is a question many entrepreneurs grapple with when they decide to move on from their ventures. Selling a business is not just a transaction; it’s a culmination of years of hard work, dedication, and passion. While the desire to sell quickly is understandable, it’s equally important to ensure that the business fetches its rightful value. This delicate balance between speed and value requires a strategic approach, careful planning, and a deep understanding of the market dynamics.

Understanding Your Business’s Worth

Before you can sell your business, you need to know its worth. This isn’t just about numbers on a balance sheet; it’s about understanding the tangible and intangible assets that make your business unique. Here’s how you can determine the true market value of your business:

  1. Comprehensive Business Valuation: Engage in a thorough business valuation process. This involves analyzing financial statements, understanding revenue streams, and evaluating assets and liabilities. It’s not just about current earnings but also about potential future revenue. Tools and methodologies to determine the market value can provide a more accurate picture.
  2. Market Demand & Competition: Understand the current market demand for businesses like yours. Are businesses in your sector in high demand? What’s the competition like? If there’s a high demand and limited competition, you might be able to command a higher price.
  3. Unique Selling Proposition (USP): What makes your business stand out? Maybe you have a proprietary technology, a strong brand presence, or an exclusive contract with a major client. These unique factors can significantly increase the value of your business.
  4. Recurring Revenue: Businesses with a steady stream of recurring revenue (like subscription models) are often more attractive to buyers because they promise consistent income. If your business has this, it can boost its valuation.
  5. Growth Potential: Even if your current profits aren’t sky-high, if there’s clear potential for growth, it can increase the perceived value of your business. Perhaps you’ve just entered a new market, launched a promising product, or secured a significant partnership.
  6. External Factors: Economic conditions, industry trends, and even geopolitical situations can influence the value of a business. For instance, a tech startup might be valued higher during a tech boom, while a travel business might face challenges during global unrest.

Remember, “How can I sell my business fast?” is a question that doesn’t have a one-size-fits-all answer. Each business is unique, and its value is influenced by a myriad of factors. However, by understanding these factors and positioning your business effectively, you can ensure that you’re not leaving money on the table when you sell.

Preparing Your Business for Sale

The adage “First impressions count” holds true even in the business world. When potential buyers look at your business, they’re not just looking at numbers; they’re evaluating its potential, its operations, and its overall appeal. Proper preparation can make the difference between a quick sale and a prolonged process. So, if you’re wondering, “How can I sell my business fast?”, start by getting your house in order.

  1. Organize Financial Records: Ensure that all your financial records are up-to-date and organized. This includes profit and loss statements, balance sheets, tax returns, and any other relevant financial documents. Clear financial records can expedite the due diligence process.
  2. Legal Documentation: Ensure all licenses, permits, and other legal documents are current. This also includes employee contracts, lease agreements, and vendor contracts. Having a variety of documents in order can instill confidence in potential buyers.
  3. Operational Efficiency: Streamline operations where possible. This might involve training staff, updating processes, or even investing in new technology. A smoothly running business is always more attractive to buyers.
  4. Physical Appearance: If you have a brick-and-mortar presence, ensure it’s clean, organized, and well-maintained. The physical appearance of a business can influence a buyer’s perception of its value.
  5. Address Outstanding Issues: If there are any lingering issues, such as disputes, legal challenges, or unresolved complaints, address them. Buyers prefer a business that comes with minimal baggage.

Marketing Your Business Effectively

Once you’ve prepared your business for sale, the next step is to market it. This is where the expertise of business brokers in Austin can be invaluable. They have the experience, network, and tools to ensure your business reaches the right audience. But beyond that, here’s how you can effectively market your business:

  1. Confidentiality is Key: When pondering “How can I sell my business fast?”, remember that maintaining confidentiality during the sales process is crucial. You don’t want employees, suppliers, or competitors to know you’re selling until the deal is finalized. This can prevent potential disruptions.
  2. Targeted Marketing: Instead of casting a wide net, focus on targeted marketing. Identify potential buyers or businesses that might benefit from acquiring your business. This could be competitors, businesses in related industries, or even investors looking for opportunities in your sector.
  3. Online Listings: Use online business sale platforms to list your business. These platforms can provide visibility to a wide range of potential buyers. Ensure your listing is detailed, accurate, and presents your business in the best light.
  4. Networking: Utilize your professional network. Attend industry events, seminars, and conferences. Sometimes, word-of-mouth can lead to the best deals.
  5. Negotiation Strategy: Be clear about your terms from the start. Know your bottom line and be prepared to negotiate. However, also be open to creative solutions that might meet the needs of both parties.

In the quest to answer “how can I sell my business fast?”, effective marketing is the bridge between preparation and closing the deal. It’s about presenting your business to the right audience in the right way, ensuring that potential buyers see its true value.

Understanding Business Valuation

One of the most critical aspects of selling a business is determining its worth. A fair and accurate valuation not only ensures you get the best price but also makes the business more attractive to potential buyers. If you’re thinking, “How can I sell my business fast?”, understanding the valuation process is essential.

  1. Methods of Valuation: There are several methods to determine the market value of a business. These include the income approach, the asset-based approach, and the market comparison approach. Each method has its merits, and the best one for your business depends on its nature, industry, and financial health.
  2. Intangible Assets: Beyond physical assets and financial metrics, intangible assets like brand reputation, customer loyalty, and intellectual property can significantly influence a business’s value. Recognizing and presenting these assets can boost your business’s perceived value.
  3. Seek Expertise: Engaging with professionals who specialize in business valuation can provide an objective and accurate assessment. Their expertise can be invaluable, especially when negotiating with potential buyers.

Closing the Deal

Once you’ve prepared, marketed, and valued your business, the final step is closing the deal. This phase involves final negotiations, due diligence, and the transfer of ownership. If you’re still wondering, “How can I sell my business fast?”, ensuring a smooth closing process is the answer.

  1. Due Diligence: Expect potential buyers to conduct thorough due diligence. They’ll review financial records, contracts, assets, and more. Being transparent and cooperative during this phase can expedite the sale.
  2. Negotiation: While you might have had discussions about the price and terms, the final negotiation sometimes begins in due diligence, when negative information is sometimes uncovered, before closing the deal. Be prepared to discuss terms, conditions, and possibly make some concessions to seal the deal.
  3. Legalities: Ensure all legal documents, including the sale agreement, are in order. It’s advisable to work with a legal professional with lots of experience in M&A to ensure all aspects of the sale are legally sound.
  4. Transition: Depending on the agreement, there might be a transition period where you assist the new owner in understanding the business operations. This phase can be crucial for maintaining business continuity.

Conclusion

Selling a business isn’t just a transaction; it’s a testament to an entrepreneur’s dedication, resilience, and vision. Every business owner dreams of the day when their venture reaches its pinnacle of success, and for many, this success is epitomized by a lucrative sale. The pressing question, “How can I sell my business fast and at the highest price?” is one that resonates deeply with those at this crossroads.

The journey to a swift and profitable sale is paved with preparation, market understanding, and strategic partnerships. It’s essential to recognize that the speed of the sale shouldn’t overshadow its quality. Your business, built with years of effort, deserves to be showcased in the best light, highlighting its potential and achievements. By ensuring your business is primed for sale, emphasizing its unique selling points, and aligning with industry experts, you position yourself for the best possible outcome.

One such expert in the field is CGK Business Sales. Their seasoned team understands the intricacies of the business sales process and can provide the guidance and expertise needed to navigate this complex journey. By collaborating with professionals like CGK Business Sales, you not only enhance the visibility and appeal of your business but also ensure that potential buyers recognize its true value.

In conclusion, while the desire to sell quickly is understandable, it’s paramount to ensure that the speed doesn’t compromise the sale’s quality. With meticulous planning, the right partnerships, and a focus on showcasing your business’s true worth, you can achieve a sale that is both rapid and rewarding.

What Happens to Debt When a Business Is Sold?

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Navigating the Complexities of Business Debt in Sales

Introduction

When contemplating what happens to debt when a business is sold, many business owners find themselves navigating a maze of financial intricacies. This concern is especially pronounced for small and lower-middle-market business owners who have worked tirelessly to build their enterprises. The process of selling a business is multifaceted, and understanding how existing debt plays into the equation is crucial. This article aims to shed light on this topic, providing clarity for sellers and potential buyers alike.

The Typical Scenario: Cash-Free, Debt-Free Deals

In the realm of business sales, especially within the small and lower-middle-market sectors, the term “cash-free, debt-free” is more than just industry jargon. It represents a standard approach to business transactions, ensuring that the business is handed over without any cash or debt attached to it. But what does this really mean for the seller and the buyer?

A cash-free, debt-free deal essentially ensures that the proceeds of the business sale are adjusted, based on the amount of cash or debt in the business at the time of sale, while not adjusting the actual purchase price of the deal. For instance, if a business is sold for $1 million and has $100,000 in debt, the seller would typically receive $900,000 in actual proceeds, using the remaining amount to clear the debt. Conversely, if the business holds $100,000 in cash and no debt, the proceeds to the seller are more than the purchase price. This ensures that the buyer acquires the business without any financial encumbrances and the seller walks away without any lingering financial obligations tied to the sold business.

So, why is this approach so prevalent, especially in the small and lower-middle-market sectors?

  1. Clarity and Simplicity: One of the primary reasons is the clarity and simplicity it brings to the transaction. Both parties have a clear understanding of what they’re getting into. The buyer knows they’re acquiring a business free from financial burdens, and the seller knows exactly how much they’ll walk away with post-sale.
  2. Risk Mitigation: For buyers, assuming a business’s debt can be risky. Without a comprehensive understanding of why the business is in debt and the terms of that debt, buyers could find themselves in a precarious financial situation post-acquisition.
  3. Facilitates Financing: Buyers often need to secure financing to purchase a business. Lenders are more likely to approve financing for a business acquisition that doesn’t come saddled with debt. A clean financial slate makes the business a more attractive proposition for financial institutions and is mandated in SBA deals.
  4. Valuation Accuracy: Determining the value of a business can be complex. Removing debt from the equation simplifies this process, ensuring that the business is valued based on its operational worth and not clouded by its financial obligations.

In essence, the cash-free, debt-free approach is about ensuring a smooth transition. When pondering what happens to debt when a business is sold, sellers should be reassured that in most scenarios, they won’t be passing on their financial burdens to the new owner. Instead, they’ll be settling those obligations as part of the sales process, providing a clean break and a fresh start for both parties.

Exceptions to the Rule: When Debt Might Transfer

While the cash-free, debt-free approach is standard, especially for small and lower-middle-market businesses, there are exceptions. In some cases, a buyer might be willing to assume some or all of a business’s debt. This is more common in larger transactions or when the business has significant assets that outweigh its liabilities. But why would a buyer agree to this, and under what circumstances might it occur?

  1. Strategic Value: Sometimes, the strategic value of a business to a buyer might be so high that they’re willing to take on existing debt. This could be because the acquisition offers a significant market advantage, eliminates a competitor, or provides access to a new customer base or technology.
  2. Asset Value: If the business has substantial tangible assets, such as real estate, machinery, or inventory, that exceed the value of its debt, a buyer might consider assuming the debt, especially if they believe they can leverage these assets more effectively.
  3. Structured Deals: In some cases, deals can be structured in a way that makes it beneficial for both parties for the buyer to assume the debt. This might involve a lower purchase price or other favorable terms for the buyer.
  4. Stock Sale: In a stock sale, the buyer is purchasing the shares of the company rather than its assets. This means they’re buying the company as-is, including its debt. However, stock sales are less common for small businesses and are typically more complex.

It’s essential to note that while these scenarios exist, they’re the exception rather than the rule, especially in the small and lower-middle-market sectors. When considering what happens to debt when a business is sold, most sellers should anticipate a cash-free, debt-free transaction.

Understanding Enterprise Value and Its Implications

To fully grasp the intricacies of what happens to debt when a business is sold, one must understand the concept of enterprise value. In simple terms, enterprise value is the total value of a business, including not only its equity but also its debt and excluding its cash and cash equivalents.

Why is this important? Because it provides a holistic view of a company’s total value, which can be crucial in negotiations. For instance, if a business has significant debt, its enterprise value might be considerably lower than its equity value. This can impact the selling price and the terms of the deal.

Here’s a breakdown of its implications:

  1. Negotiation Leverage: Understanding enterprise value can give sellers leverage in negotiations. If a business has a high enterprise value despite its debt, it indicates strong operational performance, which can be a selling point.
  2. Clearer Picture for Buyers: For buyers, the enterprise value offers a clearer picture of what they’re getting into. It allows them to assess the business’s true value, considering all its financial aspects.
  3. Informed Decision Making: For sellers, understanding how debt impacts enterprise value can inform decisions long before the business is put on the market. For instance, they might prioritize paying down debt to boost equity value ahead of a sale.

In the context of what happens to debt when a business is sold, enterprise value plays a pivotal role. It underscores the importance of considering all financial aspects of a business, not just its profitability or revenue.

The Role of Business Brokers in Austin in Debt Negotiations

Navigating the complexities of selling a business, especially when debt is involved, can be daunting. This is where the expertise of business brokers in Austin becomes invaluable. But how exactly do they assist in this process?

  1. Expert Valuation: Business brokers provide an accurate valuation of the business, considering all liabilities and assets. This ensures that the impact of debt on the business’s value is appropriately accounted for.
  2. Strategic Guidance: They offer strategic advice on how to handle existing debt before the sale. This might include recommendations on paying down certain debts or restructuring for better terms.
  3. Negotiation Assistance: When it comes to the actual sale, business brokers play a pivotal role in negotiations. They ensure that the terms of the deal, including how debt is addressed, are favorable for the seller.
  4. Clarifying the Process: For many business owners, understanding what happens to debt when a business is sold can be confusing. Brokers demystify this, explaining the process and its implications clearly.

Engaging with a seasoned business broker can make the difference between a smooth, successful sale and a challenging, drawn-out process. Their expertise is particularly crucial when navigating the intricacies of business debt.

The Bigger Picture: Debt in the Context of Business Sales

While the primary focus of this article has been on what happens to debt when a business is sold, it’s essential to understand that debt is just one piece of the puzzle. In the grand scheme of business sales, several factors come into play, and debt is just one of them.

  1. Operational Strength: Even if a business carries debt, its operational strengths, such as a loyal customer base, strong brand recognition, or proprietary technology, can make it attractive to buyers.
  2. Future Potential: Buyers aren’t just purchasing the business’s current state; they’re investing in its future potential. If the business shows promise for growth, even existing debt might not be a deterrent.
  3. Market Conditions: The broader market conditions play a significant role. In a seller’s market, businesses might find it easier to attract buyers, even if they’re not entirely debt-free.
  4. Non-Financial Assets: As mentioned earlier, non-financial assets can significantly boost a business’s appeal. This includes factors like brand reputation, intellectual property, or strategic market positioning.

In essence, while understanding what happens to debt when a business is sold is crucial, it’s equally vital to see the bigger picture. Every business is unique, and its value proposition extends beyond its balance sheet.

Conclusion

Deciding to sell a business is a significant step, and understanding the financial intricacies, including what happens to debt when a business is sold, is paramount. While the general rule in the small and lower-middle-market sectors is a cash-free, debt-free transaction, exceptions and nuances exist. By partnering with professionals like CGK Business Sales, business owners can navigate these complexities with confidence, ensuring a favorable outcome that reflects the true value of their enterprise.

How to Buy an Existing Business

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Buying an established business is a great way to save on startup costs and avoid the growing pains associated with new ownership, such as product launches and customer acquisition. It’s not without its risks, however, and closing deals isn’t always easy. Here, we’ll show potential owners how to buy an existing business.

Find a Likely Candidate

How to buy an existing business? Even when you’re working with the best business brokers in Austin, deciding which type of company to buy is the first and most important step. For instance, boutiques and shops are a great fit for those with retail experience.

It can be tough—if not impossible—to succeed in certain industries without passion and experience. Buyers who go in with basic knowledge start at an advantage because they are more likely to understand the industry’s challenges, opportunities, and trends.

Look at the Company’s Reports

Next, potential buyers should determine whether a business is worth its asking price. There are multiple valuation methods based on balance sheets, projections, and earnings, including:

  • Asset-based. These valuations involve adding up the market value of the company’s assets, including certain intangible assets, such as patents, and deducting liabilities like lines of credit, mortgages, and other debts. The asset-based valuation method is well-suited for distressed companies, not necessarily those companies that will remain as going-concerns.
  • Market. The market valuation approach looks at past sales of other companies in the same industry, setting a price based on those numbers. Market valuation only works if a buyer or broker can find comparable companies that sold recently and made their terms public.
  • Income. An income-based valuation requires an estimate of the business’s expected cash flows over a predetermined period, as well as the terminal value of annuity-like cash flows. Income-based valuation strategies are best used when it’s easy to forecast a company’s future earnings.

Some valuators combine multiple methods, such as income- and market-based approaches. In any event, valuing a business is a complex process, and buyers would be well-served to consult a valuation company or a business brokerage that focuses on valuations.

Submit a Letter of Intent

In the business world, letters of intent are non-binding agreements that convey a purchaser’s intention to buy a business. When these letters are submitted, the issuer usually gets refusal rights, which means they get the first chance to buy a company—even if other buyers come along through an exclusivity term. Letters of intent show business owners that buyers are serious, which makes them more likely to share in-depth legal, tax, and financial information.

Perform Due Diligence

As part of the purchase process, buyers should research their targets to ensure that there are no expensive surprises after closing. Known as due diligence, the process gives potential purchasers an opportunity to examine a company’s financials, tax records, operations, and legal records. Before committing, look at the company’s:

  • Permits and licenses. Check with state and federal agencies to determine whether the company is in good standing and which types of permits and licenses the government requires.
  • Tax and bank records. Ask for copies of recent income, property, payroll, sales, and excise tax returns, along with bank statements. Then, verify whether the seller’s documents match reported banking and tax activity. Finally, ensure that there are no tax liens on the company.
  • Environmental and zoning rules. If you’re buying a brick-and-mortar business, ensure that it complies with zoning laws and environmental requirements.
  • Status of assets. Review the company’s loan and lease agreements to ensure that it owns all the assets included in the sale, that those assets are valued accurately, and there are no hidden liabilities included.
  • Contracts. Read all business contracts to learn how they’ll affect the transition. For instance, if the company’s profit predictions were based on a single vendor or customer contract, is the agreement transferable? If a building is under lease, ensure that the lease’s terms won’t change. It is a good idea to ask the seller to sign a non-compete agreement.
  • Organizational structure. A company’s organizational structure outlines workflows, the chain of command, and the ways in which information is passed down through the hierarchy. Do some management team members face excessive reporting requirements? Are some parts of the company overstaffed while others are stretched too thin? Who is responsible for financial reporting, business development, sales, and other crucial functions? Getting the answers to these questions will leave you with an idea of what to expect as the new owner.

Finally, business buyers should consider the legal ramifications of their purchases. When working with a brokerage to close a sale, be sure to investigate any pending or threatened litigation involving the company or its current owner.  While this is why most deals are asset purchases, as opposed to stock purchases, being knowledgeable about pending litigation is a must.

Find Financing

Once you’ve found a business to buy and learned all about it, there are several ways to pay for the purchase.

  • SBA or Small Business Administration loans. The SBA’s 7(a) lending program allows business buyers to borrow a maximum of $5 million to buy a company, secure working capital, and purchase fixtures, furniture, and equipment. While these loans are backed by the US government, they’re available from approved lenders.
  • Term loans. Some financial institutions offer loans to help aspiring entrepreneurs acquire businesses, but qualifying can be a challenge. Term loans are typically only available to business buyers who have great credit, a history of success, and plans to buy companies with sizable holdings. Despite these difficulties, term loans are still a worthwhile option for buyers who want to buy a business with more than $2 million of EBITDA or greater.
  • In-house financing. In some cases, a company’s current owner may loan a potential buyer the money to make some of the purchase.  Usually this is 0% -30% of the purchase price, but not 80%-90%.
  • Partnerships. Do you have the knowledge to run a business, but lack the funding to get started? Consider finding a partner who can make the investment. Partnerships come in various forms. For example, a silent partner will provide funding but stay out of day-to-day decisions, while a private equity sponsor will provide support, guidance, and professional connections.
  • Personal funding. If you’ve held onto some money, tap into those savings to cover the purchase.

Many business buyers combine one or more of these funding sources to close deals. For example, it’s possible for buyers to use their own money along with a bank or SBA loan.

An Extra Step: Closing the Deal

After performing due diligence, agreeing to a price, and securing financing, it’s time to close the deal. Most business sales are structured in one of these two ways.

  • Asset purchases. Here, the buyer starts a new entity but transfers the DBA, while the buyer gets all the company’s assets, including inventory, intangibles, equipment, customer lists, and patents.
  • Stock purchases. In this type of takeover, a buyer acquires a business’ stock, along with its liabilities, contracts, and assets.

Each method has its benefits and disadvantages, and it’s best to discuss your chosen transaction type and its tax, financial, and legal consequences with your legal team before signing a purchase contract. An attorney can help by updating leases, contracts, agreements, and other documents after the sale has been finalized.

The Benefits of Buying an Established Business

While there are a few pitfalls to consider, the benefits of buying a business typically outweigh the risks. Advantages include:

  • Simplified customer acquisition. Existing businesses come with established customer bases, so new owners don’t have to spend all their time testing products, trying new services, and generating new leads. Rather, they can focus on retaining the customers they’ve acquired.
  • Easier financing. In most instances, buyers of existing businesses find it easier to get financing than they would if they were running a startup, simply because these businesses already have histories.
  • A greater chance of survival. Many new companies fail within the first several years. Corporate takeovers, however, come with much higher survival rates than startups.
  • A shorter launch. While buying a company comes at a significant upfront cost, it’s easier to turn a fast profit because there’s no need to purchase inventory, find vendors, and hire employees.
  • Experienced and trained workers. Like buying existing equipment and inventory, acquiring a trained workforce is an asset to a new business owner, especially if they’re getting into a new industry. These workers will know how the business operates, which will save money and time on hiring and onboarding.
  • Cash flow. Because existing businesses have their customer bases, staffing, and processes established, a new owner can generate positive cash flow on the first day. By comparison, a startup owner may take several months—or even years—to see a profit.
  • Brand recognition. Another reason to buy an existing company is that it already has a market presence and a brand. This will help a new owner save energy, time, and financial resources that they’d otherwise spend building a brand and putting their products and services in front of customers.

Whether you’re looking to branch out into a new industry or gain ground in an area where you already have experience, buying an existing business is an excellent way to achieve your goals. Count on the team at CGK Business Sales for the advice, expertise, and help needed for a successful purchase. Hopefully this article has been helpful as to how to buy an existing business!

Comprehensive Checklist to Help You Buy a New Business

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If you’re looking to get into the business world by purchasing an existing company, you aren’t alone. Despite current economic conditions, businesses are selling more frequently and for higher prices than ever before. Here is a comprehensive checklist to help you buy a new business. There are numerous reasons to buy an established company instead of starting from scratch, including:

  • Cash flow
  • Established market segment and customer base
  • A working business model
  • Brand reputation
  • Existing infrastructure
  • Relationships with vendors and clients

We all know that startup ownership comes with its share of risks—as well as a high failure rate. When the odds are stacked against you, buying an established company gives you a better chance of success. Here, we’ll go over some things prospective owners should consider when buying a business.

Why Checklists Are Important for Business Buyers

When working with business brokers in Austin, buyers must consider multiple factors. Even if you know what you’re looking for, it’s a good idea to make a list of must-haves. The checklist below will help you avoid pitfalls and get the information needed for informed decision-making.

Deciding Where to Invest

As you’re considering the purchase of an existing business, the first step is to decide where to invest your money, time, and effort. There are thousands of choices out there and knowing what to look for will help you choose the right company.

Multiple business structures, including LLCs, corporations, and sole proprietorships, are available. However, since most deals are asset deals, your corporate structure, as the buying entity, should be discussed with an M&A attorney and CPA, as you start the process. Those buying businesses in Austin should look for profitability, consistent cash flow, and a good reputation within the community. These factors, among others, will ensure that a business is a good short- and long-term investment.

Researching Options

Next, you’ll need to learn about options within each business industry. When purchasing an existing company, it’s best to narrow the search to those within your desired category. Get a head start by searching local and online business listings or asking for recommendations.

As you’re narrowing the field, ensure that you’re focusing on solid investments by reading up on the companies in which you’re interested. Find out about each company’s reputation and financial performance and read online reviews. Finally, in-person visits will give potential buyers an idea of how a business is operated and managed.

Getting Prepared

Before buying a business, you’ll need to get your affairs in order. Start by putting together a personal financial statement and a buyer profile, which should outline your work experience and how it relates to companies you may want to purchase. 

The gathering of these documents may seem tedious and time-consuming, but they demonstrate that you’re serious about buying a business. Because this information is so sensitive, it’s best to keep it under wraps until you’ve found a business broker or a company to buy.

Another great strategy is to get prequalified for a loan through the Small Business Administration, or to get financing through a non-SBA commercial loan or a withdrawal from a retirement account. When buyers take this step, they’ll know just what they can afford—and they’ll have an edge over those who look for businesses first and find financing later.  The SBA has a personal financial statement and buyer profile documentation that you will fill out for your bank of choice.

Learning the History of the Business

Every potential business buyer should find out why the current owner has decided to sell. The answers they offer will give clues as to the company’s quality and viability. Is the owner ready for retirement or an occupational change? Great! Are they getting out of the field because of market fluctuations and changing regulations? Those changes may not be very beneficial.

If the owner provides vague answers—or worse yet, none—keep digging into competitor, market, and industry data until you’re satisfied. Many business buyers learn about industry outlooks by working with trade associations and analyzing census and economic data. As you’re talking to the current owner, find out about their background and that of their management team. Are their skills mission-critical, or can the company survive without them?

Assessing the Company’s Finances

Now, you’ll need to decide whether the business’ earnings will sustain your lifestyle and look for ways to increase them. Ask an accountant to look over the company’s last three years of financial statements to see if its revenues are rising or falling. It’s also a good idea to ask for the past three years’ tax returns and financial ratios, including gross profit/net sales, net income/total assets, and net income/net worth.

Buying an existing business means asking a lot of questions. Is the company in debt, and if so, what’s the nature of that debt? Are any bills or invoices past due? How well does the business manage its finances? You’ll need to figure out how receivables are handled. Do customers pay on delivery or use the net 90 system? While it is possible to change invoice terms once you’ve taken over, loyal customers may be resistant to those changes.

Working Through Legal Matters

Buying a business is difficult without determining the legal structure under which it was formed. If it’s a stock sale, it’s an as-is purchase, whether it’s an LLC or a S Corp—and you’re also getting everything that comes with it, including assets and contracts, though this usually without any debts.

If you’re planning to change the company’s legal structure, you’ll have to file the conversion with the state. It’s not allowed in every area, and in places where conversions aren’t recognized, buyers must dissolve the existing entity and start over.

Ask an attorney to review the company’s contracts for hidden limitations and exclusions, including leases for property, vehicles, and equipment. Will all these contracts transfer to you as the new owner? The current owner should have contact information for government agencies that handle zoning and other regulations, so you’ll always be aware.

Learn about the company’s proprietary processes and patents, and if there are any, ensure that they’re under the organization’s name. What happens to those all-important rights after the sale has been finalized, and will you still be able to access the technology?

Finally, new business owners must take steps to protect themselves from legal repercussions. When buying an operational business, find out if there are any ongoing or pending lawsuits—or if litigation has been filed in the past.  While this is why most deals are asset sales, ongoing litigation could negatively impact a company’s reputation.  However, many companies get sued for frivolous reasons, so the presence of litigation shouldn’t be an automatic deal-killer.

Forming Sales and Marketing Strategies

New owners should familiarize themselves with the company’s market segment and learn whether it’s shrinking or growing. With some research, you’ll see what kind of reputation the business has and gauge the level of brand awareness in the target market. Strong brands are some of the most valuable assets businesses can have.

Read the company’s social media pages and online reviews to see what past and current customers are saying about the business, its workers, its products, and its services. Everyone is online these days, which means that you can learn a great deal about a company and its customer relationships on sites like Instagram, Twitter, and Facebook.

Next, it’s time to learn about the competition. What are people saying about other companies in the same space? Are their products and services comparable, or are they offering something that can’t be found anywhere else? How strong are their brands and social media presences? The answers to these questions will give you an idea of what you’ll be up against as a new business owner.

Learning About the Workforce

If the company you’re considering buying has employees, it pays to research them as well as their benefits and compensation. By doing this, you’ll find out whether they’re satisfied with the current arrangement or if you’ll need to sweeten the deal to get them to stick around. Ask your lawyer to review all worker contracts to ensure that the company is following state and federal employment laws.

Getting State Licenses and Permits

As a purchaser, you’ll need to pay attention to the requirements set forth by the Texas Department of Licensing and Regulation. These licenses have certain requirements that must be fulfilled when businesses change ownership. If a business is found to be operating without the right licenses, the owner may receive a cease-and-desist order, be fined, or lose their right to do business in the state. Any decent comprehensive checklist to help you buy a new business should include this research.

Asking About Business Insurance

All businesses need insurance, and the company you’re buying is no exception. The carrier the current owner is using is a great place to start the search for coverage, but it doesn’t have to end there. Insurance policies aren’t transferable in asset sales, and business buyers should have binders in place when closing deals. In areas prone to natural disasters, it may be hard to find the right coverage—so be sure to start looking for business insurance as soon as possible.

Buying a Business: It’s All About What You Know

While this comprehensive checklist to help you buy a new business is enough to get most business buyers started, you may have other questions—which will largely depend on your needs, industry knowledge, and plans for the company. Ask your CPA, attorney, and business broker for advice, and use their answers to make informed decisions. The team at CGK Business Sales is here to make your transaction a complete success; call or click here to contact us.

The 15 Most Valuable Types of Businesses in 2022

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Owning a business is an attractive prospect for many Americans. It’s apparently becoming even more appealing considering almost half of Americans plan to start their own companies during the coming years. Of course, the landscape of the business world is constantly changing, and not all businesses are in a position to be as profitable as their owners might hope.  These are the 15 most valuable types of businesses in 2022.

On the other hand, certain industries are gaining steam at this point. Businesses that are part of those fields could see serious profits moving forward. Whether you hope to sell your business for the best possible price or want to purchase a company with exceptional value, business brokers in Austin can help make it happen. Take a look at 15 of the most valuable business types per current market reports.

  1. Daycare Centers

Some people may be surprised to see the child daycare industry on this list. It’s definitely there, though. For one, the days of being able to survive as a single-income household have long passed. That means families with children will always need child care services. That’s only part of the picture.

During the Great Lockdown brought on by the pandemic, schools and daycare centers across the globe closed their doors. Since many parents either lost their jobs or became part of the ever-growing mobile workforce, the need for daycare declined. Now that things are starting to return to pre-COVID norms, the demand for child care is on the rise again.

At this point, though, families are finding daycare isn’t quite as readily available as it was before the pandemic. Many daycare centers that were forced to shut down haven’t reopened. One report from Child Care Aware of America points to a deficit of more than 16,000 child care programs throughout the country.

In addition to the surging demand and significant deficiency of available daycare, another factor enters the mix. It seems the cost of child care is on an upward trend. Though the costs of operating a daycare center are also on the rise, the increases in demand and premiums can easily balance the scales.

2. Trucking Companies

Trucking companies can be decisively prosperous at this point. After all, there’s currently a deficit of more than 80,000 drivers and trucks on the roads, and that number continues to grow. On top of that, the need for goods to be delivered to warehouses, store shelves, and other locales is climbing exponentially.

All that being said, maximizing the profits from a trucking company requires a certain amount of finesse. Because of the driver shortage, finding and holding onto qualified employees is a bit of a challenge. Keeping rates competitive, vying for contracts, remaining in compliance with regulations, and other matters can also be stressful. Additionally, the costs of purchasing and maintaining a fleet tend to add up.

Trucking companies offer valuable services that are going to become even more essential. Those with optimal management strategies in place can be incredibly profitable. In the years to come, this may be even more true for those that offer their own in-house driver training programs.

3. Home Maintenance Businesses

Home repair, maintenance, and improvement services are likewise in high demand. In fact, a recent write-up indicated more than 16 home services projects are completed per second in the United States, and the market has been steadily growing over the last several years. It’s showing no signs of slowing, either.

Some reports say that a growing number of American homeowners are leaning toward do-it-yourself projects. Others point out that many of those projects ultimately end in failure, leading to the need to hire professionals despite homeowners’ best intentions. It’s also worth mentioning that certain projects are becoming increasingly complicated with technology continually evolving and building codes constantly changing.

Due to those factors, this is another industry that provides a great deal of job security and room for growth and profitability. Property owners will always need help keeping their homes up to date and in good repair. Furthermore, home renovations are on the rise. As such, home maintenance businesses, handyman services, and similar companies are extremely valuable.

4. Food Service Businesses

It’s no secret that the food service industry is seeing monumental gains. Many restaurants struggled during the pandemic for obvious reasons. Some were forced to close their doors whereas others say the rise of the food delivery sector was their saving grace. With dining rooms reopening, though, businesses in this industry that are capable of delivering exceptional meals and customer service are quickly gaining value.

Now, the demand for dine-in opportunities, takeout meals, food trucks, caterers, and other members of the industry has surpassed even their pre-pandemic glory. As of last year, the food service industry even reached record highs of more than $876 billion. Consumers lead busy lives and enjoy new dining experiences, so they’re on an ongoing mission to seek out new establishments. Surprised to see food service businesses on the 15 most valuable types of businesses in 2022 list?

5. Financial Services

Businesses in the financial sector are also among the most valuable. That may seem like an obvious statement, but matters are a bit more complex than many people realize. Quite a few factors are driving growth and change in this industry, and businesses that can accommodate those aspects are certainly in a position to succeed.

Some of the most valuable businesses in this category are wealth management firms, accounting services, investment management agencies, and financial consultancies. People are paying closer attention to their money these days. They want to build wealth, and they’re realizing the importance of setting themselves up for a comfortable retirement.

This spans beyond individuals’ needs as well. Businesses increasingly need accountants, financial consultants, and related professionals to help keep their spending on track and maximize their profits.

With all this in mind, businesses that provide such services are in high demand. Helping people manage their money and achieve financial gain is a lucrative field in its own right. Considering the growing need for companies like these, they’re bound to become even more valuable moving forward.

6. Fitness-Oriented Businesses

Fitness centers were faced with major hurdles during the pandemic. As was the case in so many industries, numerous privately-owned facilities closed their doors for good. Even some national chains were forced to permanently close some of their branches.

This industry is regaining steam now, though. For quite some time, people have been taking their health and fitness more seriously. Many saw the pandemic as a wake-up call to ramp up their efforts to adopt healthier lifestyles.

That has led to an increased need for fitness centers. Boutique gyms are gaining popularity.  Facilities that offer one-on-one personal training and online fitness classes are seeing significant profits. From both the consumer point of view and the business perspective, companies in this arena are extremely valuable right now.

7. Cleaning Companies

Cleaning companies are likewise among the most valuable businesses at this point. Both homeowners and businesses are turning to professional cleaning services. They’re looking for standard housekeeping as well as in-depth disinfection to help keep germs at bay. Businesses in this industry offer services that are sure to continue gaining value.

8. Event Planning

During the lockdown resulting from the pandemic, people began to realize just how much they’d been taking spending time with friends for granted. At the same time, celebrations of milestone events were largely put on hold or held via virtual means. While the events themselves held no less meaning, being unable to celebrate in person with friends and family detracted from the festivities.

People are now making up for lost time now. They’re planning birthday parties, weddings, baby showers, anniversary celebrations, graduation parties, and other events. They’re also turning to professional event planners for help. Because of that, the value of these types of businesses is growing.

9. Website Design Services

Website design agencies are highly valuable, too. With e-commerce on the rise and the majority of consumers looking online to find the goods and services they need, all businesses need a website. Keeping websites up to date and continually revamping them to meet visitors’ expectations is recommended. Since website design requires a great deal of creativity and technical expertise, businesses in this realm are extremely valuable.

10. SEO Businesses

Along those lines, businesses that provide search engine optimization services are continually gaining value. Though website design is important, many business websites would never be seen by the public without SEO. SEO businesses help companies boost their online presences and keep their websites at the tops of consumers’ search results, so they’re certainly in high demand and will continue to be in the years to come.

11. Auto Repair Shops

Auto repair is an exceptionally important industry. Based on the latest reports from the automotive sector, there are almost 290 million registered vehicles in the United States alone. In contrast, repair technicians are becoming more scarce. Shops that have the equipment and skilled workforces to meet consumers’ auto repair needs are set up for unprecedented success.

12. Tutoring Services

It seems the need for tutoring services is also on an upward trend. Lessons are becoming more difficult even for elementary-level students, and the struggle only grows through high school and college. Many parents are finding they can no longer help their children with their studies and homework. The growing need for tutors is also being fueled by the rise of online education. All that means tutoring services are gaining considerable value.

13. Logistics Companies

Logistics is yet another increasingly valuable industry. Though we’ve already mentioned trucking companies, those are only one piece of the logistics puzzle. Logistics companies cover many more essential bases, like warehousing, packaging, and order processing.

Many manufacturers and e-commerce companies have found all those aspects to be overwhelming. They can also be unnecessarily expensive without the right resources to manage each phase of the logistics process and mitigate the costs. Companies that step in to provide comprehensive logistics services are in high demand and held in high regard by the businesses they serve.

14. IT Businesses

IT businesses are undeniably valuable, and they’ll continue to gain profitability in the coming years. With technology inundating almost every aspect of our lives, the need for IT specialists is sure to grow. This is also a vast field that encompasses numerous services.

From aiding businesses in keeping their hardware and software up and running to helping consumers overcome problems with their phones and laptops, the possibilities are endless. As technology becomes more prominent and the IoT continues to gain ground, this industry will inevitably rise to new heights. Businesses that offer IT services will build value proportionally

15. Real Estate Agencies

People will always need to buy and sell homes. At the same time, rental property owners and potential tenants will always need real estate agents to connect them to one another. Though the real estate market has its ups and downs and varies from one city to the next, consumers’ need for professional intervention will never decline. It’ll only grow. That lands real estate agencies on the list of most valuable businesses.

Making the Most of These Valuable Businesses

If your business falls into one of these categories, you could be in a position to see unprecedented gains. In the event you’re ready to sell, this may be the perfect time to do so. Anyone who’s looking for a profitable business to purchase may want to consider this list of the 15 most valuable types of businesses in 2022.

What You Need to Know About Selling Your Construction Business

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After years as a contractor, you may be ready to move into another life stage, whether it’s retirement or a different occupation. You may be wondering how to sell a construction company safely and properly, which means getting the highest possible price and picking a buyer who will keep the company going.  This is what you need to know about selling your construction business.

There are multiple steps in the sale of a contracting business. The more prepared you are as an owner, the easier the switch will be. Our team of business brokers in Austin will walk you through the process from start to finish, facilitating the sale by valuing the business correctly and putting you in touch with qualified buyers.

In the sections below, we will offer some tips to ensure a successful sale.

Get an Accurate Valuation

Successful sales begin with comprehensive, accurate valuations, which yield an asking price for a construction business. To produce this figure, we will begin by researching the market prices of comparable businesses. A proper valuation takes time to create, and it will include information about various parts of the company. Brokers consider the following factors when valuing a construction business:

  • Property owned by the company.This includes real estate and intellectual property such as copyrighted architectural plans.
  • Equipment.A brokerage will assess the condition of the company’s construction equipment.
  • Customer information.It’s impossible to arrive at an accurate valuation without information on the company’s clients. That information will, of course, be kept confidential.
  • The brand itself.We will factor in the company’s online presence as well as its brand identity.
  • Current and predicted revenue
  • Comprehensive financial records
  • The company’s management team and crewmembers
  • Physical location
  • The success of the company’s past marketing efforts
  • Safety records (history of serious accidents)
  • Information on past and pending litigation

A great deal of information goes into the process, but it’s all needed to arrive at a fair asking price. Count on our experts to dig deep and find the data needed for a successful valuation.

Make the Company More Appealing to Potential Buyers

Along with valuing the company, an owner will need to assemble and reconcile its financials before presenting the information to potential buyers. Just as one would tidy up their home before guests arrive, a construction business owner would organize their records before putting the company up for sale.

Organizing a contracting business’ records is a multifaceted process that starts with the arrangement of paperwork. Tax returns, profit and loss statements, and credit histories will go a long way toward reassuring uncertain buyers. Finally, it’s a good idea for an owner to take an honest look at their equipment. Will the new owner find it to be in good shape?  This is certainly a discussion to have with your business broker before any large equipment purchases.  This is one example of what you need to know about selling your construction business.

An experienced business broker can help you through this process and ensure that the company puts its best face forward. Contact us today to learn how our business brokerage can find the right purchaser and increase the chances of a sale.

Remember That Timing is Everything

The right time to get out of the construction business is when profits are rising, not when sales have slowed down. Some owners opt to sell when their health or that of their company has declined, but that’s not always the best strategy. No matter when you sell, keep in mind that, the more accurately you describe the business to your business broker, the more likely it is that it will sell.

Maintain a Respectful Distance

Before putting the company up for sale, consider distancing yourself from its daily operations. Hands-on ownership is a good thing, but it puts a business at risk when the owner decides to step away. By gradually pulling back before the sale, you’ll show the buyer that the company will do just fine without you.

Contemplate M&A

For an owner who wants to reduce his or her role, mergers and acquisitions are another viable option. Acquiring and merging with competitors allows construction companies to grow rapidly, enabling them to move into different markets or offer new services. Finding other owners who want to expand their companies’ footprints is a great strategy when it is time to sell a construction business.

Consider an Internal Sale

Internal sales are another way for owners to get out of the construction business, and they can be quite lucrative when executed properly. There are two options, including ESOPs (employee stock ownership plans) and direct sales, with both approaches offering increased flexibility and business continuity. A business broker can, after reviewing the business’ financials and considering other factors, determine if an internal sale is the right strategy for your company.

Contact a Business Broker

Working with a business brokerage that knows the industry will help an owner sell their company faster and for a better price. It’s important to find a brokerage with industry-specific marketing strategies as well as professional connections and an awareness of the demand for these companies.

Aside from getting clients the highest possible prices for their businesses, brokers can also guide them through the transition. Whether you’re staying on in an advisory role or making a clean break, a business broker will recommend the right strategy for the company and its buyer.

Is It Time to Sell?

The decision to get out of a business that you’ve worked hard to create isn’t an easy one but selling doesn’t have to be difficult or painful. The team at CGK Business Sales is here to help contractors at every step, from valuation to closing. We are proud to help our clients sell their construction businesses for the highest amounts, in the shortest length of time, and with the least risk possible.  This article was only part of what you need to know about selling your construction business now or in the future.

We have finalized dozens of transactions for clients in the construction industry as well as numerous others, and we would be honored to put our experience to work for your company. Request additional information via our online form or call today to find out how our team can put any business in front of potential buyers from across the country and around the world.

Maintaining Confidentiality While Selling A Business

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Discretion can be challenging during the sale of a business, especially when competitors are potential buyers. If an owner shares too much, a bidder could use that information against them; if they share too little, it may scare away potential buyers. While it’s always best to work with a business broker, these tips will help business owners ensure confidentiality during a sale.  Here are some ways of maintaining confidentiality while selling a business.

Prepare Blind Listings

There are a few ways to ensure confidentiality while getting the business’ information in potential buyers’ hands. Blind listings offer enough data to create interest without publicizing the company’s identity. Most buyers want to know the company’s industry, size, description, cash flow, and location. When creating a listing, consider whether details may reveal the company’s identity.

Put Customers and Clients at Ease

Customers are like everyone else—they prefer to see the same sales team members, products, and ordering processes. When clients hear of an impending change in ownership, they often worry about rising prices, different purchase methods, and a decline in service quality. While these concerns may seem inconsequential to some, they’re crucial considerations for owners and business brokers in Austin.

When a sale is upcoming, it’s only natural for customers and clients to wonder how it will affect them. To stop the rumor mill and preserve confidentiality, business owners should take steps to reassure their valued customers.

Sign a Confidentiality Agreement

Confidentiality and non-disclosure agreements (NDA’s) are sometimes seen as ineffectual, but that’s not always the case. Strong agreements compel companies, advisors, and employees to keep information private throughout the process. Agreements should cover elements such as:

  • Not discussing the sale with the acquiring company’s employees
  • Not discussing the acquiring company with outsiders
  • Not divulging details of the sale to customers and vendors

People tend to be more selective about the information they share when consequences affect them instead of the entire company. With a strong confidentiality agreement, it is easier to keep sales private.  Maintaining confidentiality while selling a business is made a bit easier after signing an NDA.

Redact Crucial Information

Another way to keep sensitive information out of competitors’ hands is to redact certain parts. It could be as easy as deleting customers’ and products names and using generic placeholders. For purchase contracts, pricing lists, employee names, and other elements can be redacted.

Selectively revealing information allows owners to show their companies’ value and performance without losing any of their intellectual property rights. Again, it’s a matter of balancing the need to share information with the desire to keep things private. A broker’s advice, along with redaction, will help sellers maintain confidentiality.

Use Online Data Rooms Wisely

Running an efficient merger and acquisition process by maintaining information in a data room does much to ensure confidentiality. Online data rooms should be able to monitor who is seeing documents, when they’re being viewed, and how often they’re accessed.

A secure data room allows for view-only access to documents, preventing them from being printed or saved. These restrictions can protect lease agreements, contracts, and other sensitive documents during a business sale.

Protect the Company’s Reputation

In the business world, a company is only as good as its reputation. When confidentiality breaches occur during sales, the word gets around quickly—and the company’s reputation will inevitably suffer. A breach may keep a company owner from closing a deal, and it may prevent potential business buyers from accessing future mergers and acquisitions.

In either case, others will be reluctant to work with an organization that doesn’t follow honorable principles. While it is difficult for owners to trust others to behave ethically during a sale, professional reputation is a powerful motivator that tends to keep business buyers and sellers honest.

Don’t Divulge Information Too Early

The signing of a purchase agreement doesn’t negate the need for privacy and confidentiality. Buyers and sellers should agree on when workers, customers, and suppliers will be informed of an upcoming sale. While it may be necessary to bring key players into the process early on, it is usually better to wait until the transaction is finalized to notify employees. Things can go wrong at any time and deals often fall apart. In these cases, it’s best for vendors, employees, and clients to be uninformed until the last minute.

Verify Buyers and Release Information Gradually

Business brokers typically vet potential buyers by asking them for a substantial amount of information. Requesting personal or company financial statements will help brokers and their clients determine if a potential buyer is able to acquire a business. It will eliminate curiosity seekers and those who simply want to learn more about a competitor. Once a letter of intent has been signed by the buyer and the seller, provide information gradually, with the most important matters being discussed immediately before the deal is closed.

Prepare and Number Deal Memos

Once an owner determines that a buyer is qualified and the non-disclosure or confidentiality agreement has been signed, a sale memorandum with a tracking number is a necessity. These documents offer a thorough overview of a company and its value. Sometimes referred to as offering memos, confidential description books, and selling memos, sale memos should fall under the terms of the confidentiality agreement—and there should be consequences for breaches.

Consider Who May Tip Their Hand

Those who don’t understand the importance of discretion, as well as those with good but mistaken intentions, are most likely to breach the confidentiality of a business sale. Friends and family are common sources of leaks, as these matters are often discussed in closed quarters. However, relatives and acquaintances should be made aware of the consequences of divulging such information.

Rely on a Competent, Connected Business Broker

The most effective way to ensure a confidential business sale is to allow a business broker to manage the process. Business brokers can guide clients through the points on this list, ensuring that information is shared on a need-to-know basis.

The help and support of a professional, experienced broker will streamline the sale process and help an owner maximize the sale value of their company.  Maintaining confidentiality while selling a business is a must and some simple guidelines will keep it quiet.

The Real Value of Your Business Versus an Idealistic One

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Reports show there are more than 32 million small and medium businesses currently operating across the United States. They make up more than 99 percent of our business sector. At the same time, they contribute a great deal to the nation’s economy from several perspectives. Consumer spending and employment opportunities are a couple of the most significant.  This article’s focus is about the real value of your business versus an idealistic one.

Many people dream of starting a business but few actually bring that vision to life. As a business owner, you’ve certainly accomplished more than most. You deserve a great deal of recognition for all your hard work and achievements. As is the case with the majority of entrepreneurs, though, the time will inevitably come when you’re ready to pass along your company to someone else.

A Brief Look at Business Sales in America

Some experts have said that all businesses are technically for sale providing the right price and circumstances are on the table. Reports vary when it comes to the number of companies entrepreneurs place on the market each year, but it has been growing for quite some time now.

Of course, the more important figure might be the number of companies that end up selling once they’re on the market. There’s a significant gap between the two with experts saying only 20 percent or so of businesses for sale are actually purchased by new buyers.

Though businesses fail to attract buyers for a range of reasons, one stands out as the most common. In many cases, entrepreneurs simply price their companies too high. They’re focusing on an idealistic value rather than a realistic one.

That, alone, drives away countless potential buyers. Business brokers in Austin can help you understand the true value of your company versus one you may be basing on intangible factors. In the meantime, let’s take a closer look at the problem and why working with a more realistic figure is so important.

Looking at the Unrealistic Side of the Equation

Numerous measures go into building a business from the ground up. Obviously, you spent some time trying to find a market niche that dovetailed with your knowledge, talent, and passion. From there, you had to consider the products or services you’d be offering customers. Then, you had to develop and hone them to meet the public’s demands. No doubt, you had to create a well-thought-out business plan to cover all those bases as well.

Figuring out where to build your business also came into play. Marketing, funding, and all the little legal details entered the mix, too. Those are only the bare basics. They only take a few minutes to read about, but actually putting them into practice can take months or years. On top of all that, you can’t overlook all the time and effort you put into running and further developing your company over the years.

All that is surely worth quite a bit, right? To you, it’s priceless. There’s no way to put a concrete value on your dedication and hard work. Still, you try to come up with a figure that might come close. Factoring in all the equipment, intellectual property, established customers, and other assets you’ve amassed further drives up your company’s perceived value.

All that often adds up to a price potential buyers wouldn’t even consider. As such, your business lingers on the market for years without prospects showing any interest. Those who do consider purchasing it give you lowball offers that don’t come close to what you feel it’s worth. This is why you should know the real value of your business versus an idealistic one.

From a Different Angle

On the other hand, coming up with an abstract value for your business might take matters in the opposite direction. Maybe you’ve been losing money for a while and don’t see things taking a turn in the right direction any time soon. If so, you may simply want to cut your losses and get out from under the business before things take a turn for the worse.

That might lead you to choose a price that’s well below the actual value of your business. It’ll be sure to sell then, right? While that might be true, you could also be selling yourself short in more ways than one. This scenario is far less common than the previous one, but it certainly happens to more business owners than you might imagine.

Determining the True Value of Your Business

All that brings us to the concept of determining a realistic value for your business. Several methods can be used for business valuation. Each one takes a range of factors into consideration.

One of the simplest approaches is to look at how much similar businesses have recently sold for. That’ll give you a general idea of how much you may be able to get out of your company. Though this is the easiest valuation method, it’s not necessarily the most favorable for business owners.

Another option would be calculating your company’s book value. That entails adding up the value of your assets as well as your liabilities. Then, you would subtract the latter from the former to come up with a feasible sale price. If your liabilities add up to more than your assets are worth, though, you could run into serious problems with this method.  This methodology is also not used often for businesses that will remain as ‘going concerns’, as this does not value most businesses in a correct fashion.

Other solutions consider your company’s future cash flow. They may use past sales trends or other figures to predict how much money your business might bring in during the years to come and discount those future cash flows back to the present. In turn, that would determine a reasonable price for your company. Alternatively, valuation experts may also calculate how much your assets would be worth if they were simply liquidated.

Keep in mind, not all of those options are right for all businesses. It’s best to work with business valuation experts like us to determine which one best suits your needs and circumstances. We’ll do a deep dive into your business, comparing variables and valuation strategies as they apply to you. All the while, we’ll keep your best interests at heart.  This is how we get to the real value of your business versus an idealistic one.

Why Is a Realistic Value Important for Business Owners?

With all that in mind, let’s discuss why knowing the true value of your company and using that figure when placing it on the market are essential. When you create an idealistic value that’s not based on concrete evidence, you’re likely to be disappointed in the end. Your business probably won’t sell. If it does, it’ll be for far less than you’d hoped.

On the other hand, using a realistic value sets you up for success. You’ll have a valid and reasonable image of how much your business is actually worth, so you won’t sell yourself short or price yourself out of a sale. This could also give you a chance to improve upon various aspects of your business before selling to bolster its market value.

Let Us Help You Make the Most of Your Business Sale

Knowing the true value of your company is crucial. Finding out this figure long before you decide to sell is also essential. Valuation needs to be an ongoing process that allows you to heighten your company’s worth and set yourself up for success when the time comes to place it on the market.

At CGK Business Sales, we’re experts in our industry. We’ll help you understand the true value of your company and find the right buyer to meet your expectations. Contact us and let us put our experience to work for you.  We will get to the real value of your business versus an idealistic one.

Reasons to Use Business Brokers to Sell Your Business in Austin

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When it comes to selling your business, you want to know that you are getting the full value of the business in the transaction. Oftentimes, business owners will have a hard time selling their business without professional outside help. This help best comes in the form of intermediaries or business brokers. A business broker can bring a lot of benefits to the table when assisting in the process of selling or buying a business.

There are various reasons why you should hire a business broker to help you with your selling process. These can range from simply increasing the value you will get out of the sale, to ensuring that your sale is fully documented and processed legally when transferred.

This article focuses on reasons to use business brokers to sell your business in Austin.  Here are some of the best benefits to hiring business brokers in Austin:

Privacy and Confidentiality

One of the more important benefits to hiring a professional business broker to handle your sale is their confidentiality and privacy in the process. They will ensure your identity is protected, as well as the identity of your company and its integrity. Every business broker will have procedures to follow that help maintain your business sale’s confidentiality. When a prospective buyer is approached, they will need to sign a confidentiality agreement and need to disclose details about who they are, where they work, and what types of funds they have available in order to qualify for the purchase. Only approved buyers will be given information by the business broker, to ensure both privacy for you and confidentiality of your sale.

Continuity and Integrity

The process of selling any business can be both taxing and time-consuming. It can often overwhelm business owners. A business broker can help alleviate this stress by allowing the owner to focus on handling the business while the broker handles the sale. This allows the company to continue without interruption while the business sale is processed.

Better Reach

In any industry, advertisement is key to getting you the customers you want. In a business sale, the same is said for the reach of potential buyers. Professional business brokers have both the tools and the resources to reach the largest buyer base possible for your business. Brokers will have first-hand knowledge of what buyers are looking for, which can help them secure the sale you need. A business broker will work hard to expand the reach of your potential sales by including not just the business and its services, but its current inventory as well.  This is just one of many reasons to use business brokers to sell your business in Austin. 

Marketing and Advertising

As previously mentioned, advertising is key to getting attention for any sale or service. Presenting your company in the best light will help maximize your profit. If a business has time to improve certain things prior to being sold, a business broker can help improve its appearance to potential buyers. A good broker will understand the key values needed for selling any type of business.

Negotiation and Tactics

Business brokers are some of the best negotiators in the business industry. They want to sell your business and will do so as quickly as possible at the highest price and best terms available. Business brokers are skilled negotiators that handle multiple sales at once. Their role is to bring potential buyers together with their clients to sell the business with the least amount of friction and risk involved.

Risky Business

Speaking of the risks involved with a business sale, there are many factors that can put any potential sale at risk. From the risk of potential buyers defaulting on finances to situations arising that impact the value of a business unexpectedly, there are many challenges that a business broker can help overcome or avoid. Past dealings and experiences with other sales help them qualify buyers to reduce any chances that the deal will fall short.

Valuation and Due Diligence

Financial due diligence on a business is typical for a sales process. It helps keep your sale process going with the diligence it requires. Performing some financial due diligence prior to a business sale will help the business broker estimate the current value of the company as well as its future profits. These factors can play a large role in the sale of a business with prospective buyers. Every business will include variables that differ from one another. An experienced business broker can tell the differences and ensure each type of business gets sold for the highest value with best terms possible. In some cases, a business broker can also help a buyer secure financing options for purchasing your business.

Closing the Deal

While you handle the company’s day-to-day operations, your business broker will be handling all the nuances and processes of selling your business for you. Once they’ve reached an agreement with the buyer, they will close the deal as quickly as possible. The faster a sale is, the less risk there will be of customer defection, employee problems, or issues with competition. A business broker’s goal is to ensure a smooth transaction at the highest fair value for your company.

History and Paperwork

The history of a business is important when it comes to selling it efficiently. In some cases, the longer a business has been in a community, the better standing it will have with qualifying buyers. Brokers can utilize business and sales records to help their evaluation of your business. Appraising your business accurately will help increase the value and reduce the risk of selling it. Business brokers, with the help of banks and M&A attorneys, will also help with the paperwork involved for the actual sale process.

Conclusion

An experienced business broker’s primary goal is to sell your business. While many buyers and sellers are unaware of the full spectrum of buying and selling a business, experienced brokers will be able to handle the process much more easily and provide help along the way. Utilizing a business broker will give you the time to handle your business normally, while also giving you the peace of mind that your sale is in good hands. Hopefully, this article has expressed that there are reasons to use business brokers to sell your business in Austin.  Take your time and contact an experienced business broker to learn more about the sale process and how they can benefit you most.

Why Austin Texas Is Great for Business

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Many people are setting their sights on Austin, Texas so they can start a new business. As of late, Austin has received recognition for being the number one city for job growth and the best performing city. There are a number of reasons why Austin Texas is great for business.

Those who have never visited Austin, Texas, may not be aware of its rapid growth and potential for business success. Learning why this part of Texas is a goldmine for entrepreneurs will help people make important decisions that will launch their careers and allow them to see success.

Austin, Texas Is More Than a Charming Southern Town

Austin is the bustling capital city of Texas and is home to 964,177 people, as of 2021. Many multi-billion-dollar corporations make their homes in Austin, including Hewlett-Packard, Facebook, Google, and eBay/PayPal. With your business in Austin, you can experience brilliant success.

Austin has become a hotbed of success for many industries, including medical technology, real estate, and data management. The technology companies in Austin account for a tremendous amount of Texas’ tech-related revenue. These corporations have made Austin a diverse destination for those seeking new opportunities in business ownership and employment.

Reasons Austin, Texas Is an Exceptional Place to Start a New Business

Austin abounds with a multitude of business opportunities, but what would cause entrepreneurs to decide on this great city? The following offers some reasons a person should set their coordinates to Austin.

1. Austin’s Business Environment Is Growing Rapidly

One of the top reasons people have opened businesses in this state is the business sector’s growth. Once top corporations move in, they attract other businesses, creating a boon to the economy.

People see the success of the Austin business landscape and want to get in on the action. Programs, such as Opportunity Austin, not only help employees but also foster a rich environment that helps small business owners flourish.

Austin is frequently voted as one of the top cities for business in America. In 2018, this city received the title The Best City to Start a Business. Among the many established business names, Dell Technologies and Whole Foods also call Austin home.

2. Austin Offers a Favorable Business Tax Structure

Another reason so many businesses are flocking to Austin is the advantageous business tax structure. Texas does not levy any individual state income taxes.

Companies want to save money as much as possible. With the business tax structure in Austin, small business owners can take advantage of pass-through entity tax savings and ensure they attract the best employees with tax incentives as well.

3. Austin Offers an Impressively Talented Labor Force

Austin offers some of the most talented workforces in the nation. Graduating from universities such as the University of Texas, St. Edward’s University, and Concordia University Texas, as well as graduates who flock from some best universities across the nation, the labor force in Austin allows new startups the opportunity to hire the very best of the best.

4. Austin Offers a Welcoming Atmosphere to New Business Owners

As many new small business owners have discovered, Austin offers a welcoming business atmosphere. The Chamber of Commerce works to help new business owners feel confident in their choice of cities. The goal of the chamber is to help new businesses get established rapidly.

Austin, overall, is simply a friendly place. Help is available at every turn, allowing new business owners to broaden their horizons and start working towards their goals.

5. Austin’s Tech Industry Is Rising to New Heights

The tech industry in Austin has risen to new heights and continues to beat records. Experts have estimated that around 1/3 of all businesses moving to Austin were originally in California. This is telling information about the tech industry landscape in Austin.

The state of Texas offers an astounding $19 billion a year in grant money. With the Emerging Technology Fund, tech startups receive money for product development, talent recruitment, and public and private partnerships. This fund has passed out $410 million so far and has also created over 54,000 jobs in the state.

Techies coming out of the University of Texas are thriving. They come with new and innovative ideas that are skyrocketing the industry and challenging it like never before. Those wanting to open up tech companies will find like-minded people willing to help them succeed in Austin.

6. Life Science Industries Continue to Grow in Austin

Besides tech, the life science industries are also enlarging. While some people mistakenly believe software and hardware are all Austin offers, they are wrong.

Both established companies and new startups are changing the healthcare industry. Right now, there are over 200 life science companies in the city. These companies develop medical devices, biologics, biotech, and diagnostic devices.

Since the opening of the Dell Medical School at the University of Texas at Austin in 2016, the life science scene in the city has multiplied, and business forecasts expect the upward trajectory to continue.

7. Austin’s Infrastructure Remains the Finest in the Nation

To support the boon of new residents, Austin continues to work on its infrastructure, striving to make it the best in Texas and the nation. New buildings and developments are going up throughout the year, increasing the capacity for the influx of new residents. These are just a few of the reasons why Austin Texas is great for business.

Choose the Right Business Startup

If you are considering a move to Austin, choosing the right business initiative will help you see success. Many industries are welcome in the city.

In the end, the choice will rely upon the skill set and knowledge of the owner. Maximize your experience and education by choosing an industry that showcases your talent.

Make Austin, Texas Your Home

Now is an ideal time to broaden your horizons, make a new start, and open a business in the beautiful city of Austin, Texas. With so many industries thriving in the city, entrepreneurs should take advantage of the exciting landscape and become a part of it all.

Whether you plan to start a business in tech, life science, or other industries, they will welcome you to Austin. Here, you will find help in every area of your business. With the tax incentives and helpful atmosphere, Austin is the place to get a new start in the business world. As you can see, there are more than a few reasons why Austin Texas is great for business.

Contact Us

CGK Business Sales

401 Congress Ave

Austin, TX 78701

phone: (512) 900-3770

website: https://businessbrokersaustin.com