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Home » Austin business brokers

Do not Start a Business, Buy a Business Instead

November 19, 2020 by bba12

Owning a business may be a dream, but the process of taking an idea and turning it into a viable organization is sometimes more of a nightmare. There is a lot of effort involved and most startups will not find enough funding to get off the ground. Many others do not make it past their first year in business. These facts do not mean that anyone should give up their entrepreneurial plans, they just need an alternative path to reach the success they desire.

Purchase a Success

One method that offers more security is taking over the reins of someone else. When an entrepreneur can buy a business, they have something with a proven track record of success and it is easier to prove to lenders that the company can make a profit. There are past experiences and routines to follow to prevent mistakes. A business acquisition provides the new owner with a company that already has brand recognition and a client list.

Avoid Common Missteps

New business owners often make the same mistakes. When buying a business, it is possible to have guidance and training from the previous owner to avoid repeating their missteps. In an established company, there is usually an existing, trained staff that makes it possible to continue the daily operations without interruption.

Expand Business Faster

An existing business owner should also think about how to buy a business that could expand their own company. Mergers help to increase the inventory, the equipment value and the services businesses have available without forcing them to undergo any construction or feel as if they are starting over. A merger with or the purchase of a competing company instantly eliminates the risk they once posed and increases client lists and much more without any undue effort. The value of the company is boosted immediately, and the acquisition sends a signal to potential clients of the success and professionalism of the company.

Eliminate the Worry

Entrepreneurs have a lot to consider when they establish a company. They must determine if there is a market for their product or if there are enough people in the area to support the service they offer. Even seemingly simple decisions can talk a lot of time and money to develop and research. A logo, a company name, and a business motto could take months or longer to choose and there are no guarantees they will appeal to the public. It is possible to avoid all of this when someone chooses to buy a business. An established company has already proven they are viable and they have appeal.

The details of mergers and acquisitions are easier to understand when working with a company that specializes in this type of buying and selling service. It is a business transaction that enables everyone to get what they want. The existing business owner can see the continuation of the business they created while being able to move on to other projects or retire. The buyer has an instant company to make their own and adapt over time into their own unique organization. Find out more about the potential this opportunity offers before making any other investment.

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Filed Under: Buy A Business Tagged With: Austin business brokers

When Hiring An Austin Business Broker…

December 6, 2017 by bba12

You’ve worked hard over the years to build a business that would take care of you and your family.  Now, you think it might be time to sell your business.  This is a decision that most business owners in Austin do not take lightly.  They are proud of what they’ve built and would like to see their employees and customers treated well by the next owner.  Most often, the Seller would also like to receive full value and good terms for what they’ve built.  It’s hard building a business.  Unfortunately, it’s easy to mess up the mergers and acquisitions process.

It seems that in these late stages of a nine-year bull market, everyone and anyone thinks that they have the knowledge and know-how to sell businesses in Austin.  It’s easy to “hang a sign”, as they say.  The problem is, most practitioners do not have the education, backgrounds, or experience to do so.  We hear about it from frustrated buyers all the time:  “I think the broker I talked to was 20 years old.”  “I’m not sure they had any financial experience, whatsoever.”  “In order to sign up the deal, the broker gave the seller the most unrealistic expectations, making any kind of deal impossible.”  “I’m not sure the broker did any due diligence, at all, before bringing this to the market.”  “The broker knew nothing about the actual business.”  “The Information Memorandum, if you want to call it that, was full of wrong and useless information.”  “After spending thousands of dollars on due diligence, the cash flow was no where near what was advertised.”  “There was zero chance the bank would underwrite this deal.”  Or even worse, “The broker completely mis-priced the business on the low end.  I got a steal of a deal.”  On and on they go…  So, before you turn your life’s work over to a broker who will get these kinds of reactions from buyers, it’s best to choose wisely.

Why does this happen?  Quite simply, his happens because most people in the business brokerage industry do not have the proper backgrounds to be in mergers and acquisitions.  On Wall St., M&A investment bankers are often the best students, who go to the best schools, who go through rigorous financial training to help make vital decisions for their Fortune 500 clients.  These deals are often multi-billion dollar decisions that can make or break companies, CEO’s, and shareholders.  The stakes are high.  While your company may not be a Fortune 500 company, it is nonetheless just as important to you.  To you, the stakes are just as high, if not higher.

This is why it is vital to understand the backgrounds of those you might hire to sell your business.  Reading through the websites or LinkedIn profiles of most business brokers in Austin will likely sound impressive.  They want you to trust them.  They are putting their best foot forward.  They might have good corporate backgrounds at Fortune 500 companies.  They might have built a business and sold it.  They’ve been in “your shoes”, they will say, and are now selling businesses.  They might have even done M&A at a corporation as a buyer.  Unfortunately, these are the kinds of backgrounds that lead to the aforementioned reactions from a couple of paragraphs ago.

So who should you hire?  Before you make that decision, think about who the potential buyers for your company might be.  From our perspective, buyers tend to be in three general categories.  Ultra-sophisticated private equity or venture capital buyers, who have spent an entire career learning how to buy, run, and sell businesses.  These are your Ivy League or equivalent MBA’s and Goldman Sachs alums.  Think “Shark Tank”, but better.  There are also high-net worth, individual buyers who have built a great deal of capital by being really good at what they do.  Even if they, themselves, do not have M&A experience, they tend to be very sharp, and hire those that do, as advisors.  Finally, there are strategic or corporate buyers.  These are who most sellers at this level believe will buy their business.  Often, though, the smaller corporate buyers do not see the value in M&A.  These smaller corporate buyers are generally founders, who have built their businesses from scratch, and can’t understand paying millions of dollars for what they believe they can accomplish with a few more advertising dollars.  These are often your best fit, if they truly “get it”, but they usually are few and far between because they are unwilling to pay market prices.  Finally, that leaves us with larger corporate buyers.  We often hear about “Public Company A or B” that is going to be interested in my small business.  That’s exactly the problem.  If your business can’t move the needle, in terms of revenue or earnings, or provide some real, unique niche to a public company, then chances are, they are not going to be interested.  In the event that they are interested, we will likely be dealing with someone sophisticated at the firm, who is out for a good deal.

This is why we feel very strongly that we must be one of your calls, if you are truly interested in getting the best deal possible. We get good deals, in both price and terms, for your Austin business.  Remember, every buyer wants a good deal.  A high, headline sales price is worthless to you as a Seller, if you never receive the money or get jilted by other terms or deal structures.  There are some very sophisticated buyers in the marketplace.  Some will have backgrounds that are so much better than their business broker counterparts, that they are going to run circles around them during the deal process.  Unfortunately, some sophisticated buyers will try to rob you blind.  Most business brokers and smaller M&A advisors won’t even realize their mistakes.  The Seller, the broker, and their attorney believe they’ve gotten a good deal but they haven’t.  Your broker might have just squandered millions of dollars, in an instant, due to their lack of sophistication and M&A know-how.  But wait, you say, the broker I just talked to has been in business for 20 years and sold hundreds of businesses?  Have you ever heard the saying, “They don’t know, what they don’t know”?  We consistently sell businesses that other business brokers in Austin could not.

We run a different kind of process here at CGK Business Sales.  We get the best prices and terms because of our differentiated, proprietary process.  We reach buyers that other brokers simply don’t have access to or were too lazy to contact.  We have the types of education, backgrounds, and financial training to go to-to-toe with the most sophisticated buyers.  Put us to work for you.  Get the deal you deserve.  It’s your life’s work.  Protect it.  Call us at 512-900-3770.

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Filed Under: Uncategorized Tagged With: Austin business broker, Austin business brokers, business broker, business brokers

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Contact Us

CGK Business Sales

401 Congress Ave

Austin, TX 78701

phone: (512) 900-3770

website: https://businessbrokersaustin.com

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