Around the Web: A Month in Summary

Around the Web: A Month in Summary:  A recent article posted on Business2Community.com entitled “How to Close the Deal and When to Walk Away When Buying or Selling a Business” explains the business sale process and how to differentiate between a good deal and a bad deal during the process. Closing a deal involves quite a bit of legwork, including producing a letter of intent, doing due diligence, acquiring financing, signing a purchase agreement, and actually closing the deal. These items can be easier with the help of a business advisor, broker, or attorney, but emphasis should be placed on the due diligence aspect: knowing the business inside and out is vital to a successful sale. Walking away from a deal can be difficult for a motivated buyer, but is sometimes necessary to avoid emotional and financial disaster. The following red flags help to signify that it's time to walk away: Inconsistencies Neglect Undisclosed Problems Poor Credit Rating The Industry is in … [Read more...]

The Rise of Women Business Owners

The Rise of Women Business Owners:  The National Foundation for Women Business Owners (NFWBO) identifies trends relating to the small business climate for women. New studies examining the role of female entrepreneurs by the NFWBO have yielded some surprising and eye-opening results. A joint IBM, NFWBO study of the top fifty women business owners as well as 10 additional “up-and-coming” business owners reached several interesting conclusions. The women in the study covered a diverse array of industry categories including 27% in manufacturing, 25% in retail and 10% in real estate. 46% of the women inherited a business and over 50% started their own businesses, with 34% starting businesses themselves and another 17% starting businesses with others. A Preference for Flexibility One key part of the study centered on the fact that women business owners, in general, appear to prefer smaller operations. Among the 8 million women-owned businesses in the U.S., a full 75% are one person … [Read more...]

Customers: The Tremendous Importance of Simply Saying, “Hello!”

Customers:   The Tremendous Importance of Simply Saying, “Hello!” Far too many customers have grown to expect poor customer service. Whether its rude employees and customer support or impersonal robotic phone system responses, customers are often shocked when they receive pleasant customer service. In such a climate, it is clear that businesses that simply treat customers well are taking advantage of a huge opportunity. Customers - if you've ever personally called a credit card or cable company looking for help, then you already know that it can be something of a depressing and even Kafkaesque experience, leaving you feeling drained. More than likely you don't feel too positive about any automated experience that bounces you around from one hold menu to the next. Summed up another way, hold music is never a fun or rewarding experience. Communication is Always Changing In the “old days” a telephone call was often a customer's first experience with a business. Now, the game has, … [Read more...]

Three Signs You May Be Experiencing Career Burnout

Three Signs You May Be Experiencing Career Burnout:  Burnout is a strange phenomenon in that often a business owner doesn't know that he or she is experiencing it until it is too late. Owners who feel beleaguered and over stressed frequently want to sell their business and move on. However, buyers are not so eager to accept burnout as a believable reason for why an owner wants to sell. It is the responsibility of every business owner to be on guard against potential burnout. After all, it is better to “cash in” than to burnout. In this article, we will examine a few of the key warning signs that you may be on the verge of burning out. Sign 1: There is No Joy in Owning Your Business Once upon a time, you were likely excited about your business. But if those days are long gone, then it might be time to move on. Owning a business is hard work and eventually it can take a toll. If you find each day to be boring, then it is probably time to sell, move on and start a new chapter in … [Read more...]

The Top 3 Unexpected Events CEO’s May Encounter During the Selling Process

The Top 3 Unexpected Events CEO’s May Encounter During the Selling Process:  When it comes time to sell a business, not everything goes as planned. You may be one of the lucky ones and find that selling your business is a streamlined process with only a few unexpected occurrences. But most CEO's looking to sell a business find they can expect the unexpected. Let's take a closer look at some of the top surprises CEO's experience during the sale process. Unexpected Occurrence #1 – Surprisingly Low Bids CEO's looking to sell their businesses need to be ready for almost anything. One of the larger surprises that CEO's face are surprisingly low bids. Don't let low bids shock you. Unexpected Occurrence #2 – A Huge Time Commitment CEO's have to make sure that everything from an offering memorandum to management presentation and suggestions to potential acquirers are ready to go. The offering memorandum is considered the cornerstone of the selling process and is typically at least … [Read more...]

Do You Really Understand Your Customers?

Do You Really Understand Your Customers?  The time you invest getting to know and understand your customers is time very well spent. The feedback you get is gold, pure gold. Yet, there are other reasons why this is a prudent move. Let's take a look at some of the key reasons you should learn more about your customers and their specific needs. Today's world has become increasingly impersonal. Most of us spend a shocking amount of time looking at one type of digital screen or another. Personal interaction isn't what it once was, and you can use that fact to help build your business. The Ultimate Form of Customer Service Good old fashioned human contact goes a long way when it comes to keeping customers happy, loyal and returning. The personal touch can go a long way towards building your business by improving customer service. Customer service has become, in general, a very impersonal experience for most people in the modern world. In most businesses, the owner is more of an … [Read more...]

The Top 3 Key Factors to Consider about Seller Discretionary Earnings

The Top 3 Key Factors to Consider about Seller Discretionary Earnings:  Two businesses could report the same numeric value for earnings but that doesn't always tell the whole story. As it turns out, there is far more to earnings than may initially meet the eye. While two businesses might have a similar sale price, that certainly doesn't mean that they are of equal value. In order to truly understand the value of a business, we must dig deeper and look at the three key factors of Seller Discretionary Earnings. In this article, we'll explore each of these three key earning factors and explore quality of earnings, sustainability of earnings after acquisition and what is involved in the verification of information. Key Factor # 1 – Quality of Seller Discretionary Earnings Determining the quality of earnings is essential. In determining the quality of Seller Discretionary Earnings, you'll want to figure out if earnings are, in fact, padded. Padded earnings come in the form of a … [Read more...]

The Deeper Significance of a Listing Agreement

Listing agreements are very common when it comes to selling a business. In order to sell a business using a business broker, a listing agreement is usually required. In this article, we will explore this essential agreement and why it is so critical. Signing a listing agreement legally authorizes the sale of a business. The fact is that signing a listing agreement serves to represent the end of ownership, which for many business owners, means heading into new territory. Quite often owning a business is more than “owning a business,” as the business represented a dream and/or a way of life. Walking away from the dream or lifestyle represents a significant change. For many owners this is the end of a dream. It is not uncommon for many business owners to have started a business from “scratch,” and it is also only human to feel at least somewhat attached to the creation. Phrased another way, walking away from a business that one has worked on and cared for is often easier said than … [Read more...]

Are You Sure Your Deal is Complete?

Are you sure your deal is complete?  When it comes to your deal being completed, having a signed Letter of Intent is great. While everything may seem as though it is moving along just fine, it is vital to remember that the deal isn't done until many boxes have been checked. The due diligence process should never be overlooked. It is during due diligence that a buyer truly decides whether or not to move forward with a given deal. Depending on what is discovered, a buyer may want to renegotiate the price or even withdraw from the deal altogether. In short, it is key that both sides in the transaction understand the importance of the due diligence process. Stanley Foster Reed in his book, The Art of M&A, wrote, “The basic function of due diligence is to assess the benefits and liabilities of a proposed acquisition by inquiring into all relevant aspects of the past, present, and predictable future of the business to be purchased.” Before the due diligence process begins, there … [Read more...]

Do You Know Company Value

Do You Know Company Value?  It is common for executives at companies to undergo an annual physical. Likewise, these same executives will likely examine their own investments at least once a year, if not more often. However, rather perplexingly, these same capable and responsible executives never consider giving their company an annual physical unless required to do so by rule or regulations. Most Business Owners Don't Know about Company Value Recently, a leading Cincinnati CPA firm undertook a study that was quite revealing. In particular, this study concluded that a whopping 65% of business owners don't know the value of their company and 75% of the surveyed business owners had their net worth tied up in their businesses. Phrased another way, 75% of business owners don't know how much they are worth! Perhaps most striking of all was the fact that a full 85% of business owners have no exit strategy whatsoever.  You need to understand Company Value. Having Recurrent … [Read more...]