Five Kinds of Buyers

Buyers are generally categorized as belonging to one of the following groups although, in reality, most buyers fit into more than one. The Individual Buyer This is typically an individual with substantial financial resources, and with the type of background or experience necessary for leading a particular operation. The individual buyer usually seeks a business that is financially healthy, indicating a sound return on the investment of both money and time. The Strategic Buyer This buyer is almost always a company with a specific goal in mind -- entry into new markets, increasing market share, gaining new technology, or eliminating some element of competition. The Synergistic Buyer The synergistic category of buyer, like the strategic type, is usually a company. Synergy means that the joining of the two companies will produce more, or be worth more, than just the sum of their parts. The Industry Buyer Sometimes known as “the buyer of last resort,” this type is … [Read more...]

Why Deals Don’t Close

Sellers Don’t have a valid reason for selling. Are testing the waters to check the market and the price. (They are similar to the buyer who is “just shopping.”) Are completely unrealistic about the price and the market for their business. Are not honest about their business or their situation. The reason they want to sell is that the business is not viable, it has environmental problems or some other serious issues that the seller has not revealed, or new competition is entering the market. Don’t disclose that there is more than one owner and they are not all in agreement. Have not checked with their outside advisors about possible financial, tax or legal implications of selling their business. Are unprepared to accept seller financing or now unwilling to accept it. Buyers Don’t have a valid reason to buy a business, or the reason is not strong enough to overcome the fear. Have unrealistic expectations regarding price, the business buying process, and/or small … [Read more...]

Seller Financing: The Basics

Seller financing has always been a mainstay of business brokerage.  Buyers don’t have the capital necessary to pay cash, are unable to borrow the money, or are reluctant to use all of their capital.  Buyers also feel that a business should pay for itself and are wary of a seller who wants all cash or who wants the carry-back note secured by additional collateral. What sellers seem to be saying, at least as perceived by the buyer, is that they don’t have a lot of confidence in the business or in the buyer or perhaps both.  However, if you look at statistics, it’s apparent that sellers usually receive a much higher purchase price if they accept terms. Studies reveal that, on average, a seller who sells for all cash receives only about 80 percent of the asking price.  Sellers who are willing to accept terms receive, on average, 86 percent of the asking price. The seller who asks for all cash receives, on average, a purchase price of 36 percent of annual sales while the seller who will … [Read more...]

What Would Your Business Sell For?

There is the old anecdote about the immigrant who opened his own business in the United States. Like many small business owners, he had his own bookkeeping system. He kept his accounts payable in a cigar box on the left side of his cash register, his daily receipts – cash and credit card receipts – in the cash register, and his invoices and paid bills in a cigar box on the right side of his cash register. When his youngest son graduated as a CPA, he was appalled by his father’s primitive bookkeeping system. “I don’t know how you can run a business that way,” his son said. “How do you know what your profits are?” “Well, son,” the father replied, “when I came to this country, I had nothing but the clothes I was wearing. Today, your brother is a doctor, your sister is a lawyer, and you are an accountant. Your mother and I have a nice car, a city house and a place at the beach. We have a good business and everything is paid for. Add that all together, subtract the clothes, and … [Read more...]

Highly Profitable Publishing Business For Sale

PUBLISHER BUSINESS FOR SALE THE FUTURE OF NEWS CAN BE YOURS!  As the newspaper generation ages, the younger generation is failing to follow in their footsteps, creating a Paradigm Shift in the newspaper business from Print to Online. The Internet is simply a more efficient mechanism for delivering information.  Print newspapers are slowly going out of business and unfortunately for them the solution is not their online presence.  There is no scale to any of them, and when their printing presses cease to operate, they WILL disappear along with their websites.  Newspaper advertisers are seeking alternatives to reach the new generation of consumers, yet they have no real alternatives to reach them in their local markets until now. Our Client has the ultimate turnkey solution, providing the most progressive and brilliant platform ever created.  Our Client has an ideal opportunity for the entrepreneur aspiring to be at the forefront of an extraordinary media revolution and IS the … [Read more...]

ATM On-Site Franchise Available – Cincinnati, Ohio

The Perfect Franchise for you!  This Franchise is North America’s only ATM franchise focused on providing ATM services to hotels and other travel and entertainment based businesses.  This ATM Franchise has been very successful providing services to this niche in the market with its unique “turnkey & hassle free” marketing philosophy combined with a “fair and friendly” approach.  They have been providing ATM services since 1996, franchised in 2003 and now have 200+ franchises in the US and Canada.  This ATM franchise has been recognized by many national publications including: • Entrepreneur Magazine “Franchise 500” 2012 — Ranked #2 in Miscellaneous Financial Services — Ranked #406 in General Listing  • Entrepreneur Magazine “Franchise 500” 2011 — Ranked #2 in Miscellaneous Financial Services category — Ranked #371 in the general listing — Ranked #63 in Fastest Growing Franchise  • Military Times Edge 2011 — 2011 Best Franchises for Veterans  • … [Read more...]

Certified Business Intermediary Designation

For Immediate Release   -  Certified Business Intermediary Designation Michael G. Lohbeck Receives Certified Business Intermediary Designation Atlanta, Georgia – December 1, 2012 – The International Business Brokers Association (IBBA) announces it has conferred Michael G. Lohbeck of Cincinnati, Ohio its’ prestigious designation of Certified Business Intermediary (CBI). The IBBA is the world’s largest international organization of experienced, dedicated business brokerage intermediaries representing the middle market.  The CBI designation is awarded to intermediaries who have proven professional excellence through verified transaction experience, education and peer review.  Mr. Lohbeck’s designation demonstrates exemplary commitment and experience as a professional business intermediary. Since 1983, the IBBA has addressed professional issues of business brokerage specialists.  The organization has over 1,000 cooperating intermediaries active in middle-market transactions … [Read more...]

Business Valuation: Do the Financials Tell the Whole Story?

Many experts say no! These experts believe that only half of the business valuation should be based on the financials (the number-crunching), with the other half of the business valuation based on non-financial information (the subjective factors). What subjective factors are they referring to?  SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats – the primary factors that make up the subjective, or non-financial, analysis. Below you will find a more detailed look at the areas that help us evaluate a company’s SWOT. Industry Status – A company’s value increases when its associated industry is expanding, and its value decreases in any of the following situations:  its industry is constantly fighting technical obsolescence; its industry involves a commodity subject to ongoing price wars; its industry is severely impacted by foreign competition; or its industry is negatively impacted by governmental policies, controls, or pricing. Geographic Location – A … [Read more...]

Do You Have an Exit Plan?

"Exit strategies may allow you to get out before the bottom falls out of your industry. Well-planned exits allow you to get a better price for your business." From: Selling Your Business by Russ Robb, published by Adams Media Corporation Whether you plan to sell out in one year, five years, or never, you need an exit strategy. As the term suggests, an exit strategy is a plan for leaving your business, and every business should have one, if not two. The first is useful as a guide to a smooth exit from your business. The second is for emergencies that could come about due to poor health or partnership problems. You may never plan to sell, but you never know! The first step in creating an exit plan is to develop what is basically an exit policy and procedure manual. It may end up being only on a few sheets of paper, but it should outline your thoughts on how to exit the business when the time comes. There are some important questions to wrestle with in creating a basic plan and … [Read more...]

Rating Today’s Business Buyers

Rating Today's Business Buyers:  Once the decision to sell has been made, the business owner should be aware of the variety of possible business buyers. Just as small business itself has become more sophisticated, the people interested in buying them have also become more divergent and complex. The following are some of today's most active categories of business buyers: Family Members Members of the seller's own family form a traditional category of business buyer: tried but not always "true." The notion of a family member taking over is amenable to many of the parties involved because they envision continuity, seeing that as a prime advantage. And it can be, given that the family member treats the role as something akin to a hierarchical responsibility. This can mean years of planning and diligent preparation, involving all or many members of the family in deciding who will be the "heir to the throne." If this has been done, the family member may be the best type of … [Read more...]

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