Business Brokerage Blog

This is a blog discussing the many intricacies associated with selling/buying a business.

Selling your Business??--Can you sell something with no value??

Posted by: Fernando Simo

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 As I go on listing appointments, I caution sellers that there are two ways in which one can normally value small businesses (notice the word “normally” and “small”). One way values Tangible Assets, such as inventories, receivables, furniture, fixtures and equipment. The other uses a multiple of Owners Benefit (Operating Profit plus owner’s salaries, depreciation, amortization, interest and personal benefits charged to the business). In other words, if your business generates minimal or no Owner’s Benefit, what you are really selling are the business’ tangible assets—what we business brokers call an Asset Sale or Sale of Assets--depending on which broker you talk to.  Before I get most of my colleagues upset, let me explain that by definition an Asset Sale normally includes some level of goodwill and normally represent about 90% of our sales, the other being a Stock Sale.  So, in this blog I am using the words Asset Sale loosely.  Having said that,  ordinarily, you would not be able to sell your business for an amount greater than the market value of those assets—market value is in the “eye of the beholder.”  However, buyers normally define Market Value at 20-30% of the assets’ original value--please notice I said "buyers." 

 Now, there are cases in which sellers pay more than the value of the net tangible assets—creating Goodwill in the seller’s balance sheet equal to the amount in which the purchase price exceeds the net tangible assets of the acquired company. Goodwill, however, normally has a value—such as competitive advantage, brand, employees, customer base, etc.
In summary, if your business is not generating profits, what you have is an Asset Sale (Sale of Assets) and those assets need to have a realistic value assigned to them for buyers to want to buy. In my opinion, you cannot sell anything that does not have a value attached to it that is equal to or better than the buyer’s expectations. So, if you are selling, take a hard look at what you are REALLY selling and consult with your broker on pricing your business properly.
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at or please visit my webpage at

Selling your Business??—Cheap isn’t always a Bargain!!

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What is it about most of us who decide that “cheap” is better? We do it when buying clothes, shoes, furniture, car, etc, only to find out, in most instances, that our decision was not a good one. Why?? Because in the very short term, clothes look like hell and soon deteriorate, shoes fall apart and last only a few months, and our furniture rips apart easily, forcing us to go buy the same things within months-- doubling our expense!!  We do the same when buying a house.  We forgo the best location--in front of a lake or preserve-- to save a few thousands only to lose thousands more at the time of sale.  Remember, location, location??


Unfortunately, the same thing happens when selling or buying a business. Some examples:
1.                  Sellers normally look to lower their commission on the sale of their business, instead of looking to get better results. Most good Business Brokers charge a premium 2% over their competition because they know they can get you a better price. Do the math. If the good broker sells your business for 100% of its value and a mediocre broker sells it for 75% of what the business is worth, you actually loose 23% total!! Not a good deal, but a daily occurrence.
2.                  Buyers decide not to use a lawyer fearing a $1000.00 plus charge and eventually find themselves loosing thousands of dollars in litigation fees.
3.                  Buyers decide not to use a CPA/Accountant to perform a due diligence on their purchase (they do not want to spend the $500-$1000 required) only to regret it and lose thousand of dollars, if not all of their investment in the process.
4.                  Buyers want to buy a business based on price (normally lower price) rather than looking for a quality business with great bottom line results. Crazy!! It is better to pay $50K more for a business than to lose $100K on a bad business during your first year of operations!! Right??
So, please do what makes sense when selling or buying your business. Stay away from “cheap” and get quality instead—get professional help when buying or selling your business.
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at or please visit my webpage at

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 Phone Card Business (HOME BASED)

Sales   $758,818

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Price    $125,000

Seller Financing $31,000

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Fernando A. Simo, P.A.
O: 407-992-8487


“Fernando is a go getter! If you want something done and done right, ask Fernando. He quickly became a leader in our industry and a heavy hitter here at Transworld. If you are considering selling or buying a business, Fernando is your best bet!!” June 28, 2009 .  Andrew Cagnetta, CEO and President of Transworld Business Brokers, LLC

I have known Mr. Simo for approximately 5 months.  I met Mr. Simo through Business Networks International, a highly professional business development organization.   Throughout his tenure, he has exemplified the utmost professionalism.I feel very comfortable recommending Mr. Simo as a great resource for your business brokerage needs.

Stephan Boehringer
TOLS Multimedia

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