Business Brokerage Blog
This is a blog discussing the many intricacies associated with selling/buying a business.
Posted by: Fernando Simo
on Sep 25, 2009
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During one of my listing appointments, I met a seller who wanted to sell his business in order to improve his quality of life—he wanted to spend more time with his family. According to him, he spent over sixty (60) percent of his time doing things that had nothing to do with the actual operations of the business—the back office stuff. He complained that the forty (40) percent he spent focusing on his business, although enjoyable, was not enough to provide the kind of bottom line profitability he needed to provide for his current life style. Therefore, his solution was to sell the business. Unfortunately, this story is not uncommon. Business owners should know that to improve profitability their focus should be ninety (90) percent or more on their business and a limited amount for everything else. They should focus on the critical skills needed to the run the business and outsource all non-critical areas; such as payroll, human resources services, accounting, billing and collections, etc. Not only would you be able to focus more on your business and, therefore, generate more profits, but you may also improve profitability be reducing the cost of those time-consuming services. Today, Professional Employment Organizations (PEO’s), normally reduce the cost of payroll processing and workers compensation insurance while providing additional benefits, such as human resource services--limiting your liability as an employer while allowing you full control over your employees. Your legal fees, business insurance and employee headaches should be reduced significantly through this process. So to improve your quality of life, profitability and business enjoyment, outsource!!! 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 fsimo@tworld.com or please visit my webpage at www.bizbuyorsellflorida.com
Posted by: Fernando Simo
on Sep 15, 2009
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In one of my recent articles, I discussed the impact the current recession has had on the Business Brokerage world. I indicated that one of the major reasons for the negative impact has been the inability of buyers to get financing to purchase a business, particularly larger businesses-- I recently heard that the average price reduction in Florida businesses sold over the last two years, compared to the previous two years, is between $150-$200K.
Now for the good news! The light at the end of the tunnel is getting really bright!! Buyers normally get financing from three key areas: Commercial Banks, the seller, and the Small Business Administration (SBA). I believe these areas are becoming a lot more flexible in providing financing today than just a few months ago. As the financial markets and the banking system go back to some degree of normalcy, Commercial Banks are more receptive to providing business loans. Likewise, sellers are beginning to understand that without a significant amount of seller financing, their business will not sell and they may have to wait months, or years, to sell their business.
Most importantly, the SBA became a lot more flexible by making changes to the acquisition policies impacting purchases which included Intangible Assets. These changes give “Preferred Lender Providers” more flexibility to provide business loans WITHOUT going through the SBA for final approval. In addition to providing “PLP’s” with greater flexibility, the changes give buyers more leeway in what regards the minimum amount of equity they must invest for the project.
Wonderful, right?? So, with greater levels of financing available and businesses sale prices at their lowest level, there has never been a better time to buy your dream business. Now is the time!!!
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 fsimo@tworld.com or please visit my webpage at www.bizbuyorsellflorida.com .
Posted by: Fernando Simo
on Sep 12, 2009
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As we brokers begin the process of selling someone’s business, we normally ask the seller to provide four specific items: Year-to-Date Financial Statements; at least three (3) years tax returns; a list of furniture and fixtures and equipment; the lease agreement. All of these items will provide a piece of the puzzle in valuing someone’s business and determining what the right price for it should be. In this article, I will focus on financials and taxes.
For most sellers, providing the last three (3) years tax return, in addition to current financials, becomes a real difficult chore. On the other hand, as I mentioned in previous articles, buyers rely heavily on good, recent, financial data to make a decision about the business. Yesterday is history!! This is particularly true in a recessionary economy, where significant drop in revenues and profits results in lower market values.
Now let’s assume that the seller provides the tax return and current financials data and we effectively “price” the business when we list it. It does not end there. What we need is an update of the financials, at least every six months. The primary reason is, of course, valuation. The value of your business may go up based on the current financials—after recasting. So we may be able to increase the price on the listing—the bad news is that if profits decline significantly, the seller may have to reduce the price in order to be competitive in the market place.
The problem some of us brokers face is that once the seller provides the initial tax and financial data, getting current financials is like “pulling teeth.” The good news is that those who keep their listing “current” have a greater chance of selling their business than those who do not. Help your broker help you and remember, yesterday is history, today is what counts!!
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 fsimo@tworld.com or please visit my webpage at www.bizbuyorsellflorida.com .
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Phone Card Business (HOME BASED)
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Listing No. 43901998
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Fernando A. Simo, P.A.
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Testimonial
“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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