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April, 2010
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| Investigate Your Financing Options When Buying a Business
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One of the most important requirements when you buy a business is raising capital, which will require you to prepare a well-thought-out business plan. This is vital not only for when you are using capital to buy a business but also for budgeting initial operating expenses. Additionally, a business plan will help creditors to determine the maximum amount and terms of financing that will be made available to you.
CHOOSING THE RIGHT FINANCING OPTIONS
Since most financial institutions only provide
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| Elements Needed to Become a Successful Business Owner
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With any profession, there are certain characteristics that allow some people to excel over others that do not possess such traits. The business world is no different. There are key characteristics that allow business owners to make their businesses profitable, earn the respect of their employees and maintain success over a long period to where an owner can sell a business with a high resale value.
There are some characteristics that lead to a business owner to become successful:
Advanced Pl
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| Deciding a Fair Price when Selling a Business
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When you are looking to sell a business, there are many way to price that business, which your VR business intermediary can assist.
Multiples of cash flow – Usually 1 to 3 times annual cash flow depending on the type and size of the business;
Value of equipment and inventory – This includes one year’s cash flow;
3 to 12 monthly gross sales – Depending on the type of business;
Book value of assets.
Many elements will affect the price of the busin
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| Determining the Right Time to Sell Your Business
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This is a hard question to ask, but only can answer it when it comes down to decidingtosella business.
Some argue that you should sell when the business is doing well, which can give you the most control over the deal and maximize your profit. However, others argue that the owner should sell when the business is on a non-seasonal downward trend.
Circumstances Determine the Time to Sell Business
Deciding when tosell a business depends on the circumstances of the owner, but there are a number o
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| Don’t Forget to Run Your Business as You Prepare to Sell to a Buyer
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One of the worst mistakes that you can during the process of selling your business is neglectingyour every day duties of running the business. It’s easy to get caught up spending so much time and energy in regard to business sale matters that it can result in a deterioration of both revenue and the resale value of your business.
Remember that you will benefit in the end and receive better offers from prospectiveowners that are looking tobuy a business through maintaining your inventory, m
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| Why You Must Find a Qualified Buyer When Selling Your Business
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Remember that even though you may find aspiring and established business owners that are looking to buy a business, they might not be qualified to buy your business.VR Business Sales will help you find the most qualified buyers to take over your business through our extensive global network.
Your local VR business intermediary will consider a variety of factors to determine the most qualified buyer for owning your business:
Buyer’s Capital;
Source of the Buyer’s Capital
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| Deciding to Position Your Business for Sale
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The realization is easy to forget, but small business owners do not live and breathe their businesses, they live and breathe their dreams that they have had since they were young. For the majority of business owners, their aspirations recently came to fruition when they were able to buy their businesses. Other business owners are purists that have seen their businesses develop and expand that they have enjoyed and cherished for years if not decades.
However, the inevitable reality does kick in
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| Mistakes to Avoid When Performing a Business Valuation
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When you are preparing a valuation for your business with a VR business intermediary, do not attempt to embellish and create false numbers. This will only hurt your chances ofselling your business to the right buyer. You want to be honest with your VR business intermediary. This means you need to avoid mistakes that over small business owners have made when trying to estimate their value.
Projecting Unrealistic Cash Flow
The most common mistake withperforming a business valuation is unrealisti
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| Determining the Right Strategy for Your Business that You Buy
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In order to determine the strategy that will work effectively after buying your business, there are five essential questions that will help you determine if you will able to implement and push you to prosperity and solidify customer loyalty.
As a business owner, you cannot expect to answer these questions quickly, nor are the answers black and white. Evaluate the strategy that you want to follow with these five questions at least twice a year – even if the answers haven’t changed si
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| System and Specializing Makes a Successful Franchise Business
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Why do people buy franchises? Because the franchise is a defined and proven business format that offers any aspiring business owner the opportunity to run their own business with an established formula, training and support from the corporate headquarters. Franchising is about taking and building a concept that’s already been developed and duplicating. Franchisors such as Dunkin’ Donuts and Kentucky Fried Chicken standardized the presentation of their products and the services that g
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| The Main Two Methods of Valuating a Business
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Whether you’re selling or buying your business, your VR Intermediary will perform a business valuation.
There are two methods that are normally used in business valuations: Multiple of Earnings and Discounted Cash Flow Approach.
Multiple of Earnings
This method can also be used when valuing a business. Parties dealing with private businesses should also remember that most are likely to be subject to a much lower price-to-earnings ratio than a publicly-held corporation because the smal
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| Different Ways to Financing Your Business
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With the majority of businesses,financing to buy a business is going to be needed to both keep your business in operation if you have just bought it and/or if you’re looking to expand your business. Here at VR, we will offer advice and support to small and medium-sized businesses, providing some ways to raise capital if you’re looking to buy.
Debt Financing
With this way, the principal must be repaid with interest. However, this does not give the lender ownership control. Depending
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