Timing the Sale of Your Business
In a perfect world, business owners sell their companies when banks are
anxious to lend, the economy is strong, their industry is booming and the business is enjoying record profitability, with the future looking even brighter. Naturally, a perfect convergence of all these variables would enable you to maximize the value of your business allowing you to sell it at the highest price and on the best terms.
But most business owners don't sell when market conditions are perfect. Instead, they make the decision for more personal reasons, such as retirement or to free up cash to pursue other investment opportunities. Unfortunately, many businesses are sold when the owner dies unexpectedly or is otherwise unable to run the business. These unplanned events increase the chance that the business will realize a lower selling price than it would in better circumstances.Click Here to Read Full Article
Determine Why a Seller is Selling
When looking for a high-quality company to acquire, it does not take long to discover that it's a seller's market out there at least at that moment. For every business in your targeted industry worth owning, many more will turn out to be troubled, a poor fit or maybe both. That's why due diligence is such an important part of the acquisition process.
Before purchasing a business, it's important to thoroughly understand the company's you are considering and a big part of the understanding is getting a handle on why the current owners are looking to sell their stake. Doing so may help you avoid overpaying for an acquisition or even spare you from making a very costly mistake.
When EBITDA is Just a Number:
The Limitations of EBITDA
Experts agree that EBITDA has limitations and should be taken in the
context of other factors in the transaction. Buyers seriously interested in your company will also conduct in-depth due diligence processes to examine your company's financials over a longer period of time. This is essential for buyers to get a proper assessment of a business's worth.
"EBITDA is only the starting point and due diligence should result in the discovery of whatever operational issues there are in the financial reporting and EBITDA," says John Weld, managing director at Strategic Value Advisors.
The due diligence can either happen before or after the letter of intent (LOI). There is no set practice for when due diligence is conducted - many buyers already conduct rigorous due diligence before they submit an LOI or have a more intensive process after the LOI. An M&A advisor can provide you with more information about the due diligence process and timeline.
VR in Oakbrook, IL Finalized the Sale of a Cleaning Company for $589,000
VR's Oakbrook, IL location has recently sold a highly reputable cleaning company which has been in business for 20 years. The cleaning company operates in the western suburbs of Dupage County and offered a turnkey opportunity with higher than average profit margins. The company has been successful due to their customer retention and employee loyalty. Congratulations to Hiram Gonzalez on this successful transaction!
VR Continues to Match Qualified Buyers with Businesses for Sale
In today's business climate, our clients demand quality and professionalism. We applaud our VR business intermediaries for a job well done!! Here is a small sample of transactions that have closed across the VR network recently:
Thinking of selling your business or looking for an established business to purchase?
VR Office in North Dallas, TX is Engaged to Sell a Multiple Unit Retail Flooring Company
Our VR Office in North Dallas has been engaged by the owner to facilitate the sale of a fast growing multiple unit retail flooring company. The company has had significant growth in a short amount time with locations in Texas, Oklahoma and soon to be in Louisiana. The owner would prefer to partner with an organization that can provide the growth capital needed, while he maintains an equity share in the businesses. The projected revenue for 2016 is estimated to $8.4 million. Congratulations to Larry Lane on another successful engagement!
Businesses For Sale
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Small businesses make up over 56% of the annual U.S. GDP and every year a large amount of them change hands.
VR is the industry leader in facilitating such transactions.