Reasons Why Your Business
By: Ryan Jorden
, Owner of VR office in Calgary, Canada You've been thinking about selling your business for a while and now you're finally ready to pursue a sale. But is your business prepared to withstand the scrutiny of a buyer and their professional advisors? If you haven't been through this process before, then you may be unaware of some issues present in your business that a savvy entrepreneur is looking out for and seeking to avoid. These barriers to sell will undoubtedly show themselves during a buyer's due diligence and likely derail your deal. So let's take a look at some of the common issues that arise so you can start working on them in order to maximize your value in a successful sale.
1. You aren't mentally prepared for the process.
You thought you were ready, but now that you're discussing it in depth with your trusted broker you realize that you have no plan for your life after the sale. Your identity and self-worth are very closely wrapped up in your business, or perhaps you've worked so hard at growing your business that you simply didn't have much room for a social life or hobbies. What are you going to do with all of that free time? The great unknown looms large and you're getting cold feet at the prospect of reinventing yourself.
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Selling Your Business?
Learn to Think Like a Buyer
You've built a great business with love and care. It has grown larger than you'd ever imagined, and generates a nice profit that has allowed you and your family to live comfortably. Now you're ready to sell. You assume there's a buyer out there who will pay you a fair price and then nurture the company with the same attention you have. What's more, selling the business is a major part of your retirement plan. Needless to say, buyers look at businesses differently than sellers. So to achieve the outcome you want, it's important to think like buyers and understand how they evaluate a business.
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EBITDA Can Be Misleading
EBITDA, otherwise known as earnings before interest, taxes, depreciation, and amortization, has become the buzz word of the century, touted by many as the measure of company performance and indicator of value. Not so fast, it is only one of the methods used to measure performance. It is exactly what it is, and should be used as one indicator of earnings for comparison purposes. By itself, EBITDA does not measure how healthy a Company is.
Understanding the amount of asset depreciation is of limited value in determining the present viability of a company; instead, it is a measure of what the company has spent, in the past, on capital expenditures. If you are trying to evaluate the health of the company, depreciation and amortization are "non-cash" items and are irrelevant. Calculating the company's future capital expenditures is much more meaningful. The assets purchased in the past, can be a measure of calculating needed purchases in the future, and the future is what is important.Click Here to Read Full Article
M&A FOMO: How to Deal and Still Get Deals Done
FOMO, or "fear of missing out," is millennial-speak for the anxiety that is felt when you are left out from something exciting. In the case of middle market M&A FOMO, nothing is more anxiety-inducing than missing a $2M-$10M EBITDA deal where a boutique investment bank is running a sophisticated and limited process.
FOMO in M&A is hardly a new phenomenon, but given the increasing competition for deals in today's market, unease seems to be at an all-time high. A few clicks around Term Sheet or PE Hub and it's easy to see when your firm has been bested. For investors, there's nothing worse than reading "XYZ Capital Partners has acquired My Firm's Perfect Platform Investment" - when you didn't even see the deal.
VR Office in Calgary, Canada has Facilitated the Sale of a Well-Established Lighting Centre
Our VR office in Calgary assisted in the sale of a well-established, highly profitable and successful lighting store in the Canmore area. The lighting store has a great reputation within the community due to focusing on creating and maintaining strong and lasting relationships with contractors and home owners alike. The seller will be staying on for a period to ensure a smooth transition of the business. Congratulations to Ryan Jorden on another 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:
Medical Spa | $1,225,000 | Waukesha, WI
Glass Tempering & Lamination Business | $530,000 | Boca Raton, FL
Sign Shop | $283,000 | Wichita, KS
Pizza Restaurant | $154,000 | Springfield, MO
Thinking of selling your business or looking for an established business to purchase?
VR Office in Baton Rouge, LA is Contracted to Sell a RV Sales, Rentals & Service Business
Our VR Office in Baton Rouge, LA has been contracted to sell an RV sales, rental and service business which has been operating for over 30 years. The business is situated on 1.89 acres of real estate which the current owner is willing to lease long-term or is willing to discuss the sale of the real estate. The buyer must have industry experience and be able to qualify for SBA financing and inventory financing, which is a short term loan used by retailers to purchase high-cost items. The current owner is willing to provide transitional training and consulting to the new owners. Congratulations to Steve Windham on your new engagement!
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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.
The Jab of Sales Success
I don't really follow boxing much anymore. But, taking a quick break from a recent writing project, I put on the television and caught a fight. Both terrific young fighters, mainly equal in skill, both had a good inside game, but one of them had the better jab. And, that was the difference-maker.
You see, with a good enough left jab (with a southpaw it would be a right jab), you can virtually control the fight. You can keep a charging opponent away, you can drive your opponent back. You can protect yourself just by virtue of having a leather fist in your opponent's face, and you can set up the next punch you want to throw, whether a hard right, a left hook or a shot to the body.