Recap of the Year at Sunbelt Indiana

Well everyone, 2011 is coming to a close and we are proud to announce that we have successfully closed over 25 sale transactions this year... the following tombstone sheets show just a sampling of our recent transactions... click on the subject line to review just a few.

• Recent Completed M&A Transactions


• Recent Completed Mainstreet Transactions

To take your business from "for sale" to "sold" contact us at indyinfo@sunbeltindiana.com or 317-573-2100 to speak to a broker about your exit planning strategy.

Check out this great article on financing a business from BusinessNewsDaily...

Today there was a great article on BusinessNewsDaily.com, "7 Ways to Finance a Small Business" By David Mielach, Staff Writer.

What makes this article great is not only its inciteful synopsis of the 7 ways to finance, but also the breakdown of each one including advantages and disadvantages. According to Mr. Mielach, the 7 ways to finance are...

• Small Business Administration Loan


• Friends and Family


• Home Equity Loan


• Credit Cards


• Angel Investors


• Venture Capitalists


• Strategic Investors

The only one he may have missed, is of course financing the purchase of an existing business through use of retirement funds. Other than that, this is a great read for both buyers and sellers alike to educate themselves. It is definitely worth a read.

Click here to read the full article.

Staffing Decisions - 2 Options if you are going to sell

One area that has the potential to affect the value of your business is the staffing of your business. If you are thinking about selling, you may want to consider two different options.

1. Outsourcing

Many services, especially in today's environmen of the self-employed, can be outsourced. Replacing workers is not pleasant and should only be done if substantial savings can be realized, but outsourcing is worth investigating.

When evaluating the potential savings, you will want to compare the total costs related to the employee (salary, benefits, bonuses, etc.) to the total costs related to outsourcing. You will also want to consider how the change could affect customer service and the morale and productivity of the other employees.

2. Removing Negativity

Now may be the time to get rid of any disgruntled employees. Negative employees hurt a business in several ways. Their attitudes can create a sour environment for their co-workers; their criticisms and complaints can rub off on their coworkers; and their demeanor can leave a negative impression on the customers of the business.

Happy and contented employees make for a profitable business - and it is evident to anyone looking at the business.

Check out our own Larry Metzing in the Biz Voice by the Indiana Chamber

Check out the September / October 2011 issue of BizVoice magazine, put out by the Indiana Chamber of Commerce. Our own Larry Metzing, Senior Partner at Sunbelt Indiana Business Resource is highlighted as an Indiana "dealmaker", along with several other dealmaking Indiana professionals, in The Deal Behind the Deals, Pros offer Stories, Facts and Analysis.

Larry talks about fascinating deals, estimated market valuation, and the importance of taking the busines to market, as opposed to selling to the first buyer that comes along.

Click here to read the article.

Article 9: Take a Look at Your Lease

This article is helpful for any of you who are thinking or either starting your own business or purchasing an existing one, or if you currently own a business that operates out of leased premises. Very helpful.

If your business is not location-sensitive, that is, if your business location is immaterial to its success, then the following may not be important. However, lease information is usually helpful no matter what the situation. The business owner whose business is very dependent on its current location should certaily read on.

If your business is location-sensitive, which is almost always true for a restaurant, a retail operation, or, in fact, any business that depends on customers finding you (or coming upon you, as is often the case with a well-located gift shop) - the lease is critical. It may be too late if you already have executed it, but the following might be helpful for your next lease negotiation.

Click here to read the full article.

Recent Businesses Sold in central Indiana...

The following are businesses recently sold by Sunbelt Indiana brokers ... congrats brokers - great job!

• Free Spirit Lounge (Broker Gary Stehle)


• Kem-Co Chemical (Broker Tim Koger)


• Midas Location (Brokers Brian Knoderer & Dave Gorman)


• Mears Automotive (Broker Dave Gorman)


• Jack's Pizza - Danville (Broker Tim Koger)

If you are interested in learning more about selling your business, buying a business or planning for an exit strategy down the road, please contact us immediately. Sunbelt Indiana has been selling businesses in the Indiana marketplace for over 30 years! We have sold over 1,300 and can help you sell yours.

Ph. 317-573-2100
marketing@sunbeltindiana.com

Check Out "Sales of Small Firms Are Up" in Wall Street Journal today

Sales of Small Firms Are Up
But Gain in 2nd Period Reflects Owner's Realization Businesses are Worth Less

By Sarah Needleman
Wall Street Journal, July 14, 2011

More small business owners sold their companies in the second quarter, but there's gloom surrounding the transactions.

Sales of businesses with roughly $350,000 in annual revenue rose 8% from a year earlier, reports BizBuySell.com, an online marketplace for small-business acquisitions in San Francisco. The increase marks the third year-over-year quarterly gain in a row, with brokers nationwide reporting similar gains.

Yet the growth isn't indicative of significant improvements in business performance or banklending volume. Instead, main driving force is the acceptance among owners that their businesses are no longer worth what they once were. Many sellers cut their asking prices and agreed to finance a significant portion of the deals themselves.

To read the full article... click here.

MOTIVATED SELLERS, what makes them motivated?

By Ralana D. Shelley, CBI
Sunbelt Indiana Business Resource

You see this term on many business listings online or hear it from listing brokers all the time. Have you ever wondered what makes a seller a "Motivated Seller?"

There are several reasons that a Business Seller would be considered a "Motivated Seller." Generally they all have a sudden important "motivator" such as a serious personal or family health issue, or they are planning on moving out of the geographic area for reasons beyond their control. Perhaps they are just really burnt out and want to get out of the business. These are only a few of the possible reasons for a seller to be especially motivated.

Whatever th reason, the "Motivated seller" is usually spurred on by a need to sell as quickly as possible. This is good news for you as a buyer. Often it means that a seller will consider an offer that maybe they would not have considered previously, or that this business may go for a little less than others comparable to it. You want to see this term on a listing.

There are certain precautions one should take to ensure that the motivator is not a negative material fact of the business, reasons you do not want to see are poor performance, or a downturn in the industry/market that is not expected to recover, or a lease that will eventually bury the business, just to name a few. Just be prepared, good advisors such as your business broker, accountant and/or attorney can assist you in making an informed decision on any turnaround business.

Currently, Sunbelt Indiana Business Resource has over 100 businesses listed, some of which have "Motivated Sellers." To review our current listings... click here.

How an Equipment Lease Can Affect the Sale of Your Business

Written by: Ralana D. Shelley, CBI
Business Broker & Dir. of Marketing, SIBR
June 10, 2011

As any business broker will tell you, equipment issues that arise at closing can be sticky. It is best to be prepared ahead of time, and know how to handle your particular issues. Of course, equipment varies from business to business. A bar / restaurant may lease coolers, ice makers, etc. and be concered with obsolete equipment due to age and maintenance needs. Whereas, a printer may lease copiers and be more concerned with obsolescence due to technology. But, overall, the following are scenarios that can apply in most situations.

• Old or obsolete equipment under lease will most likely not be assumed by purchaser.


• If a lease is assumed, remember that if not handled correctly, it may decrease the overall purchase price you get at closing.


• Capital leases have a negative impact on the cash flow - and therefore a negative impact on the purchase price at closing.

To find out the specifics on each point above... click here to read the full article.

As is the case with most things, an ounce of prevention equals a pound of cure. If you prepare ahead of time, you may be able to avoid equipment issues at closing.

Article 7: Buying vs. Leasing Equipment

"This article from Forbes.com has great information pro and con if you are trying to decided whether to buy or lease equipment for your business... check it out!" - Ralana D. Shelley, CBI, Sunbelt Indiana

Forbes.com
Nolo 01.24.07

Leasing equipment can be a better option for business owners who have limited capital or who need equipment that must be upraded every few years, while purchasing equipment can be a better option for established businesses or for equipment that has a long, usable life. Each business owner's situation is unique, however, and the decision to buy or lease business equipment must be made on a case-by-case basis.

To have a look at both options... click here and read the full article at Forbes.com.

And check out our next installment on Friday... Article 8: How equipment leases can affect the sale of your business.

Article 6: Equipment - The Very Expensive Desk Lamp

Courtesy of Business Brokerage Press
"Moral of the story: Prepare your business before a buyer sees it"

This is a story based on a true incident - only some of the details have been changed. The buyer and seller were ready to close on a business when the buyer asked to look at the list of fixtures and equipment that were to be included in the sale. After a few minutes reviewing the list, the buyer said that the desk lamp on the owner's desk was not listed. The seller explained that the lamp was a gift from his parents many years ago and therefore it was not included. The buyer got very upset, stating that the lamp was just perfect for the desk and he wanted it. The seller tried to explain that the lamp had lots of sentimental value, but that he would replace it with another desk lamp. This did not satisfy the buyer, and in order to stop the sale from falling apart, the seller agreed to subtract $1,000 from the purchase price to keep the lamp. That made the desk lamp a very expensive one.

To find out how this could have been avoided, and how you can avoid this scenario, read the full article... click here.

Inventory: A Key Component to the Business Sale

Ralana D. Shelley, CBI (bio) Sunbelt Indiana Business Resource March 28, 2011

One of the most overlooked but important issues in the health of any business is inventory. Inventory plays a pivotal role throughout its entire lifecycle, from purchase to storage to sale. It is just as important how inventory is kept and sold as who it is bought from, how much is paid for it, and how much one can charge a customer for it. Below are three key issues to consider abuot inventory and how it affects the health and future sale of your business.

Inventory Accounting... Once a business has purchased its inventory, it becomes important how that business is going to handle it. How quickly or slowly it is turned over can have a direct impact on business value...

To Include in the purchase price or not to include... Most businesses offered through an intermediary will clearly state up front whether inventory is included in the purchase price, or whether it is in addition to the price...

Counting Inventory at Closing... There are basically two ways to count inventory before closing...

Inventory is not so simple when considering its impact on the value of a business both while running it and while trying to sell it. It is certainly something to handle and track carefully, and prepare if you are thinking of selling now or in the future.

To read the full article and learn more about inventory's impact... click here.

How to Hold on to Key Employees (Article 3, Exit planning series)

Courtesy of Business Brokerage Press
During a company merger, the devil is in the details. Identifying key employees and employment issues early on can facilitate a smooth deal. And a communication plan can help prevent, for example, top-producing salespeople from defecting to competitors, decimating the company's customer base, and affecting its value.

It's important to offer employees incentives to stay, but you also need to anticipate potential legal issues. Plan now to put in place protections to prevent employees from disrupting your deal, both before and after its closes.

to read the full article... click here.

Check us out Monday for Article 4 in our Exit Planning Series when we address the subject of Inventory.

Tips for Business Buyers: Selling Yourself - Seller Financing

Courtesy of Business Brokerage Press
Remember that when a seller offers seller financing, he or she is taking a risk. If you are the buyer, the seller is taking a risk on you, that you will be able to run the business successfully. Therefore, other than a seller needing the cash from the sale of the business, the biggest obstacle to seller financing is the seller's concern regarding whether a new owner will be able to pay off the loan from the profits of the business. While the seller already has the best idea about the potential profits of the business, there are some additional things a seller may want to learn about a potential buyer.

You may want to consider what would best demonstrate that you are a "good" risk and have the documentation ready to sell yourself.

• Do you own your own house? If so, how long have you lived in it?
• What is your work history? What experience will help you as a business owner?
• A seller may ask to see a copy of your credit report.
• Be prepared with a list of personal references.

These are just a few ideas that will allow you to "sell yourself" to a business owner so they may feel better about offering seller financing.

Be sure to check us out every Wednesday for more useful buyer articles...

Starting the discussion on employees... independent contractor vs. employee

The Big Question: Independent versus Employee Status
Courtesy of Business Brokerage Press

Are your workers independent contractors or employees? This is a compelling question, especially where the Internal Revenue Service is concerned. Every worker claiming status as a non-employee means payroll taxes and social security contributions that won't fall into the IRS's pocket.

Now many states are taking a closer look at the question, too. They are increasingly on the lookout for new sources of state revenue, including workman's compensation and unemployment insurance, both of which can be bypassed when a business uses independent workers.

To read the full article... click here.

Insurance: A Dull Subject Unless You Need It

Most business owners faithfully renew their business insurance policies every year, but how many actually review the policies on a regular basis? Unfortunately, too many business owners have never read the policies. This means, among other things, that they don't know whether the policies are continuing to adequately cover the changing needs of the business. For example, is the new expensive computer system covered? Are all the weather contingencies covered? Is the employee health coverage up to date with today's medical costs? Does you company have business interruption insurance? If so, when was the last time you reviewed it?

Now might be a good time to review all of your insurance policies...
especially if you are considering the sale of the business now or in the future...

To read the full article... click here.

Why Deals Fall Apart -- Loss of Momentum

Deals fall apart for many reasons -- some reasonable, others unreasonable.

For example:

• The seller doesn't have all his financials up to date
• The seller doesn't have his legal/environmental/administrative affairs up to date
• The buyer can't come up with necessary financing.
• The well known "surprise" surfaces causing the deal to fall apart

The list could go on and on and this subject has been covered many times. However, there are more hidden reasons that threaten to end a deal usually half to three-quarters of the way to closing. These hidden reasons silently lead to a lack of or loss of momentum...

To read the full article... click here.

Do You Have a Plan?

While it may not be visible itself, a positive plan for the future of the business is key to actually moving toward a positive future. Business owners should be prepared to spend what it takes to generate new business, and they should take time to explore new possibilities for long-range success.

If the company currently has no mission statement or business plan, creating one will be evidence of the owner's enthusiasm for the future and for the ongoing success of the operation. If the company has a mission statement or business plan that no longer fits current conditions and needs, it may be time to revisit and revise the statement or plan.

To write / rewrite your mission statement, here is a great article from Entrepreneur.com... "How to write your mission statement"

Watch our blogs for the next several weeks, as we will be covering several issues to consider in the everyday running of your business. Issues that will prepare you for an eventual sale, or at the least a more profitable well organized and forward thinking business.

Exit Planning - Prepare for an out while you're still in

Running a succesful business is time consuming, leaving you little time to plan what may seem like distant succession issues. It's important, however, to outline an exit plan and make succession decisions as early as possible. Evaluating and grooming possible successors or preparing for an outside sale can take years. And it's never too early to make retirement and estate plans.

To read the full article from Sunbeltmergers.com... click here.

Seller Financing -- How a Broker Can Help

Another important factor relating to the asking price is the amount of cash involved in the sale. There is an old saying that the higher the full-price, the lower the down payment - and vice-versa. The sale of almost any business involves some seller financing. The smaller the down payment, the higher likelihood of a quick sale. No seller wants to take back his or her business because the buyer wasn't successful. On the other hand, a buyer wants to make sure that the business will not only pay for itself, but also provides sufficient income for his or her family's needs.

What it all boils down to is that the seller wants the buyer to be successful and the buyer wants to buy a successful business. With the amount of capital required in today's market to buy a business, sellers should feel optimistic that they are dealing with successful buyers.

Read on to find out more about four important ways a Broker can help in this process...

• A Valuable Service
• Maintaining Confidentiality
• The Future of the Business
• What Buyers Think

to read the full article... click here.

Sayonara for Your Small Business?

By Teresa Novelino
Portfolio.com, The Business Blotter
Feb. 28, 2011

Small-business owners who hoped tp sell their companies last year may find it easier to say goodbye this year, as the economic recovery picks up, a new survey finds.

That's the word from BizBuySell.com, a key Internet marketplace for those interested in buying or selling a small business. Its survey found that 76 percent of responding brokers nationwide believe that 2011 will be a "good year to sell."

So does that mean that the amount of small businesses sold are back to what they were before the downturn hit? Not yet. Most of the brokers who responded to the survey say they do not believe transaction volumes will return to prerecession levels for at least another 18 months. That's a grimmer outlook than they had in November, when 62 percent said the same, or in July, when 53 percent were prepared for an 18-month hold on the market's return.

The majority of those who say that the selling season is heating up now though - 69 percent - cite the recovering economy as the reason.

click here to read more.

Check out our January Buyer Newsletter

Great resource for buying a business...

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31 businesses sold in 2010!

Congrats to the brokers here at Sunbelt Indiana Business Resource ... Over 1300 businesses sold since 1981, and 31 in 2010. To view a sampling check out out our 2010 tombstone sheets

Middle Market Trasactions: click here
Mainstreet Transactions: click here

Feel free to contact one of our experienced Business Intermediaries if you are in the market to sell your business, or are looking for a going business to invest your time and money.

PEGs and M&A professionals are encouraged - our M&A / Middle Market Intermediaries are very busy these days on some diverse and exciting acquisition searches, and have garnered some high revenue, high EBITDA engagements as well.

For further information, call 317-573-2100, or email indyinfo@sunbeltindiana.com.