Top Four Factors in Closing a Deal

1. The assurance of a prompt closing - Deals that are allowed to drag are more at risk of falling through. Sellers, buyers, and the related professionals should all be motivated to keep the process moving. This does not mean glossing over issues and concerns in order to close the sale, but dealing with each step of the process in a timely manner. A professional business intermediary can be a big help in keeping the momentum of a sale moving forward.
2. How the deal is structured - This includes such things as cash, stock, contingencies, earn-outs, representations and warranties, etc.
3. Full price and/or the considerations
4. Legal and/or governmental issues - Obviously, the presence of such issues can be a hindrance to the successful closing of a deal. A business owner will want to address these issues before placing a business on the market.

Benefits of Meeting with a Business Broker in person...

Whether you are ready to list now or are considering in the next fews years, as you move forward with the sale of your business, you will want to consider all of your options. Speaking to a qualified business broker is one of the first steps you are going to want to take. You will be better prepared to move forward whether you list with the broker or not. Arming yourself with all the tools available to you is always a good idea. But, do not think a quick conversation over the phone is going to give you a full picture of the advantages that a business broker can offer to the situation.

A qualified business broker can render an initial opinion of value, and recommend courses of action to market your business. In order to do so, you will want them to have a full picture of your business. An on-site meeting can give your potential broker a better understanding of your business. You want them to see it as more than just the numbers. Your business has a flavor, and should you decide to list, the better understanding the broker has the more likely they are to concentrate on that right-fit buyer, the one most likely to see the value and succeed in your business...

Click here to read my full  article, and respond with a comment. Would love to hear what you have to say...

Ralana D. Abraham
Business Broker, Dir. of Marketing
Sunbelt Indiana

Are you sure you're ready to sell?

You may have decided it's time to sell, but before you begin the M&A process, you need to take a good, hard look at what you plan to put on the block. Just because you're ready doesn't maean buyers will be interested - particularly if this is the first time you've thought about preparing your business for sale.  Prospective buyers won't just scrutinize your business, but they'll also compare it to other opportunities in the marketplace.

Asking tough questions
With the help of your M&A advisors, go over your company with a fine-tooth comb, just as a buyer will during the due diligence stage. Evaluate everything from debt levels to personnel to customer relationships and address any issues that are likely to give potential buyers pause, such as too much business concentration in only a few customers.

To read the full article by the staff at SunbeltMergers.com click here.

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

Running a successful 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.

Take stock
Before determining where you want to be when you're ready to retire, assess where you and your business are financially today. Prepare a detailed financial analysis of your business with the help of a valuation professional. This expert will review historical data to determine its current value.

Click here to read the full article by the staff at SunbeltMergers.com.

Negotiating the Price Gap Between Buyers and Sellers

The terms of the deal are extremely important to both parties involved in the transaction. Many times the buyers and sellers, and their advisors, are in agreement with all the terms of the transaction, except for the price. Although the variance on price may seem to be a "deal killer", the price gap can often be resolved so that both parties can move forward to complete the transaction.

Listed below are some suggestions on how to bridge the price gap.

• If the real estate was originally included in the purchase price, the seller may choose to rent the premises to the acquirer rather than sell it outright.
• The purchaser can acquire less than 100% of the company initially and have the option to buy the remaining interest in the future.
• A subsidiary can be created for the fastest growing portion of hte business being acquired.
• A royalty can be structured based on revenue, gross margins, EBIT, or EBITDA.
• Certain assets, such as automobiles or non-business-related real estate, can be carved out of the sale to reduce the actual purchase price.

Although the above suggestions will not solve all of the pricing gap problems, they may lead the participants in the necessary direction to resolve them. The ability to structure successful transactions that satisfy both buyer and seller requires an immense amount of time, skill, experience and most of all - imagination.

Creating Value in Privately Held Companies

Creating value in the privately held company makes sense whether the owner is considering selling the business, plans on continuing to operate the business, or hopes to have the company remain in the family. Building value should focus on six components:

• the industry
• the management
• products or services
• customers
• competitors
• comparative benchmarks

Click here to read the full article Courtesy of the Business Brokerage Press.

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.

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.

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.

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.

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.

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Great resource for selling 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.

November Seller Newsletter is available...

CLICK HERE to view our October 2010 seller newsletter and learn how to prepare your business for sale in this market...

October 2010 Buyer newsletter available...

CLICK HERE to view new listings, featured listings and informational resources about buying a business.

Check out our newsletters - great resources for buyers, sellers and professional advisors.

There's something for everyone...




Click here ...
to view our August 2010 Buyer's newsletter - useful articles and a listing of featured and new businesses for sale.

Click here...
to view our September 2010 Seller's Eye on the Market newsletter - great articles about the business sale process exit planning strategy and current market trends.










Click here...
to view our September 2010 Deal Advisor newsletter - news and information about the business sale process for business advisors.

ANOTHER SUCCESSFUL BUSINESS TRANSACTION!

Sold a Business - Tobacco Express

Tim Koger, Business Broker at Sunbelt Indiana, has sucessfully marketed, and assisted in the transaction negotiations for Tobacco Express in Indianapolis, Indiana. Congratulations to the new owner, Jason Stahl.

Check out our newest Seller Newsletter... Seller's Eye on the Market...

Great articles about what Buyers expect. If you are thinking of selling your business in the near future, this is a must read...

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