Sell A Business, Key Factors For A Successful Exit

You started your company 20 years ago \”in your garage\”, worked many 80 hour weeks, bootstrapped your growth, view your company with the pride of an entrepreneur, and are now considering your exit. The decision to sell is all too often a reactive one rather than a proactive one — the primary reasons are a serious health issue, owner burnout, the death of a principal, general industry decline or the loss of a major customer.

Exit on purpose and do it from a position of strength and receive the highest and best deal the market has to offer.

1. Hire a Mergers and Acquisitions firm to sell my business. You improve your odds of maximizing your proceeds while reducing the risk of business erosion by hiring a firm that specializes in selling businesses.

A large public company would not even consider an M&A transaction without representation from a Merrill Lynch, Goldman Sachs, Solomon Brothers or other high profile investment banking firm. Why? With so much at stake, they know they will do better by paying the experts. Companies in the $3 Million to $50 Million range fall below their radar, but there are mid market M&A firms that can provide similar services and process.

Generally when you sell your business, it is the one time in your life that you go through that experience. The buyer of the last company we represented for sale had previously purchased 25 companies. The sellers were good business people, knew their stuff, but this was their first and probably last business sale. Who had the advantage in this transaction? By engaging a professional M&A firm they helped balance the M&A experience scales.

2. Engage other professionals that have experience in business sale transactions. You should consider engaging a CPA firm that has the experience to advise you on important tax and accounting issues that can literally result in swings of hundreds of thousands of dollars.

What are the tax implications of a stock purchase versus an asset purchase? A lower offer on a stock purchase may be far superior to a higher offer on an asset purchase after the impact of taxes on your realized proceeds. Is the accountant that does your books qualified to advise you on that issue? Would your accountant know the best way to allocate the purchase price on an asset sale between hard assets, good will, employment agreements and non-compete agreements?

Remember, each element of deal structure that is favorable to the seller for tax or risk purposes is generally correspondingly unfavorable to the buyer, and vice versa. Therefore the experienced team for the buyer is under instructions to make an offer with the most favorable tax and reps and warranties consequences for their client. You need a professional team that can match the buyer\’s team\’s level of experience with deal structure, legal, and tax issues.

3. Be reasonable in your expectations on sales price and terms. The days of irrational exuberance are over. Strategic buyers, private equity groups, corporate buyers, and other buyers are either very smart or do not last very long as buyers. I hate rules of thumb, but generally there is a range of sales prices for similar businesses with similar growth profiles and similar financial performance. That being said, however, there is still a range of selling prices.

So, for example, let\’s say that the sales price for a business in the XYZ industry is a multiple of between 4 and 5.5 times EBITDA. Your objective and the objective of a good M&A advisor is to sell your business at the top end of the range under favorable terms. In order for you to sell your business outside of that range you must have a very compelling competitive advantage, collection of intellectual property, unusual growth prospects, or significant barriers to entry that would justify a premium purchase price.

If you think about the process of detailing your car before you offer it for sale, a good M&A advisor will assist you in that process for your business. Let\’s say, for example, that 4 to 5.5 multiple from above was the metric in your industry and you had an EBITDA for the last fiscal year of $2.5 million. Your gross transaction proceeds could range from $10 million to $13.75 million.

A skilled M&A firm with a proven process can move you to the top of your industry\’s range. The impact of hitting the top of the sales price range vs. the bottom more than justifies the success fee you pay to your M&A professionals.

4. In the business selling process, disclose, disclose, disclose, and do it early. A seemingly insignificant minor negative revealed early in the process is an inconvenience, a hurdle, or a point to negotiate around.

That same negative revealed during negotiations, or worse yet, during due diligence, becomes, at best, a catalyst for reexamining the validity of every piece of data to, at worse, a deal breaker. No contract in the world can cover every eventuality if there is not a fundamental meeting of the minds and a trust between the two parties.

Unless you are lucky enough to get an all cash offer without any reps and warranties, you are going to be partnered with your buyer for some period in the future. Buyers try to keep you on the hook with reps and warranties that last for a few years, employment contracts, or non-competes that last, escrow funds, seller notes, etc.

These all serve a dual role to reduce the risk of future surprises. If future material surprises occur, buyers tend to be punitive in their resolution with the seller. Volunteer to reveal your company\’s warts early in the process. That will build trust and credibility and will ensure you get to keep all of the proceeds from your sale.

5. Be flexible and open to creative deal structure. Everything is a negotiation. You may have in mind that you want a gross purchase price of $13 million and all cash at close. Maybe the market does not support both targets. You may be able to get creative in order to reach that purchase price target by agreeing to carry a seller note.

If the sale process produces multiple bids and the best one is $11.3 million cash at close. You may counter with a 7-year seller balloon note at 8% for $3 million with $10 million cash at close. If the buyer is a solid company, that may be a superior outcome than your original target because the best interest return you can currently get on your investments is 4%. Be flexible, be creative, and use your team to negotiate the hard parts and preserve your relationship with the buyer.

You may have spent your life\’s work building your business to provide you the income, wealth creation, and legacy that you had planned and hoped for. You prepared and were competitive and tireless in your approach. You have one final act in your business. Make that your final business success. Exit on purpose and do it from a position of strength and receive the highest and best deal the market has to offer.

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8 Winning Elements Of The Successful Internet Home Business Website

They look so simple, that I often ask, what special they have and how they have become so successful in the tough internet home business market? It seems that the simpler and the more user friendly the site is, the better chances it has to create big sales.

Very clearly one big success factor is that the fine tuning work should concentrate to take away all the unnecessary elements and non-selling links.

1. Winning Element: Attention Grabbing Title.

The title is absolutely the most important element of the site. It should contain the promise and to describe the content of the site. The job of the title is to persuade the visitor to continue and to find the things that are useful for him.

The headline should be written well and it should stand out from the rest of the copy. It also should be the first element, which catches the visitor attention in seconds, because if it does not do that, the visitor continues the surfing.

2. Winning Element: Well Written Copy.

The Internet is the information highway, so the role of the copy is very important, this is the world of the words. The copy should draw the readers attention immediately to the benefits your offer give to him.

The style is important and the target is to build up the trust from the first contact. The copy should make the reader enthusiastic about the benefits but it should not use hype style over promises, because they will destroy the trust.

3. Winning Element: Easy Site Navigation.

This is the technical must, because nothing drives the visitors away faster than the bad navigation. The site structure should be clear and logical, so that the visitor knows all the time, where he is and to where he could go from here.

The menu should be the same on every page and clearly accessible and also easy to understand. The terms should be clear, despite of the fact that you may want to use internet home business key phrases.

4. Winning Element: Call To Action.

After the copy has presented the main benefits it is the time to call the reader into action. Yes to tell him directly what to do and not to leave him guessing, how should I go on? Action is everything and we have to call the reader to do that.

One good way is to lower the bar, i.e. to offer a cheap or free trial opportunity for some weeks, before the reader will buy the product. The efficiency is the better, the more often you call the reader into action.

5. Winning Element: Images.

One picture tells more than thousand words. You should include photos of every product you sell, because they make the products more real, than the copy alone.

If you have lots of products for sale, you can use thumbnails that link to larger images. This speed up the page loadings.

6. Winning Element: Opt in Form.

Most of the internet home business visitors needs at least five contacts before they will buy. However if they are interested about what you offer, it is important to get their name and email address through an opt in form on the visible place of the site.

In this process you have to give them a gift, an email course, a free e-book or something like that, which again will sell your offer later on. Now you can send them messages during a long period of time, which clearly makes the process more productive.

7. Winning Element: About Us Section.

The idea of every internet home business site is to build trust over a long period of time. This requires that you tell enough about yourself and give your contact information for further questions. An effective way is to use a picture about yourself and some information in the form of a story and underline your expertise as a marketer in this area.

This shows people that there is a real people behind the business.

8. Winning Element: Site Freshness.

People and search engines love unique, fresh information. That is why you should update the content very often and change those parts that do not work anymore and add some elements which show right away that something new is available. It is useful to look the competing sites in your internet home business niche, because they are a great source of new ideas. Another idea is to make sure your site can stand out from the crowd.

The marketing is very important but the key is still the quality of your internet home business site. It makes the people to come back and it is the real place, where they can reach you and your offers.

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7 Critical Factors That Define A Home Based Business’ Potential To Succeed

A lot of people are now looking for opportunities to start a home based business and earn money from home. For some people the main reason is to just earn extra cash, while for others it’s the hope that the home business will replace their job’s salaries.

Whatever your goals may be, it is essential that you choose the right home based business that has huge potential to grow. Although there are various types of home based business, internet marketing has become one of the most popular ways to make money online.

What factors must you look at while deciding the best home based business to get into?

1.Must have a huge and expanding market. Your chances of succeeding will be very limited if you start a business for which the market is decreasing. For you to succeed with your home based business there must be a huge and expanding market for your product or service. If you want your home based business to have long term potential, it must be targeted at a huge market. So what are some of the growing markets with huge potential in the future? Work from home online, health and fitness, nutrition, e-commerce or personal care are some of the expanding markets. To expand your potential profits, you can start a home based business in several of these expanding markets.

2.Positive market trends that are supportive to your home based business. Starting home based business in a huge and expanding market is the starting point. You will also need to ensure that market trends are in a direction that supports your business. In terms of our home based business, key trends are that more people are seeking to work from home and retire early, a lot of people are aiming to have better health, and some people are seeking more money and financial security and freedom. Make sure that your home based business will meet some of these market trends. You must a home based business for which there are positive market trends to ensure that it will continue being viable in the long term.

3.The product or service you offer in your home based business must be useful and needed often. This is an obvious factor that is often underestimated. A product which people will need regularly means more repeat business for you and a steady flow of income. Your product must bring a benefit or must solve a problem. All these factors will ensure that what you offer in your home based business will have constant demand which is good for the success of your business.

4.Easy, quick and cheap delivery of the product. If your home based business can be offering a product that you have to post and will take days to get delivered, this is time consuming and it limits your income potential. The best home based business is one where what you offer can be delivered automatically or electronically on the internet. This is cheap, quick and efficient.

5.A proven and successful business system you can leverage on. Time is of essence. You need to start a proven home based business with which you will quickly start to make some money. Ideally, the home based business must have integrated marketing tools and effective automated systems that will make it easy for you to get started to actually get some checks rolling in!

6.A good support structure to help you while you build and develop your home based business. A home based business with which you can easily succeed is one where you can get some support. Forum networks, tools or mentors who can help you develop your home based business are essential during the initial stages of your business. You will want to make your learning curve as short as possible, so you will need all the support you can get.

7.A stable, credible and financially sound organization. This is a very important factor while you are looking for your home based business. You will need to deal with an organization that is established and with a good reputation. Factors to consider are the duration they have been in business, their reviews, refund policies and remuneration promises among other factors.

If you make sure that the home based business opportunity you are considering has these factors; then you are most likely going to succeed.

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A Brief Guide To Online Finance Degrees

Online degrees are gaining popularity because they are flexible, accessible and convenient. However, if you plan on getting a finance degree online you need to make sure that Moreover they are also acknowledged by most of the employers provided they are pursued from accredited online universities. You can opt for various levels of degree programs as well as certification programs completely online without discontinuing your existing job.

Types of Online Finance Degrees

Different levels of degreesin finance can be pursued online; this includes undergraduate, bachelor’s, master’s as well as Doctorate Degree in Finance. You can even consider various types of specialization to develop niche careers. Some online colleges even offer a combination of accounting and finance degrees.

Some of the most popularOnline Finance Degrees are:

>Online Finance MBA Programs
>Online Finance Certificate Programs
>Bachelor of Science Finance
>Bachelor of Business Administration Finance
>Master of Science in Finance
>Master of Science in International Finance

Choosing an Online Finance Degree

If you are interested in a specific career in the field of finance, you can consider different levels and types of Online Degrees in Finance. They can help you to develop lucrative careers like finance analyst, finance manager or budget manager. However, while choosing an Online Finance Degree at any level, you should look for credible degree programs. You should conduct adequate research and develop a list of accredited online colleges which ensures quality online education.

You can find out about its accreditation from various accredited agencies which are recognized by the U.S. Department of Education. With these accredited degree programs, you can develop a lucrative career in the field of finance. This can enable you to get jobs in various work settings like private banking, financial planning, insurance or investment management.

Curriculum for Online Finance Degrees

The curriculum for an Online Finance Degree is one that can help you to develop a strong foundation in the field by gaining business skills along with gaining knowledge about different areas related to the field like finance, marketing, management, economics and statistics. You can also get in-depth understanding about various aspects of the field like risk management, related concepts, different strategies, investment and banking and financial markets.

The basic curriculum for different types of Online Degrees in Finance includes subjects like:

Financial and Intermediate Accounting
Cost Management
>Business and Finance
>Mathematics and Statistics
>Money Markets
>Commercial Finance
>Fiscal Accounting
>Financial Administration
>Global and Domestic Business Finance
>Introduction to Economics
>Investment Banking

An Online Finance Degree offers a lot of benefits and can help you to get experience as well as pursue higher education without leaving your existing jobs or compromising on other family commitments. You can pursue it at your own schedule and pace and can take it up from anywhere and at anytime.

In these times of uncertainty, a finance degree pursued from a top university is one of those few careers that still promise a good salary and a prestigious job.

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The Future Of Finance Jobs

In the not so long-gone past, many career advisers were advising young people seeking to start out a career to go into finance. The financial markets were doing well then, finance jobs were in plenty and MBA schools were bursting with young students seeking to build a career in finance. And the finance jobs were, of course, not limited to the financial markets. With a strong economy, finance graduates who couldn’t get jobs in the financial markets and investment banks could quite easily be absorbed into commerce and industry accounting jobs. Other would get middle office finance jobs in the public service, and going was good.
Then the bubble burst.

The economy went into recession mode, the financial markets shrunk and finance graduates who had taken up jobs with investment banks found themselves facing the axe, as the investment banks are the worst affected by turmoil in the financial markets. And as if on cue, companies, in a bid to cut costs, were also cutting on their head counts, thus also shaking the fortunes of the finance graduates who found commerce and industry accounting jobs in the private sector. In the midst of all this, it seems that the only secure finance graduates are those who took up middle office finance jobs in the public sector, but even this is not fear-proof for we do not know for sure what the full effects of the economic turmoil will be on civil service staffing.

So in the face of all this, what is the future of finance jobs?
It might seem counter-intuitive to say, but the future of finance jobs is still bright, in spite of the current turmoil in the financial markets. As it were, economists tell us that the current economic turmoil is largely short-term to medium term, which is to say that it won’t be with us forever. Which means that the people who chose to pursue a career in finance need not regret their choice, as better times are coming. But even before the better times arrive, the people with finance backgrounds who are currently getting laid off might not find themselves in the cold for too long.
As governments unveil the various economic stimulus plans, there will be need for people to manage the money as it goes into various sectors which translates to some finance jobs. Of course the finance jobs created in this way will be for the best brains in finance.

And then there is the fact that all companies, like human beings, have a native survival instinct, which they are likely to find handy in these hard economic times. One survival strategies for companies in crises is to hire the experts who are likely to navigate them through the particular crises. And since the current crisis is financial, the companies are likely to find themselves hiring financial experts to help them address the economic crisis. Of course, the companies are not likely to be overtly looking for finance experts to help them address the financial crises. What we are likely to see is an increase in commerce and industry accounting jobs, but the accountants so hired are bound to be almost exclusively tasked with cost and revenue management tasks, geared towards helping their employers sail through the turbulent times successfully.

And finally the good times will surely come back again. If the history of the financial markets is anything to go by, we know that all bursts are always followed by booms.

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How Can You Finance A Mortgage?

Most homeowners purchase their houses through mortgage finance or a loan. There have been many changes in home mortgage financing and loans in the past ten years, bringing many benefits to homebuyers. These changes also bring some significant tradeoffs. The greatest benefit a homeowner received from the changes in mortgage finance is that there are more choices. More choice means a homebuyer can effectively shop around for the best mortgage finance deals and make better decisions.

There are a number of specialized mortgage finance institutions that provide mortgage finance products. Savings and loan mortgage finance institutions are also known as thrift associations, since lenders take the deposits of their customers and use the money to create mortgage finance and loan products. Thrifts declined during the 1980s when interest rates were erratic, and mortgage failures were at an historic highpoint. Thrift institutions were replaced later on by mortgage finance bankers, who originate the mortgage finance product and offer them to investors. In the 1990s, mortgage brokers arrived on the scene. These are freelance mortgage finance agents who handle loans for a number of lenders and sell them to several clients that may include investors or homebuyers. Mortgage brokers remain popular with homebuyers who are looking for mortgage finance advice. Because these brokers have relationships with several lending firms, they represent the best source of mortgage finance advice concerning the current real estate market. Another good source of information for homebuyers who are looking to make a final mortgage decision is the Internet.

The general rule in the 1980s was that only individuals with good credit could obtain a mortgage finance loan. In the current market, nearly anyone can apply for such a loan if they want to buy a house. If you have excellent credit, you will probably find a mortgage finance loan that covers the total purchase price of a home. Having bad credit does not necessarily mean that you will not be able to get a mortgage finance loan, however. It is still possible, but you will pay a higher interest rate. Homebuyers who are getting their first house and how do not yet have a credit rating also have mortgage finance loan options available to them. These loans typically have low down payments and flexible standards defined in the underwriting.

The loan approval process has been made much faster because some of the underwriting has been streamlined. Computers have allowed mortgage finance loan information to be accessed rapidly, In fact, some finance companies offer approvals online or by using computer programs. The concept of credit scores” has also led to a decrease in the number of finance loans that are rejected. Credit scores can offer some relief in usually strict mortgage loan approvals, so applicants have less of a problem.

The modern mortgage finance market has developed a number of new mortgage products as well. When interest rates began to fall, homeowners took advantage of the decreases to refinance their mortgages. In order to reduce the expense of refinancing, lenders than began to offer mortgage finance loans without discount points.

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Where To Get Your Online Finance Degree

An online finance degree is a wonderful option for individuals who want to go to college, but for whatever reason prefer an online forum as opposed to a traditional classroom. Frequently, those who opt for an online finance degree have busy schedules already because of family and work commitments, and juggling a typical class schedule is nearly impossible. Also, individuals who have disabilities often times opt for an online finance degree simply because it is easier to work straight from home. No matter why you want an online finance degree, there are many options out there for you to choose from.

The online finance degree is a very popular major, and because of this almost all of the online universities offer the online finance degree. In addition to this, the online finance degree is not only available in bachelors, but also in masters and in some cases PhD. So, no matter if you want just a bachelor’s online finance degree or want to get an online finance degree at ever level, the choice is totally yours.

Paying for your online finance degree is not as difficult as it ahs been in the past, either, because now you can get student loans and choose different payment plans for your online finance degree. Paying for your online finance degree has never been easier.

In addition to this, you will need to decide exactly what you are looking for in the university where you will obtain your online finance degree. The reason for this is because there are so many online university options that range in popularity, accreditation and cost, that you will need to find out which ones offer the best online finance degree for your budget.

Be sure, however, before you begin studying for your online finance degree that you know your university is accredited and has many successful graduates with their online finance degree.

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Key Ingredients For Starting A Catering Business

All of us dream about starting our own business. The kind of business we start should be compatible with our abilities and personality. If you have a passion for cooking, a head for planning and can keep your cool under pressure, consider starting a catering business.

You don’t need a big initial investment to start a catering business. You can keep your costs low at first by renting needed equipment. Most of your spending can wait until you get your first contract.

Catering is not affected by downturns in the economy. In good times or in bad, there always seems to be a market for catering: catered parties for rich clients, business lunches and meetings, birthday parties, wedding receptions and more.

If you’re not sure about starting a catering business, test the waters first. Ask your friends or your office to let you “pretend” cater a dinner party or lunch meeting. They pay you for the groceries and you do the work for free. Experience first-hand the challenges of planning and running a catered event.

When you start a catering business, you’ll need to check state and local laws. Zoning laws could affect where you do your cooking and how much of your catering business you can actually handle from home. The city you live in may require a permit. It won’t be fun or easy getting everything set up legally, but when it’s the law, you don’t have a choice. Starting a catering business illegally is a bad idea.

Decide on a name and then create your identity. The entire process of naming your catering business and creating an identity is known as “branding.” Don’t rush through this important step. If your catering business really takes off, you can brand things like spice mixes, sauces, baked goods and other food items. Sell these from your website or give them away as gifts to clients. The point is to keep your name in front of your potential customers as much as possible.

You probably won’t need to set up a separate office when you first start your catering business (unless you want to). But you will need to make sure you have some basic office supplies around so you can look professional.

If you’re serious about succeeding, start working on a business plan for your catering business. A business plan is a blueprint for a successful business start-up. Good plans are the result of careful study and hard work. Your business plan explains how your catering business will operate, how it will be structured and managed, how it will be financed, and how much profit it will make. If you need cash to start your catering business, your business plan is what investors and lenders will use to make their decision.

The children’s TV character Aardvark Arthur Read wisely pointed out that “the catering business is tough when you only know how to make peanut butter and jelly sandwiches.” But if you enjoy working with people, have good intuition about what they like, and have the planning and cooking skills to make it happen, starting a catering business may be your dream come true.

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Looking For Business Purchase Financing In Canada ?. Buying An Existing Company? Finance And Buy Ti

Business purchase financing. When you or your firm has made the decision about buying an existing business in Canada you need some solid information around how to finance your transaction.

Why buy a business in the first place. Many clients we speak to are fortunate enough to have what we might call an ‘ inside track’ on a company or business that would accept a favorable offer based on current situation.

The obvious benefits around our ability to buy a business that is established already is simply the fact that there’s a revenue stream, a client base, and assets and location that are already in place . That certainly beats a start up scenario and all the work and challenges that go with that.

Also, business purchase financing also has the ability to structure a financing deal with the owner remaining in a subordinate position via a VTB, i.e. a vendor take back. Naturally the skills and expertise of the owner and current management team might also have a significant value to your own efforts to grow the business, at lease for an interim period.

Is it easier to arrange funding for an established business versus an existing business? There’s never a clear answer to that one, but many people do believe your chances of success are much higher when you buy an established concern; and if you’re a lender looking at a transaction such as this it also means you’re more positive than negative, wouldn’t one think?

Naturally cash flows and profits of an existing business are positive in the context that you can demonstrate immediate cash flows and profits to repay loan financing. In some cases you might be purchasing a franchise and you will need the support of the franchisor to make that acquisition. Once again the ‘ branding ‘ and ‘ reputation’ around that franchise is clearly positive as opposed to negative.

Valuation is a challenge when it comes to both purchase and financing when buying a business. A higher valuation will mean you might have to finance a goodwill component, which is difficult in an asset based transaction. On the other side of the coin we meet clients who are interested in buying a distressed business that has been trending down – valuation is cheap and they believe they can engineer a turnaround. Easier said than done sometimes.

Valuations on the business can be supplied by the owner, or you can arrange your own through a qualified advisor or appraiser. That’s particularly important when it comes to an asset based business.

Key issues to consider in the valuation and financing of the business are quality of the financials, revenue trends, cash flow generation – i.e. does the business use cash or throw off cash? ( The latter is better!) You or your accountant and advisor need to ‘ normalize ‘ the financials, making the assumptions on how the business costs will look after you take ownership.

In Canada businesses can be financed with term loans, asset based lending, franchise financing if applicable, and even the Government Small Business Loan if its a smaller transaction under 350K.

Speak to a trusted, credible and experienced Canadian business financing advisor on how to properly structure and complete buying a business in Canada.

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