BayState Business Brokers Blog

Should you rent out your business rather than sell it?

Posted by Marc Gudema on Wed, Aug 22, 2018 @ 11:04 AM

Every so often a business owner will ask me whether they should rent the business to a potential buyer rather than sell the business to them.  These business owners also own the real estate so it makes sense to them to get rent for a long time rather than sell the business for a one-time payment.  Renting a business to a potential buyer is not the same as renting real estate, and not a good idea.

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Tags: sell a business

How Long Does it Take to Sell a Business?

Posted by Marc Gudema on Thu, Feb 01, 2018 @ 08:31 PM

One of the questions we frequently get from business owners is “How will it take to sell my business?”  This is the time from when a business owner signs our listing agreement to the closing on the sale of the business.  The quick answer is that it usually takes about 6 to 9 months to sell a business.  This can vary; this blog is about what the steps are that take time and how long they take.  I’ll go through them, chronologically.

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Tags: sell a business, how to sell a business, how long does it take to sell a business

Owners Cash Flow - What it is and why it is the most important number if you are buying or selling a business.

Posted by Marc Gudema on Wed, Jan 24, 2018 @ 02:33 PM

If you are going to sell a business or buy a business, it is important to understand Owners Cash Flow and how it is used to value a business.  In most small business sales, the seller is operating the business and the buyer plans to do likewise. Because of this, the best measure of the earning power of the business is the total income and benefits available to the owner, not the reported net profit of the business. In many small businesses, the owner is not trying to maximize net profit. The owner is trying to take out as much as possible in tax deductible salary and benefits. When buying or selling an owner-operated business, it is important to understand, and know, the Owners Cash Flow of the business. This is the best measure of the earning power of a small business.

Owners Cash Flow Defined
Owners Cash Flow is defined as the income before deducting the primary owner's compensation and benefits, other discretionary, non-operating, or non-recurring income or expense, depreciation, interest, and taxes. This is also referred to as Sellers Discretionary Earnings. This is the amount of money available to pay the buyer an income, pay off debt, and provide for capital to operate the business. In order to accurately calculate Owners Cash Flow, we use tax returns, income statements, and other financial records.

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Tags: buy a business, sell a business, owners cash flow

How to Sell a Customer Base or Customer List

Posted by Marc Gudema on Wed, Jul 20, 2016 @ 09:59 AM

Most business sales are of businesses that will continue to operate as a separate entity after the sale, but with a new owner.  However, in some cases, particularly when the business is not doing well, the best sale may be one in which the business is merged into another company in the industry.  In this situation, the primary asset being sold is the customer base.  The customer base is the group of customers that buy from the business on a regular basis.  The business is, by definition, one that does business with other businesses.

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Tags: sell a business

When you sell your business, what is its strategic value?

Posted by Marc Gudema on Tue, Nov 25, 2014 @ 02:01 PM

If you are thinking about selling your business, you may have heard that you can get more for it if you can sell it to a strategic buyer. That is probably right, but it raises some questions: What is the strategic value of your business? How do you get paid for the strategic value of your business? How do you find the best strategic buyers?

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Tags: sell a business, m&a, strategic value,

Should your business broker use an auction to sell your business?

Posted by Marc Gudema on Wed, Apr 23, 2014 @ 11:42 AM

An auction process is frequently used to sell middle market businesses (those with sales of $5,000,000 to $1,000,000,000).  The primary reason for using an auction is to raise the selling price of the business.  An auction is rarely used in the sale of smaller businesses.  Would it be a good practice to use the auction process to auction a smaller business for sale?

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Tags: sell a business, business broker, auction a business for sale

Exit Planning? Update Your Marketing

Posted by Marc Gudema on Thu, Apr 17, 2014 @ 03:11 PM

When I meet with business owners who are preparing to sell their businesses, it is not uncommon to find that their marketing hasn’t changed much for several years.  They still pay for the yellow pages.  They may not have a website – or, if they do, they don’t know how to use it. They don’t use Google Adwords.   They are probably not using social media. 

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Tags: sell a business, exit planning

5 Terms to Be Reasonable About If You Want to Sell Your Business

Posted by Marc Gudema on Fri, Mar 28, 2014 @ 10:46 AM

You may have a great business to sell, but if your selling terms are not reasonable, it may not sell.  Or, it may take a lot longer to sell the business and result in you getting a lower price.  Keep in mind that no matter how good your business is, a buyer doesn’t have to buy it.  A buyer is comparing your business to others on the market, and if any of these terms are not realistic, it may kill a buyer’s interest.

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Tags: sell a business, price a business, sale terms

When You are Looking for a Business Broker, Don’t Choose a Cowboy

Posted by Marc Gudema on Tue, Feb 11, 2014 @ 01:25 PM

When I think of a cowboy, I think of a tough individual who doesn’t need anything or anybody to do his job.  That may work on the range, but it doesn’t work well when you are buying or selling a business. 

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Tags: buy a business, sell a business, business broker, co-broke

How to Sell Your E-Commerce Website For More Money

Posted by Gino DiGiallonardo on Tue, Jan 28, 2014 @ 10:27 AM

Have you ever wondered what your website is worth? Have you ever thought about the changes you can make to your website to increase its value? If you own a website, chances are you have thought about selling your website or you are interested learning how much your website is worth. 

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Tags: sell a business, sell a website, sell a website for more

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