Valuation of private companies is much more subjective than public companies because there is no free trading marketplace for the private companies’ stock. Just like a champion Olympic figure skater, the performance has to be flawless. Take a look at the following check list – see if the target company rates near perfect (on a scale of 1 to 10 – 10 being best):
• Stable Market
• Stability...Read More
• They neglect to run their business during the sales process. – The owner of a business with sales under the $20 million range can get so involved in the selling process that they neglect the day-to-day operation of the business.
• They don’t understand the “real” value of their business. – A business may actually command a higher price than the value determined by an appraiser. The...Read More
The deal is done and you have completed the closing. Now what do you do? You help the new owner because chances are that you have some vested interest in the new entity, and it is in your best interest that the new owner is successful.
For example:
– there may be an escrow account due you.
– the buyer may have given you a note.
– you may be the landlord, and the buyer the tenant.
– your...Read More
One of the most frequently-asked questions by those looking at the independent business scene is: “How many are for sale?” Right on the heels of that question comes another: “How many actually sell?”
To determine how many of these businesses are for sale at any one time, and what percentage of these get sold, it is necessary first to define terms by business category....Read More
Use the following criteria to separate the serious buyers from window-shoppers. (Add up plus points, subtract minus points. The serious buyer will rate a 6 or above.)
Minus Point Factors
-4 needs outside financing (excluding home equity)
-4 been looking for 6 months or more
-3 no available cash
-3 still working in corporate world
-2 spouse not supportive of buying a business
-2 uses a legal...Read More
