Blog for Business Buyers and Sellers

The US manufacturing sector has undergone tremendous change over the past several years, mainly because so much of the industrial output in this country has shifted to less expensive offshore suppliers.  As a result, entrepreneurs looking to purchase a manufacturing business for sale by owner will need to look for a business model that is still strong enough to be profitable in this environment. 

 As a general rule, it makes sense to look for opportunities on a manufacturing business FSBO web site.  Once you find a listing that interests you, make sure the business isn’t vulnerable to overseas competition.

In this questionable economy, many people are hesitant to buy an existing business for sale, buy a franchise, or buy anything else for that matter.  Without a doubt, the economic picture isn’t encouraging, which makes it tempting to stay away from any new or risky investments.  But as a business analyst and consultant, I would definitely buy a business for sale, as long as it meets certain criteria.  One of the best ways to evaluate the health of any enterprise is to see it in action.  For this reason, an existing business is a lot less risky than starting a brand new venture. 

With so many options available to entrepreneurs, it is difficult to decide between existing businesses, franchises, home-based businesses and start-ups.  Under normal circumstances, a smart and talented business person could buy a for sale businesses assets or buy a business for sale without worrying about failure, but today’s entrepreneur needs to be much savvier. 

Regardless of how the company has performed in the past, at least an existing business will have a history from which to make the right decisions.  In many cases, investors look for a distressed business for sale, buy it, and then make a modest investment in its growth; and improve it enough to sell it for a short-term profit within a few years. 

Instead of developing a brand new product or service, marketing it, and then seeing whether people are willing to pay for it, today’s smartest entrepreneurs are buying up existing businesses that have a strong upside potential.  If you are interested in finding out which businesses are on the move, you can find valuable research, learn about current trends, and buy a business for sale on a Business FSBO directory. 

Selling a restaurant can be surprisingly simple.  As long as it has a loyal following, a good reputation, and the potential for future growth, finding a buyer is never the issue.  However, sentimental ties can make it difficult for some restaurant owners to separate themselves and their emotional ties to the business from the cold, hard facts involved in transferring ownership.

Owners who are looking to sell a restaurant may find it difficult to deal with potential buyers whose only goal is to fault and lower the price.  Potential buyers may pick apart restaurant’s menu, operational procedures, décor, or location.  In some cases, it is easier to deal with a business broker, who will help you get the best deal, minus any emotional upheaval.  However, if you are not interested in sharing the profit with a broker, then make it a “restaurant for sale by owner” transaction.  

Selling a restaurant on your own?  Time to get organized

If you plan to sell your restaurant in an FSBO directory, this is a wise choice, but it may require some thick skin and get organized with your time. Selling a restaurant takes time, and it could impact your ability to manage the day-to-day operations of the business.  Some sellers hire a consultant, or ask a business partner to screen potential buyers.  Remember, the buyer or his or her agent will want to review every detail of your bookkeeping records, which can be a very time-consuming and exhausting ordeal.   While attempting to sell the restaurant, you cannot afford to compromise on quality or sacrifice profits.  Even if a potential buyer is anxious to learn about the business, be sure to schedule meetings outside of your busiest mealtime hours.

Agreeing on a price can be another obstacle to selling a restaurant.  It may take some aggressive negotiation on your part to ensure you do not undervalue the real and intrinsic assets of the business.  Even if after a buyer and seller come to an agreement on price, it can be tough to hold the transaction together until the closing takes place.  For this reason, be sure you are working with a well-qualified buyer who has adequate cash, and be willing to offer seller-financing when necessary.

Be careful of buyers who are looking to turn a quick profit by buying and selling your business.  They may try to bully you into a lower price by undervaluing your business assets.  If you get a bad feeling about a potential buyer, remember, you are not obligated to make a deal unless you are comfortable with the offer. 

Selling a restaurant may seem like a major ordeal, but with the right preparation it can be a lot less stressful.

Selling your business is never an exact science.  Just when you think you have an interested buyer, something comes up to threaten the deal.  But sure enough, another potential buyer is waiting in the wings.  In order to direct your company’s marketing efforts effectively and sell your business to the right type of buyer, it helps to understand the various types of buyers who may be attracted to your business.  The two types of buyers who may find you through a Businesses for Sale by Owner Directory are financial buyers and strategic buyers. A third group consists of potential buyers that you already know, such as managers, employees and family.  While less common than the other three, a fourth category is selling to the general public through an Initial Public Offering, or IPO.  This is a smart move if your industry is very hot right now and you want to cash in while demand is still high.

Financial Buyers are primarily interested in the cash flow produced by your business.  Whether an individual or corporate interest, these buyers have money to invest and are looking at a variety of different industries.  In many cases, they are former executives who want to buy themselves a job by finding a company in need of their management expertise, but they can also be holding companies looking for a generous return on their investments. If you are selling to a financial buyer, remember that they will be carefully studying your company’s financial statements.

Strategic buyers are people who are interested in investing in your company because it fits into their long-range business plans.  These buyers could be in a related industry or similar company who wants to expand operations into your area.  Sometimes, because strategic buyers are usually in some type of parallel industry, they are referred to as “synergistic buyers”.  Because they already see the value in your company as a good fit with their overall plan, this type of buyer may be willing to pay more for your company. 

Finding qualified financial and strategic buyers may help you sell your business faster, but first you must promote your business to them.  One of the best ways to do this without spending a fortune is to list your business for sale in a Business FSBO directory.

Whether you are new to business ownership or you have decades of entrepreneurship under your belt, there are several programs available to small business owners.  Before your buy a business or start browsing the Business FSBO directories, it pays to investigate which local and federal assistance programs are available to you.

Here is a sampling of what the SBA can do to help you with your new business:

Getting certified as woman-owned or minority-owned business

Becoming a certified women-owned or minority owned business can draw a lot of new clients to your doorstep.  In order to become certified as minority-owned, the business must be owned and at least 51% controlled by one or more minorities.  Women-owned businesses are self-certifying, so no paperwork needs to be filed.  Find out how your state and local government regulates this process by visiting their web site.   The SBA offers a Business Development Program to assist small businesses with owners who are socially or economically disadvantaged.

Getting a small business loan

SBA offices throughout the country offer assistance in preparing the documents required for a small business loan.  These documents include the purpose of the loan, financial statements (for existing businesses) or a projected opening-day balance sheet (for new businesses), details of the lease, the business owner’s investment, and projections of income and expenses.  If for some reason your loan is not approved, the SBA may ask the lender to reconsider under the SBA’s loan guaranty program.  While this process may take up to 10 days, but your business must be for profit and not exceed the SBA’s business size guidelines. 

Finding an investor for your business

The Small Business Investment Company (SBIC) is a venture capital fund made up of privately owned investment companies who make capital available for small businesses. SBICs are licensed and regulated by the SBA and they are incented by the ability to share in the success of the small businesses they fund.  Contact your local SBA office for more information about these programs.

Finding the right businesses to buy

If you are looking to acquire an existing small business, consider searching on a “Businesses for Sale by Owner” (FSBO) directory.  Here, you can learn first-hand from the existing owner about any SBA programs they already use.  Plus, you can be one of the first to find out about new business opportunities in your area.

If you have always wanted to be an entrepreneur, there has never been a better time to buy an existing business.  Just one look at a “Businesses for Sale by Owner” directory and you will see how many businesses are available at rock-bottom prices.  But don’t be too quick to make a decision.  Often there is a good reason why the current business owner is selling.  Perhaps they didn’t have enough working capital, or they failed to recognize key industry trends in time to stay ahead of the competition. 

Remember the old adage: “Business owners never plan to fail; they simply fail to plan”?  If you are looking at buying an existing business as an investment, chances are you will need to come up with a better business plan than the previous owner had; one that positions the business for short and long term growth.

Whether you have written dozens of business plans before, or if this is your first one, avoid these common mistakes:

1) Procrastination: Too many business owners only write a plan for their business when they are forced to do so by a financial institution.  Don’t put off writing a business plan. As a business owner, you will always be “too busy” to do it. 

2) Misunderstanding cash flow:  Being too casual about cash flow can quickly cause a business to become insolvent. Use a cash flow table regularly and do your best to understand your cash flow thoroughly.

3) Adopting a “one size fits all” mentality: Your business plan should reflect your unique ideas for the new business, so resist the temptation to copy the ideas you find in other business plans.  Include action plans, marketing plans, financial plans, and anything else that will help you run the business better.

4) Dreading the plan: Creating a business plan is never as hard as you think it will be.  You can find the help you need from small business development centers, how-to books, software programs and mentors.  Remember, when you buy an existing business, the plan is there to guide you and make you more successful. 

You will find a lot of advice about creating a business plan online in a Business FSBO Directory, where business buyers and sellers come to exchange ideas, opportunities and advice. 

Are you thinking about selling your business, but maybe you are hesitant to do so because you’re afraid it will be undervalued by potential buyers?  Despite the economic realities, and the fact that it is still a buyer’s market out there, there are a few important techniques to ensure you get a good price for your business.  Some of the most common reasons that business buyers feel empowered these days are that so many selling companies are presenting weaker financials, and there is a lack of confidence in the economic recovery.  Plus, there is a lack of available capital for business buyers, so they are looking for the best deal possible.  However, businesses for sale that are performing well can still fetch a decent price. 

Here are some tips to improve the odds of successfully selling your business in a buyer’s market.

So, you’ve been thinking about starting and operating a profitable small business.  Owning a small business can be one of the most intellectually stimulating and rewarding pursuits in your life, and it can also allow you the flexibility and financial freedom to live life to its fullest.  However, the process of finding and purchasing a small business can be somewhat complicated.

Here are some ways you can fully prepare yourself for the challenge ahead, and know which business is the best fit for your lifestyle and skills.  Only then will you be fully prepared to run a successful business.

Most people who are considering buying an existing business will search the businesses for sale listings first.  After all, the allure of instant cash flow, an established brand, and an existing customer base sounds like a lot more fun than starting a business from scratch.  Established businesses are usually a much more attractive option for first-time entrepreneurs, but buyers need to learn how to analyze and evaluate buying an existing business before signing the dotted line.

Buying a business isn’t quite the same as buying a house, a car, or a piece of furniture. With physical commodities, it is much easier to see what you’re getting. Businesses tend to hide their flaws well and flaunt their best features, so to speak, and you will want to find out as much as possible about their financials, but these questions will provide important insight about the quality of the opportunity itself.