Buy a Small Business for Sale Instead of Starting From Scratch

Don’t Start a Business From Scratch

Buy one instead

Being a smart entrepreneur is more than starting a business. Read on to learn how it's better to buy a small business for sale instead of starting one from scratch.

Small business for sale by owner

What if you could own a new business overnight?

The mindset of entrepreneurs often focuses on building a business from the ground up. However, you're actually far better off finding a small business for sale by the owner instead of starting a brand new business from scratch.

Wondering why you shouldn't start from scratch? Here's our complete guide to buying the best small business to start.

The Time Is Right

You could buy an established business for sale at any time. So, why is now the best time to get started?

Many businesses are owned by Baby Boomers. And a whopping 10,000 Boomers are retiring each day!

Baby Boomer business owners retiring are motivated sellers who will be happy to see their brand continue. And with so many pondering retirements, you'll have a selection of businesses to choose from.

Easy Business Financing

The biggest obstacle to starting a business from scratch is financing. Banks are understandably hesitant to fund an unproven idea, especially during a tumultuous economy.

However, they are likelier to provide financing for an established business. After all, such a business has already proven itself with the sweet smell of success within the local community.

Honestly, avoiding financing headaches is one of the best reasons to scoop up an existing business!

Easy Instant Profits

Starting a new business is always a calculated risk. Smart entrepreneurs must be prepared to deal with even years of waiting before profit is generated. And, of course, it may never actually turn a profit.

When you buy an existing business for sale, though, you start pulling down real income from the very beginning. The math on this is simple: by purchasing a successful business, you can enjoy the sweet smell of success from day one!

With these instant profits, you can also engage in any renovations and innovations you've been dreaming of. And you can do so secure in the knowledge that your business is already a success.

Hit the Ground Running

In addition to being a proven brand, part of what makes your best small business to purchase a success is that you can hit the ground running.

That's because you didn't just buy a building and its equipment. You also bought a robust network of contacts. And you have access to trained and skilled employees who helped make the brand a success.

Why go through the headache of building something brand new when you can own a proven business model right away? And there's always room for expansion later on.

Less Work, More Instant Profit

The final reason to purchase a small business for sale by the owner can be summed up in 4 words: "less work, more instant profit."

You get to skip all those sleepless nights and endless paperwork that comes from starting a new business. And you also get to skip the difficult task of hiring the right employees.

Instead, you get to jump right into a great brand and a successful staff. Your only challenge? To make this the best small business to start as big as your ambitions!

Small Business for Sale: Your Future Awaits

Now you know why you should buy a small business for sale. But do you know where to find the best businesses just waiting for you?

We specialize in linking ambitious buyers with motivated sellers. To start your small business big dreams, check out our small businesses for sale by owner today!

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Ultimate Guide to Buying a Small Business For Sale

Ultimate Guide

To Buying a Small Business For Sale

Buying a small business for sale can be a complicated process. This ultimate guide will get you started on your way to owning a flourishing small business.

Buying a small business for sale

So you've always wanted to be a famous entrepreneur, and you've decided that it's time to turn your dream into reality by acquiring a small business for sale.

Congratulations!

That can be an incredibly fulfilling and smart business decision to make, but of course, buying a small business enterprise isn't a simple process.

There's a lot to think about, especially during the initial stage of this entrepreneurial adventure program of yours. Keep reading and learn how to value an existing business!

How to Choose A Good Business To Buy

Finding a good business to acquire is about asking yourself and the business seller a series of questions.

Firstly, you need to understand:

• If you feel passionate about the business

• If you have the expertise to take on the business and, if not, how you can obtain the necessary skills

• If you can afford the business and if not, whether you should apply for a loan or start a search fund

If after considering these factors, you still want to buy the business, it's time to talk to the business seller. A few things you can't forget to ask them are:

• "Why is the small business for sale?"

• "Are the revenues increasing or decreasing? Why?"

• "What is the small business marketing strategy put in place?"

• "What are business liabilities that you are facing?"

• "Will I need any specific small business licenses?"

• "Has the business been involved in any legal issues?"

Based on the answers to these and other questions, you should make a realistic decision that won't end up putting you in a difficult business situation.

Remember, as much as you might love the idea of the business, if it doesn't seem like it could work long-term, it's probably best that you reconsider.

Buy a Business

6 critical questions to ask sellers

Learn More

How to Value an Existing Business

Eventually, you'll find a small business enterprise you feel passionate about and that seems to be a good investment in 2020. Once you do, the next step is to value the business: to understand how much it is really worth.

This is something you should always do, as the business seller financing might suggest a price that is in fact too high for what you're acquiring.

There are several ways of valuing a business, such as calculating its net worth or its value based on capitalized future earnings. The most important thing is to guarantee that you consider both tangible and intangible assets as well as calculating intangible assets amortization.

To make this step easier, you can always use an online business value calculator. 

Buying a Small Business Enterprise

When you find a good small business enterprise for a fair price, you'll be ready to take the leap and acquire the business enterprise!

To do so, you'll need to get all the documentation in order: the financial documents, any necessary licenses, the contracts, and agreements. It's important that you have it all organized so that you ensure you're doing things properly.

Once everything is taken care of... it's time to get to work!

Ready to Become a Famous Entrepreneur?

Now that you know all the basics of buying a small business for sale, you're ready to start looking for the right one and finally become the entrepreneur you've always wanted to be.

Here at BizNexus, we match buyers with acquisition opportunities according to their acquisition preferences and niche saved searches. If you'd like a hand finding the perfect business for you, sign up and let us know what you're looking for!

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

5 Business Exit Strategies For Startup Founders

Business Exit Strategies

For Startup Founders

Startup founders are always looking for the next business tycoon to be. Check out these business exit strategies for entrepreneurs and founders.

Exit strategies for a business

So you've created a successful business. Do you know what to do next?

After your startup flourishes, you're going to move on to other innovative ideas. But that means you need to have an exit plan for business.

With these 5 exit strategies for a business, you'll be moving on to the next challenge in no time!

1. Merger and Acquisition

The first exit strategy in business is arguably the most popular one among famous entrepreneurs: merger and acquisition.

In this scenario, you either merge with a similar-sized company to create a larger entity or get bought outright by a larger company. This is a popular move among business owners or entrepreneurs because everyone walks away a winner.

For best results, you should pursue this route at the height of your business valuation calculation.

2. Individual Sale

Despite its popularity, the merger and acquisition route isn't perfect for everyone. You might instead prefer to sell your business to an individual.

More famous entrepreneurs than you think prefer to buy existing businesses instead of creating something from scratch. If they buy your business, you can pay off debts and investors and start making plans for your newest business. 

As a bonus, this approach is arguably the best way to retain the branding and feel of your original business instead of watching it change into something else entirely.

Sell a business | How it Works

3. What is an IPO

Another method is to sell shares of your startup via a new IPO. This method has some real benefits but also some definite drawbacks.

For a successful business startup, this is the first step towards real financial security. You can raise funds for a business that results in additional growth and watch the value of your own shares continue to rise.

At the same time, the number of IPOs by year has declined significantly in the last 20 years. You may not want to take this really big gamble, especially when it means putting up with a gaggle of annoying shareholders.

4. Income Stream

One of the simplest exit strategies for a business is to not exit the business at all. In fact, all you have to do is exit the building!

If the business is really booming, you may not want to sell at this exact moment. Instead, you can leave day-to-day management to someone else and count your money as it comes in.

With that cash, you can pay off debts and start investing in your next business venture. If you can make it work, this is a great way to have your cake and eat it too: easy money now and new challenges later!

5. Total Liquidation

The final exit strategy in business is typically the last option among business owners or entrepreneurs: total liquidation.

Liquidation is relatively straightforward. You simply close the business down and begin selling everything that you can.

No young entrepreneur likes to liquidate, but it may be your only option if the market value dramatically shifts. Just make sure you explore all other possibilities before you choose to liquidate.

Exit Strategies in Business: Make the Call

Now you have options for exit strategies in business. But do you know who can make selling your business easier than ever?

We specialize in helping successful entrepreneurs "go out on top" and move on to the next challenge. Unleash the possibilities by selling your business today!

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PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

The Top 5 Loans to Finance Your Business Acquisition

Finance your business acquisition

Here are top 5 loans to learn about

Looking for the right type of loan to finance your business acquisition? There are a lot of options. Read on to learn a few of the best.

Finance your business acquisition

A record $2.5 trillion in mergers was announced in the first half of 2018.

If you are looking to acquire a business, there may not be a better time.

The acquisition gives you access to experts, capital, and market power that can grow your enterprise and build your brand. Yet you may be wondering how you can make it happen.

There are a number of ways to finance your business acquisition. Here are five of the best loan options.

1. Small Business Administration Loans

Small Business Administration (SBA) loans are known for their competitive interest rates and long repayment plans. The SBA does not loan money directly. Instead, they partner with select banks and lenders to secure loans to business owners.

It is easier to get approved for SBA financing if you are an established business rather than a startup. This is because the lender can use your existing repayment history to prove your credibility.

It may take longer to qualify for an SBA loan than other loans. In addition, you will likely be required to provide a down-payment of at least 10%.

Interest rates on SBA loans vary depending upon the current U.S. prime rate. A repayment schedule will vary depending upon the type of business you are purchasing. It is shorter for working capital and longer for real estate.

2. Startup Loans

If you are a new business owner hoping to finance your business acquisition, a startup loan may be best for you. 

These loans may be easier for new business owners to qualify for, but you will still need a solid business plan and a good credit history. One downside of startup loans is that they can restrict cash flow. And don't forget that you could be putting your own credit reputation at risk if the business doesn't work out.

3. Rollover for Business Startups

Rollovers for Business Startups (ROBS) allow you to access the money from your retirement to start a business without paying taxes or early withdrawal fees. The funds can be used for acquisition, working capital, or as a down-payment for other forms of financing.

A ROBS is not a loan, so there will be no debt to repay. It is also quicker to acquire than a typical business loan.

A ROBS usually requires a setup fee and a small monthly management fee. The biggest obvious drawback is that you will risk your retirement funds.

More related posts handpicked for you…

4. Home Equity Line of Credit

A Home Equity Line of Credit (HELOC) is a line of credit secured by the equity you have in your house or apartment. You will likely need at least 20% equity in your home.

A HELOC can be a more inexpensive way to access your credit than other methods because they offer interest-only payments for the first few years of repayment. The downside is that you are risking your home if your investment does not work out.

5. Term Loans

A term loan offers a lump sum that can get repaid in fixed installments for a predetermined period of time. Generally, they are quicker to acquire than an SBA. You may, however, get held personally liable if your business stops making payments.

The Best Way to Finance Your Business Acquisition

The best loans to finance your business acquisition will depend on your experience, credit history, and type of business.

For more information on business acquisition options, read our blog today.

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

What Is Entrepreneurship Through Acquisition? Your Guide to the Benefits

What is ETA?

Your guide to the benefits

Have you heard of entrepreneurship through acquisition but are unsure of what this means? Read through here to answer this and to learn why this is a great choice.

Entrepreneurship through acquisition

Many Americans are growing tired of working in corporate America. Here, they are spinning their wheels on a fixed salary and far too many hours. To make matters worse, their wages are barely increasing on a yearly basis.

Fed up, millions are responding to an entrepreneurial spirit and starting their own business. In fact, 27 million Americans are either starting or running a new business.

Pursuing an entrepreneurial opportunity is a wise decision. The profitability rate recently surged more than 25% in a single year.

Read on to learn about entrepreneurship through acquisition. Explore the benefits of acquiring an existing business over starting a new one.

What Are the Challenges of Starting a New Business?

Many entrepreneurs decide to start their own businesses. While some find success, this path is likely to see significant challenges.

The most obvious challenge to overcome is that you are starting from scratch. You do not enjoy the luxury of an existing brand.

There are no loyal customers or equipment to leverage off of. Also, policies and processes have yet to be developed.

You do not have existing employees or subject matter experts. Instead, an employee training program needs to be developed and provided to all new workers.  There may be significant barriers to entry in the marketplace including established competitors.

What Are the Benefits of Entrepreneurship Through Acquisition?

Entrepreneurship through acquisition occurs when buyer(s) purchase an existing business. This includes pursuing franchising opportunities.

In this scenario, an entrepreneur finds a business for sale and pays a price to acquire it. This may come in the form of a lifelong small business owner who is retiring and looking to sell.

There are many benefits to this approach because the transaction may include many different items. For example, you may be acquiring the company’s machinery and supplies. Perhaps the company has popular social media accounts that you will take control of on day one.

Perhaps the greatest benefit is that an existing business has an established revenue stream. You do not have to stress over generating profit as it will be coming in from the start.

How Do Entrepreneurs Find an Existing Business?

Once you decide to forgo starting a new business from scratch, it is time to find an existing business. However, this is easier said than done. Businesses do not typically put up a for-sale sign on the storefront.

The good news is that there are online resources to pair entrepreneurs with business owners looking to sell. There are algorithms that help match your passions with existing businesses and franchise opportunities. Once financing is secured, you can get a business appraised and make an offer.

Glance through featured businesses for sale listed recently on BizNexus Marketplace

Wrapping It Up

The American Dream is alive and well. Now is the time to seize your opportunity and become your own boss.

Instead of working uphill with a brand new business, you should consider purchasing an existing business. This way, you can inherit an established brand and revenue stream.

If you want to learn more about entrepreneurship through acquisition, you can start your search for the next business opportunity by signing up to BizNexus.

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

How to Buy an Existing Business: Tips to Find, Value, and Acquire Something Successful

How to buy an existing business?

Tips to find, value, and acquire something successful

Want to acquire something both pre-existing and successful? Read on to learn how to buy an existing business and put it on the path to success.

How to buy an existing business?

Business acquisition is growing increasingly popular in the United States. Take franchising opportunities for example.

In 2020, there are more than 785,000 franchise establishments in the nation. This is the highest figure in the past 14 years.

Interest rates are still hovering near record lows meaning capital is cheap. The cost of money makes buying a new business more appealing than ever before. In addition, the nation’s economy is sitting on a solid foundation with strong consumer demand.

Read on to learn how to buy an existing business. Explore tips on how to find, value, and acquire a successful business investment.

Reasons to Buy an Existing Business

There are many good reasons for entrepreneurs to consider an existing business. For one, there will be a strong supply as Baby Boomers retire and look to sell.

From a business standpoint, you will inherit a proven business model. You can verify that the concept works simply by evaluating prior sales.

In addition, you get to leverage an established brand and product. The business comes with a loyal customer base, employees, inventory, and other assets.

Finding a Business For Sale

The first step in the acquisition process is finding a business for sale. Unlike homes, it is uncommon for a for-sale sign to be placed in front of the business. Existing businesses rarely advertise that they are looking for a seller.

Traditionally, investment bankers facilitate some business transactions. In other cases, accountants or lawyers will share information with prospective entrepreneurs. These professionals often get a heads up as they help plan the existing business owner’s retirement or other financial endeavors.

Another way to find a business for sale is by networking with local owners. However, these methods are old school and often lead to long waiting periods.

Modern entrepreneurs get to take advantage of online tools. There are online resources that use algorithms to pair together businesses looking to sell with entrepreneurs. Here, you can save search criteria like price and favorite businesses that you are interested in.

Your search may lead you to consider franchising opportunities. You can be matched up with a franchise that is in line with your passions.

Business Appraisal

Once the perfect business is found, you need to get an appraisal. In this process, finance professionals pour over the business to determine its value. Your team will review balance sheets, taxes, revenue statements, and more.

This appraisal is a critical step in getting financing to buy your new business. Unless cash resources are available, you can apply for a business acquisition loan. With cash or a pre-approval in hand, you can now make offers on existing businesses. 

A Recap of How to Buy an Existing Business

Acquiring a business is not simple by any means. It takes a lot of research to find the right one. The good news is that there are professionals and platforms out there that can pair you with the best fit.

If you want to learn more about how to buy an existing business, sign up for BizNexus and start getting matched with opportunities today.

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

How to Exit Your Startup When You're Not Going to Be the Next Billion-Dollar Unicorn

How to exit your startup?

When you’re not going to be the next billion dollar unicorn

Has your business startup not been doing so well? It can happen to anyone. Read more to learn how to exit your startup and move forward if this is the case.

How to exit your startup

Have you mentally checked out of your startup? Or maybe the business just isn’t working how you imagined it to be?

If you feel ready to exit your startup company, it may be time to bow out gracefully. However, there’s a right way to exit and a wrong way to do it too.

How you exit as a first-time startup business owner can define your career going forward, showing onlookers that you can deliver, or fail. If you’re not sure what the best practice is, we’re here to help. Here’s how to how to exit your startup the right way.

Keep Building Your Business

Even when you’ve decided to exit, it’s important to keep building the business. Why?

It’s a classic startup mishap. With a potential buyer looming, many startups start cutting costs to appear lean and efficient.

They allow money in the bank to dip dangerously low instead of sourcing more funding. They reduce user acquisition to save funds. They stop building the company to make ends meet, allowing revenue growth to diminish.

This doesn’t fool anyone though. While you may be making the bottom line appear well, your growth is suddenly at risk. Of course, this is bad for business and it places you in a vulnerable situation.

Investors may suggest an attractive offer, only to withdraw at the last moment once a startup has run out of money. Avoid such situations by continuing to grow your company, even when you’ve decided to sell. As a startup founder, you’ll have a better selection of offers and options if you can prove growth with plenty of money behind the business.

Seek Support

Many startup founders see themselves as lone wolves, but if you’re ready to exit your startup, the worst thing you can do is try to do it on your own.

You might want to learn more about the best exit strategies for your business.

Don’t retreat to your office and hammer out a contract alone. Seek support from people you trust, such as your angel investors who believed in you and the company from the very beginning. If you know any fellow entrepreneurs who have been through a similar situation, they’re a great option to speak to too.

These are the best people to reach out to who have you and your company’s interests at heart.

How to Exit Your Startup the Right Way

Voila, there’s how to exit your startup the right way. In the end, a successful startup exit comes down to achieving a good company as an entrepreneur. It’s all about connecting with investors that are in tune with your vision and fellow entrepreneurs that you can rely on.

Even then, exits aren’t simple, and success can never be guaranteed. If you’re still in doubt, then seeking professional help is a great way to gain perspective and to help you through the steps.

Here at BizNexus, we’re here to help. We help match business owners with the ideal business intermediaries, helping you sell your business for the best price, on optimal terms. For more information, click here.

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PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Buying vs Starting a Business: Which is the Better Option?

Buying vs Starting a Business

Which is the Better Option?

Wondering whether to buy an existing business or start a new one? Read through to learn why the former is the superior alternative.

Buying vs starting a business

Are you wanting to own a business but don’t know where to begin? So many questions and options such as, “what should my business be?” or “should I buy a business or start one?”

These are all good questions! Let us help show you why buying vs starting a business is really the better option!

Starting a Business

While starting a business can seem like an enchanting idea, it poses several major disadvantages as opposed to buying one.

When you start a business, you must build it from the ground up. Starting from scratch is definitely not for the faint of heart. Here is a list of just a few of the difficulties you will face if you start a business from scratch:

• Creating and keeping your customer base

• Acquiring a patent if it’s for a product or novel idea

• Hiring employees

• Marketing your business

• A large amount of capital is available

• Not having an established reputation 

Starting a business is very risky. Statistics show that about 2 out of 10 start-ups will fail. 

When you are starting a business, you have to create your own value for your product or company, whereas part of buying a business that is already established includes purchasing their already established value.

Buying a Business

If you decide that starting a business is not the route you want to take, the better alternative is buying an already established business. Here are several advantages to buying a business:

• Known brand—having a known or popular identity

• Existing infrastructure

• Employees who are trained

• vendors who are already established

• Existing funds

• The business model that is proven and established

• Existing customer base 

Check out this video if you are looking to buy a website, eCommerce, an app, or SaaS Company

Buying vs Starting a Business

When buying a business you have a proven business model because customers are familiar with the business or product and are purchasing already. They have established customers.

Starting a business requires you to produce a proven business model as if it were a hypothesis. “My customer wants my product because of ABC.” This is what you are trying to prove.

Buying a business means you have trained employees meaning you can start immediately generating sales because you don’t have to waste your time on the training and hiring process.

These already trained employees will help your business to run smoother with their expertise and prior experience.

Starting a business means wading through piles of applications and interviews and then taking the time to train each of the employees you hire. You also will have to factor in a learning curve and be prepared to have a slow start when it comes to generating sales.

One Final Thought

When considering buying vs starting a business, if you really have your heart set on starting and developing your own, we suggest you first buy an established one to get a feel for how a business is run.

Once you have bought a business and have taken a few years to turn a profit and understand the nitty-gritty of the business world, then maybe consider starting your own.

While starting a business can at first seem inspirational or enchanting, we promise you will soon become disenchanted. When that untrained employee sets the kitchen towel on fire, you will think back to this post and wish you had instead bought your business.

Want to learn more about owning your own successful business? Contact us today to see how we can help. 

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Effect of COVID-19 to Sell Your HVAC Business

A Guest Blog Post By

Patrick Lange

Are you considering selling your HVAC Company in the next 12 to 18 months? This post is meant to help you through understanding the current M&A market amid the Coronavirus pandemic.

Here is what Patrick has to say about the effect of COVID-19 to sell your HVAC business.

Efforts to Sell Your HVAC Business

Unless you have been stuck in an attic replacing ductwork for the last two weeks, you have been overrun with speculation on what is in store next for this fast-spreading virus. Since I do not work for the Center For Disease Control (CDC) or have a crystal ball to tell me what to expect from this Virus, I will leave that to the professionals.

What I want to talk about is what it means for those who are considering selling their heating and air companies in the next 12 to 18 months. As I am sure you have already experienced with your business, there is an apprehension from your customers for letting your technicians in their homes. I have had reports out of the Tampa Florida area of gated communities that will not allow service companies to enter.  As we all know this is not a good time of year to have things slow down, or fall behind. Many companies are just starting to ramp up to perform their maintenance visits, and if they end up a month or two behind on those it can spell disaster for the start of summer. In addition to the increased workload, we all know a service call is more profitable than maintenance, and having techs catching up on maintenance agreements and not running service is a recipe for a bad year.

Thinking of selling or buying a heating and air company, we can help. We specialize in the sale of heating and air businesses.

The Impact on the economy

The federal government has already cut interest rates in an effort to push off a slowdown, but as you know by now, the good times and growth cannot last forever. Just looking at the school shutdowns, sporting events cancelled, and millions of people told to stay home and not go to work, there is going to be a financial impact of this. We have already seen record declines in the stock market which may not be over yet.

This is all happening after many parts of the country, especially the southeast had a mild summer in 2019 and an almost nonexistent winter. Buyers are paying a price based on cash flow, so it only makes sense if cash flow is down, so will sales prices and it could turn what has been a very strong sellers’ market in a buyers’ market quickly.

The good news

As I have said many times over the years in articles just like this, I own, and help others buy and sell heating and air companies because I STRONGLY believe in the industry. If companies are run properly they typically do well in times of slowdown and even during a recession. As other industries are being crushed, people still want cold air in the summer and warm air in the winter and are willing to pay for it. Companies who have strong maintenance programs and quality employees may get behind for a bit, but they will bounce back fairly quickly. That is exactly what buyers are looking for.

I have talked in the past about the push of private equity buyers trying to get into the industry, and times like this are why. Those who have built their companies on a strong foundation, and have a system to train and retain employees are in the driver’s seat to command a premium if they choose to sell.

These can be great times for those who have put in the work, and a drastic wake up call for those who have not. If you have built your business on the reliance of new construction installs and not repeat income of PMA’s, the next 12 to 18 months may be very challenging, especially if you are looking to sell. Hopefully you have the ability to withstand it, and make corrections so the next time it happens you are better prepared.

I pray that your families and loved ones remain safe and healthy during these uncertain times, and if I can help out in any way please let me know. 

More about Patrick Lange

Patrick has been a serial entrepreneur his entire life. He has not only helped others buy and sell businesses with great success, but he has done it himself with his own businesses as well. He specializes in helping those who are looking to buy or sell heating and air and plumbing companies.

Patrick Lange

Certified Business Intermediary who serves business owners in the Florida, Georgia, Alabama, and Texas markets with exit planning, business acquisition & sale.

About Patrick & His Current Listings

Franchise Frenzy! How to Buy a Franchise in 5 Simple Steps

How to buy a franchise?

Here are 5 simple steps

If you're thinking of buying a franchise, there are some things you'll need to know about the process. Read through to learn more!

Buy a franchise

Is owning a franchise one of your dreams? Let us help you make that dream happen by showing you how to buy a franchise in just a few simple steps!

What is a Franchise?

Someone who buys a franchise takes over a store of an already established company such as McDonald's or Edible Arrangements. You aren’t having to start your business from scratch.

You must pay the franchisor a fee upfront, and then pay continuing royalties on your business. They provide you with a trademark, support, and rights to their equipment and products.

Step 1: Consider Your Options

Look for a list of franchise chains to determine which one is best for you. Here are a couple of franchise corporations:

• Soccer Shots

• Checkers Restaurant

• Culvers Restaurant

• Edible Arrangements

• Planet Fitness

• Firehouse Subs

If you are interested in looking at a list of the top 2020 franchise locations, click here.

Step 2: Keep in Mind Qualifications

When buying a franchise, several qualifications must be met. I have made you a list below:

• Have a credit score of at least 680 (check your score here for free.)

• Capital—you will need to place a large fee initially along with other necessary franchise costs.

• Net Worth—You will need your net worth to be higher than your investment.

• Industry Experience—Choose a business you are familiar with. Relevant experience is one thing franchisors look at.

• Experience as a Manager—You must have some type of managerial experience when running a franchise business.

Step 3: Apply for a Franchise

Fill out your chosen franchise’s applications and questionnaire forms! Once you pass the application process, the franchise will send a representative to meet with you to give you a Franchise Disclosure Document (FDD).

This document will detail the company’s fees, rules, financial history, and legal aspects. Legally, you have 14 days to review this 50-page document before you sign any binding agreements with the company.

Step 4: Determine Which Finance Option is Best for You

When it comes to funding your business, here are a couple of options you can choose from that will help you get your franchise started:

• Rollover business startups (ROBS)

• SBA loan

• Bank loan

• Funding from the franchise itself—Some companies offer full or partial financing options.

Step 5: Buy a Franchise Location

You can choose to lease (rent) a property or purchase outright for your business. Most new franchisees opt to lease a property since it is less money up-front. As their business grows, they may choose to buy a location.

When choosing your location whether you lease or buy, you need to consider the following:

• Is your location safe and easily accessible?

• Are there any major competitors to your business nearby?

• Is your building space large enough?

• Is your location in a highly trafficked area?

• Does the location add to your advertisement visibility or subtract?

Final Thoughts

Now that we have discussed some of the ways to make your dream a reality, we must warn you, following your dream is never going to be easy.

Opening a franchise will take a lot of time, effort, and hard work but once you accomplish the goals you set forth, you will find the rewards are worth every ounce you’ve invested. 

Want to learn more about how to buy a franchise? Contact us today to learn more about how we can help. 

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

How Could Corona Affect The Sale of Small Businesses?

A Guest Blog Post By

Neal Isaacs, CBI, MBA,

Are you selling your small business? This post is meant to help you focus as a small business owner on what it means to survive the Coronavirus.

At the time of the writing of this article, we are on the precipice of something unprecedented.  The Corona Virus and COVID-19 have paralyzed the US emotionally and economically. It goes without saying that from a humanitarian perspective this event is devastating as people are sick and dying, but I’m a business broker, not a medical professional. This content is only meant to focus on what it means for small businesses and the owners who depend on them.

Most small business owners are just trying to put together a plan for their businesses to survive what happens when the government imposes mandatory closures and the lack of “business as usual.”   But some owners are looking farther into the future. Some were positioning for an exit and some just had offers fall off the table. Let’s explore what this abrupt stagnation could mean for business owners when reviewing this time from the future.

One Time Adjustments:

The important thing to recognize is that we’re all in this together.  Every owner and prospective buyer knows that this is a monumental, once-in-a-lifetime economic event.  Most buyers have pressed pause on acquisitions for now, and there is uncertainty when it will end at this time, but it’s well documented that it started affecting businesses in March of 2020.  

When recasting financials for 2020, most buyers would consider normalizing 2020 by replacing March and similar “Corona infected” months with documented trends from unaffected months.  In other words, an argument could be made that a business that normally produces $100K of revenue each month from January to December, which did $25K in March-June of 2020, should be valued as a business that does $1.2M in a year that didn’t experience a pandemic.  

While the banks may not consider this financial treatment, a pragmatic buyer could.

A must-watch guide on self-isolation during the Conronavirus pandemic.

Abnormal Expenses:

One thing that’s happening for event businesses and many other scheduled service businesses are cancellations.  In these scenarios, business owners are experiencing the double whammy of not only losing the business but paying the credit card processing fees twice; once for the booking and again for the return.  A data set could be prepared to show what typical credit card fees are and highlight those merchant charges that were unnecessarily attributed to the pandemic’s activity. Credit goes to Jeff Snell of Enlign Business Brokers for this insight…

A pragmatic buyer would understand that he or she wouldn’t experience these escalated merchant charges in a normal year.

The general rule of recasting is asking if the next owner of the business would experience similar revenues and expenses if they stepped into the owner’s shoes in the normal course of business.  Because we’re living through the opposite of a normal course of business, so undoubtedly there may be other adjustments in trying to reconcile the effects of the pandemic.

Another example could be the Cost Of Goods Sold for utilized food or similar perishable products purchased going into the week(s) when all businesses shut down. 

The list could go on and on, within reason...

Pivot opportunities

When considering adjustments, however, it goes both ways.  Some entrepreneurs will pivot their businesses and make money from the response to this event.  Medical distributors, for example, could add ventilators and masks to their pipeline and make a lot of money from this episode.

Savvy buyers will dig into the numbers and discern what revenues are COVID-19 specific and which couldn’t be replicated in the long term.  Lack of customer and product concentration are hallmarks of transferable businesses, and owners should move into new markets to fill the gaps but also be mindful of the proportion of the business they are depending on as they grow.

Long Term Outlook

Years from now, we should be able to look back on this time and view it from a long-term perspective.  As painful as it is now, the Corona pandemic episode can become another aberration on the trend curve, no different than previous events like SARS and Swine flu.  Long-term trends matter and time give perspective. If business owners can pull their businesses through this tough period as we make history, they can re-write it for business buyers in the future to illustrate what could have been without Coronavirus, and at the same time reap the benefits of the rebound. 

More about Neal Isaacs

Neil helps entrepreneurs acquire & sell their businesses through his firm VR Business Brokers of the Triangle and writes about the business owner’s journey on his blog at www.RaleighBusinessBroker.com

Neal Isaacs, MBA, CBI is a Business Broker

Certified Business Intermediary who serves business owners in the North Carolina Triangle market with exit planning, business acquisition & sale.

About Neal & His Current Listings

How to Get a Loan to Buy a Business

Want to buy a business

Here is how to get a loan

Are you worried about your lack of capital? Many successful businesses started with a loan. Get a loan to buy a business with these simple steps.

Loan to buy a business

Only 80 percent of small businesses survive the first year. After that, things get even worse. Only half of the small businesses pass the five-year mark.

Are you an entrepreneur wanting to own your own business but are afraid of failing? There's a solution!

Buying an existing business is a great way to increase your chances of success. And if you're worried about getting a loan to buy a business, we have the tips for you.

Keep reading to learn more about your options for financing your new business. 

Bank Loans

If you have a great credit score and can show a history of strong financials for the business you want to purchase, you'll probably qualify for a bank loan. Many banks offer their own loans and even small business administration (SBA) loans that are backed by the government.

If the company has a good history and a positive outlook, you may qualify for a loan with a low interest rate. However, bank loans aren't always the best choice. They can be time-consuming and often require you to make a deposit as collateral. 

Credit Union Loans

Credit unions are not for profit and are owned and control by their members. This means they often have lower interest rates and fees as well as more flexible lending requirements.

They tend to have a more personal approach and aren't bound by a set of strict guidelines. 

Online Business Loans

Prospective business owners can choose from many different options when it comes to online business loans. Online lenders offer a fast and convenient application process and tend to have higher approval rates than traditional lenders.

Be sure to compare rates and terms carefully to avoid getting stuck with a high interest rate.

Online Personal Loans

Personal loans can also be used to finance business ventures but it's important to shop around. While going this route can get you funding quickly, not all personal loan lenders will let you use the funds for business purposes. 

Seller Financing

If you don't want to get a loan from a third party, you may be able to make arrangements with the seller of the business. They will act as a lender and you can make payments to them for their business in installments.

Sometimes the seller will even finance part of the sale price. With this sort of arrangement, you can pay as you go. This can make managing your budget and cash flow much easier. 

Looking for a Loan to Buy a Business?

Starting your own business can be one of the most rewarding yet scary ventures you'll ever make. You can go into the process with more confidence and less risk by buying an existing business.

If you looking for a loan to buy a business, we are here for you. We help entrepreneurs buy existing businesses.

Click here to learn more about funding your new business. 

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

From the Trenches - Interview With Connecticut Business Broker David Richman

David Richman

Current market perspective from the trenches of the business acquisition & sale industry

Learn More

Sit-Down Interview With Business Broker David Richman

What are your thoughts on where business acquisition & sale market activity is heading over the next 3-6 months?

In New England, the second and third quarters of the year are typically slower with buyer activity but are a great time to acquire new listings. This is the busiest season for sellers. The plus for brokers is the summer lull gives extra time to prepare for a marketing push at the end of August when buyer activity picks back up.

What do you see as the most significant current threats out there that could adversely affect the current bull market for business acquisition & sale?

Buyer confidence is most important. A significant source of this is from the banking industry and SBA. If it's easy to obtain a loan with a good rate buyers will be more aggressive in their pursuit of business opportunities.

What do you see as the top three reasons right now is a great time to SELL your business?

1. Baby boomers are looking for retirement options, leaving their established and profitable companies available for buyers.

2. When considering loan options for buyers, it's still advantageous to buy an established company with good cash flow and room for growth rather than work through the difficult and uncertain start-up process.

3. New England is a great place to live and work. Younger entrepreneurs are looking to establish in this area. 

What do you see as the top three reasons right now to BUY a business?

1. It's always a buyer's market. There are more sellers than buyers.

2. The SBA has many great programs and lenders have streamlined the loan process. There are also advantages of buying a business and real estate together. 

3. New England is a great place to live.

What are some of the questions you should ask when choosing an advisor to help sell your business?

1. How long will it take to sell my business. This should be 9-12 months. In some industries businesses "move" faster, but for most in New England, this is the start-to-close time frame.

2. Do you have administrative staff to help you manage your listings?

3. How many listings do you currently have and what industries? 

How would you rate the current political environment related to small business growth, business acquisition & sales?

3/5

What are your thoughts on transaction terms for buyers & sellers in the current market?

The seller should expect a fair market value for their company. This is sometimes in line with expectations, sometimes it’s not. This will vary per industry and regional market.

Thoughts on business valuations in today's market?

There will always be situations when a business requires a valuation such as the death of the owner, divorce, and shareholder disputes.

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

5 Factors to Consider When Purchasing an Existing Business

Purchasing an existing business

Here are 5 factors to consider

You want a business that has a blueprint for success. Here are five critical factors to look for when purchasing an existing business.

Purchasing an existing business

Starting a business from scratch is one of the most stressful things that a person will ever do. The stress associated with doing it can be too much for some people to take.

It's why many people with an entrepreneurial spirit prefer purchasing an existing business and working to perfect it over starting a business from the ground up. There will obviously still be some stress involved, but it won't always be quite as overwhelming.

Are you interested in potentially purchasing an existing business and taking it to the next level? Here are five important factors you should consider before you do.

1. Is the Existing Business the Right Type of Business for You?

Whether you start a business from scratch or buy an existing business, the business that you own needs to be something you feel passionate about. You should be excited to jump out of bed every morning to get to work on your business.

If you don't feel this way about a business that you're thinking about buying, it's not going to be a great fit for you. Even if there is a lot of money to be made with the business, what good will it be if you don't enjoy doing everything it'll take to make it?

2. Does It Have a Business Model That Seems to Be Working?

One of the best parts about purchasing an existing business rather than starting a new one is that it'll come with almost everything you need to run it from day one. It'll have:

• A name and an established brand

• A team of employees

• A loyal customer base

• A lot of inventory

But in addition to having these things, you should make sure that the business also has a business model that is working. This business model should be set up to continue working well into the future.

If you have to come in and start making wholesale changes to a company's business model, it could end up costing you more than it would have to start a business from scratch.

3. Do You See Areas in Which You Can Improve the Business?

You want a business that you buy to have a business model that is working. But you also want to have the opportunity to improve the business in different areas.

For example, you might know for a fact that you can use your current business connections to get the materials used to make a company's products for cheaper than they're making them for now. By using these materials and improving the production process as a whole, you can make a business that you buy more profitable right away.

Check out this video if you are looking to buy a website, eCommerce, an app, or SaaS Company

4. Are You Confident in the Business' Ability to Grow?

By improving small things about an existing business, you should be able to generate more money and make purchasing the business one of the best decisions you ever made. You should also be able to get the business to grow into something larger than it is now.

Are you prepared to take on that challenge? And furthermore, is the business you're considering buying scalable enough to make it worth your while?

You need to have confidence in the business's ability to grow and expand over time. Otherwise, it might not be a great investment on your part over the long run.

5. Can You Afford to Buy the Business?

One drawback often associated with purchasing an existing business is that it can cost more than starting a new business. You're paying a premium to get your hands on a finished product.

But the good news is that most lenders are more willing to lend money to someone buying an existing business as opposed to starting a new one. They see helping someone buy an existing business as a less risky move.

There are also lots of ways to finance a business purchase if you want to do it. Still, you should carefully consider whether or not a business fits within your budget before you even think about buying it.

Get the Help You Need When Purchasing an Existing Business

Purchasing an existing business can be a daunting experience if you've never done it before. You need someone by your side to guide you in the right direction.

We have a large selection of businesses for sale and can help you pick out one that's a good fit. It'll make the entire experience more manageable for you.

Check out some of the existing businesses for sale through us today.

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Buying a Business: How to Value a Small Business That's for Sale

Buying a business

How to value a small business for sale?

Buying an existing business can yield big rewards. The more market value a business has the better.

Discover how to value a small business that's for sale.

Starting a business from the ground up is a major undertaking without any guaranteed success after all that hard work. In fact, once opened, only about 20% of businesses survive their first year. This statistic is both staggering and disheartening.

Instead of swinging for the fences and shedding blood, sweat, and tears in the hopes of getting a business to profitability, you can ensure success and profitability by purchasing a business instead of starting one.

You might be wondering how to go about putting a dollar value on an active, profitable business.... There are certain ways you can go about that and make sure that you're investing your money in the right places.

Keep reading to learn how to value a small business that's for sale.

1. Assess the Business Market Value

If you want to know how to evaluate a business, one reliable method is to assess the business market value.

Business value is determined by the market itself. With this in mind, you can compare the type of business you want to buy with the same types of businesses that have already sold.

If a business you want to buy is way above the determined market value, then you might be getting ripped off. However, the market value isn't the only factor to consider.

2. Calculate Assets and Liabilities

Another way to get an accurate idea of how much a business is worth is by determining the difference between assets and liabilities. That number will be a reliable indicator of whether or not you should invest.

Remember that assets are a bunch of smaller chunks of a business that can add up to much more value than what might first meet the eye.

Liabilities, on the other hand, are debts that the small businesses still need to pay off, which takes away from value, of course. With that in mind, too many liabilities can be a red flag when thinking about buying a business.

Check out this video if you are looking to buy a website, eCommerce, an app or SaaS Company

3. Check the Income History

Yet another way to assess the value of a small business is by looking at its income history.

This is a great way to figure out whether your investment will be profitable at the get-go. You can also figure out if you're looking at a low-maintenance business or one that will need more work put into it.

By adding up the net profits of the business from the past and getting the average, you can have an idea of what to expect after you buy the business.

From there, you can use a purpose-driven model to grow that business even further if you're up to the task.

You Know How to Value a Small Business

Now that you know how to value a small business that's for sale, you can start thinking about taking your first steps towards finding an actual business to approach.

Whether you want to buy a business that's for sale or put your business on the market through a business broker, BizNexus can help you get matched.

To get started, sign up and set your acquisition preferences, and start getting matched with businesses for sale and business brokers who can help you. Try it at www.biznexus.com

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

What You Need to Know About Selling a Small Business

Read to exit your business?

Here are great tips you need to know

You're ready to move on to the next venture. Start with this entrepreneur's guide to selling a small business as quickly and efficiently as possible.

Selling a small business

In 2018, there was a 4% increase in businesses sold from the previous year. The 2019 numbers are just coming in and it's clear this has been a banner year for business exits/sales.

The economy has been on a tear and business owners are cashing in on a market with active buyers and high price multiples. But don't believe that just because you have a business, and because you work really hard in that business, that you'll be able to sell your business quickly. 

There are steps you need to take when selling a small business, and we want to share with you what they are. Keep reading our guide to learn how to sell your own business. 

Figure Out Why You're Selling a Small Business

The first step to selling a small business is being able to clearly articulate why you want to sell. Most potential buyers will ask this question right off the bat.

Most business owners decide to sell for the following reasons:

• Bored

• Overworked

• Retiring

• Illness or death

• Partner problems

Others decide to sell because their business isn't profitable and their soul has been accordingly crushed after years of slugging it out with nothing to show for it. Selling a struggling business is like trying to sell a rundown house with a crappy foundation and a frat house next door. It's harder to get a favorable transaction done and there are fewer buyers out there interested in dealing with the problems they'd be inheriting in a market with so many attractive deals for sale.

You're better off trying to fix any addressable problems before putting your business on the market if you can take the time to do it.

You Must Know The Real Value When Selling a Company

It's vital you know how much your company is actually worth in the eyes of a potential buyer. This will ensure you don't price it too low or too high. 

Find a business broker to get a valuation. The broker will provide you with a detailed explanation of your business's worth based on real market comparable and professional experience.

A formal valuation can also help you back up your asking price. Most buyers will ask for the business to have a valuation done at some point in the process, so better to arm yourself with one before you start engaging prospects.

Prepare Documents

There are certain documents buyer's will need to take a look at regarding your business such as:

• Financial statements

• Tax returns (dating back three to four years)

• List of equipment being sold with the business

• A list of contacts of salespeople and suppliers

You should also include any relevant paperwork like your current lease. A buyer must understand exactly what he or she is getting if they choose to buy your business. 

Find a Broker

Yes, you can sell a business without a broker but it's like selling a home without a broker. It's often more difficult, riskier, and leaves you vulnerable to making costly mistakes. 

Selling your business tends to be a lengthy process. Being patient, taking your time, and being thorough will help you make smarter decisions. 

Before choosing a broker, interview several before you choose which one to work with. A good broker will have a realistic approach. A bad broker will try to sell you a fantasy of what you can expect and it'll take longer for your business to sell it at all.

Sell your business, buy a business, or buy a franchise with BizNexus. BizNexus matches business owners with the best intermediaries to help sell your business on the best terms. We leverage data science & verified reviews to confidentially connect entrepreneurs with business intermediaries who can help them buy or sell a business.

Put Your Business on the Market

Selling a small business doesn't have to be hard. You just need to surround yourself with the right team to help you find the right buyer. Use websites like BizNexus to match you with the right business intermediaries to help you sell your business on optimal terms at the right price.

Best of all, it's a free service. Click here to try it now. 

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Series: Using a Virtual Assistant to Grow Your Business Part I: Why Hire a VA?

From Concept to Implementation:

Finding, Hiring, & Managing a Great Virtual Assistant.

Part I: Why Do It?

Why hire a virtual assistant?

This is the first part of what will be larger series of posts on finding, hiring, and managing a quality VA, and will be included in the BizNexus newsletter as we kick that back up with a focus on offering clear value for our entrepreneur members.

One recurring point of frustration I’ve heard from almost every type of user on our platform (buyers, owners, intermediaries, etc.) is how to successfully hire quality support to help scale operations on a limited budget, -how to hire dependable help to run the day-to-day operations of your business so that you, as an entrepreneur, can consistently focus on the strategically valuable initiatives that will actually help you succeed.

Less brush-fires, more time on shit that actually moves the needle.….

We’ve nailed down a pretty great process for running a distributed team here at BizNexus, and we’re going to start sharing some of the lessons we’ve learned along the way so you can hopefully not only benefit but ideally avoid some of the near-fatal mistakes we made early on (and continue to make).

Our VA team has been a game-changer value-add for us, so we’ll start with that piece…

The first huge mistake we made at BizNexus….

When we first started BizNexus we did what everybody else in startup land is told to do. We built the pitch deck, we tweaked the pitch, we told the story, and even won some big New England startup competitions talking about the “Baby Boomer Business Bubble” business drivers & TAM yada, yada, etc., etc.

We met with “angels” who all had their own opinions about how we needed to revise the pitch deck, tweak the pitch and tell the story. It was exhausting, and we were burning our time and effort on optimizing for the wrong thing:

Investment.

Sure, we took some initial capital to get the platform up and running because we thought we didn’t have a choice at that point. But somewhere early on we realized how much time we were wasting speaking with interested investors & groups who we had very little real background clarity on, very little data on as to whether this person or group typically invests or not, how long does that process take, how much will they ultimately invest after they deduct their own legal fees for diligence, will they want to "finesse the terms of the offering with “advisor shares” etc.. -It became exhausting, and our product development and month-over-month performance was clearly suffering, which in turn hurt our negotiations and valuation leverage.

We stepped back for a much-needed SOTU and wound up looking at five things:

1. We were running out of cash.

2. We were operating in a market (M&A) where there were (are) clear pain points and major inefficiencies when it comes to traditional methodologies around biz dev. sales & marketing.

3. We knew there were (are) successful, cash-liquid potential customers who were already engaging with us.

4. We knew (know) this niche really, really well.

5. We knew we were (are) really nailing something with the emerging concept of digital sales & social selling, and leveraging that to drive personalized lead generation at a long-term scale. We were well on our way to $1 billion in organic inventory growth, and we had refined a duplicable process we could potentially package up and sell.

Enter Paid Services & VA-Facilitated Bootstrapping…

Let’s fast-forward to the end takeaway here because nobody really reads past 50% of the post anyway according to our Hotjar analytics.

Today, BizNexus is still early on in the business life-cycle, but we’re at a point where we’re regularly fielding investor inquiries but don’t have the pressure to drop everything and respond because we’ve been able to bootstrap the platform development through our B2B digital sales agency, BN.Digital. We love speaking with the investors about future opportunities in the market and with BizNexus, but the conversation no longer has any underlying stink of needy desperation.

We got to this point by making some major pivots along the way and switching our focus to what I believe is the right thing for 99% of the fundraising-focused startups out there in today’s crazy market:

Profitability.

By transitioning early on to a clear focus on profitability over outside investment, we’ve taken a different approach to build BizNexus than most startups out there these days and we’ve had to be lean since day #1. We’ve built a cash flow positive, scalable operation and we’ve done that in a large part by leveraging the opportunity to work with virtual assistants through a distributed model based on Slack, Basecamp, Upwork, and Google Hangouts.

This blog post series will be all about finding, hiring, and managing a great Virtual Assistant for your business, and we’ll share the tricks we’ve found to be successful, along with the major red flags you need to avoid (trust us on these…).

Coming Up Next:

Part II: Our Step-By-Step Process for Finding a Great VA

Want to Chat With One of Our VA’s?

The Top 5 Ways to Finance Buying an Existing Business

Buying a business

Here are five ways to financing your acquisition

Are you looking for innovative ways to finance buying an existing business? Read on to learn more.

Finance buying an existing business

In a lot of ways, running your own business is the ultimate fulfillment of the American dream. You set your own hours, act as your own boss, and get to spend your days doing something you love. But how can you become a business owner without all the risk that comes along with starting something from scratch?

What do you do if you want to finance buying an existing business?

There are a number of ways to approach business financing. From making arrangements with the seller to getting a standard loan, you can choose the option that works best for you. Read on to learn about some common ways to finance buying an existing business.

1. Seller Financing

Depending on who you’re buying your business from, you may be able to get the seller to finance the sale of the business. Like with a loan, you pay an agreed-upon amount every month for a certain period of time until you’ve paid for the business in full. This gives the business owner a guaranteed source of income for the life of the loan, and it allows you to avoid the initial up-front expense of buying them out.

Sell your business, buy a business, or buy a franchise with BizNexus. BizNexus matches business owners with the best intermediaries to help sell your business on the best terms. We leverage data science & verified reviews to confidentially connect entrepreneurs with business intermediaries who can help them buy or sell a business.

2. Partnership

If your seller won’t finance your purchase but you want to avoid a traditional loan, you may be able to go into business with a partner. Each of you would pay for a portion of the business, and you would run it together. This effectively doubles the amount of capital you have to invest in this business and gives you some help in running it.

3. Sell Stock To Employees

If you plan on having a number of employees, another financing option may be to sell stock to your employees. You’ll have to organize the business as an S-Corp or a C-Corp, and we would recommend selling non-voting stock so you retain ownership. But this option can get you a huge discount – possibly as much as 90 percent – on the business price.

4. Lease The Business

As with many other large purchases, one of your options with buying a business is to lease it. This will require cooperation with your seller since you will take over running the business and pay them a fee each month, while they still retain ownership. But it gives you time to build up capital in the business before you make the big purchase.

5. Get A Loan 

And, of course, a very popular option for financing buying a business is getting a loan. You can get a term loan, a Small Business Administration loan, or asset-based financing, depending on your situation. You can also use a combination of the three to get the right solution you need to buy your new business.

Learn How to Finance Buying an Existing Business

Starting a business is challenging enough, but knowing how to finance buying an existing business is a whole different ball game. There are a number of different approaches that will work, depending on your needs. Talk to your seller and your bank and see which option will work best for you.

If you’d like to learn more about entrepreneurship through acquisition, check out the rest of our site at BizNexus. We have tools to help you buy or sell a business or franchise. Check out our posts about buying a business to start planning your entrepreneurial success today.

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

3 Practices to Get Your Business Ready for Sale

Get ready

To sell your business

Are you looking to sell your business? Read through to learn a couple of things you'll need to do to get it ready for the big sale.

Let’s get your business ready to sell

A record number of businesses were sold in 2018. Four percent more businesses were sold that year than in 2017. 

Selling a business is a lot like selling a home. It's something you've put a lot of blood, sweat, and effort into, and it takes time to prepare for an exit that makes it all worthwhile. 

More often than not, your employees can't come with you once you've sold your business, and that alone can make selling a business rather bittersweet and difficult when it comes to making sure they stay on board with a new owner so you can get through a successful exit.

If you're wondering how to begin to get a business ready to sell, we can help with that. Keep reading to learn our three ways to start the process of selling a business. 

1. Get a Business Ready to Sell by Boosting Your Brand

The more brand awareness you have, the more valuable your company is to potential investors. Here's how to boost your company's brand:

Appearance

All your marketing and branding efforts should have a consistent and attractive look to them. 

Visibility

Customers and buyers alike should be able to find your company online. Make an effort to get your website ranked first on searches. 

Integrity

Clean up any problems your business has going on. That includes any scandals, lawsuits, or scam reports. 

Potential buyers want to know you and your business are honest. 

Followers

You can't just post every once in a while on social media. You must have an active profile and accumulate followers. 

The more customers who are loyal to your brand, the more successful your business becomes. And buyers are purchasing not just your office space and products or services, but your customers as well. 

2. It's About Timing and Knowing Your Worth

Get an appraisal done on your business. You'll not only know the real worth of your business but prospective buyers will want one done anyway. 

But selling a business is all about timing. While you may think you need to sell because your business has legal challenges, is facing bankruptcy or is losing too much money, you'll also attract buyers eager to cash in on your distress. 

It's better to sell when your business is doing well. It's appealing to investors and you walk away with more money in your pocket. 

3. Keep Costs Down

The more costs you can cut, the more profits you'll make. And the goal as a seller is to show buyers a revenue trend that's ticking up instead of down. 

Take a look at your current expenses and find ways to either reduce them or eliminate them entirely. Often, all it takes is a quick phone call to your vendor to ask for a better deal. 

Cutting costs can help show buyers that the business is improving rather than slowing down. 

Get Help

Another way to learn how to get a business ready to sell is to partner with the right business broker. We can help match you with the best professionals for you and your unique business when the time comes.

We'll also help explain the process and be there with you every step of the way. Click here to learn more. 

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PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

What's Your Business's Market Value? How to Value a Company

How to Value a Company

What’s Your Business’s Market Value?

Are you wondering what your business's market value is? Read this article to learn how to value a company fairly so you can sell fast and make a profit.

How to value a company

You’re finally ready to sell the business you’ve worked so hard on. The first step of the process is valuing how much your company is worth.

But if you’re new to selling a business, likely you won’t have a clue where to start. Thankfully, there are several ways to work out the market value of your company.

Ultimately, your business is worth whatever you decide it’s worth. But you can make your estimation using various ways to value the company and can choose a mix that reflects your final thoughts.

Keep reading to learn how to value a company.

Work out the Value of the Assets

If you’re wondering how to value a business, the first thing you should do is add up the value of everything the company owns. This includes all the equipment and inventory. Then, you’ll need to remove any debts or liabilities.

After all, a buyer would need to purchase all the same stuff if they were starting the business from scratch, so the company at the very least is worth the replacement cost.

While this doesn’t provide an efficient whole evaluation of a business, it’s a great starting point for understanding a business’s worth. Your final balance sheet will offer a good indication of the value of your business’s assets.

Remember that the company is probably worth a lot more than its assets though. Consider how much revenue and earnings the company pulls in.

Base It on Revenue

This leads us to another method on how to value a company. You can base the value of a company on its revenue.

How much does the company make in annual sales? Work that out and determine, using a stockbroker or a business broker, how much a company within your niche may be worth for a level of sales. For example, it may typically be worth about three times sales.

Explore Beyond Financial Formulas

It’s important not to just base your assessment of your company’s value on figures. For example, maybe the location of your business is extremely sought-after?

Always consider the value of your business based on other factors too, such as geographical location.

How to Value a Company for New Sellers

When considering how to value a company, these are some of the best methods to start with. However, one of the best ways to assist with the process is to consider professional help.

Here at Biznexus, we can help. We help match business owners with the best business intermediaries to help you sell your company for great value, on optimal terms.

The service is free for business owners, and we aim to help improve entrepreneurs’ chances of having a positive experience of selling their business. To learn more about how we can help, check out our website.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.