Why Entrepreneurship Through Acquisition is the Best Path Forward

As an entrepreneur, the most rewarding path for me is entrepreneurship through acquisition. This route allows me to leverage my knowledge and experience as well as extract value from the business. What's more, it allowed me to do it more quickly than if I grew it organically.

There are clear and associated benefits with this type of entrepreneurial strategy. The benefits range from accelerated growth to higher return on investment (ROI). Entrepreneurship through acquisition provides rapid growth while also maintaining autonomy over your company.

Entrepreneurship

All entrepreneurship paths have one thing in common. The commonality is that the entrepreneurship path only has two possible ends. The first is a failure, which happens when the business goes out of business or doesn't meet the profit it needs to stay in business.

The second is when a business succeeds and turns a profit. Becoming an entrepreneur can happen in many ways. One of the most popular ways is entrepreneurship through acquisition. The reason why it's so popular is that it is also simple enough to do.

Business Acquisition 

Entrepreneurship through business acquisition brings many benefits to the table for entrepreneurs. The benefits include but aren't limited to:

• Existing infrastructure

• An established customer base

• A business that is already profitable

• An existing team in place to help make a smooth transition

• Real property and equipment already on hand

These benefits allow entrepreneurs to get a good idea of their company's future before they begin.  

Existing Businesses

Whatever the reason might be behind selling, buyers who step into an existing business through acquisition know what they are getting into. That plays a big part in the success or failure of a business. A recently acquired company has increased value.

The value increase is because it brings cash flow and profits that the acquiring company can use.

Buying a Business

Buying a business brings many other benefits, from buying a business's customer list to buying a business's inventory. The buying of another company is not the only way for entrepreneurship to be achieved. Sometimes entrepreneurship happens when a buyer purchases the assets, intellectual property, or raw materials of a company.

Business Owner

Becoming a business owner through business acquisition is the business equivalent of getting a business degree. Getting a business degree is not always necessary to start a business. But it can give people an inside look and knowledge about how the business works. 

Starting a Business

The process of selling or starting a company can be complicated. But it doesn’t have to be something you don't know enough about to move forward. BizNexus is here for you with the best business brokers for your unique situation,

Whether you are an entrepreneur looking to buy an existing business or sell a current one, there is a place you can go. If you want to identify potential opportunities in the marketplace, we would love to hear from you!

Entrepreneurship in Your Future

Not all business broker services are equal. So how do you know which business broker company is the right one for your needs? Biznexus can help by introducing you to a personalized list of qualified brokers.

Brokers who understand what sellers, as well as buyers, want from entrepreneurship. Entrepreneurship is about working towards your professional goals without having any regrets. BizNexus can help you find and stay on the right path for your business acquisition dreams.

How to Exit Your Business By Getting Matched With the Best Possible Deal Team

When you're trying to sell or otherwise exit your company, it's important that you look for a quality deal team that can assist you. Turning over ownership to a company that you built is no small matter, so you need to know that you find the right new owners. 

A brokerage team can help you out in several ways. Let the tips below help you if you're looking to exit your business on your terms.  

Check Out a Broker's Background and Experience Level

When you're looking to sell a business, it helps to hire a broker that is capable and proven. They should have experience not just in brokering the sale of businesses but also assisting with Mergers and Acquisitions (M&T) and other specialized deals. 

They should have plenty of experience with these deals, along with a background dealing with the type of company you own. Every industry has its own set of details that affect the details of a sale and the way that it's handled, so do your due diligence when finding the right team of pros. 

Seek Referrals From Other Businesses That You Trust

You also owe it to yourself to reach out to your prior network to get an idea about which brokers are trustworthy and ideal. That provides an excellent starting point and improves your likelihood of landing a deal that makes it easy to exit your business. 

Take the time to search Better Business Bureau (BBB) directories for your state, and look into organizations like the International Business Brokers Association (IBBA) for leads. There are several professional associations you can reach out to that will also help you find the best fit. 

Assess Your Business and Create a Plan of Action

Whether you're selling a startup or an established business, it's important that you go into it with a solid plan of action. The first part of your plan should involve assessing your business and appraising its value. 

The brokers that you hire can help you out with an appraisal, and you'll need to be ready to produce records of your company's finances. From here, you will be able to address any snags and red flags that your business has, and can work out a quality plan of action for moving forward. 

Avoid Speaking Publicly About Your Business Until You Get the Details Ironed Out

Finally, make sure that you and your team get on the same page when it comes to keeping things close to the vest. Avoid making statements or having private conversations about the potential sale of your business outside of your team. 

Allow your team to spearhead negotiations on your behalf so that you can keep the details out of headlines and off social media. 

Exit Your Business on Your Terms

The points above are useful when you'd like to exit your business. This is a delicate process that will require the help of the best professionals available. 

At BizNexus, we have a plethora of resources and services that you can take advantage of when you need assistance. Take some time to contact us on the web, or give us a call at (855) 949-6969 for more information. 

A Quick Look Into the Merger and Acquisition Market - What's Hot And What's Not

What the Buyer and Seller Market Shows Us

Encouraged by low interest rates and concerned about pending tax changes more and more sellers and buyers are entering the arena.

We’re seeing a very interesting trend as we continue to see businesses pop up around the country. Deal volume is up. Now, lending companies are gaining a lot of attention given the increase of business acquisition as it supports the merger and acquisition market. On a business level, it will be interesting to observe the supply chain, PPP funds, and SBA options as businesses continue to operate. Looking to sell or buy? Read on to dive more deeply into the M&A market to see what’s hot and what’s not.

Commercial Real Estate is Booming

Contrary to what previous data suggests, commercial space as it relates to brick and mortar is making a comeback. The pandemic brought retail sales down significantly. However, with the vaccine and awareness, there’s been an increase in retail, particularly as it pertains to brick and mortar sales. Recent data suggest that in addition to the vaccine, more people are looking forward to shopping in person, increasing sales, and bringing the brick and mortar stats back to normal. Just in time for the Holidays.

Inevitably, interest rates will begin to rise. Many business owners have seen this time as an opportunity to position themselves more comfortably for a sale. For example, many brick and mortars are renovating and improving their current space with the additional lending to attract prospective buyers. Whether you’re looking to sell your commercial space or buy, perhaps it’s worth researching commercial real estate. Checkout our current BizNexus commercial listings today.

Home Improvement Businesses Are Popular

During the pandemic, Home Depot experienced a 20% growth in sales. Many businesses were closed down and what better way to spend your time than to make home improvements. Contractors can take advantage of the low interest rates and increase in demand for housing remodels.

Research indicates steady growth over the next five years, driven mainly by a continued rise in per capita disposable income.

“Without question, the need for home improvement projects remains strong, from maintenance touch-ups and new roofs to massive remodels and full-on reconstruction”

— Better Business Bureau

As per capita disposable income rises, we will continue to see an increase in demand in home improvements and contract work.

Home Healthcare is Entering the market

Though it’s hard to start home healthcare businesses, these listings have shown to have a lot of buyer interest. Those looking to exit the medical confines, have begun their own healthcare endeavors by providing services from their homes.

Pizza Shop sales are through the roof

Unless. Unless a prospective buyer has been in the food service industry before, it’s becoming increasingly difficult to sell foodservice businesses. Additionally, this does not hold true across the board. Franchise opportunities have seemingly been shown to have success in the current market. So, it really all depends on the buyer. Pizza shops are rocking and rolling! From 2016-2020, $46.24 billion dollars were spent by pizza lovers. To that, when thinking of ways to meet consumer demand, takeout establishments are booming. Those in the industry who’ve pivoted their business model to appease their patrons have seen an increase in profit margins and cash flow.

Market Trends That Have Remained The Same

Moreover, franchises are still popular and the less risky of business opportunities. Granted, each deal is different and many factors come into play when owning and operating a business. Contract work has always been in high demand and given the circumstances, home healthcare is on the rise for both economic and obvious health reasons. If you can keep up with the demand and have the necessary expertise and capital to begin, data is showing a boom in home healthcare. I encourage those interested in following business trends to look at market data and research trends.

Additionally, if you can, take advantage of the low interest rates and the opportunity for cheap money by making improvements now. There is still buyer and seller action, contrary to what you may be seeing in the market. We may not see another time where money comes to us at such a low cost.

Broker and Buyer Concerns

Where have all the workers gone? Weekly and monthly P&L’s are now more important than they ever were. Yearly numbers have become less important than weekly and monthly P&Ls. When it comes to buying a business or selling a business, additional requests for financials over short and longer period of time are the norm. Consider putting together a due diligence lists from business accountants. When it comes to concerns from buyers, this relates to any governmental approval; anything related to government is significantly delayed. Solution: Start the process earlier.

Summary

To conclude, it’s time to do business with actual books. Gone are the days where you can make money and not have to track profit and loss. To that, now is the time to take a look at interest rates that you may never see again. With increase awareness and the availability of the COVID-19 vaccine, many industries that faced some significant profit loss are now seeing a nice upward trendline.

Bonus Tip! It’s easier to sell high cash flow, quality companies.

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Different Ways to Finance the Acquisition of An Existing Business

So, you’re in the market to purchase an existing business. You have the business education, training, and experience. The only thing missing is the financing. 

Don’t worry. We’re going to show you two ways you can finance the business of your dreams. 

1. Use Cash Flow to Purchase a Business 

As might be expected, cash solves a lot of problems. If you had pockets that were deep enough, you could take control of the existing business without any loans to worry about.  

A more feasible option for most people is to use cash to partially pay the asking price and receive a loan for the remainder. Then use the cash flow from your new business to meet the loan’s payment schedule. You’re essentially using the business to pay for the business. 

This approach requires a careful beforehand analysis of the cash flow the current owner is enjoying. Is it verifiable? How much of the current cash flow will be available for repaying the loan?  

Imagine that the business under the current owner has a monthly cash flow of $40,000. You project that under your ownership, the cash flow will be about the same. Of the $40,000, you think that you could allocate approximately 10% to your debt reduction.

That means that you would have $4,000 available each month to repay the loan. If you could negotiate a purchase that works with your estimation, you would be able to purchase the business. 

2. Use Seller Financing to Purchase a Business 

Seller financing means that you won’t have to deal with a traditional loan institution when buying a business. Instead, the seller agrees to structure a loan agreement with you. The arrangement is similar to some used car lots whose selling point is “buy here, pay here.”  

A seller may be more lenient regarding your qualifications than a traditional bank. However, that doesn’t mean that sellers aren’t going to protect their property. They will still require that you submit the standard financial background information that indicates that you can repay the loan.  

Like other loaners, the seller will structure a loan with an interest rate guaranteed to produce a profit. The interest rate can vary from significantly lower to notably higher than the one you might receive from a bank. It depends on the seller, the amount of the loan, and your financial track record.  

You will also have to make your payments on time just as you would to a bank. And as with a traditional lender, the loan agreement will include penalties should you make your payments late or default on the loan. 

Sellers expect to receive payments on schedule, but they also want to see your business succeed. They’d prefer to collect your regular payments than regain ownership of their old enterprise.

So, they might be a bit more patient than a bank if you’re a little late with your payments. They may also willingly offer advice to help you clear the hurdles associated with running their former business. 

Acquire An Existing Business Today 

There’s no reason that you need to go another year without being an entrepreneur. If you genuinely want to purchase an existing business with a healthy cash flow, contact us today. We’ll match your interests with a compatible business along with the right broker to facilitate your transition to business owner.  

Buy Faster - Creative Business Acquisition Methods to Speed Up The Buying Process

Be Creative and Buy Faster

Things change. Traditional business strategies are now being challenged as the competitive acquisition landscape grows.

If there’s any time to get creative, it is now. Every day, there is an individual or company growing and working their way up the success ladder. Hence, why buying a business today must be approached differently. In order to compete with the masses, a prospective buyer must consider creative strategies. If you’re looking to buy a business, defy traditional methods in order to win. Read on to learn about creative business acquisition methods to speed up your buying process.

Structure The Deal

When you think of structuring a deal, think of decision-makers. Who is the main point of contact? One way to slow down any process is by communicating with the wrong person. Don’t make that mistake. Instead, know the individual who holds the key.

Network Your Business Tail Off

It goes without saying, one of the best ways to know what’s out there is to simply chat about it. If you’re not building your network on a daily basis, you are missing out on hot opportunities. Reaching out to those within your network and asking if they too can reach out to their network, creates a nice funnel of communication and awareness around the interest in buying a business. Besides, any businessman or woman knows that having a conversation can lead to learning opportunities. Sometimes, it’s not always what you know, but who you know.

Use professional platforms to network

Don’t hesitate to use platforms that are built to support networking. Platforms like LinkedIn are great for building professional networking groups. In addition, LinkedIn allows you to choose specific groups tailored to your experience and background.

Use business listing platforms that work

With so many advertisements out there, pay attention and research the most effective business acquisition platforms like BizNexus. Unlike other platforms, BizNexus offers you quick business matching, placing only the businesses that you want buy-in front of you. Using the unique search options, just create a profile and begin searching in seconds. Knowing where to find businesses for sale is half the battle. You can spend countless hours on the wrong opportunities. No more emotional roller coasters, it’s smooth sailing with BizNexus. Search for a business for sale today.

Know Your Finance Options Ahead of Time

Want to slam dunk your acquisition? Yes or yes? Knowing your finance options will help to streamline the buying process. There are traditional methods that exist. However, those options are becoming less popular due to the increase in differing levels of assistance needed from a prospective buyer. Larger lending companies tend to think new business is too risky and smaller lending companies may not have enough options to choose from. As a result, you’re left spending countless hours wondering how you will afford your dreams.

Popular non-traditional lending options to consider

1. P2P - Peer to Peer

2. Crowdfunding

3. Microfinance

4. Seller Financing

Use Straight Up Cash

Now, if you have the cash to purchase a business outright, that will speed up the process a lot. Not having to go through banks and loan companies, doesn’t require as much time and energy. This also allows you to stand out to sellers. The fewer hurdles, the better. Money talks.

To that, make sure you invest time into researching your options and the fine print embedded. If you’re looking to acquire faster and have the cash to prove it, our BizNexus finance partners can get you in front of the right people faster. Skip the lenders, and get approved as a cash buyer today.

Summary

To summarize, the process of acquisition can be timely or efficient depending on how you strategize and plan. To speed up the process, it’s important to know who you are dealing with; the key players in making the final sale decision, and your options to finance. By networking accordingly, you can skip the hassle of speaking to the wrong professionals and buy right away.

Lastly, knowing how much money you are working with and the amount you will need when buying a business is crucial. Don’t get bogged down by lenders if you don’t need to. If you have the cash, skip the lines and let BizNexus place the right cash buyer businesses in front of you.

Bonus Tip! No Numbers. No Deal. Retrieve proper financial data before you buy.

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To the Rescue: Golden Opportunities in Buying a Struggling Business

Buying a business can be very rewarding, but it's not something everyone should do

With your know-how, capital, and a few changes, you could transform a struggling business into a real performer! Here's what you need to know when buying one.

Are you looking to buy a business? You’ve got the know-how, capital, and desire. But do you have what it takes to turn around a struggling business? 

It's essential to understand the process and what steps you need to take before making an offer. Buying a business can be very rewarding, but it's not something everyone should do. 

So before taking on this kind of responsibility, make sure you have the time and money necessary for such an undertaking. 

Keep reading to get the full checklist to help you along your way and provide some insight into the world of small businesses and entrepreneurship in general.

Find the Best Business Opportunities in the Market

Business opportunities are everywhere. While most people do not have the means or expertise to start a business from scratch, many are looking for turn-key opportunities. 

That is why buying a struggling business can appeal to those with ambition and a love for business. It requires less capital and time than starting a business from scratch but can still be very rewarding.

Prepare for the Decision

Forget buying a business; it's time for you to become an entrepreneur. Before you buy any struggling businesses, make sure this is the road you want to take. It's not like most vocations where you start out small and progress with your career. But, if done right, entrepreneurship can lead to great success.

So, are you ready to put your fate into your own hands? If so, then it's time for you to become an entrepreneur. It can be hard work, but the reward is great. Put in the necessary effort, and you might find yourself providing for a family one day with your business.  Remember, buying a troubled business is not easy. Hence, preparation is necessary.

Find the Best Way to Buy a Struggling Business

There are several different ways to buy a struggling business. The main four options are asset sale, stock sale, merger, and management buy-out. 

Each has its own unique advantages and disadvantages that you must understand to make the right decision. To that, consider the following when looking to buy a struggling business:

1. Assets

2. Stock

3. Merger

4. Management Buy-out

5. Auctioning

Assets

There is a complete transfer of ownership of all assets from the old owner to the new owner. The old owner is not liable for any debt or taxes if they get paid off. 

It is the easiest and quickest way to buy a business, but the price may be more than you can afford. This type of deal is usually best suited for buyers who have plenty of capital on hand.

Stock

Selling some, most or all, their stock to a new owner. This is an easy process and provides the seller with personal time to leave the business on good terms. 

The buyer must own at least 51% of the stock for this transaction to be valid. Suppose you buy more than 80% of stakes. In that case, it may affect the tax-exempt status, and the seller will be liable for any debt or liability.

Merger

One company combines with another to create one big business. However, because this business only exists in theory, the old owners are not responsible for any debts or liabilities. 

Also, this type of deal is usually best suited for buyers who have plenty of capital on hand and can manage a larger company with more employees.

Management Buy-out

This type of transaction is when managers or critical employees buy the shares from the current owner. They must have at least 30% of the total shares for this transaction to be valid. 

Because they lack experience, it's also perfect for buyers with plenty of capital and excellent management of large companies with more employees.

Auctioning

You can also auction off your business or sell it to the highest bidder, but keep in mind that this transaction method is often very unpredictable. You never know who will show up at the auction and what they want for your business.

Also, many buyers may take advantage of you if you are not aware of all the necessary procedures involved. The best way to buy a struggling business is from the current owner. 

This way lets you become familiar with all aspects of the company and ensure that there are no debts or liabilities before signing any contracts. But, ensure you know what you're doing if you decide to go this route.

Know Your Competition

Once you decide about purchasing a distressed business, it's time to start looking for the perfect one. But where do you find them? Is it better to go with personal connections or an advertisement in the newspaper?

When it comes to finding promising companies, word of mouth is often the best form of advertising. If you know successful businessmen, or competitors, who have taken the path, ask them about their experiences and if they would recommend it to you.

If you know anything about the business world, then there's a good chance that you have seen an advertisement or two for businesses that are up for sale. Although these ads can help find a failing business, try to find as much information about the company as before getting involved.

Identify Your Resources

Many resources can help you in buying a failed company, but they may cost money to use. Whether it's for sale by the owner or through an ad, be sure to ask them how much commission you need if you buy the business.

If it turns out to be more than you expected, then you should consider using a different resource.

Stay Focused

After deciding on the best struggling business to buy, invest more in its operations, how you can build it, and not only on the profits. As exciting as this may be, many other factors come into play when buying a business, such as location and suitability.

The most important factor in buying a company is whether it's for sale for the right price. If you have enough capital on hand to buy this company from its current owner, then go ahead and make an offer.

Many companies are currently up for sale because the owners do not know how to manage such a large business, and it's up to you to turn this struggling company around.

Summary

If you have the resources and know-how, then go out and find a struggling company needing great improvement. But, remember to stick to a price you can afford.

Also, if you need more advice on how to buy a struggling business, feel free to contact us, Biznexus at any time. Put our team to work for you.

Bonus Tip! Know the benefits of negotiating during an acquisition

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Consider These 7 Things Before Buying a Business

Buying a business is an excellent way to become an entrepreneur without having to start from scratch. However, just like with any other investment, purchasing an existing business requires a lot of research. 

Knowing exactly how to pick the best option for you is crucial to becoming a successful new business owner. 

Becoming an entrepreneur has many benefits, so if you are looking to make the best decisions when buying a business, you've come to the right place. We've put together a guide of seven things you should consider if you are looking to buy a business and avoid buyer's remorse. 

1. Finding the Right Fit For You

About 20% of small businesses fail within the first year. Therefore, there are plenty of owners that decide to sell their businesses.

However, just because a business is up for sale does not mean it is the right fit for you. The first thing you'll need to decide before buying a business is if it aligns with your values.

A company has a higher chance of surviving if its owners are passionate about it. When you start looking for a business to purchase, narrow down your interests and try to go for one that you'll actually be passionate about. 

Amid the pandemic, many aspiring entrepreneurs have had a lot of success with SaaS businesses. Of course, you need to fully research any business you might consider buying, but if you don't know where to start, looking at SaaS companies for sale might be a good option for you. 

2. Understand Why the Business is Up for Sale

If you find a business that you would like to purchase, it is a good idea to ask the original owners why it is up for sale. Different businesses go on sale for different reasons. For example, an existing owner might be retiring, moving, or going through some lifestyle changes. 

However, you might also encounter a business that is on sale because of some deeper issues. If this is the case, you'll want to fully understand what the problems are in order to determine if the investment is worth it. 

You'll want to be careful about buying a business that was built based on a poor business plan, or one that has a lot of debt. Make sure you understand that when you buy a business, you will be buying it with all of its existing issues.

3. Find Out if the Seller Can Offer Financing

Sometimes sellers will offer financing to the new owners. This is often done in order for the original owner to oversee the performance of their company going forward. 

This can be a really beneficial thing if you are looking for ways to finance your investment. Therefore, when you are looking for a business to buy, consider asking if this type of deal is an option. 

Most times, seller financing will be similar to getting a loan from the bank. That is, you'll probably have to provide documents such as your credit score and other information that will tell the seller if you'll be able to pay them back. 

4. Fully Understand Your Purchase

Buying an existing business can be a bad investment if you don't know exactly what you are purchasing. Whenever you are ready to make a deal, make sure you know the ins and outs of the company you are buying. 

Here are some questions you can ask in order to get a better understanding: 

• What is the business' established brand?

• Does the business have a large client base?

• Does the business come with employees?

• What licenses and permits are needed to continue running this business?

5. Determine if the Business is a Good Investment 

You will need to get an idea of the business' financials in order to determine if the asking price is fair. There are three ways in which you can value a business:

1. By evaluating the business' earnings

2. By determining the business' tangible and intangible assets

3. By evaluating the market and seeing how the business compares

Depending on the business, any of these methods can be helpful to determine if it'll be a good investment. If you don't think the asking price is fair after you have evaluated the value of the business, you can always negotiate.

6. Get to Know the Competitors 

It is important to do thorough research to understand what your plan will be to improve operations and set the business apart from its competitors. When you become the owner of an existing business, you will want to do everything possible to improve it. 

Get to know the competitors, and evaluate all the areas you could improve in order to make your new business better than everyone else's. 

7. Be Prepared to Build a Team

When you buy a business, a lot of times it will come with its existing employees. However, some of these employees will not want to stay in the business with a new owner. Therefore, you will have to be prepared to build a strong team. 

Of course, some of those employees will stay, so it is crucial for you as the new owner to build great relationships with them. A huge determining factor of a business succeeding is its team. Therefore, whether you find yourself with existing employees or have to hire new ones, make sure everyone is on the same page. 

Interested in Buying a Business? 

Buying a business can be very rewarding. However, finding the right fit for you and understanding everything that is involved in the process is crucial to being successful. 

From determining the type of company you want to purchase, to looking for ways to finance it, being diligent about your research is key to making a good investment. 

If you want to start your journey as an entrepreneur, we can help you find a business for sale now!

How SaaS Companies Have Been Popular Acquisition Targets Since COVID

Even during the pandemic and all the restrictions, business happened!

Many companies were bought and sold during the pandemic. One of the most popular companies being bought and sold was SaaS companies. SaaS stands for software as a service. These companies provide access to a software system online, and people pay a subscription for it. This gives the company regular income and provides up-to-date software for the user. There are a few key reasons why SaaS companies have been popular acquisition targets and why you may need to think about acquiring one. This could also be a great time to sell your SaaS company if you are ready.

SaaS Business Model

SaaS companies have increased in popularity because so many people are using them. You don't have to buy software and then buy the updated software like in the old days. This trend only increased during the pandemic because many people started working from home. The need for SaaS products has dramatically increased, and the trend isn't going down.
Many people have found out they enjoy remote work, and that segment of the market is increasing. Companies have to rely on SaaS products to keep their remote teams aligned. As the market sees these trends increase, more investors are seeing the benefit of a business acquisition of a SaaS company.

Benefits of an Acquisition Target

Acquiring a SaaS company makes sense for those who want to increase their reach or gain a foothold in a new market. The SaaS has already done the heavy lifting of starting and building an audience. The acquisition meaning in business for the company is shown in their instant growth of market share. They didn't have to build the market share from the ground up; they were able to obtain it through acquisition. This saves the company time and can be a great investment into a market that still sees significant growth.

Further, as the remote workforce increases and internet access becomes more available, SaaS will be even more important. The benefits of acquiring can help the company in two different ways. Defensively, the company can buy potential competitors and gain their creative resources. Offensively, the company can expand into new areas quickly. Acquiring a company with a customer base allows you to focus on retention and monetization of the current base. This focus builds a stronger financial base for the company because it is more effective at revenue growth. Gaining new customers can be expensive, but those expenses can be diminished when you have a base of customers already. You can offer more options to them to increase revenue.

Business Acquisition Financing

Financing an acquisition can be done very creatively today. You can decide if you want to pay with your money or pay with other people's money. There are many options at your disposal when planning to finance an acquisition.
One of the most popular options that many uses when acquiring a company is seller financing. The owners of the company will often accept a financing deal where they are paid a sum upfront, and then the rest is spread out over time.

Moreover, this provides the seller residual income, so many will accept a settlement like this. It is a benefit for the person acquiring the company because the income from the new company can help pay the residual amount.

Another option for investors wanting to buy a SaaS is to build an investment team. If one investor sees the potential in acquiring a company, most likely, they can find other investors to go in with them. You can even build a team of investors who help you find potential companies to purchase. Their expertise can assist you in finding the right SaaS company with the right potential.

The Importance of an Acquisition Team

One of the most important things you can do when planning to acquire any business is build a strong acquisition team. You want people who can help you see the reality of a business. You will want to have a CPA and a business acquisition lawyer who can help you go through every aspect of the deal, so you don't miss anything. They can help you answer the question, "Why is this business for sale?"

A strong acquisition team will help you reach your acquisition targets faster.

Additionally, you want to dig down to make sure you aren't buying a company on its way down. You need to study the market and the potential growth of the company for the future, as well as the costs per customer for the SaaS. Healthy Saas growth only happens when the customer acquisition cost is low, and the customer acquisition rate is high. This, along with a high speed of acquisition, sets up a SaaS company for strong, healthy growth.

You need people who will help you decipher the data to know what type of investment you will be making. There are business acquisition companies and websites that assist you in every aspect of your search.
These companies will also work with the sellers of companies to find the right buyers. The business acquisition doesn't have to be an unknown journey for the seller or the buyer. Whether you are buying or selling, you don't have to figure it all out yourself. These sites will help you find companies for sale and assist with all aspects of the deal, from financing to negotiations.

Your Acquisition Plan

There are many acquisition targets out there. What you want to do is find the right one that fits you or your company. The SaaS market is exploding, and it won't be slowing down. With creative financing and the right help, you could make a great investment for your future. Our passion is simplifying the business acquisition process. We assist sellers and buyers through the complicated world of acquisition. Find a Business For Sale Now and discover how simple the process can be.

Summary

With SaaS (software as a service) companies on the rise, it’s no wonder they are turning quick profits if set up properly. With the right acquisition team and plan, you’ll be well on your way to hitting; even exceeding your acquisition targets. To learn about your options and to buy or sell a software company, check out Biznexus. Put BizNexus to work for you. List your business for sale or find a SaaS business today.

Bonus Tip! Don't be afraid to utilize upsell funnels to increase your SaaS profit

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Buying vs. Starting a Business: Which Is Better?

Did you know that 20% of businesses fail within the first two years of opening? For many people, this makes buying an existing business a much more attractive proposition. But how do you know if it is the right move for you?

Startups and existing companies all have pros and cons. Read on as we decide between buying and starting a business to see which is better for you. 

Passion for the Product

When you have a great idea for a product or service, you may need to start a business to get it going. A business that already exists to provide that product may not already exist. If they do, they may not be for sale, leaving you with only one option. 

In contrast, if you have skills, experience, and expertise in a field or industry, then buying a business can be a great idea. An existing business will already have something to sell. All you need to do is see what they already do and improve the business by increasing profit. 

Brand and Customer Base

When you buy an existing business, they will already have worked on building a brand. They may have done marketing campaigns, built a website, started social media pages, and gained followers. All of this translates to a customer base that already exists and is making purchases.

With a new business, all of these relationships have to be created and won. Most people will already have affiliations and loyalty to brands and companies in a similar niche. You have to work hard to offer them something more and employ marketing to let them know about it. 

This means that when you start out with a new business, you need to go hard on the marketing efforts. This may cost a lot of money at a time when income is slow. With an established brand, marketing channels, advertising methods, and customers will already exist. 

Funding

When you try to secure funding with a new business, you are essentially making an educated guess at your success and your profit. You can back it up with market research and get your figures and projections accurate. However, there is still an element of estimation involved. 

All of this can make it harder to secure funding. A lender has to look at your figures, your suggested desire for the business on the market and decide if they will reclaim their investment. This is why it can be very hard to get new business funding. 

When you buy an old business, they can look at past financial statements. They can see where profit comes in and how they would be able to reclaim their money. Even if the business is not making as much profit as they could, telling them how the money will impact sales at least gives them something concrete to view. 

Startup Time

When buying a business, the startup has already been done. With the product, stock, processes, and customer base already intact, you just need to learn the current method of working and improve on it. 

In contrast, a new business has a long startup time. You will need to forge relationships with customers and suppliers. Staff needs to be trained. Systems have to be put in place. 

However, it also has its advantages. You can shape the business and mold it how you like. 

You may have certain goals you want to achieve or specific ways in which things should be done. These can be put in place from day one. 

With an existing business, while you get to skip this process, you don't get to shape the company in this way. It may cause conflict, and you may even lose customers if your changes are vastly different. 

Staffing

One big hurdle you will have to face when you buy an old business is the staff. If you are lucky, they will be hardworking and willing to accept change. At the worst, they could be lazy and averse to new ideas, especially those from a new boss.

Your changes may also mean that some staff becomes redundant. In both instances, this means you have the tough task of removing staff who no longer fit the business model. This can be emotionally draining and cost money. 

With a new business, this is not an issue. You are recruiting from the ground up. You can pick and choose the staff you need and only select the ones who fit your business and its outlook. 

Taking On Existing Problems

Occasionally, someone may sell a business when it is at its prime. This ensures they get the best amount possible for it. However, in the world of buying businesses, you get what you pay for. 

Very often, people sell businesses for two reasons. The first is that they are tired of the industry or want to move onto new ventures. This inevitably means that they take their foot off the accelerator in the run-up to a sale, something you have to make up for. 

The other reason is that the business was not doing well when they sold it. Thus, you may have to turn around a business. You may have to revive its fortunes with a bad reputation or in a failing market and sort a multitude of problems. 

When starting a business, you still have a huge degree of problem-solving. However, you are building a company instead of changing one. For some people, this can be much easier. 

Starting a Business vs. Buying One

In summary, if you have a new product, service, or idea, then starting a business is a better idea. However, if you have experience in business or a given industry, then buying may be better for you. 

If you are looking to purchase a business, then Biznexus should be your first stop.

We have everything to help you locate and acquire the ideal company. We make it easy to find a business for sale by creating a login and taking the first step toward business success. 

Business Ownership: What Your Costumers Want More Than Personalization and Ease

What customers wanted a decade ago has changed.

The pandemic presented us with significant data. What we observed was both advantageous and opportunistic for Your business.

So, the pandemic presented us with significant data. What we observed was both advantageous and opportunistic for business. In sum, we saw a mass migration of consumers demanding quality products, personalization, ease, and above all security. The necessity to compartmentalize the consumer experience became the true focal point of a successful business. Read on to learn what consumers want more than personalization and ease.

a business owner needs to be compassionate

If you’re not making every effort to be personal and compassionate with your current customers, you’re missing the point. The most valuable resources are time, energy, and attention. By placing these resources into your customers and your business, you will make more money. The more you connect with the customer, the greater the opportunity to create exactly what they want; better serving them. Whenever possible, focus on data management.

Customer Data is the Foundation of Customer Satisfaction

Where do you house and protect your customer data? Do you know your high-value customers? Lastly, how do you use the data you do have to personalize their experience? More than a first name, last name, and email. This comes down to intelligence. Used narrowly, intelligence uses customer data to identify who your customers are, what their behavior is, and tailoring communications such as email campaigns and marketing to get them to take action. The trick here is getting them to not only take action but stick with you. It’s much easier to grab the attention of a customer than it is to keep it. Hence, why collecting as much customer data and keeping it as safe as possible is crucial.

How do you use your customer data to improve the overall experience?

Moreover, it’s like a science project. Therefore, you can work tirelessly on this project but if you can’t do anything with it, it doesn’t drive anything. Even with the greatest data, if you’re not taking advantage of what the data is showing, you’re not meeting the customer where they are at. To that, being able to understand what the numbers are telling you will assist you in taking the next steps to improve the customer experience and overall satisfaction.

Your Customers want it now and they want it to be easy

Furthermore, customers are smart. As much as we think we know how to approach them and what to offer, we don’t. To this, the best way to know how to approach your customers to offer what it is they truly want, we have to ask. Patience is a virtue in operations. However, customers can be impatient and it’s important to consider your delivery time. When you can, survey your customers to gain valuable insight on how you can improve your business.

Take every security measure possible to protect your business and its customers

Lastly, what customers want more than personalization and ease is security. Anytime your collecting customer’s data, it’s important to keep that information secure. Whether you own a tax preparation business or a wellness spa, whenever a transaction has been made, you’re going to want to make sure that information is heavily guarded. There are many ways you can protect information. However, one of the best ways to protect your business information and customers is through encryption.

Encryption is a process by which information that is stored or transferred is, in laments terms, blocked out. If your point of sales system is backed by a firewall or your wifi isn’t secure, any information being received is vulnerable.

Remember these factors when buying a business

To conclude, personalization is nice and anytime you can make a product or service easy, saving time and money, is great. More than that, however, is how you both use transactional information between your business and its customers. Secure your business information. Make sure you take commercially reasonable steps to encrypt information. Doing so will help your business credibility and customer experience. What customers want more than you calling them by name is their privacy and information managed securely. Trust but verify.

Bonus Tip! Choose the right SSL Certificate for Your Business Website

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Owning a Small Business: The Untapped Gold Mine in 2021

Being a small business means you can invest into the community and your own stock.

Small businesses are witnessing a rebound in 2021, increasing owner confidence heading into 2022.

I’m going to kick off this post by saying 2021 wasn’t nearly as bad as projected for small businesses post-pandemic. More than half of the government’s PPP (paycheck protection plan) loans went to businesses with fewer than ten employees. Additionally, the number of small businesses has doubled since 1982. What this means is that there’s a greater sense of confidence amongst small business owners and the need for smaller businesses over large corporations has skyrocketed. So, read on to learn more about owning a small business and how they prove to be an untapped gold mine in 2021. 

Community Involvement Leads to Monetary Gains

What sets small businesses apart from big dogs? Simple answer: community involvement.

“It’s your small businesses that have been the sponsors of the Little League baseball team, supported the local civic groups, sponsored student scholarships and helped plant flowers and trees along Main Street,” Wagner says. “It’s just what they do. It is institutionalized within owning a small business in a community.”

— Matt Wagner, Chief Program Officer, National Main Street Center, Inc.

As a result, smaller businesses are able to invest more into their communities. In turn, those same community members invest in them. Hence why a lot of larger corporations were forced to shutter their doors amid the pandemic. When your customer interaction intent is stronger than your desire to make a profit, your profit margins begin to increase. Talk about bang for your buck.

Freedom in Small Business leads to Uncapped Earnings

Time is money. We all know that owning a business is tough, provided you’re likely operating lean. However, being a small business owner affords you the ability to create your own monetary empire. The equation works like this: what you decide to put in is what you get out. In other words, your profit is dependent upon how much or how little you want the company to grow.

If you want more money, you will likely have to increase your efforts in order to grow the company to do so. To that, you get to decide how much time you want to spend and where. Knowing, that there’s really no ceiling or earnings cap. The average small business owner can make on average $73,000-$156,000 a year, plus commission, profit sharing, and bonuses.

Showcasing your Unique Value Proposition

You’re small. Unlike corporations, you have fewer hurdles to jump and fewer superiors to receive approval from in order to make changes. You have the ability to create your niche and define your offerings and benefits to your customers. Your goods and services are unlike the masses. Current market research suggests consumers are more likely to pay more for something different, like local goods and services than to invest in mass corp. Furthermore, by showcasing your unique value proposition (UVP), you stand out to consumers, bringing you, more capital.

small businesses that make the most money

Certainly, individuals go into business to make a profit. If you’re looking to make a lot of capital with minimal investment. Take a look at the below list of small businesses that have become untapped gold mines in 2021.

1. Food Trucks

2. Car Washes

3. Auto Repairs

4. IT Support

5. Mobile App

Summary

In sum, if you’re looking to invest in a business but are unsure what, check out, first, your options for small business. Increased funding opportunities have become more readily accessible. With the initial capital required to start being lower than beginning a larger company, there’s the ability to profit sooner. Especially, given the consumer demand shift. Consumers are more likely to spend more at a smaller business they believe in and connect with than corporations. Take the time to research the market. By planning ahead and learning about what it takes to own a business, you will position yourself better when tapping into the untapped gold mine of small business.

Bonus Tip! Have a clear mission statement

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3 Easy Tips to Sell Your Startup Fast

It’s easy if you do it smart

3 easy tips to help you sell your business fast.

The average length of time it takes to sell a business is 6-9 months. However, by following these 3 easy tips, you can speed up the process.

As an entrepreneur, selling your startup is validation that your hard work yielded significant value. So, if you’re ready to cash out, here are some helpful tips to help you sell your startup fast.

1. Spend time building trust with investors and buyers

2. Know your non-negotiables

3. Clean Up Your Digital Footprint

Invest in Your Network to Build Trust

Who are your strong key players in your network? Identify strategic buyers early on to engage and build genuine relationships. A majority of buyers say efforts in cultivating and maintaining relationships were critical in making a purchase decision. Oftentimes, existing partners opt to buy and so keeping those close ties may end up paying off. Moreover, relationship building is an essential piece in owning and operating a successful business.

“As economic growth accelerates, so do business buyers’ personal finances and investment opportunities. In an environment with more relaxed lending policies, plenty of financing options, and a stable stock market, more buyers have the capital needed to buy a business.”

— Inc.com

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Know Your Non-Negotiable’s

Only you know your business inside and out. When it comes to wanting to sell your business fast, the more concrete details you can provide, the better. To that, it’s just as important to know what you are willing to part ways with. Do you want to give up complete ownership? Do you still want to stay on the team after-sale? Knowing these will keep the process moving. Plan ahead. Think about royalties, your employees, and current partners.

Declutter Your Digital Footprint

We live in a digital world where a lot can be seen. Cleaning up your digital footprint is a rule of thumb whether you are prepping to sell or not. Customer reviews, website copy, social content, and voice will be researched by the prospective buyer. A common mistake many business owners make is not responding to or monitoring the negative comments. How your business will be perceived is based on accessible public data. Take the time to strengthen your online presence.

Summary

There’s a lot that goes into the exit process. So, whether you’re just getting started or 4 months into a sale, these three easy tips will help to speed up the process. Remember, it’s not always a sprint. A proper exit strategy takes time and a tremendous amount of consideration.

Bonus Tip! Choose and hire the right advisor (M&A)

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The BizNexus Roundup Podcast series

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.

SELL With Confidence - Exit strategies For Beginners

Position your business for sale

We go over strategies for beginners. Sell your business with confidence.

5 Tips to start planning your business exit strategy:

1. Get your paperwork ready

2. Keep growing your business and increase revenue

3. Keep the sale confidential

4. Find a certified business intermediary

5. Never too late to start positioning your business for sale

SELL With Confidence- How to Take the Worrying out of a Business Exit Strategies For Beginners

The truth is, bidding farewell to an asset of yours is tough. Blood, sweat, and tears have likely laid the grounds for your success. It goes without saying, knowing how to exit makes the world of a difference.

Proper Record Keeping is Crucial

Record keeping is a must. Too many unknowns can trigger significant red flags to a prospective buyer. You’ll want to make sure all business information and records are clear and organized. Going into a deal blind does not lend itself to a done deal. If you haven’t already, begin carefully organizing important documents. Whomever the prospective buyer is, he/she will want to take a closer look. Stay ahead of the sale by making all relevant business information readily available upon request.

General List of Documents to Have and to Hold

• Invoices

• Confidentiality Agreements

• Vendor Agreements

• Partnership Agreements

• Financial Statements

• Discretionary earnings & cash flow

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Keep Your Revenue Up

Those planning to sell often make the common mistake of selling when revenue is down. There are critics out there who will say selling when sales are down is the smart thing. One size does not fit all in business. Remember, you will have to disclose financial statements to the prospective buyer. You will need to supply a valid reason why you’re selling, especially when it’s been made clear your margins are down. Most prospective buyers want to see a strong cash flow. So, just as you entered into business for your ROI so too will the prospect. Not to mention, higher numbers could also mean higher business valuation. Two things to always keep in mind

1. Recurring Revenue

2. Growth Potential

It’s OK to Go Under the Radar Until the Deal is Finalized

Moreover, don’t leave your business before you actually sell it. If there’s anything that will hurt your bottom line more, it’s the mindset that it’s over before it’s over. It’s much safer and more professional to carry on with your day-to-day operations as you did on day one. Your employees don’t need to stress about their job security and before a deal is finalized, you don’t want to jeopardize the empire you built.

Find The Right Business Broker

For anyone wanting to sell a business, hiring the right broker on your side is the difference between a successful sale and failure. You want an individual who understands your goals and sets the bar on delivering exactly that. Business brokers represent you and your business, so finding the right one is important. BizNexus instantly connects you to a business broker in your area and niche, taking the headaches out of searching; saving time and money.

It’s Never Too Early to Start Planning for a Sale

Undoubtedly, it’s never too early to start organizing the “back office” and putting your business puzzle pieces together. The most seamless deals happen when the seller has their ducks in a row and the buyer is provided all of the details to allow them to feel comfortable giving that final handshake. The best way to ensure a positive experience, when you are ready to sell, is to plan. When you are ready to sell, BizNexus can help. BizNexus instantly connects you to prospects and brokers in your industry. Don’t waste your time and energy. Put Biznexus to work for you. We’ll make sure you get that handshake.

Position your business for sale today to access active business deals.

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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.

Why There's No Better Time Than Now to Buy a Business

Buy a Business

There is no better time to acquire a business more than now.

So, if you’re thinking about buying a business, you’ve likely considered the risks and the rewards.

What you might have also questioned, however, is the timing. Before you walk away from closing a deal, let us outline why there’s no better time than now to buy a business. Here’s why:

Valuation

More businesses have sold in 2021 than in previous years. This is because recent market trends have shown the economy rebounding. More buyers are looking to sell, given the increased valuation. As a result, you have more room to negotiate a price you can "deal" with as a buyer. Private and public companies continue to grow in this market, increasing demand for profitable companies.

Business Availability

Additionally, business owners in 2020 took time to rethink their life aspirations. Many, chose to list their business for sale to retire and spend more time with their family. The ease of virtual business deals increased significantly over the past two years. Business listings that solely existed outside of the “www” decided to make their listings available online. Over 440 thousand businesses were started in 2021. There are several businesses for sale, but when it comes to investing in the right one, BizNexus has you covered.

Financial Support

Moreover, from personal banking, VCs, partnerships, angels, crowdfunding, grants, and more, there are many ways to obtain the funds needed to buy a business. Be careful, you want to choose the option that best fits your needs.

BizNexus helps you find a business for sale that’s right for you.

Whether you’re looking to buy a business to diversify your portfolio or a first-time business extraordinaire, BizNexus can help you get started!

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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.

Why Business Acquisition Is Smart Investing

Is Business Acquisition a Smart Investment?

9 reasons why it is smart investing!

Business Acquisition - 9 Reasons Why it is a Smart Investment

1. Positive income opportunity

2. Greater appreciation potential

3. Easier access to cash

4. Established expectations

5. Established brand

6. Promote goodwill in the community

7. Acquire with other’s people money

8. No more foundation work needed

9. Many business owners want to sell

Smart investing is about taking calculated risks with a bigger upside than a downside. Financial advisors will point you toward slow-growth index funds and conservative stocks as the key to getting rich. 

However, business acquisition can be an even smarter investment decision with a far greater upside. In the following article, we'll discuss why it makes sense to buy an existing (successful) business. First, let's look at your options. 

Online Businesses

Business models like online courses or software as a service (SaaS) give entrepreneurs like you a chance to establish ongoing passive income from proven informational products. The info-boom is a huge business with players like Udemy and Clickbank opening doors with existing online infrastructure. 

Brick-and-Mortar

A brick-and-mortar business gives you better access to built-in brand recognition that helps you stand out. Geographical location also opens doors to impulse buyers in a way that you just can't enjoy online. The overhead is usually much larger though, with employees, payroll taxes, utility bills, and real estate to pay for.

Once you establish the type of business to buy, it's time to reap the benefits. Here are nine reasons that business acquisition makes for smart investing. 

Buying a Business Can Be a Passive Income Opportunity

Establishing a business isn't passive. Working in your business isn't either. However, buying a business that's already got a track record of success and the support system to keep it going can offer the buyer total passivity. 

At the very least, it will be a business investment that you don't have to constantly worry about. One that provides you with ongoing access to liquidity and growth potential.

Businesses Have Greater Appreciation Potential

The ROI on buying a business is not guaranteed, but neither is the return on a stock, mutual fund, or cryptocurrency. That said, stocks and mutual funds often are touted as better investments because of their long-term returns of 7-8 percent per year. 

You might save enough money to retire that way, but you're not going to be on the fast track. Successful businesses can produce year-after-year returns that are exponentially higher. 

It Provides Easier Access to Cash

One of the big benefits of buying a business is that there is already some record of liquidity established. The business wouldn't be operational without customers. Customers wouldn't be customers if they weren't spending.

Owning a previously established business gives you quicker and, more importantly, predictable access to cash if you need it. Investing in a retirement account, in contrast, ties your money up for several years. During that time, you can't access it without paying state and federal taxes along with an early withdrawal penalty, which is usually 10 percent.

Business Acquisition Gives You Established Expectations

If you were starting from scratch, everything would be a hunch. Hunches have a harder time finding investors, lenders, or any other source for getting your business off the ground.

Investing in a business that's already established gives you direct access to past sales. It shows you what has worked and what hasn't. Using this data, you can map out what to expect from the current performance and future growth. 

It Removes the Challenge of Brand Building

It's said that it takes 5 to 7 impressions per person before they will remember your brand. Impressions, meaning that your branding is placed before a potential customer. 

That means finding just 1,000 customers requires that you connect with them 5,000-7,000 times. That's a lot of work to be doing on top of everything else that your business requires of you. Acquiring a business allows you to inherit your existing customers and any continuing word-of-mouth marketing they might provide on your behalf. 

It Can Help Promote Goodwill in the Community

Buying the right business gives you some built-in goodwill with your community. This especially is true if you plan to keep the existing jobs in place and any record of charitable activity.

It's a smart business strategy to become an active part of your community. That's why many new businesses will join the chamber of commerce and sponsor events from which they will receive no direct revenue. 

They know that establishing themselves with their neighbors will spread brand awareness and goodwill, and it will set them up for future profits. Buying a business means inheriting that goodwill from the previous owners' efforts and committing to continue it forward.

You Can Buy Using OPM

OPM stands for other people's money. One great thing about buying a business is that you can use it instead of your own if the numbers make sense. 

This is much tougher to accomplish with an unproven idea that has no development or track record. Using OPM is easier in the business acquisition scenario because you can point to a history of past sales and profits to convince lenders to pony up the cash.

You Do None of the Foundational Work

Starting a business requires a lot of groundlaying work. You have to develop the product or service, market it, hire workers, deal with bookkeeping. Buying a business means there is some template for all of this that you can use or adjust to suit your needs.

Many Business Owners Want to Sell

Not every business owner is ready to get out but many would for the right price. One need look no further than the trillions of dollars worth of companies that are currently being represented on the open market. 

The reasons for wanting to sell your business can be many. One common driver of it is that too many owners never make the leap from working in their business to working outside of it.

It consumes too much of their time. Their constant mental and sometimes physical energy is required to keep things on track. Pretty soon, that dream of "being your own boss" feels like you have too many bosses.

Smart Investing Is About Calculating and Minimizing Risks

Smart investing means embracing risk in a sensible way. As you can see, buying an established business allows you to calculate your returns, set realistic forecasts, and skip many of the steps that go into starting your own business. 

Good luck, whatever you decide! For more helpful tips and information on starting a business through acquisition, subscribe to our newsletter today.

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BUSINESS ACQUISITION

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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 Properly Sell Your Business

Sell your Business

6 Steps on how to get started!

Sell Your Business - 6 Steps on How to Get it Ready

1. Get business valuation

2. Get your financial docs ready

3. Hire a business broker

4. Vet qualified buyers

5. Due-diligence and negotiation

6. Sort out all your documents

Are you ready to exit your business and move onto the next stage in your life? There are plenty of ways you can go about exiting a business, and one of the most lucrative methods is to sell your business. 

To ensure that this is the right decision, however, you will need to sell your business the right way. This article will provide a guide on how to sell your business well. Read on to learn more.

Determine the Value of Your Business

When you want to sell something, the first thing to figure out is how much the item is worth. The same goes when you want to sell your business. 

You may have a vague idea of the value of your business, but it's important to get down to it and actually find out by evaluating your current operations.

You will have to go through your cash flow, current revenues, and profit-generating potential to understand just how much your business is worth. You can also enlist the help of a valuation expert, who will be able to accurately undergo business valuation.

Knowing this type of information will allow you to set a price that is not too high or too low. This will help the negotiation process with potential buyers of your business. 

Sort Out Your Financial Documents

When you've gone through the business valuation process, make sure to get your financial documents sorted. One of the main factors that affect whether your business sale will be successful is how organized your financial records are. 

In the process of selling a business, there will be scrutiny over your financial records. The buying party, as well as their lawyers and accountants, will be going through your statements to see whether everything adds up. If your records contain errors or inconsistencies, this will raise questions about the credibility of your business. 

To sort your financial documents well, you will need to have an accountant go through everything and make sure they adhere to accounting regulations. If you don't have an accountant in your company, you will have to outsource one. 

Hire a Business Broker

When selling a business, you can hire a business broker to simplify the entire process. A broker will essentially act as the intermediary between the buyer and the seller. They will be able to evaluate who to match you with that will be interested in buying your business. 

They can also help you with marketing your sale to the best buyers, as well as provide due diligence services. Even more so, they can actively partake in negotiations. 

You can use a matching site to find the best brokers and/or buyers for your business. 

Vet Potential Buyers

Not all potential buyers are worth following through with. In reality, it may be that a competitor just wants the opportunity to understand your finances and business operations. Buyers will have access to sensitive information, so it's important to vet potential buyers and evaluate whether they are being genuine.

You also don't want to settle with the first deal that comes onto the table. You will want to evaluate the different types of deals so that you can settle with the best one. 

You can undergo this process by asking them about their plans for your business. This will help you understand how they will operate to ensure your business continues to succeed. You would also want to analyze the deals to see which ones are worth the most for you. 

It is important to take things slow and to make sure that you've considered everything before settling on a buyer. You can always choose to use the existing deals as a way to negotiate even higher prices for your company. 

Be Firm During the Negotiation Process

During the negotiation process, you can allow a bit of room for the business price to change. However, make sure you maintain a minimum standard and be firm about it. 

It is also important to write down everything you've agreed on. This will ensure that the buying party won't back out or deny having agreed to something, which will cause further complications. 

Sort Out Your Final Documents

What happens once you've settled on a buyer? You go through the final documents and ensure that they are completed. You may need a lawyer at this stage to make sure that everything is filled out correctly, and that the deal will be binding. 

The legal documents and contracts you need may include:

• The purchase agreement

• Listings of assets

• Non-compete clause agreements

• The bill of sale (which transfers the assets of your business to the buyer)

• A security agreement

You may be tempted to draft your own purchase agreements, but it will be highly difficult to do so. There may be inconsistencies that prevent the contracts from being legitimate. Instead, you will need someone who is knowledgeable about legal contracts. 

Steps for How to Sell Your Business Well

Have you been looking for a way to sell your business properly? There are some tips that can be helpful for you during this process. You will need to determine the value of your business before anything else so that you can settle with a suitable selling price. 

You will then need to sort out financial documents, vet potential buyers, undergo a negotiation process, and sort out your final documents. These steps will allow you to benefit when exiting a business. 

Position your business for sale today to access active business deals.

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Is Buying a Business a Good Idea?

Buying a Business?

Here are 3 reasons why it is a good idea!

Buying a Business - 3 Reasons Why it is a Good Idea

1. Data and business predictability

2. Existing structure

3. Convenience

Buying a business is a large undertaking. However, it's in fact often easier than creating a startup and can carry much less risk too, done right.

If you're asking yourself "Should I buy a business?" then you have a good deal to consider.

That's why we've put together a guide to help you determine if a given purchase is a good idea (because it very much could be).

Buying a Business vs Starting Your Own

For many entrepreneurs, there are two options: purchase a business or start your own. While there is no one right answer, there are a few factors to consider when making such a choice.

First, the best business strategy for you will depend on your goals. For most business owners, the primary goals are going to be profitable and to avoid unnecessary risk. Whatever your goals, they will guide the rest of the process.

Most startups fail. While that fact can be a bit misleading in isolation (many "fail" but don't cause the owner any major financial loss) it's worth noting. Starting your own business is difficult and can be a serious risk.

While purchasing an existing business has its own risks, those tend to be far more manageable. The simple fact is there are fewer unknowns than with starting a business from scratch.

Starting a business rather than buying one tends to involve a great deal of estimation. While experience and thorough research can get you far, at a certain point, an entrepreneur can only push through, hoping their estimates are enough.

Hard Data and Predictability

Perhaps the biggest advantage of purchasing a business is the substantial pool of records one can look at to determine how risky the purchase is. 

A company that has been around for multiple years has records of its expenses, profits, and more, all helping to illustrate the company's value (or lack thereof).

While this information alone isn't enough to determine whether the company would make a good purchase, it is still an invaluable tool. While past results don't guarantee future performance, they do hint at it.

This also helps illustrate why "Is buying a business a good idea?" is something of the wrong question. It's too broad. The real question an entrepreneur needs to ask is "Is buying this business a good idea?"

Looking at a companies financials combined with good market research can help one understand the future profits a company might offer. From there, one can start to estimate at what price a company becomes a good deal.

Preexisting Structure

While it's rare a company will be identical after purchase (at the very least, the highest leadership has changed) much of the company's core will remain.

This often allows a purchaser to "hit the ground running" when it comes to their purchase. If they don't intend to change much, they may be able to start pulling in a normal profit even just weeks after buying.

This ability to have a pool of employees who are already trained and ready for their duties, a network of suppliers and manufacturers who are willing to work with you can lead to huge savings over starting a new business.

Even if a purchaser instead wants to restructure the business they've bought, this preexisting structure still offers some distinct advantages. It is unlikely a purchaser will want to radically restructure a business that interested them.

The disadvantage of all this is that, should a purchaser decide they do indeed want to radically restructure, it can sometimes be more expensive than having started from scratch.

Quality due diligence will help ensure a purchaser will be happy, for the most part, with a company's preexisting structure. If they want a company but think it needs heavy reworking, that will need to factor into the price.

Convenience

Most entrepreneurs find purchasing a business convenient compared to starting one. The draw of convenience cannot be dismissed as laziness; time saved is money saved.

Briefly touched on in the previous section, starting a business involves a great deal of planning and then enacting that plan. Everything from hiring to marketing to your production line must be fully formed.

It can take months or even years to take a new business from the planning stages to a point where even mild profit can be drawn. While this doesn't mean it is always a bad idea to start a business, it needs to be considered.

When one purchases a business, someone else has already done this work for you. Even if there is a transitionary period where the business is shut down, it is almost always much faster than if one started a new business.

Moreover, if there are things a buyer doesn't like about a business, they can still be changed. Buying an existing business does not prevent you from shaping it the way you want so long as your approach is careful.

Buying a Preexisting Business is Worth Considering

It would be objectively wrong to say buying a business is always better than starting one's own (or pursuing a different investment approach). Every opportunity is different and some businesses aren't worth their price.

At the same time, buying a business already turning a profit or with strong potential can be an excellent entrepreneurial move. It can be easier to predict than starting one's own business and more convenient, all while making you money.

Find a Business For Sale Now!

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Getting an SBA Loan: A Simple Guide

Guide to SBA Loan Submission

The process may take longer than most loan programs, but the benefits of SBA loans are numerous. 

Guide to SBA Loan Submission:

1. Determine your eligibility

2. Choose the best program for you

3. Lower down payments

4. Choose the best lender

5. Gather your paperwork

6. Fill out the application

7. Closing the process

You're thinking about getting an SBA loan. You're struggling to get approved for a loan. Your credit score is decent, but lenders remain hesitant. An SBA loan may be the answer.

The steps for SBA loan approval entail researching eligibility requirements, choosing the best SBA program, choosing the best lender, organizing all your paperwork, completing the application, going through underwriting, and reading over the loan agreement. The process may take longer than most loan programs, but the benefits of SBA loans are numerous. 

This article is your comprehensive guide to SBA loan submission. Let's explore. 

Determine Your Eligibility

Before applying for an SBA loan, determine if you're able to do so. Overall, the SBA imposes the following guidelines: 

• Your business must adhere to the legal definition of a small business (The legal definition is usually a max of 250 employees or a max of 1,500 employees, but the max number depends on your industry)

• You have used all other financing options

• You don't have a history of government loan defaults or delinquencies

• Your business must be registered as a profit-based enterprise

• You have invested time and energy into the business

• The business must be registered in the United States

• The business must operate within the United States

The SBA also has some income requirements, but income guidelines depend on what type of SBA program you're applying for. If you're applying under the 7(a) program, for example, your net operating income must be under $5 million. Overall, your business must have enough cash flow to satisfy debt obligations.

Besides SBA requirements, you must adhere to lending requirements as well. When it comes to credit scores, most lenders prefer a 640 score, but other lenders may prefer higher.

You'll stand a much better chance of approval if you have a score of 680 or higher. The SBA doesn't have minimum credit thresholds, but the lenders do. Further, lenders usually prefer minimum annual revenues of $100,000. Also, lenders usually want companies that have been in business for two years minimum. 

Your personal financial history will fall under scrutiny as well. You could face denial if you have a history of bankruptcies, foreclosures, or tax liens.

Additionally, be prepared to provide a down payment and/or collateral if necessary. The down payment could be 10% of the balance. If you're borrowing over $25,000, you may need to provide collateral. 

Choose the Best Program For You

The SBA has multiple programs, such as the:

• 504/CDC Program: This program is for borrowers who want to purchase assets in the form of large equipment or real estate. You can borrow up to $5.5 million, and the rates are usually around 5 or 6%. The terms last up to 25 years.

• 7(a) Program: This loan program allows you to borrow up to $5 million. The interest rates are from 8 to 13%. This is the most common and popular loan option.

• Microloan Program: This loan option offers a max borrowing amount of $50,000. It can be used to purchase supplies or inventory. This program is more flexible and is a good option for startups.

• Express Program: Choose this option if you need a loan of up to $350,000. The rates are the same as the 7(a) program, and you'll get a faster approval time.

The SBA offers other programs, such as SBA Disaster Loans, Community Advantage Loans, and lines of credit. 

Choose the Best Lender

Since the SBA guarantees a portion of the loan, you must choose a participating lender. When looking for the right lender, look for one within the preferred lending network.

Preferred lenders have positive track records. Plus, they can process your application faster than non-preferred lenders. Additionally, ask yourself the following questions when choosing the best lender:

• How long does the process take?

• What is your pre-approval process?

• What are your minimum credit score requirements?

• Do you require any collateral?

• What are your typical interest rates?

• Will a loan rep guide me from beginning to end?

Gather Your Paperwork

A dedicated service rep is crucial for SBA loan help because they can tell you all the paperwork you need. You'll need basic documents such as:

• A loan request letter specifying how much you intend to borrow and how you intend to use the money

• Financial statements, business statements, and personal tax returns

• Legal documents showing your company registration

• A business plan

You may need to provide other docs, such as a debt schedule, or any other type of documentation unique to your chosen program. 

Fill Out the Application

The programs have different applications. Therefore, ask your loan rep which application is appropriate for you. Some lenders may offer an online application, but others may prefer a paper application.

Closing the Process

After applying, you'll usually hear back from the SBA within one to two weeks. If they proceed with your application, you'll get a letter of intent stating the borrowing amount, lending terms, and interest rate.

If you accept the terms, the process will continue. The underwriting process is the next step and will take between two to four weeks.

The SBA will verify the information in your application and may ask for additional documentation. If all goes well, you'll get a business agreement. Read over the agreement thoroughly before signing. A business attorney can read over the document on your behalf.

Is Getting an SBA Loan Worth It?

Getting an SBA loan will be easier if you have all your documentation in place. During the underwriting phase, make yourself available in case they need additional documents. Before applying, however, ensure that you meet the SBA's core requirements.

Do you want to buy a business? Click here to learn more.  

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Pros and Cons of SBA Loans: 3 Things That Are Great, and 3 That Aren't

Pros & Cons of SBA Loan

We walk you through the benefits and drawbacks of SBA loans.

3 Pros to SBA Loans:

1. No collateral necessary

2. Lower interest rate

3. Lower down payments

3 Cons to SBA Loans:

1. Longer approval times

2. Borrowing restrictions

3. Good credit needed

Are you debating the pros and cons of SBA loans? Ask yourself the following questions:

• Is my credit score decent?

• Can I wait a little longer for my loan?

• Do I have an established business?

If you answered yes to these questions, an SBA loan may be right for you. On the other hand, there are problems with SBA loans. This program may not be the best choice if you're a startup (even though startups can get SBA funding with additional requirements), if you need a faster loan, or if you have a lower credit score. 

This article will highlight the benefits and drawbacks of SBA loans. Read further to learn about SBA loans.

The Pros 

1. No Collateral Necessary

If you apply for a loan through a non-SBA lender, loan reps may require collateral that's equal to or greater than the loan amount. Collateral can be anything of value, such as a house or boat.

If you default on the loan, lenders can seize the asset. With an SBA loan, however, lenders usually don't require upfront collateral. If they do require collateral, the amount is usually small.

Since the government is backing the loan, lenders feel reassured when approving your application. Therefore, they're less likely to ask for collateral. 

Here is a step-by-step guide on how to get an SBA loan.

2. Lower Interest Rates 

SBA loans offer some of the lowest interest rates within the small business lending world. Overall, an SBA loan interest rate is around 5%. However, the rate depends on several factors, such as:

• Your credit history

• The lending institution

• The amount borrowed

Let's say you're getting a 7(a) loan. If you borrow less than $25,000, and you intend to pay it off in seven years, you could have an interest rate of 7.50%. Conversely, if you borrow more than $50,000, and you intend to pay off the loan in over seven years, lenders could offer a 6% rate. 

The SBA mandates lower interest rates to keep costs low for borrowers. Additionally, SBA lenders are content offering lower interest rates because these loans aren't high risk. Since the SBA is guaranteeing a portion of the loan, lenders don't mind offering loans with lower interest rates. 

3. Lower Down Payments

SBA loans offer lower down payment requirements. With a 7(a) loan, the down payment must be 10% of the loan balance. 

• Example: If you're borrowing $400,000, the down payment is $40,000.

That said, the down payment amount could be 15% for startup enterprises. Companies engaging in mergers or acquisitions may have to place a higher down payment as well.

The amount largely depends on the lending requirements. Some lenders may even require some collateral as part of the down payment. 

The Cons

1. Longer Approval Times

If you're looking for fast loan approval from the SBA, you may want to look elsewhere. SBA loan processing can take anywhere from 30 to 60 days. In some cases, the process could take up to 90 days. The time depends on how fast the lender processes the loan.

On the plus side, processing times are faster through the SBA Express Program. This program is a trimmed-down version of the 7(a) program where borrowers can borrow up to $350,000. Since you're borrowing a lower amount, the approval times are typically faster. 

To speed up the processing times, ensure that you have all the necessary paperwork in order. If you're purchasing real estate, make yourself available to appraisers to expedite the process. If real estate isn't involved, you stand a good chance of faster approval.

Above all, the processing times depend largely on the lender's experience with SBA loans. Experienced lenders will generally streamline the process faster than inexperienced lenders. Therefore, do some research on each lender to root out new SBA lenders. 

2. Borrowing Restrictions

Many lenders don't care how you use the funds, so long as you pack back the loan on time. However, the SBA imposes limits on how borrowers can use the funds.  

• Example: The 7(a) program forbids the purchase of investment properties, such as houses or duplexes. If you want to invest in commercial real estate, you must apply through the 504 loan program, and this program has various restrictions.

SBA loans are primarily for small business owners. They're generally not for investors looking to make risky investments. 

3. Good Credit Needed

An SBA loan program offers flexible terms, but it's not for business owners with bad credit. If you want to get a 7(a) loan, you'll need a minimum score of 640.

However, a minimum score doesn't mean you'll get approved. To increase your chances of approval, you'll need a score of at least 680.

The SBA doesn't mandate a minimum credit threshold, but lenders generally prefer scores in the mid 600s or higher. Getting an SBA loan may be an issue if you don't have a credit history, or if you're a startup with a small credit history. 

Additionally, you must be concerned about minimum business scores. Whereas personal credit scores stretch from 300 to 850, business credit scores are on a scale from 0 to 300. In most cases, lenders look for a minimum 140 score. Some lenders even prefer scores of at least 160. 

Pros and Cons of SBA Loans: Are They Worth It?

The pros and cons of SBA loans depend on your situation. An SBA loan offers lower interest rates, minimal down payments, and no collateral. However, SBA loans are only accessible to those with higher credit scores.

Moreover, borrowers must contend with restrictions that determine how they can use the funds. Also, SBA loans take longer to process than most loans. 

Are you thinking of buying a business? Click here to learn how you should proceed. 

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7 Things to Know Before You Buy a Business

Buy a Business

Here are 7 things to know before you buy a business.

Buy a Business? Seven Tips to Follow:

1. Pick the right industry

2. Know what you want

3. Do in-depth research

4. Make sure you buy the assets

5. Prepare to make tough staffing decisions

6. Always get seller indemnity

7. Check all prepaid expenses

Did you know that around half of all businesses will have failed by their fifth year?

With this starting period being the crucial years for a company, it makes sense to buy one that is already running. But do you know how to find a purchase a business successfully?

There are many different facets to consider, from how to check if you are legally covered to managing new staff. Read on as we give our seven essential tips to know when you buy a business. 

1. Pick the Right Industry

It is important that you buy a business in an industry you know, for a number of reasons. Firstly, you need hands-on knowledge of how that business works from the ground up. No one likes a business owner without experience.

Secondly, knowing the industry means knowing the state it is in. Is the market in decline, or is it set for a huge boom period? Without knowing this, you could buy a business that is already doomed to failure. 

Start by making sure you have worked in the industry. Take six months out to go and work on the factory floor or make calls in the office. This will give you a much better understanding of how the whole place operates. 

2. Know What You Want

When you take your first steps into acquisition entrepreneurship, goals are going to be at the center of everything you do. People who take over businesses need to set goals for everything from customer service standards to profit. Without them, it is impossible to measure the success and growth of the business. 

What many people fail to address are their own personal goals. When you buy a company, other than increasing its turnover, what do you actually want from it?

Some people will go into the business with a goal to sell it later down the line for increased profit. Others may be going into it for life and may plan to pass it on to their children. Knowing what you want out of the venture makes it easier when setting the short, medium, and long-term goals of the business. 

3. Do In-Depth Research

Once you have seen a potential business, then you need to do your research. The internet is the first place to begin your business valuation. Delve deep into the company's history, its financial records, and any news articles related to it. 

Once this is done, begin to branch out. Do the same for its main competitors. Look at others in the chosen sector, or a geographical region if it is a brick and mortar business. 

4. Make Sure You Buy the Assets

When a corporation or LLC decides to sell a business, you need to make sure you are not just buying stock. It can work out much better if you offer to buy the assets instead. From here, form a separate company that would act as the buyer. 

The reason for this is twofold. First, if the business owes money, is in debt, or is being sued, then you are no longer liable, as you are not the business owner.

In addition, you will get better tax deductions on the assets. They will be judged by the price you paid for them, not the price the prior owner paid for many years before. 

5. Prepare to Make Tough Staffing Decisions

When you take over a new business, it is natural that you'll want to do some things differently. Even if the previous business model worked, you will have ways of improving and adapting. Inevitably, this means that some people will have to go.

As the business models change, certain people or departments will become redundant. Unless you are willing to spend lots of time and money retraining them for new roles elsewhere, then they are no longer needed. Even if you do this, they may not be as interested in a different role. 

Be honest with people about the reason for the dismissal. Give them fair severance packages and thank them for their service. 

6. Always Get Seller Indemnity

From the business valuation to the period of due diligence, you will have gone through the company with a fine toothcomb.

However, you can always miss something. If that is something that could lead to the company being sued down the line, you'll take the wrap. 

Indemnity can be placed as a clause in the contract. It states that if any lawsuits occur in the future as a result of something that was done before you took over, the previous owner will defend the case, paying all fees and judgments. They may also want an indemnity clause for anything that you may do after the closing takes place.  

7. Check All Prepaid Expenses

Before buying, check how many prepaid expenses are in place.

For example, the company may have annual software leases or in-place advertising that costs thousands of dollars. You don't want to find out about this midway through your first year without having included it in your financial projections. 

In addition, do not forget to check any leases on offices, shops, and warehousing. Make sure this will be carried on when you take over the business. Check if there are any clauses or stipulations, such as whether the rental price is fixed or may soon be facing a raise. 

Want to Buy a Business Near Me? Get Assistance

When you buy a business, it pays to get assistance. There are many sites online that can match you with potential sellers and ensure a smooth handover. 

Your first stop should be BizNexus. Set your targets, get matched with a business then connect with potential sales quickly.

Click here to sign up and let us help find your next opportunity starting today! 

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