A January 2004 survey conducted by the DAK Group/Rutgers found the following breakdown of why businesses are for sale: Reasons To Sell Risk reduction      44% Competition or market changes   41% External pressures     27% Lifestyle factors (age, health, etc.)   14% Lack of capital      9% Ownership/management issues  07% Note: Multiple responses allowed;  Source: DAK Group/Rutgers It is interesting to note that the […]

Another important factor relating to the asking price is the amount of cash involved in the sale. There is an old saying that the higher the full-price, the lower the down payment – and vice-versa. The sale of almost any business involves some seller financing. The smaller the down payment, the higher likelihood of a […]

Many business owners would like to receive all-cash for their business when selling. And yet they are often told that this is really not possible. Why? Most people are accustomed to financing just about everything – home, car, vacation home, even college for their children. The first question business brokers are often asked is, “How […]

Structuring the purchase of a business is an issue that should be faced early in the selling decision. Ultimately, the final structure of the sale will be determined by actual negotiations between buyer and seller, but the seller must still answer the following questions: What is the lowest amount of cash acceptable from the sale? […]

In the practical sense, when selling a business, goodwill is all the hard work and effort the seller has put into the business over the years. When acquiring a business, goodwill is the difference between the tangible assets and the purchase price. Goodwill value should not be confused with going-concern value. There is a big […]

“Confidentiality Agreement – A pact that forbids buyers, sellers, and their agents in a given business deal from disclosing information about the transaction to others.” The M&A Dictionary It is common practice for the seller, or his or her intermediary, to require a prospective buyer to sign a confidentiality agreement, sometimes referred to as a […]

The following might be a subtitle for this true account of how one deal was put together: “In spite of everything, you need only one buyer – the right one!” (Although the details are factual, names and financial data are fictional.) The company (let’s call it ElectroCo) has carved a niche in a billion dollar […]

“The most successful integrations were directed by people who placed the common good of the combined organization and its customers before all else.” From: The Mergers & Acquisitions Handbook. By now, most business owners are familiar with the problems created by the merger of Daimler, the German automobile company, and Chrysler, the American car maker. […]

Settle all litigation and environmental issues before putting the company on the market. Hire a good transaction lawyer, because the buyer will also. If company owners are totally inflexible, the buyer may walk away from the transaction. Be prepared to accept a lower price for lack of management depth, dependence on a small number of […]

You, as the seller, are an integral part of the total marketing program. We would like to offer a few friendly recommendations that will help in the marketing efforts. It might also be helpful if you took a good look at your business from the perspective of a buyer. Try to put yourself in the […]