Daily Archives: December 28, 2016

Business Brokers San Diego - What Can Business Brokers San Diego Do For You?

Business brokers San Diego are the outside parties that will help you transition your business to the family, or merge it with another company. They play an indispensable role throughout the process. The thing that you need to do is to find that one business broker who is genuinely interested in helping you get the best deal out of the sale and one that has the experience and knowhow. In this post, however, we will be focusing on some of the important things that the right San Diego business broker will do for you.

Facilitate the process

The main role of a business broker San Diego is to facilitate the successful transition or sale of your business. They are only paid on commission. This means if they don’t help you sell the business, you will not have to spend a single dime on them. However, long before you bring a broker on board, it is imperative that you understand what he can and cannot do.

The right business broker will help you decide on the right price of your business as well as how you should structure the sale. This makes it easy for buyers to understand your business. The broker will then find the right buyers then work with you as well as the buyer every step of the way to ensure that the transaction closes successfully. The business brokers San Diego will further help the buyer with every detail of the buying process.

Business brokers cannot only be retained by sellers. If you want to buy a new business, you can hire your own broker to guide you through the process.

Let you know the best time to sell

Most people choose to sell their business when it is at its prime. This is when it is the most profitable. However, if you are selling your business for any other reason other than it was always your exit strategy from the start; you have to know the best time to sell it. A good business broker will be able to let you know when it is the right time to sell. Their main role is to evaluate your business and your expectations. They will then determine if the opportunities alight for you to get maximum value.

More often than not, when selling a business, a business broker San Diego may have to spend time upfront with you. This could even be a couple of years. During this time, they will focus on helping you prepare financially as well as operationally to the transition.

These are the two main ways in which a business broker will help you when selling a business. All in all, it is important for you to remember that business brokers San Diego are not magicians. They cannot sell a business that has been overpriced. For a business to sell fast, it has to be structured and priced properly. It is always important to remember that the marketplace is what determines how much you end up getting for your business. The business broker will help you get the best deal possible.

Business brokers San Diego

Business Brokers Orange County - Tips to Help with Succession Planning

Business brokers Orange County will come in handy when you want to get your business off your hands. The broker will work with you in drawing up a succession plan, help get your business ready for a sale and enable you find the right successor. However, succession planning is not something you should take lightly. It may mean many things to different people.

Succession planning is not a priority and is obviously an emotional issue. Whether you want to pass your business on to a family member or an employee, you have to make sure that you consider all your options before making the final choice. There are many reasons why you would want to pass your business to your successor. The key reasons include disability, event of death, illness or just the need to retire. Having a well thought out plan is important and a business broker Orange County will help with that. Here are some of the things you need to do when it comes to succession planning.

Plan early

Developing the succession plan early will make it easier for you to smooth the transition. Yes you may not need to implement the plan any time soon but having one in place will help you prepare for the unexpected. There are so many factors that may move up the timeline.

Get outside help

You have obviously given your business a lot to get it where it is now. The last thing you want is to pass it on to someone who will bring it to the ground. This is why you need expert help to help you evaluate your options objectively. You need business brokers Orange County, accountants, attorneys and financial advisors. Pooling together these resources will help you come up with the best possible succession plan. They will evaluate your options more objectively to help you ensure that everything is in place.

Involve the successor

The last thing you want is to come up with a sound succession plan only for the successor to turn you down. To avoid discontent, you need to involve your successor in the plan. Bringing the successor on board will create goodwill and support.

It is also important that you train your successor. You want to make sure that once you leave, your successor will know and understand what it takes to run your company and how to keep it successful. Train and work with your successor. The successor should understand the big picture and not just the duties.

Consider the financial impact

Your succession plan should also include a financial plan. The last thing you want is for your heirs to deal with heft gift taxes that they cannot stomach. You should also liaise with your business broker Orange County to ensure the business valuation is accurate.

Be realistic

Last but not least, make sure the person you pick is up to the task. If you feel he is incompetent, there is no harm in going for another employee or family member. It doesn’t necessarily have to be your eldest son. You want the most competent son.

Business brokers Orange County

Business Broker San Diego - Tips to Help Find the Right Business Broker San Diego

Business broker San Diego will increase your chances of success when selling your business. This is mostly because he has more experience than you when it comes to the preparation and sale of a business. What is more is that the broker will help you concentrate on the core operations of your business as he finds and communicates with the right buyers. All in all, it is important for you to understand that not every business broker out there is worth hiring. There are a number of tips you should use when searching the market for the right broker.

Get referrals

The most important thing to do when searching for a business broker is to get referrals. You need to get referrals from trusted sources. You can turn to your attorney or accountant. These two professionals may direct you to the business brokers San Diego with proven track records. Once you find the recommended brokers, ask them for a list of satisfied clients.

Focus on specialists

It is not uncommon to find a realtor who doubles as a business broker. When searching for the best business broker San Diego, you need to focus only on the one who spends his full-time selling businesses. This is the person who will add more value to your transaction. He will bring along a network of contact and understanding of principles when it comes to marketing, confidentiality and business valuation. You need to work with someone who is dedicated to the profession. Don’t forget to ask for testimonials.

Trust is important

The last thing you want is to work with a biased business broker. Such a broker will exploit you to advance his own agendas. You only need someone who you can believe in and put your trust in. This is someone that you will be working with very closely for a long period of time. He should have the credibility and offer senses that you can depend on to obtain the best price for the sale.

Avoid paying excessive upfront fees

The fee of business brokers San Diego is usually a commission. At times, this may include an upfront fee for marketing and valuation. If the broker asks for an excessive fee, think twice about working with him.

Keep everything confidential

The sale of your business has to be kept quiet. A professional business broker will make sure that they protect your business information.

Don’t bend under pressure

Last but not least, the sale of a business is a stressful one. You should never make rush decisions. The business broker will help manage your expectations. Don’t go behind his back.

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Business Broker Orange County - Sellers Financing Options in a Business Deal

Business broker Orange County will make it easier for you to sell your business. However, if the buyer does not have the money to buy the business, chances are you will hit a brick wall or even have to lower your selling price to accommodate the seller. This is why even when you are the one selling the business; you have to learn of the different methods that buyers can to get finances.

Seller financing

As a matter of fact, one of the most important steps when getting your business ready for sale is to help with seller financing. More and more buyers and lenders are looking up to the seller for financing as they strive to get their transaction together. In this case, the seller holds a note at the agreed interest rate for the specific amortization or term. This ranges from 5 to 10 years. Needless to say, you need to involve business brokers Orange County in this process.

The term of the sale may include a balloon payment of 3 to 5 years after the purchase. This is a method used to give the buyer time to get the business up and running as well as to establish a successful track record.

The best thing about seller financing is that it makes the bank feel more comfortable when financing the transaction. The lenders will know that they have a seller with a vested interest in the success of the business and not one who will make money and run.

SBA Loans

Another option that can be used is that of considering the Small Business Administration (SBA) lender. There are several loan options for you to pick from here. The SBA will guarantee you a portion of the loan. Here, the buyer is required to pay an SBA loan fee which allows him to get funding for the loan that the bank could not do conventionally. If the guaranteed loan is defaulted, the SBA pays the lending institution up to 75% of the deficit after they liquidate the collateral. Business brokers Orange County will help you evaluate your options when considering SBA loans.

Earn-outs

This is based on an agreed dollar amount by the buyer and seller based on the performance of the business after the completion of the transaction. The earn-outs can be structured in many ways based on the various financial benchmarks like company’s revenues, net income or gross profit. This option is used in companies that are in turnaround situations or when the buyers are buying on potential rather than historical cash flow.

Mezzanine financing

This is an alternative that a business broker Orange County will recommend if you are considering an acquisition or merger. The financing package can include interest rates of up to 30%. Lenders here are the high net worth individuals that are expecting large ROI. Limited collateral is needed hence the high interest rate.

There are many more financing options. Never make a choice in a hurry. Liaise with your business broker to know if the option is worth it or not.

Business broker Orange County

Business Brokers San Diego - How to Prepare Your Business for Sale

Business brokers San Diego have the experience and the knowledge to help you sell your business profitably. It is for this reason that you should always enlist the help of a professional every time you are planning on selling your business. With the help of the best business broker, you will be able to learn how to get your business ready for a sale. Below are some of the important things that you need to do when preparing your business.

Determine the actual worth of your business

There are so many formulas that are used in business valuation. The valuation may be based on the cash flow, assets of the business, annual growth, gross revenues, and other factors. The sale price, however, will be based mostly on the profits. You can get a valuation through numerous sources among them the use of a qualified company such as a business broker San Diego.

Update your records

With your valuation in hand, you can now make changes to add value to your business. Start by making sure that all your records are in order. You want to make sure that you have current and detailed records that offer a clear assessment of your business’ financial position as well as future projections. Buyers will want to see these records before they consider your business.

Consider your staffs as an asset

Losing key employees during the sale can significantly impact the sale price of your business. This is why you need to maintain confidentiality throughout the sale process. Business brokers San Diego will start by making sure that you have foolproof confidentiality agreements in place. These documents have to be signed by everyone who is considering your business. The moment people get wind of your business sale, both your employees and your suppliers will start to abandon you. This is something that will significantly affect the sale.

Keeping your key employees on board is important to the ongoing success of your company. Buyers will shy away from any company that lacks the relevant staffs. You have to do everything within your power to ensure that key employees don’t leave the company throughout the transition.

Hire experts

In everything that you do, the sale of a business is not something you should do on your own. This is one of the biggest financial deals you will ever make. It is vitally important to be sure that you take the right steps in the sale. You will have no second chances. One of the best things you can do is to assemble a team of experts. Start by hiring an experienced business broker San Diego to work with you.

The best thing about working with experts is that you will get to take of the load off your shoulders. They will handle the sale while you focus on the core operations of your business as well as improving it. You must always remember that selling your business is only a onetime event. Proper preparation will keep you from regrets.

Business brokers San Diego

Business Brokers San Diego - How Do Business Brokers Determine the Value of a Business?

Business brokers San Diego and other professionals use different methods to determine the value of a business. Every expert has his own opinion of value. This article is designed to help you understand the different theories that are used by business valuation experts to determine the worth of a business. There are basically three standards of value.

  • Fair Market Value

In the United States, the most widely accepted and recognized standard of value s the fair market value. This is the standard that is used in all the Federal tax matters may it be estate taxes, gift taxes, inheritance taxes or income taxes. According to the IRS, the fair market value is defined as the price at which property would change hands between willing buyer and willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell. Both parties must have reasonable knowledge of the relevant facts.

A business broker San Diego can help with this valuation. This is for the simple fact that he is constantly involved in the buying and selling of businesses.

  • Fair value

The fair value is the statutory standard of value in most states when it comes to dissenting stockholders’ valuation rights. This option focuses on the valuation of a business’ shares. In this case, the worth of the shares that a shareholder has is calculated then the shareholder gets the equivalent value in cash.

By definition, the fair value means that the value of shares immediately before the effectuation of corporate action to which dissenter objects, excluding appreciation or depreciation in anticipation of corporate action unless the exclusion would be inequitable. In other definitions, the fair value is the amount that would be compensate to the owner involuntarily deprived of property. Again, for this to work there must be a willing buyer and a willing seller.

Fair value can also be used in a divorce. The definitions of fair value vary. Experienced business brokers San Diego will, however, help you understand your options.

  • Investment Value

This is also referred to as strategic value. it is the value to a particular investor based on the individual investment requirements as well as expectations.

The premise of value can be broken down further into:

  • Going concern value

This is the value of a business that is expected to continue operating into the future. The value is determined by factors like operational plant, trained work force and necessary licenses, procedure and systems. This is more relevant to service firms like the medical practices.

  • Liquidation value

This is the value at which assets of a business are sold quickly like in an auction.

  • Replacement value

This refers to the present cost of a similar property having the nearest equivalent utility to the property that is being valued.

There are many aspects that are considered in business valuation. It is up to you to find the right business broker San Diego to help with the valuation or to help find the best business valuation expert.

Business brokers San Diego

Business Broker Orange County - Best Approach when Selling a Business

Business broker Orange County is there to keep you on the right track when selling a business. However, there is only so much that he can do to ensure that you make the right choices and end up with the best deal. Whether you are selling your business on your own or want to sell with the help of an intermediary, there are a number of important things that you should consider doing.

Maintain privacy

In the sale of a business, privacy is very important. This is because once word gets out that you are selling your business; you will not only loose customers but also your key employees and suppliers. This loss will definitely impact your selling price. It is very important that you ask your business brokers Orange County to draft a foolproof confidentiality agreement that has to be signed by anyone who is interested in buying your company.

Safeguard your time and sanity

The sale process of a business can be overwhelming. This is irrespective of whether you have sold a business before or not. There are so many things that have to be considered. The process is also an emotional one. This is why you need to get outside experts. You need an attorney, an accountant and a business broker to help with the sale. The more support you have the better. Expert help will help you manage your expectations as well as enable you to concentrate on the core operations of your business during the sale.

Get business valuation

Knowing how much your business is worth is very important. You cannot coin a price from the thin air and expect buyers to go for it. Doing this will only mean that you will either under or overprice your business. To convince buyers to consider your business, you have to provide them with a detailed business valuation. Your business broker Orange County will either help you with the valuation or recommend you to an expert that will give you a sound valuation. The recommended valuation is the fair market value.

Pick buyers carefully

The main role of business brokers Orange County is to match buyers and sellers. However, the final decision rests on you. It is your duty to ensure that the new buyer will not drive your business to the ground. You need to make sure that the candidate that the broker brings is qualified enough to run your business.

Get help with the negotiations

When selling your business, the last thing you want is to cave under pressure or to get off on the wrong foot with the buyers. You need someone to play the bad guy on your behalf. That person is the Orange County business broker. He will help you negotiate with the buyer in an objective manner while keeping all the parties involved calm.

The most important thing you need to do when selling a business is to hire the most competent business brokers Orange County. They will not only help with marketing, valuation and negotiations but will also help with the legal and financial aspects of the deal.

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