SELLING PRIVATELY HELD BUSINESSES


–SINCE 1982–

Articles & News

The Biggest Mistakes Sellers Make

My team is often asked why businesses don’t sell. Although there are a variety of reasons, or a combination thereof, we believe that the pie chart below does a pretty good job of addressing this topic. For brevity purposes, I will briefly address the top three reasons: Why Won’t My Business Sell? Unrealistic Expectations It is human nature for most of us to believe that our assets (houses, cars, businesses, etc.) are worth more than the markets dictate they are worth.   The way to address this deficiency is to hire an outside expert that has the capability of providing you

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The Sale of Your Business is a Process (Not an Event)

Here are the 5 Phases and how we help manage the selling process: The Business Sale Process Phase 1 – Planning Define seller’s goals and objectives Conduct preliminary due diligence and presale audit Assemble advisory team (accountant, transaction attorney, broker/intermediary, financial planner) Assemble data from Seller Information Checklist Analyze financial statements and prepare valuation range (Opinion of Market Value) Phase 2 – Preparing Agree on range of business value and transaction structure Execute engagement agreement Develop timeline for the process Assemble additional company information Prepare comprehensive presentation package Phase 3 – Marketing Conduct market research and identify buyer prospects Activate marketing

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What is Required for Business Valuation?

In the M&A world, documentation is critical.  Not only does a Seller need the proper documentation to obtain a valuation on the business and to get the Buyer interested in the transaction, but the proper documentation is required during the due diligence process to verify the accuracy of the Seller’s financial statements and the goodwill of the business. At FBB Group, we typically break the process down into multiple components, as assembling all the information simultaneously can be time consuming for time-challenged business owners.  The first group of information is used to provide a range of value for the business.  Set forth below

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Trying to sell a business with only one prospective buyer is a bad idea.

By David Mead Reprinted with permission from Issues for Growth   Doing a sale with only one prospective buyer is typically a bad idea. Recently, there have been a number of failed sales transactions where the seller negotiated with only one prospective buyer only to have the deal fall apart, or to have the sales price significantly lowered during due diligence. Here are a few comments from disillusioned sellers: “We received an unsolicited offer for our business. The process wore on for more than nine months. Then the buyer just withdrew the offer and disappeared.” “We were planning to start

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Ron Brasch and Una NG-Brasch Win 2013 Business and Arts Leader Award

Ron Brasch and Una Ng-Brasch were recently recognized as the Business Arts Leaders of the year at the sixth annual Business and Arts Lunch. The lunch, co-presented by the Colorado Springs Regional Business Alliance and COPPeR, the Cultural Office of the Pikes Peak Region, honors businesses and business leaders that support the arts and integrate arts and creativity into their companies. Ron Brasch is a Merger and Acquisitions Specialist at The FBB Group, Ltd., and Una Ng-Brasch works in the Education Department at Colorado College. Brasch is an award-winning poet who participates in the Smokebrush Foundation’s Story Project and the Pikes

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Tax Strategies for Business Owners

The 2013 tax year will be a Brave New World for many closely-held business owners. A number of tax rates are increasing, depreciation incentives are ending, and then there’s the Affordable Care Act (ACA). Business owners face many new tax challenges in 2013. Business owners will want to identify how these many changes will affect both their business and personal taxes. New tax rate increases in 2013 The legislation early this year that added a new top bracket for higher-income individuals was well-publicized, but 2013 has a whole array of tax rate increases applying at varying income levels: New ACA

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Commercial Real Estate Financing Options for Owner-Users

Although we will occasionally complete a transaction without any type of leverage, the majority of our transactions involve some type of bank financing. In larger transactions involving strategic acquisitions and Private Equity Groups, the acquiring entity usually has financing relationships in place. However, for transactions under $5,000,000 involving individual acquirers or smaller companies, we usually see financing involving an SBA guaranteed loan of one form or another. The SBA guarantee not only provides down side risk to the lender, it enables the borrower to get into a transaction with a lower down payment and a longer amortization period to pay

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Year-End Tax Planning With a Potential Sale Looming

The end of the calendar is typically one of the busiest periods in the M&A industry. There are usually tax and other considerations, in completing a transaction at year end or the beginning of the new year. This year is no exception and, in fact, we are busier than usual as 2015 has just surpassed 2007 as the most active year for M&A activity, and we anticipate that this trend will carry over into 2016. Last month, I attended an industry conference which was attended by several dozen Private Equity Groups looking for acquisitions and, based on my conversations with

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New Year’s Resolutions for Business Owners Contemplating a Sale

January is customarily the month noted for people making resolutions. If you are a business owner and contemplating the sale of your business within the next three years, let me suggest a few resolutions that might assist you with making your business more valuable and attractive to the marketplace. 1.  Start running your business like a business; not your personal checkbook. No one likes to pay taxes, but profits are important to buyers and lenders to prove that the business will be able to pay back debt and generate an appropriate income to sustain the buyer. The more income that you

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Combined Business and Real Estate Sales

When we are dealing with a business owner that owns the real estate that the business occupies, we are often asked about the best way to treat this underlying real estate. Unless there is a particular circumstance that clearly dictates the decision, our response is almost always to be flexible and be prepared to keep or sell the real estate to maximize the marketability of the business. In most situations, it is more difficult to sell the business than the real estate and the business owner has some options to achieve the desired outcome. For combined transactions of $5,000,000 or

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