Most Americans continue to read, hear and see troubling news about the U.S. economic outlook. Business owners need some reassurance that the sky is not falling, particularly for business owners considering the future sale of their business.  Today is a seller’s market!  But, cyclical indicators point that this window will not stay open forever.
The NY Times tackles a very important topic for today’s business owner: what to do when partners want to split. A buy-sell agreement protects all owners in a business for events when a minority, majority or equal owner decides or is forced to leave a business. In most cases, a buy-sell agreement will include a provision for determining “fair market value” via a credible third-party business valuation.
If you own a business and are thinking about selling, it is important you recognize the value of a defined plan & strategy and the value of professional advisors. An article featured on Financial Post summarizes a recent study of business owners who sold their business within the past 5 years (more than 100 business owners were surveyed about selling and what they would recommend to other business owners following their own personal experiences):
Over at BNET, they are developing a series on the topic of M&A with goal of empowering business sellers and buyers to “Be a Master M&A Negotiator”. We like BNET because they take complex issues and spell them out in layman’s terms making it easy for most to understand and learn. The portal with various resources is here.Â
The Financial Times and Canada.com are at it again and has published a compelling�article�titled “Working out what your firm is worth”��for small business owners and their need to conduct recurring business appraisals.� While some businesses do not need annual appraisals, most privately owned companies do need one at some point in its existence. It is very common for an owner to grossly over value their business based on the blood, sweat & tears they’ve invested over the years to get to where they are today.� While sweat equity is valuable, there are specific indicators a valuator will examine in order to determine “fair market value” of a small business.  A key factor for�the business valuation is what is expected to happen in the future when the existing owner is removed from the equation?� If a small business is heavily dependent on that owner’s reputation, expertise & services it could have a negative influence on future financial successes; thus�devaluing such a business.
If you or your company has any business interests that tie into internet marketing and the promotion of your website, then you need to hop on over to Andy Beal’s www.MarketingPilgrim.com. On a daily basis, you can expect to find a combination of internet marketing news stories, useful tips, and some strong opinions on an assortment of relevant topics. We have been following Andy Beal’s thoughts and opinions on internet marketing well before the launch of Marketing Pilgrim, tracing back to his days at Search Engine Lowdown; so take it from us, he knows his stuff and will give some great insight beyond mere facts & rehashed news stories.
As a business owner, do you have a succession plan? If you answered no, please take a moment to read this fantastic article which was featured on Canada.com.
In a nutshell, this piece emphasizes the importance of succession planning and business valuation when the unexpected illness or death of a business owner takes place. In the example used, the owner’s wife was left to keep the business affairs in order amidst competitors trying to buy it for pennies on the dollar once the owner passed accompanied by a number of other stressful events. A business valuation became a life saver to this company and the heirs of the previous owner’s estate.
Starting November 12-15, 2007, a fantastic conference will take place in Cleveland, OH called “The Big Makeover”. It is a spin off of the TV hit “Extreme Makeover: Home Edition” where one lucky business owner will have their entire company reconstructed from top to bottom, bottom to top — FREE! A select group of 250 CEO’s, Presidents and business owners will be invited to Cleveland, OH November 12th – 15th to watch the selected company be completely overhauled, and in so doing, will actively learn how to apply the same techniques and strategies to their own businesses.
If you are a small business owner who’s company is primarily internet-based, especially in eCommerce, trying to determine the value of your web business can often be a daunting and very challenging task. A fundamental question that challenges traditional thinking pertains the tangible and intangible value of a website. For pure play web companies, the website is their building and the internet is their real estate. When a traditional company is sold, often times the building and land go with it. Is web real estate and property being valued in the sale of a web business?
The Center for Media Research just released a study, conducted by ThirdAge, Inc and JWT BOOM, that indicates 40+ year olds are hip to the internet as nearly 75% have Broadband internet in their homes. The group labeled as “Third Agers” is defined as baby boomers and mid-lifers ranging in age from mid 40’s through mid 60’s.
