Want to Build Business Value? These Tools Can Help!

Want to Build Business Value? These Tools Can Help!

Improving your company’s a list organization and processes with these excellent tools recommended by Forbes magazine.   These 15 applications are no-cost or low-cost and will help you bring value to your business by having the right tools.

From Trello for project management to Boomerang and MailChimp for better emails, these are the tools entrepreneurs and start-ups rely on to boost efficiency and have teams work better together.

Let us know if you use any of these tools or if you have others you would recommend.

https://www.forbes.com/sites/alejandrocremades/2018/11/29/15-free-tools-every-entrepreneur-should-use

 


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.

What assets are you selling – when you sell your business?

As business brokers know, most small businesses are sold on the condition that the Seller keeps the cash, accounts receivable, and the accounts payable as of the date of sale.  As businesses get larger, or if the business has high accounts receivable, then a “deal balance sheet” may be negotiated.  In almost all cases the Buyer receives the business name, lease, inventories, good will, customer list, telephone number, yellow page or other advertising, employees, industry knowledge, and so on.  The Seller also pays off all debts.  This is similar to the Seller paying off the mortgage from the sales proceeds when you sell your home.

Connect with Harvest Business Advisors today – email info@harvestbusinessadvisors.com or call 443.334.8000

Generally the Buyer needs to receive the assets necessary to create the cash flow he is purchasing.

Machine Shop Owner Loves His Lathes

We worked with  a machine shop owner who had eight industrial lathes.  He had not used more than two in the past five years but he just loved his lathes!  He really only needed to sell two with the business.  We suggested that he remove the other six lathes from the shop floor and the equipment list prior to showing the business to prospects.  Whatever he was able to earn from the sale of the lathes was money he would not have earned conveying all eight to the new owner.

As businesses become larger these assumptions are subject to negotiation.  For larger businesses it makes sense to define the business that will be sold by negotiating a ‘deal balance sheet.’  This shows the approximate value of all assets and liabilities (if any) being sold.  For instance, a “deal balance sheet” may specify that current assets are to be $200,000 above current liabilities in order to provide working capital for the buyer.

 

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokers, Business Valuations, Business Transactions
Mid-Atlantic and Nationally
609-664-7955
www.harvestbusiness.com

How to Sell Your Business – Types of Buyers, Private Equity Groups (PEGS)

Selling your business is quite complex.  One of the most important things you should understand in order to get the highest business value who your buyer is and what they might want.  PEGS or Private Equity Groups are a viable group of buyers.

Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

Private Equity Groups, also known as PEGS.  PEGS are investment groups.  They want to buy a business – grow it quickly and exit in 5 to 7 years.  For a business to be a fit for them there must be a plan for growth.  Generally, to get into a line of business they are not already in, these Buyers usually want businesses with at least three million dollars of EBITDA.   The first buy in an industry by a PEG is generally called a Platform.  If they are already owners of the same type of business they may buy a smaller competitor.  This is called an add-on transaction.  They will joint venture with Sellers who are willing to sell control.  This can be a good group of prospects if the management wants to buy the business but does not have sufficient capital and the business has very good growth prospects and is fairly large. 

Business brokers and business intermediaries can assist you in finding PEGS and other buyers.  Remember, identify your best buyer and market to them.

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
www.harvestbusiness.com
gcaruso@harvestbusiness.com

609-664-7955

 

Selling Your Business – Setting an Asking Price for Your Middle Market Business Sale

Setting an asking price when selling a larger middle market business is easy.   Experienced merger and acquisition experts, business brokers, and business intermediaries will tell you larger businesses likely to be purchased by sophisticated investors, private equity groups and large corporations do not need to have an asking price.  These business buyers when buying middle market businesses will calculate what the business is worth to them and put in an offer.  If you give an asking price to these prospects, you’ll simply cap your offers.

For a few businesses that size-wise and market-wise fall between larger sophisticated buyers and the corporate refugee, you can try to market to larger buyers first without a price and then attach a price when it comes time to shift to smaller, less sophisticated buyers.

Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

Still it is important to have realistically estimated a sales value of the business before the business sales process.  You will need this information to negotiate with prospects and obtain the best deal.  For this you must know the likely market value.  Knowing the likely sales price will also allow you to determine if the likely outcome from the business sales process will meet your needs in terms of sales price, likely buyers, tax liabilities and more. Just remember the best professional estimate of your business’s value is not the same as several buyers with checks. That is the real measure of value in any given market.

Always estimate the value of your business.  For larger middle market businesses do not put an “asking price” on your business when you go to sell your business.

 

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
609-664-7955

gcaruso@harvestbusiness.com
www.harvestbusiness.com

 

 
Harvest Business Advisors believes in creating opportunity and building business value through business brokerage, business valuation, and succession consulting in Maryland, Virgina,  Pennsylvania, and New Jersey.

Remodeler’s Advantage Webinar; Gregory Caruso on Building Business Value with Succession Planning or Business Exit in Mind.

Great stuff if I do say so myself.  While geared for residential remodelers the talk applies to any cyclical business owner such as general contractors succession planning, subcontractors including electrical contractors succession planning, plumbing contractors succession planning, HVAC contractors succession planning, engineering firms succession planning and all sorts of distributors, manufactures, professional service firms and the like.

What I covered in the webinar was:

1.  Why Succession Planning?  Because with a succession plan you will build a better business that will be more manageable.  You will resolve management and family conflicts (take it on if you really are willing to do what it takes).  You will sell your business when you want to for more money in less time.  Why would a business owner not want that?

2.  What is a valuable business?  Think of an ATM.  Simple systems that can be mastered by ordinary people.  The ordinary people (who are extraordinary at this point) use the systems over and over and in effect stay around.  Works every time.  Money or profits come out.  While simplified that is what creates value in a business.

3.  How do you actually capture and collect the value you created?  How to minimize taxes, minimize risk, and maximize price through the preparation and sales process.  Some of this is not what you think.

Click here to learn more about Remodelers Advantage

Gregory R. Caruso, JD, CPA, CVA
Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.