Why Your Accountant Should Not Sell Your Business

I recently attended a conference full of accountant’s and CPA’s who do business valuation work for litigation and IRS gift tax calculations.  They tend to work for accounting firms.  Most are very good at business valuation.  But do you really want your accountant selling your business?

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

A few comments as regards to selling businesses and M&A:

“The owner of the business came in and demanded that I renegotiate the price when I already had a handshake.  I could not do that.”

Welcome to doing a brokers job.  For better or worse in the deal world negotiations never end and flexibility of the intermediary is essential.

 

“The sales value was $50 million.  We found a buyer and negotiated the deal.  My fee was $75,000.  Far less than a brokerage fee would ever be.”

Yes but how do you know you got the highest price.  You know you saved a fee but at what cost in sales price?   There was one buyer with one offer.  Whoever bid high when they were the only game it town?

 

“We negotiated back and forth from the projections that the buyer demanded”

Really, talk about a zero sum game.     Every comment, every move is an opportunity for the “returns” to the buyer and price to the seller to go down.  Again the way out of this box is to find a second buyer prospect.  That will add positive fire to the negotiation.  But, what accountant ever found more than one buyer prospect at a time?

 

I love my accountant valuation friends.  They are very qualified to do taxes, prepare financials statements and audits, and perform business valuations.  Accountants and CPA’s practicing out of accounting practices are not business brokers.  Few know how to attract and negotiate with more than one buyer which is the surest way to increase business sales price and value through the business brokerage process.

Hire a business broker to do a brokers job.   It’s just that simple. 

Gregory Caruso, Esq., CPA, CVA
Harvest Business Advisors
Business Brokerage, Business Valuations, Succession Planning
Maryland, New Jersey, Pennsylvania
gcaruso@harvestbusiness.com
609-664-7955

How to increase your construction company business profitability and business value

My friend Victoria Downing at Remodeler’s Advantage recently posted a video on a simple tool that improves business profitability and business value when used by construction contractors, subcontractors, material suppliers, engineering firms and re-modelers.  The tool is an annual budget.  While Victoria specializes in residential remodelers the principle applies to all construction contractors (really all businesses).  Click here to watch this short video now.

Want to know more about building value and selling your construction company – Click here to download a 20+ page e-book. 

Gregory Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokers, Business Valuations, Succession Planning
gcaruso@harvestbusiness.com
609-664-7955

 

Prospecting Buyers for the Sale of Your Business

In order to sell your business you must generate prospects.  Prospects are people or companies who are ready, willing, and able to buy your business.  The first step is to draw in contacts and get them to approach you by phone or email. To accomplish that, price your business properly (assuming you have a smaller business – see our posts on pricing a business for sale) and let these prospects know about the business for sale without breaching the required confidentiality of the owner.

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

Fishing Story Number 2

The first time I went out on a charter fishing cruise with a professional captain and first mate I was amazed.  Of course, I am old enough that this was before radar type ‘fish finders,’ but they  not only seemed to know where the fish were but they had a strategy for catching the fish.  Multiple fishing poles were carefully baited and dropped into the water.  Different weights were placed on different lines to put them at different water levels.   All this work to find fish that we could not see.

Marketing your business is very similar.  This critical part of the process involves doing the things your experience suggests will work and, if necessary, trying different variations until you find the “fish.”  Patience is required.  And, once you hook a fish, it is very important not to lose him as many businesses have only a very few good Buyers.  Of course the good news is that just like dating, or selling a house, it only takes one.

 

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
609-664-7955
gcaruso@harvestbusiness.com
www.harvestbusiness.com

Business brokers credit growth of business sales to active business buyers

Biz Buy Sell, www.bizbuysell.com  just released a research report based on a nationwide survey of business brokers.  The report polls business brokers views on the current business sale market for main street businesses.  The findings are consistent with what we have been experiencing as business brokers in Virginia, Maryland and Pennsylvania.  The report on the current outlook for selling businesses found; 1.   Buyers are back which is fueling sales.  2.  Seller financing is essential to getting deals done.    Read the report for yourself.

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

Gregory Caruso
Harvest Business Advisors
Business Brokerage, Business Valuations, Succession Planning
Maryland, Virginia, Pennsylvania, Southern New Jersey
gcaruso@harvestbusiness.com
609-664-7955

Start Retirement Planning Today

Most small business owners don’t make nearly enough money from the sale of their business to survive the thirty to forty years they may live after the sale.  You must start saving early and consistently.  Consider a tax assisted retirement savings program.  Another strategy is to buy the real estate where your business is located. Find a financial planner you trust and start today.  There is nothing worse than being physically or mentally exhausted and having to leave the business but resisting it because you do not have the downstream financial resources.

Many owners we work with intend to augment their savings by seeking employment in the future.  They just want to get the weight of owning a business off their shoulders.  If the income expectations and time requirements are realistic this is a good plan.  Limited future employment is becoming a normal component of many owners’ plans.

If you are not in a position to properly make these types of plans yourself meet with a competent financial planner early.  Find a way to save.  Make it a priority because your future depends on it.

Gregory R Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokerage, Business Valuation, Transaction Planning
609-664-7955
www.harvestbusiness.com