Mr. or Mrs. Business Owner, Congratulations!
In fact, even when your business produced strong cash flow did you take it out and by fast cars, luxury items, and exotic trips? No.
You re-invested most free cash flow back into
the business. Why? So that someday you can sell your business and get the
biggest check of your life; from the sales price. Building the business was
like pushing a large boulder up a mountain. Over the years as the business
grew, it became even harder, more stressful and required more commitment.
Very few business survive the first 5-10 years, no less, 20 years plus.
Anyway, you did, and today or at some point in the future you stand to cash in big time, if you play your cards right. However, less than 15% of business owners have any form of plan to sell, or how to do it, or when, or to whom, or even a clue as to what it’s worth. This is invariably the largest asset you own. It is the money that you will need to live on in your retirement or to begin the next endeavor.
If you have spent 3,000 your business is 20 years old, then you probably spent more than 60,000 hours pushing that boulder up that mountain. 60,000 hours, think about that level of commitment toward one goal. Do you think it is worth 1-2 hours of your time to meet with a trusted advisor explore exactly what is involved in taking a full inventory of all you need to be mindful of when positioning your business for sale or perhaps transfer to another family member? To sell or not to sell? To transition to another family member or not? To plan in advance or not?
Planning is like exercise, everyone… it has been long-known that less than 20% of all business owners have ANY form of plan on what to do with their business for when the day comes that they no longer want to run it. And one thing is for certain, and that is, that you cannot run your business forever!
The pharos built great pyramids in Egypt to ensure a long-lasting legacy that everyone can remember them by. Today business owners in many respects have same goal in mind. They have spent years building up a business in the hope that someday a long time from now the business will endure and bet transferred to others and the name would stay on, etc.
In fact many business owners have a sense that their son or another family member will take over the business once they no longer want to run. However, very few owners have had any form of a serious discussion with that family member about the prospects of transfer. Most of the time the family member in mind is not as interested in taking over as the owner had thought.
Moreover, many studies show that the chance of long term success of the business after the transfer has been greatly reduced. In fact, only 20% of businesses that transfer to another family member (typically a son), survive the transfer and stay in business. Another statistic, only 9% of businesses survive to a 3rd generation. These statistics are alarming, but true. As they say, the first generation starts it, the second generation grows it, and the 3rd generation blows it.
What all this suggests is that transferring to a family member is not always the best solution to get your big sale price and pay off. Nor are these family members the best choice to run the business over the long-term; they just happen to be these all these years because the owner was. In short, when making the decision to transfer the business to a son (or other family member) as the “best choice” to run the business going forward, ask yourself this question, would me closet competitor hire my son to run his business? If not, then the son (or family member) is not the best choice to take over your business.
I often see many years of hard work on the business owner’s part wind up being thrown away or put at to risk because the “wrong person” was chosen to take it over. In short, use your HEAD not your HEART when making a decision to transfer the business to another family member or sell it to an outside party. If you feel like selling to an outside party is best, but feel you may be ripping the rug from the family member, then perhaps give them some of the sale proceeds to compensate them for many years of their efforts.
Today’s business owners more than anyone else, have too much responsibility, too much stress, too much risk, and make too little bottom line income. Owners got into business years ago because business ownership used to be fun, had freedom, you had control of everything, no one told you what to do and how to operate, and the cash flow was great early on. 10-20 years later the business owner today realizes that it’s no longer cracked up to be what he thought it way.
The hours are long, the stress can be high, the responsibility is high and everyone relies on him, and the income swings are dramatic. Costs go up (especially insurance costs), competition increases, workers complain, hard to collect receivables, harder to bid work, margins are going down all the time, risks are higher especially with more workers and equipment/vehicles today.
It’s no longer fun to own a business for some owners. In fact, most business owners today don’t sell to retire per se, because either can’t or don’t want to. They sell because they simply want to take a break or want to do something else and transfer all of this to someone else. They often have in mind other things they would much rather pursue if they had more free time by not running a business anymore. They often state that they are no longer excited or feel challenged by what they do anymore. They want to start something again that would excite them and get their entrepreneurial spirit going again for the first time in years.
Pre-sale and pre transfer planning ensures that you get the most money before the handoff. Be pro-active on planning, this way when you do transfer the business you get “your” price and terms, not just a low-ball offer from a buyer that doesn’t see your true value. Get properly paid for all your years of commitment to the company and all your invested time and money. Over the past 10-20 years you’ve done nothing but re-invest everything back into the business for the biggest payoff of your life. Most owners only take a small salary to live on and plow everything back into the business over the years. Why? So they can get the biggest check of their life to either retire on or reinvest into another endeavor.
Why get short changed? Why let the tax man take up to 50% of your gross sales price, especially if this can be avoided with good planning well before the transfer? Deal structure alone can either cost you dearly or benefit you tremendously. Everyone talks about the top 5 or top 10 mistakes business owners make before they sell. We simply think that they all boil down to 1 mistake, the mistake of not taking the time and energy to plan in advance.
Planning in advance is key regardless of what time frame you have before you decide you may no longer want to run it. We are experts in professionally positioning your business for sale and creating a professional and comprehensive package to present to qualified buyers that are designed to get them to pay far MORE for your business than they otherwise would have. Our presentation packets are the best in the industry says most-all buyers and sellers of businesses.
We use digital media and an advanced format that brings out the best in your company. We select a short list of buyers form our VR buyer database and then qualify them. If they have a strong background and are financially qualified, they must then sign a comprehensive Non-Disclosure Agreement. Only then do they get to review the sales packet. Most brokers simply post it on the internet or run advertising in local newspapers and industry journals for all your employees and competition to see, without even “masking” the business.
Our approach has ensured we don’t breach confidently for over 10 years now. This is key to maximize value. In fact though our approach you never have to do buyer ‘showings’. This eliminates foot traffic through your office from buyers, which again can disrupt the moral of employees and start rumors. Also, our proprietary approach allows you to avoid wasting time with unqualified buyers, tire-kickers and lookie-loos. This means you will only spend time with qualified buyers that are fully interested in your business and have the money to buy it.
Any business broker will list your business for sale. We are the only business brokers and mergers and acquisitions company in Colorado that will actively work with you on Pre-Sale planning services to best position your business at no up-front cost to you. As you know most brokers earn a commission for just selling the business, we earn the same commission but we provide all up-front services pre-sale planning services that will dramatically increase the overall value of the company before going to the buyer market.
This indirectly benefits us since our commission will go up with the final sales price. In fact, other national companies such as GW Equico Inc. charge an up-front fee of up to $50,000 for the pre-selling planning services that we do as part of our commission after the sale. This speaks volumes about out commitment to assist business owners in planning and preparing for the largest check of their life.
As stated, other professionals offer pre-sale planning services for a substantial up-front fee, but they often are not business brokers at all or have never sold a business. So the question is, how can CPAs and other professionals help prepare a business for sale for a maximum sales price, if they have never sold a business or know exactly what buyers want and how to present “the up-side or the opportunity of the business? Let your CPA do your tax returns.
,We have dealt with buyers every day for 20 years. We know exactly what they want and how to get them to pay a premium for a business, or at least a higher multiple. We know the local and national buyers extensively and we know their hot buttons. Like they say, the best tax lawyers and CPAs to hire for an IRS audit is ones that worked for many years with the IRS. Likewise, after 30 years in business VR Business Brokers is well equipped to advise you on pre-sale planning and positioning of your business. “We look at your business through the eyes of the buyer”!
Also, we have a wide variety of information that we would like to send you each month in our newsletter about ownership transfers, business valuation and tax consequence.
Call us to learn more about transfer of ownership - 303-382-1906
Anyway, you did, and today or at some point in the future you stand to cash in big time, if you play your cards right. However, less than 15% of business owners have any form of plan to sell, or how to do it, or when, or to whom, or even a clue as to what it’s worth. This is invariably the largest asset you own. It is the money that you will need to live on in your retirement or to begin the next endeavor.
If you have spent 3,000 your business is 20 years old, then you probably spent more than 60,000 hours pushing that boulder up that mountain. 60,000 hours, think about that level of commitment toward one goal. Do you think it is worth 1-2 hours of your time to meet with a trusted advisor explore exactly what is involved in taking a full inventory of all you need to be mindful of when positioning your business for sale or perhaps transfer to another family member? To sell or not to sell? To transition to another family member or not? To plan in advance or not?
Planning is like exercise, everyone… it has been long-known that less than 20% of all business owners have ANY form of plan on what to do with their business for when the day comes that they no longer want to run it. And one thing is for certain, and that is, that you cannot run your business forever!
The pharos built great pyramids in Egypt to ensure a long-lasting legacy that everyone can remember them by. Today business owners in many respects have same goal in mind. They have spent years building up a business in the hope that someday a long time from now the business will endure and bet transferred to others and the name would stay on, etc.
In fact many business owners have a sense that their son or another family member will take over the business once they no longer want to run. However, very few owners have had any form of a serious discussion with that family member about the prospects of transfer. Most of the time the family member in mind is not as interested in taking over as the owner had thought.
Moreover, many studies show that the chance of long term success of the business after the transfer has been greatly reduced. In fact, only 20% of businesses that transfer to another family member (typically a son), survive the transfer and stay in business. Another statistic, only 9% of businesses survive to a 3rd generation. These statistics are alarming, but true. As they say, the first generation starts it, the second generation grows it, and the 3rd generation blows it.
What all this suggests is that transferring to a family member is not always the best solution to get your big sale price and pay off. Nor are these family members the best choice to run the business over the long-term; they just happen to be these all these years because the owner was. In short, when making the decision to transfer the business to a son (or other family member) as the “best choice” to run the business going forward, ask yourself this question, would me closet competitor hire my son to run his business? If not, then the son (or family member) is not the best choice to take over your business.
I often see many years of hard work on the business owner’s part wind up being thrown away or put at to risk because the “wrong person” was chosen to take it over. In short, use your HEAD not your HEART when making a decision to transfer the business to another family member or sell it to an outside party. If you feel like selling to an outside party is best, but feel you may be ripping the rug from the family member, then perhaps give them some of the sale proceeds to compensate them for many years of their efforts.
Today’s business owners more than anyone else, have too much responsibility, too much stress, too much risk, and make too little bottom line income. Owners got into business years ago because business ownership used to be fun, had freedom, you had control of everything, no one told you what to do and how to operate, and the cash flow was great early on. 10-20 years later the business owner today realizes that it’s no longer cracked up to be what he thought it way.
The hours are long, the stress can be high, the responsibility is high and everyone relies on him, and the income swings are dramatic. Costs go up (especially insurance costs), competition increases, workers complain, hard to collect receivables, harder to bid work, margins are going down all the time, risks are higher especially with more workers and equipment/vehicles today.
It’s no longer fun to own a business for some owners. In fact, most business owners today don’t sell to retire per se, because either can’t or don’t want to. They sell because they simply want to take a break or want to do something else and transfer all of this to someone else. They often have in mind other things they would much rather pursue if they had more free time by not running a business anymore. They often state that they are no longer excited or feel challenged by what they do anymore. They want to start something again that would excite them and get their entrepreneurial spirit going again for the first time in years.
Pre-sale and pre transfer planning ensures that you get the most money before the handoff. Be pro-active on planning, this way when you do transfer the business you get “your” price and terms, not just a low-ball offer from a buyer that doesn’t see your true value. Get properly paid for all your years of commitment to the company and all your invested time and money. Over the past 10-20 years you’ve done nothing but re-invest everything back into the business for the biggest payoff of your life. Most owners only take a small salary to live on and plow everything back into the business over the years. Why? So they can get the biggest check of their life to either retire on or reinvest into another endeavor.
Why get short changed? Why let the tax man take up to 50% of your gross sales price, especially if this can be avoided with good planning well before the transfer? Deal structure alone can either cost you dearly or benefit you tremendously. Everyone talks about the top 5 or top 10 mistakes business owners make before they sell. We simply think that they all boil down to 1 mistake, the mistake of not taking the time and energy to plan in advance.
Let us show you how we can find the "best buyer" for your business!
Planning in advance is key regardless of what time frame you have before you decide you may no longer want to run it. We are experts in professionally positioning your business for sale and creating a professional and comprehensive package to present to qualified buyers that are designed to get them to pay far MORE for your business than they otherwise would have. Our presentation packets are the best in the industry says most-all buyers and sellers of businesses.
We use digital media and an advanced format that brings out the best in your company. We select a short list of buyers form our VR buyer database and then qualify them. If they have a strong background and are financially qualified, they must then sign a comprehensive Non-Disclosure Agreement. Only then do they get to review the sales packet. Most brokers simply post it on the internet or run advertising in local newspapers and industry journals for all your employees and competition to see, without even “masking” the business.
Our approach has ensured we don’t breach confidently for over 10 years now. This is key to maximize value. In fact though our approach you never have to do buyer ‘showings’. This eliminates foot traffic through your office from buyers, which again can disrupt the moral of employees and start rumors. Also, our proprietary approach allows you to avoid wasting time with unqualified buyers, tire-kickers and lookie-loos. This means you will only spend time with qualified buyers that are fully interested in your business and have the money to buy it.
Any business broker will list your business for sale. We are the only business brokers and mergers and acquisitions company in Colorado that will actively work with you on Pre-Sale planning services to best position your business at no up-front cost to you. As you know most brokers earn a commission for just selling the business, we earn the same commission but we provide all up-front services pre-sale planning services that will dramatically increase the overall value of the company before going to the buyer market.
This indirectly benefits us since our commission will go up with the final sales price. In fact, other national companies such as GW Equico Inc. charge an up-front fee of up to $50,000 for the pre-selling planning services that we do as part of our commission after the sale. This speaks volumes about out commitment to assist business owners in planning and preparing for the largest check of their life.
As stated, other professionals offer pre-sale planning services for a substantial up-front fee, but they often are not business brokers at all or have never sold a business. So the question is, how can CPAs and other professionals help prepare a business for sale for a maximum sales price, if they have never sold a business or know exactly what buyers want and how to present “the up-side or the opportunity of the business? Let your CPA do your tax returns.
,We have dealt with buyers every day for 20 years. We know exactly what they want and how to get them to pay a premium for a business, or at least a higher multiple. We know the local and national buyers extensively and we know their hot buttons. Like they say, the best tax lawyers and CPAs to hire for an IRS audit is ones that worked for many years with the IRS. Likewise, after 30 years in business VR Business Brokers is well equipped to advise you on pre-sale planning and positioning of your business. “We look at your business through the eyes of the buyer”!
Also, we have a wide variety of information that we would like to send you each month in our newsletter about ownership transfers, business valuation and tax consequence.
Call us to learn more about transfer of ownership - 303-382-1906