This article originally appeared on Chris George's LinkedIn.  In 35 years of valuing & selling other people's businesses as a business brokerage, it's always been a Seller's market for a solid company introduced to the market BUT things are changing. I'm not referring to our sister firm GEORGE & Co. that specializes in middle market Mergers & Acquisitions because private equity is still sitting on an estimated $1 Trillion in dry powder they need to spend....

Oftentimes, when an individual seeks out a business to purchase, he or she does not typically have enough personal capital to cover the cost of purchasing the company. Buyers must locate other forms of financing in order to successfully complete a business acquisition. Fortunately, there are a variety of outlets that a buyer can utilize to find financing, depending on the type of acquisition and their current credentials. The following is a list of the most common options that a buyer may uti...

For someone who is looking to sell his or her business, considering the questions most often asked by buyers is critical. It is also important to reflect on the manner in which to best approach the answers. The buyer will want to confirm that they are making the correct decision that will prove to be beneficial to them before they agree to go through with the entirety of the M&A process. Therefore, it is important for sellers to anticipate the types of questions that a buyer may ask and prep...

When it comes to business brokerage, trends have evolved into it being a buyer’s market, with fewer people looking to sell their business through a broker. Due to this overflow, business brokers are able to be more selective in who they choose to recommend when pairing their listed businesses for sale with potential buyers. Therefore, as a buyer, it is important for one to focus on tactics that will cause one to be more marketable to the industry....

One of the first pieces of information that a business buyer will want to obtain from a seller is the answer to the inevitable question of why a business is for sale. Due to the fact that most business owners do not choose to sell when their company is booming and they are at the height of their success, buyers need to understand the risks involved that are incentivizing the owner to sell....

Oftentimes, when people explore the idea of selling their business, they find themselves overwhelmed by foreign terminology and are unsure of where to begin. While many people have heard the term “business broker” used to describe someone that buys and sells businesses, this does not cover the full scope of the market. In fact, depending on the type of company being bought or sold, a business broker might not be the appropriate person to address at all. The mergers and acquisitions industry i...

The due diligence process is used in M&A as a rigorous analysis of all aspects of the prospective business that allows the buyer to see the full scope of a company that they plan to purchase. The main purpose of due diligence is to mitigate risk for the buyer by qualifying it for financial performance, analysis of client and vendor relationships, test proprietary and patented products, and processes, etc. It is important for both parties to be aware that the process can often take several mo...

Many people dream of the day when they can own their own business and no longer have the burden of answering to a demanding or apathetic boss, and instead have the freedom to be creative in their pursuits. However, few pursue the act of procuring an existing business because they do not believe that they have adequate capital to purchase one. Buying a business has its benefits because the business is already well-established and includes a full inventory and a consistent cash flow....

An earn-out is a type of financing in which the full payout is deferred until the acquirer verifies the financial success of the business within a predetermined period of time after the closing date. An earn-out is a practical financial tool for an instance when a gap exists between the valuation price and allotted funding from the buyer. They can also be a very valuable tool when a significant client concentration exists or when the trailing twelve month’s financials are substantially above or ...

It cannot be stressed enough—the most important portion of the M&A process for a business buyer is due diligence. Performing effective due diligence allows the buyer to deeply comprehend the target company’s numbers and infrastructure. If thorough due diligence is not achieved, the buyer runs the risk of acquiring an unsuccessful company with unknown issues that will only be revealed after the payout has been made and documents signed. Not only does financial and legal information require as...