The Buy-Sell Agreement and Triggering Events

Men shaking hands at work.While some business are owned and operated by a single individual, many businesses are a part of something bigger. Co-owners, partners, or shareholders all have a stake in the company: so what happens when one of them is suddenly gone or on their way out? Many businesses that grow organically or through mergers suddenly find themselves in a situation where it’s not spelled out what the process is for when one of the business owners no longer wants or is able to continue their ownership. A standard solution for stopping this issue before it occurs is the Buy-Sell Agreement. [Read more…]

5 Types of Materials Needed For a Business Appraisal

Hand wih pen and hand holds clipboard with green checkmarksWhether you are selling your business, raising capital, or preparing your estate, an accurate business valuation is vital to taking the next step. Before the valuation begins, a business owner should understand the information which will be required. The process of determining the value of a business is no small task. Valuation is a balance of both art and science, and while the numbers will play the biggest role, presenting your company accurately and professionally will always be advantageous. Broken into 5 categories, here are twenty materials needed for a business appraisal the business owner will need to provide. [Read more…]

4 Reasons Selling a Business Isn’t Like Selling a Property

No sign with long shadow on white backgroundSelling a residential or commercial property is usually a taxing affair, but selling a business is much more complex. Even if you are selling a business alongside its property, it’s vital to know the differences between the two and have the right people help you reach the right buyer. Doing it incorrectly won’t just lose you money, it could cripple your business while you try and find a buyer. Below are four of the most common reasons that selling a business isn’t like selling real property. [Read more…]

Figuring Out Your Divestiture Strategy

A red pencil representing an asset needing to be divested.For those familiar with M&A, finding and acquiring new assets for your company is a vital part of its success. From a full on merger with a rival to a bolt-on acquisition of a specialized company, mergers and acquisitions bring new options and profitability to a business. However, the un-investment – the divestment – of these assets can be just as vital, as they stop being useful segments of your business. Figure out your divestiture strategy to help cut the fat from your company. [Read more…]

Seller Financing: Finding a Business Buyer

Your business is worth $10,000,000 if you’ll take $10 a day for the next million days!

Seller Financing, George and Company, Worcester, MAOnce a business owner has decided to sell their business, they want to sell their business as quickly as possible. Even after they’ve partnered with a business broker and had their business appraised, it might be hard to find an interested buyer with enough money to write a check. Just like having a perfect house on the market, rarely does the buyer pay cash. By working with a business broker additional financing options appear. What if, to get the most out of selling your business, you helped finance its sale? [Read more…]

Understanding Financial Metrics

Financial Metrics, George & Company, Worcester, MAA company’s job is to provide a service in exchange for money. This income of money into a business—is its cash flow—is the lynchpin on which a company turns. The amount of money that flows into and out of your business not only allows it to grow but to provide a gateway to more funding by showing the profitability of your business to investors. And if you want to sell your business (or buy someone else’s), having this data is vital to making the sale. [Read more…]

Price Dictates Terms and Terms Dictate Price

Business Valuation, George & Company, Worcester, MAWhile business valuation has its roots in complicated appraisal metrics, the real world of business valuation has roots in practicality. Imagine that you were recently laid off by downsizing corporate America. You have 2 kids in college and a significant mortgage on your home. You were earning $150,000 plus bonus per year but after severance that income stream is going away. Your executive talents are great but the work place does not have a job for you at your salary expectations/needs. Enter the real world of buying a business. The goal is to find a company that suits your vocational talents, is within a suitable geography and will be something you would be proud to own. [Read more…]

How to Value a Company: Part 2

How to Value a Company, George & Company, Worcester, MAWelcome back to our study of the different kinds of valuations for a company. Last time we talked about Asset Valuation, Capitalization of Income Valuation, and the Market Approach Valuation. You can read Part 1 of How to Value a Company here. This time we’ll be talking about an additional four types of valuation. [Read more…]

How to Value a Company: Part 1

How to Value a Company, George & Company, Worcester, MAWhat is it worth? Whether you’re buying or selling, this is the million dollar question—as well as the sticking point for many in an M&A negotiation. Many times the seller won’t provide a starting price, which means it’s up to you to figure out the initial offering. As a seller, without a clear idea of how much your company is worth you can encounter two problems: under-estimating your company’s value, which throws away your hard work and leaves cash on the table or overestimating the value of your business, which can lead to no buyers and maybe, no sale. This is why companies undergo professional valuations. [Read more…]