VR Has Sold More Businesses In The World Than Anyone.®
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5 Tips For Selling Your Business
By JoAnn Lombardi, VR Business Brokers/Mergers & Acquisitions, President
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Business owners own life-long dreams, not businesses. When the time comes to pass on that dream, care should be taken to get the best price. The following tips can help business owners successfully sell their businesses.
1. Position your business for sale.
This process should begin the day you purchase or start the business. To build long-term value, develop and maintain a tracking system of customer transactions, financial records, licenses, equipment, and inventory.
2. Determine the fair market value of your business.
Because the market determines value, business intermediaries are the most qualified professionals to value your business. They have the most complete and current information on actual business sales and pricing formulas, and can therefore provide businesses with accurate market values.
3. Manage your business.
A common mistake made by sellers is to relax once they have decided to sell their business. To maintain maximum value, continue to manage your business with complete dedication and keep up your inventory, maintenance, advertising, and customer service levels.
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Choosing the Right Business for You as a Buyer
By Peter C. King, VR Business Brokers/Mergers & Acquisitions, CEO
When you are looking to buy a business, it is important to find the right business first before worrying about the right price. Never base your search simply on finding a good deal because you will find yourself ultimately in a place that you don’t want to be.
The price must be considered secondary to your personal preferences relating to how you want to spend your time and energy. Remember that you will be spending between 40 and 80 hours a week at the business you choose to buy.
Deciding on the Business to Buy
- How do you know which is the right business for you to buy? A good place to start is by speaking with a VR business intermediary that will lead you down the right path, based on your interests and needs. Here at VR, we have worked with thousands of people in many diverse situations, where we can match you as the potential owner with a business that’s best suited to your lifestyle.
Evaluating the Business Intuitively
- Once you have determined the general type and size of business that you want to buy, you must evaluate specific opportunities with focus and awareness – for example, if you wanted to own a retail computer supply business with $50,000 to $70,000 cash flow. To do this properly, you must combine both the intuitive side with the analytical.
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Small Deals, Big Returns
Big versus small has been a lingering question in the private equity space for decades. Of course in the 1980s big buyout deals were all the rage and that trend continued into the 1990s. During the last decade the middle market became the darling of the private equity industry and now the lower middle market garners plenty of attention as well. Still the question remains: What size buyout firm generates the best returns?
In May, Cambridge Associates published an article discussing the returns of private equity mega funds, which it defines as any fund that has raised $10 billion or more. Big funds means big resources. These funds usually have easy access to leverage, the ability to engage with top tier advisors, and a deep network to recruit the best talent for their portfolio companies. Based on these advantages, it would seem an obvious conclusion that these mega funds should produce above-market returns.
However, according to the article, mega-fund returns are more akin to those of the public markets than they are to private equity funds of other sizes. On a three, five, ten, and 12.75-year basis (through September 30, 2018), Cambridge’s analysis shows that global mega funds returned 15.6%, 14.9%, 13.5%, and 10.5%, respectively. This puts them more or less equal to the Russell 3000®’s performance on an mPME basis. In addition, mega-fund returns are more than 60% correlated with public indexes, nearly twice the correlation of funds of less than $1 billion in size, which typically produce larger returns.
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The American Dream...Owning Your Own Business
By: Raymond H. Melcher, Jr., Owner of VR Office in Wyomissing, PA
How many times have you heard someone say they would like to own their own business? As a long time banker and now a strategic business advisor who works almost exclusively with business owners and business leaders, I have heard that comment more times than I could ever remember.
What is it about owning a business that elicits that comment? Is it the perception of job security? Financial independence? Controlling your destiny? Personal satisfaction? Pride of ownership? Satisfy entrepreneurial desire? Other? All of these perceptions of what one can experience from owning a business can be realized. It can truly be like living The American Dream.
But, we would be naive to think that owning a business is always all peaches and cream. There can be sleepless nights when worrying about meeting payroll or getting an order completed and delivered on time to a good customer or handling an irate customer over a mistake that your employee made or whether to relocate the business and incur higher expenses when you are bursting at the seams…..or others too many to list here.
Not with standing the pros and the cons of owning a business, my experience is that once someone owns a business, they would never want to give it up to work for someone else ever again. Owning a business can be a very special and passionate experience and decisions about the business can cause wide-ranging emotions.
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Premier Airport Ground Transportation Service|$750,000 | Colorado
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With more than 30 years of experience in the industry, this IT consulting firm has built a sterling reputation. Offering a variety of services and timely IT support, this company continues to exceed clients' needs. As a virtual IT department, the company supplies and monitors products to ensure the security and integrity of the business.
For more information:
Raymond H. Melcher,
Owner, VR Business Brokers Wyomissing, PA
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This great B2B service company is located in a 1,750 square foot free standing building in one of the fastest growing suburbs of the Dallas / Fort Worth Metro area! The company has been in business for over 30 years and was owned by the seller for over a decade!
Products include all types of advertising/promotional products of apparel, corporate gifts and awards, pens, caps – just about anything that is appropriate to print a company name on! The business has been built by offering superior customer service and an incredible assortment of high-quality products that allows for an amazing rate of repeat business on an annual basis. Revenue increased each of the last 3 years, and still growing with revenue in 2019 exceeding the prior year by over 20%!
We congratulateLarry Laneon this successful transaction!
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Home Automation & Energy/Security Company| $1,150,000 | Charlotte, NC
Thinking of selling your business or looking for an established
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Have You Ever Considered Selling Businesses?
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