Top Value Drivers Buyers Care Most About When Selling Your Business
Selling your business is a challenging task, even for the most experienced people. No matter how you present your business when going to market, it will be scrutinized by all buyers. It’s important to consider the top value drivers buyers care most about when reviewing businesses to acquire. Knowing these will allow you to adjust or improve them before going to market. This is half of the value drivers we’ve compiled over the last decade. If you’d like to learn more about the other half, please reach out to us.
Earnings: Many business owners either sell when they just had their best year, or, when they’ve tapered off…
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Why a business owner should use our team to sell their business
Starting and running a successful business is a challenging task that requires a significant amount of time, effort, and expertise. Business owners must often make difficult decisions, such as expanding the business, selling it, or staying the course. In any of these cases, having the right support and guidance can make a significant difference. That's why many business owners choose to work with our team.
We’re a team of professionals who specializes in helping business owners sell their businesses. We’re also capable of helping business owners grow and expand through consulting. We provide a range of services, including market research, valuation, marketing, and….
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How should a seller prepare themselves to sell?
Selling a business is a big decision and requires proper preparation. It’s important for business owners to understand the steps they need to take in order to ensure that their business is in the best shape possible when the time comes to sell. Here are a few things that business owners need to do to prepare themselves to sell the business.
Assess the Business's Value One of the first things business owners need to do when preparing to sell is to assess the value of their business. This involves looking at factors such as revenue, assets…
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Differentiating Benefits of Working with CBA
We’re professional negotiators – We’ve seen thousands of transactions and have helped hundreds of business owners exit successfully. We corral every possible buyer in the market to compete in buying your business.
We save valuable time – CBA business brokers quarterback the sale of your business. We are leaders in bringing all parties together in an efficient manner. Other professional advisors, such as attorneys, are often discouraged from speaking with “the other side,” causing costly delays. Inexperience fills the pockets of professionals that are paid by the…
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SBA Loan Program Explained
Many prospective business buyers look to the Small Business Administration when purchasing a business. The SBA loan is the most commonly used business acquisition loan available today. The two available loans through the SBA are the 7(a) and 504 loans.
The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can also be used for:
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SBA Essentials FAQs
How much money do I need to put down?
You may hear 10% down, but typically you can expect at least 15% down, factoring in all required fees. This percentage can go up, depending on the type of business and your creditworthiness.
What if I use the equity in my house for the necessary funds?
You can do this, but you will need to be qualified to pay that loan back outside of the new business’ profits or the new owner’s salary at that new business. This can be with real estate income or a spouse’s income.
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The Five C’s of Credit
There are five key factors, or the five C’s of credit, that all major lenders assess when scoring loan applications and judging the creditworthiness of borrowers. Learning these components will help improve your eligibility and help set you up for success when applying for a loan to buy a business.
Character – The lender will start here by looking at the applicant’s credit history as well as education and business background. Do you have a good reputation and track record of repaying debts? Many lenders have a minimum credit score requirement before an applicant is approved for a new loan.
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What type of buyer are you? It’s important to know.
If you are thinking about buying a business, it’s good to know how you’ll be viewed in the marketplace. Sellers and brokers are very weary of buyers. Statistics indicate that approximately 90% of people who inquire about a business never buy one. The lineup of "tire kickers" is endless and can include people without sufficient funds to acquire a business; people incapable of running a business; competitors, customers, or suppliers who are trying to figure out what is for sale; and bargain-hunters with unrealistic price expectations.
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A detailed approach - How to fund the purchase of a business
One of the most important aspects to the purchase of a business is how it’s funded. Have cash? It might not be the best approach, as you could potentially leverage that cash elsewhere to earn more. The SBA sometimes lends up to 90% LTV, and depending on interest rates, it could be the most attractive option. Some sellers are willing to “play the bank” and offer seller financing. Here, a seller would require a healthy down payment and essentially lend you the remainder to be paid back upon an agreed schedule. These type transactions avoid lengthy and intrusive bank requests, but often gives you less leverage on your money.
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Uncertainty in the market to sell a business
Since the start of the pandemic, we have been experiencing a great deal of uncertainty in the markets. COVID-19 sent the global economy into a frenzy, and it will take years to fully analyze the full economic effects. Many businesses were hurt and had to close down while others flourished and found new ways to be efficient and thrive. As of recent, we are seeing demand increase for stable < $5m revenue businesses or “Main Street Businesses”. However, inflation has left small business owners with a lot of questions.
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How CBA can help you with financing the purchase of a business
The team at CBA can help you finance your business purchase in a variety of ways. Having a local partner help you through the process can prove to be a valuable resource. We’ve seen thousands of deals, many which have been financed with SBA or conventional bank loans. It’s a challenging journey from start to finish. The smartest business buyers have an advisor guiding them through the process.
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Selling Your Business to a Family Member or Friend
A business broker plays an essential role in helping you sell your business even if you already have a family member or friend in mind as the potential buyer. A business broker will guide you through the process, ensuring the transaction and hand off of the business goes smoothly. The role of a business broker in this type of transaction is the same as any other buy or sell transaction, except the search for a buyer…
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Most Business Owners Are Flying Blind. Are You Too?
Understanding what your business is worth is an essential part of owning a business, as it is often your most valuable asset. However, according to a survey by M&T Bank, 98% of small business owners who responded did not know the value of their business.
Being in the dark on the value of your business puts you at a disadvantage while you manage and run it…
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Economic Downturn | Sale of your Business | <5 Years
What does an economic downturn mean for the sale of your business over the next five years? That’s a question we get a lot. Simply put, it would mean that your business both becomes less sellable, and likely worth less, if nothing else changed. This isn’t great news, but if you recall the last major downturn was over 13 years ago. Statistically, we’re due for a major downturn in the economy…
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BUYERS - Commonly Requested Items During The Due Diligence Process
When buying a business, it’s imperative that you do your own due diligence. The due diligence process is typically completed AFTER an offer is made and accepted by the seller. Overall, the due diligence process is the timed review of documents and other data on the business prior to completing a business purchase. Most sellers offer one to three weeks for the typical review timeline…
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How Inflation Affects The Sale Of Your Business
We have recently entered a period of high inflation. Since 1970, the rate of inflation on average sat at around 3 to 3.5%. Since 2020 and the covid pandemic, the inflation rate has doubled and now sits at 7.2%. This is happening for various reasons such as a combination of supply chain disruptions, increased supply of money,
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2022 – A “Perfect Storm” For Selling Your Business
If so, you’re not alone. Record numbers of your fellow business owners are giving this idea serious consideration, especially after dealing with a turbulent and uncertain 2020. The good news for those considering selling is 2021 is shaping up to be a once-in-a-generation opportunity to sell a business for top dollar and under highly favorable term…
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A Guide to Letters Of Intent
If you’re considering the sale of your business, or possibly the acquisition of another competing business, it’s important to understand the selling/buying process. An often overlooked and important first step during the process is the negotiation of certain terms the buyer and seller will ultimately agree to at the closing table after the due diligence phase of the process is completed…
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Expedite Selling Your Business
A common question business brokers get asked is “how long will it take to sell my business?” Research completed by the IBBA indicates that for businesses that sell for under two million dollars, it’s likely going to take 7-9 months.
Many owners aren’t excited about this answer, but there are a few things you can do to expedite the sale of your small business. Let’s explore a few of these options…
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Will My Business’s Assets Increase the Value of my Business?
When selling your business, the question of whether or not you can get paid for your assets is one that comes up a lot. The answer is rarely what the business owner wants to hear. There are sound reasons for this. Understanding how businesses are priced can help an owner with decisions on how to allocate resources for assets; especially if they are planning to sell in the near future…
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