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Through the Fresnel Lense

Why are you selling?

Posted by David Humphrey on 27 July 2017 | Comments

Why are you selling? Some answers to this question scare buyers and can kill your deal. The buyer knows you know more about the business, customers and industry than they do. No matter how much due diligence they conduct this will always be true. So this question plays into the buyer’s fear that you are selling because the marketplace has changed and now is the peak time for you get out, as it is all downhill from here.

comment(s) | Read the full post

Time Kills Deals

Posted by David Humphrey on 6 June 2017 | Comments

Once a deal is reached with a buyer, there is typically a time period between the intent letter and actual closing, usually between 60 and 120 days depending on the industry and buyer. During this time the buyer conducts due diligence and the formal purchase documents are drafted. No matter how well you feel you are bonding with the buyer during this period, remember the deal is not done until documents are signed and the wire transfers of purchase money has crossed from their account to yours. Until these things happen, the deal is still in limbo and you are still in sales mode.

comment(s) | Read the full post

Legislation

Posted by Jeff Muir on 5 May 2017 | Comments

Business regulation is a fact of life.  Business owners need to have a good handle on how regulation and potential legislation affects their business’ future and what is coming down the pike. 

comment(s) | Read the full post

Unreported Cash

Posted by David Humphrey on 29 March 2017 | Comments

Being a business owner can provide an owner the opportunity to meet interesting people, many owners of other businesses as well. Some of these owners may become customers. From time to time, the owner then becomes a customer of his customer, an arrangement good for both businesses. However, when this occurs there is the temptation to trade products rather than follow normal billing practices and exchange of payment. This practice is typically not in an owner’s best interest for several reasons.

comment(s) | Read the full post

Real Estate Leases

Posted by Jeff Muir on 8 March 2017 | Comments

The typical business owner doesn’t worry about a real estate lease except when it is created or when it is time to renew.  In some cases the renewal process consists of a one-page addendum signed by both parties agreeing to a new monthly rent and an extended term with other provisions carrying over from the existing lease.  This quick renewal can have unintended consequences during the late stage of the business sale transaction.

comment(s) | Read the full post

It's not about you

Posted by David Humphrey on 28 February 2017 | Comments

The sale of your company is not about you.  Well, it probably is, but that should not be the focus during the sales process. Think like the buyer; investors are looking to buy a business, an engine that generates revenues and profits separate and distinct from the value a retiring owner contributes to the business.  

comment(s) | Read the full post

Staff Retention

Posted by Jeff Muir on 10 February 2017 | Comments

Many owners highlight that their business is a great place to work by pointing to their employee retention. With pride they mention the number of employees who have been with them for more than twenty years and even the occasional thirty-year pin they awarded. If the workforce is large and this long-term retention applies to a small percentage of employees while there is a strong mix of ages among the rest of the team, this is truly a feather in the owner’s cap, a strong testament to the company as a great place to work. Think like the buyer; if the team is predominately older, especially in the management ranks, the buyer sees three potential problems:

comment(s) | Read the full post

Enhance the Presentation

Posted by David Humphrey on 1 February 2017 | Comments

When working with buyers, you are in sales mode all the time—from the initial contact to an on-site tour to meetings even after the deal is struck. Make each contact with the buyer positive. The initial tour should show the plant off in the best light. Let the buyer see clean work spaces, well organized inventory, efficient assembly areas, and offices that function and thrive, not shells of empty cubicles with desks piled high with storage boxes and discarded computers. The tour for a buyer is as critical as a sample product for a customer.

comment(s) | Read the full post

Web Content

Posted by Jeff Muir on 18 January 2017 | Comments

The second most popular question from buyers after “when can we meet the owners?” is “what is their web address?”  A company’s website can say a lot about the company to a buyer, not all of it intentional.

comment(s) | Read the full post

Unreported Cash / Barter Transactions

Posted by David Humphrey on 7 December 2016 | Comments

Being a business owner can provide an owner the opportunity to meet interesting people, many owners of other businesses as well. Some of these owners may become customers. From time to time, the owner then becomes a customer of his customer, an arrangement good for both businesses. However, when this occurs there is the temptation to trade products rather than follow normal billing practices and exchange of payment. This practice is typically not in an owner’s best interest for several reasons.

comment(s) | Read the full post

Why are you selling?

Posted by David Humphrey on 27 July 2017 | Comments

Why are you selling? Some answers to this question scare buyers and can kill your deal. The buyer knows you know more about the business, customers and industry than they do. No matter how much due diligence they conduct this will always be true. So this question plays into the buyer’s fear that you are selling because the marketplace has changed and now is the peak time for you get out, as it is all downhill from here.

comment(s) | Read the full post

Time Kills Deals

Posted by David Humphrey on 6 June 2017 | Comments

Once a deal is reached with a buyer, there is typically a time period between the intent letter and actual closing, usually between 60 and 120 days depending on the industry and buyer. During this time the buyer conducts due diligence and the formal purchase documents are drafted. No matter how well you feel you are bonding with the buyer during this period, remember the deal is not done until documents are signed and the wire transfers of purchase money has crossed from their account to yours. Until these things happen, the deal is still in limbo and you are still in sales mode.

comment(s) | Read the full post

Legislation

Posted by Jeff Muir on 5 May 2017 | Comments

Business regulation is a fact of life.  Business owners need to have a good handle on how regulation and potential legislation affects their business’ future and what is coming down the pike. 

comment(s) | Read the full post

Unreported Cash

Posted by David Humphrey on 29 March 2017 | Comments

Being a business owner can provide an owner the opportunity to meet interesting people, many owners of other businesses as well. Some of these owners may become customers. From time to time, the owner then becomes a customer of his customer, an arrangement good for both businesses. However, when this occurs there is the temptation to trade products rather than follow normal billing practices and exchange of payment. This practice is typically not in an owner’s best interest for several reasons.

comment(s) | Read the full post

Real Estate Leases

Posted by Jeff Muir on 8 March 2017 | Comments

The typical business owner doesn’t worry about a real estate lease except when it is created or when it is time to renew.  In some cases the renewal process consists of a one-page addendum signed by both parties agreeing to a new monthly rent and an extended term with other provisions carrying over from the existing lease.  This quick renewal can have unintended consequences during the late stage of the business sale transaction.

comment(s) | Read the full post

It's not about you

Posted by David Humphrey on 28 February 2017 | Comments

The sale of your company is not about you.  Well, it probably is, but that should not be the focus during the sales process. Think like the buyer; investors are looking to buy a business, an engine that generates revenues and profits separate and distinct from the value a retiring owner contributes to the business.  

comment(s) | Read the full post

Staff Retention

Posted by Jeff Muir on 10 February 2017 | Comments

Many owners highlight that their business is a great place to work by pointing to their employee retention. With pride they mention the number of employees who have been with them for more than twenty years and even the occasional thirty-year pin they awarded. If the workforce is large and this long-term retention applies to a small percentage of employees while there is a strong mix of ages among the rest of the team, this is truly a feather in the owner’s cap, a strong testament to the company as a great place to work. Think like the buyer; if the team is predominately older, especially in the management ranks, the buyer sees three potential problems:

comment(s) | Read the full post

Enhance the Presentation

Posted by David Humphrey on 1 February 2017 | Comments

When working with buyers, you are in sales mode all the time—from the initial contact to an on-site tour to meetings even after the deal is struck. Make each contact with the buyer positive. The initial tour should show the plant off in the best light. Let the buyer see clean work spaces, well organized inventory, efficient assembly areas, and offices that function and thrive, not shells of empty cubicles with desks piled high with storage boxes and discarded computers. The tour for a buyer is as critical as a sample product for a customer.

comment(s) | Read the full post

Web Content

Posted by Jeff Muir on 18 January 2017 | Comments

The second most popular question from buyers after “when can we meet the owners?” is “what is their web address?”  A company’s website can say a lot about the company to a buyer, not all of it intentional.

comment(s) | Read the full post

Unreported Cash / Barter Transactions

Posted by David Humphrey on 7 December 2016 | Comments

Being a business owner can provide an owner the opportunity to meet interesting people, many owners of other businesses as well. Some of these owners may become customers. From time to time, the owner then becomes a customer of his customer, an arrangement good for both businesses. However, when this occurs there is the temptation to trade products rather than follow normal billing practices and exchange of payment. This practice is typically not in an owner’s best interest for several reasons.

comment(s) | Read the full post