Thursday, September 30, 2010
Tuesday, September 28, 2010
Monday, September 27, 2010
The two options for expanding a small business
Business owners and entrepreneurs are almost always seeking to expand their company, and the biggest question in deciding how to do so comes down to two options: slow growth or acquisition. As always, the decision will involve serious cost-benefit analysis, but each is not without its own degree of risk and reward.
If affordable, buying another business can immediately bring a new industry, customer base and profit line into a business’ hands, but as Matt Quinn writes for Inc. magazine, “you’re inheriting a process … By buying instead of building, you’re sacrificing the ability to tailor the business to all of your specifications.”
If acquisition is not a feasible option, slower, deliberated growth can be just as powerful in expanding your company. Building a company from scratch allows businesses to adapt quickly to changing circumstances while affording them full control over the pace at which they operate.
However, some markets and industries demand rapid expansion to merely survive, and such a slower pace of business may lead to costly missed opportunities.
These two options are not black and white; in some cases there is room for both. But as small businesses seek to expand, they should heavily consider the risks and benefits of organic development versus rapid acquisition.
http://www.bizilla.com/blog/2010/09/the-two-options-for-expanding-a-small-business/
If affordable, buying another business can immediately bring a new industry, customer base and profit line into a business’ hands, but as Matt Quinn writes for Inc. magazine, “you’re inheriting a process … By buying instead of building, you’re sacrificing the ability to tailor the business to all of your specifications.”
If acquisition is not a feasible option, slower, deliberated growth can be just as powerful in expanding your company. Building a company from scratch allows businesses to adapt quickly to changing circumstances while affording them full control over the pace at which they operate.
However, some markets and industries demand rapid expansion to merely survive, and such a slower pace of business may lead to costly missed opportunities.
These two options are not black and white; in some cases there is room for both. But as small businesses seek to expand, they should heavily consider the risks and benefits of organic development versus rapid acquisition.
http://www.bizilla.com/blog/2010/09/the-two-options-for-expanding-a-small-business/
Sunday, September 26, 2010
Saturday, September 25, 2010
Thursday, September 16, 2010
Business Owners Need To Do Some Soul Searching | Tips & Tools
Before a business owner decides to sell their business they need to do some soul searching to find out what they are going to do once they sell. Often times they start the process and change their mind because the alternative to being a business owner isn’t what they first thought it would be.
A couple of other suggestions are to get a business valuation to know what the business is worth. It’s my experience that too many sellers think their business is worth way more than it really is. And the final is to understand that taxes will probably be pay on the sale price of the business. So don’t think if you sell it for $1,000,000 you’ll get to keep it all. Seriously consider the help of professionals to sell your business – it’s a long and complicated process.
Andrew Rogerson-www.bizilla.com/broker/andrew-rogerson/1348
A couple of other suggestions are to get a business valuation to know what the business is worth. It’s my experience that too many sellers think their business is worth way more than it really is. And the final is to understand that taxes will probably be pay on the sale price of the business. So don’t think if you sell it for $1,000,000 you’ll get to keep it all. Seriously consider the help of professionals to sell your business – it’s a long and complicated process.
Andrew Rogerson-www.bizilla.com/broker/andrew-rogerson/1348
Many older or retired workers are buying a business
A struggling economy is motivating many semi-retired workers to consider entrepreneurship, and buying a business allows people to utilize their life experience and expansive network of contacts.
Typically drawing on savings or even a retirement account for funds, some retired workers are pursuing a second career, according to the U.S. News & World Report.
“Increasingly, older workers who are unable to find new jobs or are looking for increased workplace flexibility go to work for themselves,” writes Emily Brandon. “Almost a quarter of workers who change jobs after age 51 become self-employed, according to an AARP and Urban Institute analysis.”
Since permanent retirement is closer than it is for younger entrepreneurs, experts warn that using too much money to buy a business can be risky. Business professor Dan Olszewski advises older entrepreneurs to be prepared to accept a “worst-case scenario.”
Older workers have a competitive advantage in their network of colleagues and friends who can provide advice and sales leads.
But entrepreneurship is never without risk. Angel investor Marty Zwilling writes at the Huffington Post that entrepreneurs should be wary of businesses that rely on new technologies or internet services that have a high attrition rate.
Friday, September 10, 2010
Businesses sold in San Francisco area down by almost half since 2007
The economic downturn is impacting the number of businesses bought and sold, especially in the San Francisco Bay area, and business owners are increasingly considering a lower selling price.
The number of small businesses sold per year in Sonoma County has dropped by almost half in the last three years, according to the Santa Rosa Press Democrat.
The value of businesses sold have declined also, with one Bay Area realtor reporting a 30 percent drop in revenue.
"The No. 1 reason small businesses don’t sell is that they’re overpriced," Peter Siegel, a business consultant, told the paper. He advises business owners who are trying to sell to consider financing part of the sales price.
Some business brokers also believe that owner financing can help move a business through escrow. It demonstrates to a bank that the previous owner – with all the experience – has an interest in seeing the new owners achieve success.
The market may be improving: Second quarter numbers from 2010 show a 6 percent increase in business sales.
But the process can still be tedious since most potential buyers don’t actually end up buying a business. Using business brokers can help identify the serious investors, writes author Russell Brown at BusinessBookPress.com.
The number of small businesses sold per year in Sonoma County has dropped by almost half in the last three years, according to the Santa Rosa Press Democrat.
The value of businesses sold have declined also, with one Bay Area realtor reporting a 30 percent drop in revenue.
"The No. 1 reason small businesses don’t sell is that they’re overpriced," Peter Siegel, a business consultant, told the paper. He advises business owners who are trying to sell to consider financing part of the sales price.
Some business brokers also believe that owner financing can help move a business through escrow. It demonstrates to a bank that the previous owner – with all the experience – has an interest in seeing the new owners achieve success.
The market may be improving: Second quarter numbers from 2010 show a 6 percent increase in business sales.
But the process can still be tedious since most potential buyers don’t actually end up buying a business. Using business brokers can help identify the serious investors, writes author Russell Brown at BusinessBookPress.com.
Steps to take when selling a business
Whether owners are planning for retirement or looking for a new challenge, selling a business requires a few simple preparation steps to help with the process and increase the value.
The first step is obtaining a business broker who can help estimate the value of a business as well as search for potential buyers, writes Tim Skarda, a consultant with Allied Business group, in the Kansas City Star. Certified professional accountants, brokers and lawyers can have a big impact on the value of a business and the tax implications.
Business owners should also make themselves an unnecessary part of the equation in order to persuade potential buyers that the business model is sound and can be transferred to a new owner. Additionally, expanding a customer and product base will show that a business is not reliant on a single large account.
Automating financial accounts and having transparent reports available for brokers and possible buyers will help speed up the process. Skarda recommends eliminating any unnecessary businesses expenses or deductions, such as travel, that can affect the profit margin.
Misrepresenting a company’s finances and a lack of preparation are listed among the most common mistakes business owners make when selling a business, according to Entrepreneur magazine.ADNFCR-3727-ID-19937277-ADNFCR
The first step is obtaining a business broker who can help estimate the value of a business as well as search for potential buyers, writes Tim Skarda, a consultant with Allied Business group, in the Kansas City Star. Certified professional accountants, brokers and lawyers can have a big impact on the value of a business and the tax implications.
Business owners should also make themselves an unnecessary part of the equation in order to persuade potential buyers that the business model is sound and can be transferred to a new owner. Additionally, expanding a customer and product base will show that a business is not reliant on a single large account.
Automating financial accounts and having transparent reports available for brokers and possible buyers will help speed up the process. Skarda recommends eliminating any unnecessary businesses expenses or deductions, such as travel, that can affect the profit margin.
Misrepresenting a company’s finances and a lack of preparation are listed among the most common mistakes business owners make when selling a business, according to Entrepreneur magazine.ADNFCR-3727-ID-19937277-ADNFCR
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