Stanton Financing Guide

Businesses are something which have a tendency to change hands now and again over the entire life of the business. Whether it is a merger or an outright sale, there are certain factors which will affect the overall value of a business that is put up for sale by its current owner. The following paragraphs will highlight some of these factors and explain why the overall value of business can be altered from time to time.

Delaying the Sale

Selling one’s business is an extremely important decision for a business owner to make. The sale thereof is something which can either make or break the financial stability of an individual at times. A factor which tends to affect the overall value of a business is a delay with regard to deciding whether or not to sell the business. As there are times when the market would be most profitable for a business sales transaction, this time period can pass should an individual business owner wait too long to determine whether to sell or not.

Not only outside factors, such as the general market, will affect the sale of a business. Internal factors such as a decrease in sales, creditors and unrest amongst employees within the company may all affect the time period in which a business goes up for sale. With that said, it is important that individuals sell when the time is right for selling. Unreasonable delay in a sale of a business may have adverse effects on the overall value of the business.

Private Business Owners Lack the Resources

Another factor which affects the overall value of a business with regard to the sale thereof has a lot to do with the lack of resources that many business owners experience. Unlike their corporate counterparts, smaller business owners do not have attorneys, accountants and financial advisors at their beck and call who can aid them in the sale of their business. Due to the lack of these professionals, business owners tend to take longer selling their business and finding the best buyers which will affect the overall value of the business.

Lack of Appropriate Business Sale Knowledge

Much of the information which an individual can gain from outside media sources such as television, magazines and websites deals with selling larger companies. For those individuals who are looking to sell a smaller, privately owned business, they may find difficulty gaining valuable insight into how to sell their business so that it brings in the most profitable price. Not having the requisite business knowledge can hinder the overall value of one’s business, as they do not know how to sell the business in a way which brings in the best price.

Future Profitability

A buyer in a business purchase transaction wants to know that the business which they are purchasing is one that will see future profits. It is not only important for the business to be seen as doing well at that particular moment in time, but it is also vital that the business will continue to do well in the future. Therefore, future profitability is something which will drive up the value of a business. After all, who really wants to purchase a business that will go downhill soon thereafter. The answer to that question is probably no one. If a current business owner can show factors which relate to future profitability of the business, then their business may be one that is portrayed as having good value.

Position the Company for Sale

A business that is going to achieve the best price and be seen as having the best overall value is one which is properly positioned for sale. There are many aspects which can adequately position a business for sale such as showing unique qualities that the company maintains, the value of its employees and the profitability of the company as a whole. The company must be prepared in a nice, attractive package in order to have the best positive value. A company which is under great management, sees good profits on the market and is a good purchase opportunity overall will yield the best selling price. Positioning the company for sale is best left up to professionals who are in the market of handling situations such as these.

Summary

To conclude, the previously mentioned items are certain factors which can affect the overall value of a business that is being sold. In order to ensure that a current business owner receives the best value for their company it is important to take certain steps to avoid sale delays, obtain the necessary resources to help the sales process along and retain the help of knowledgeable professionals in areas where they are needed. By taking the aforementioned steps, the current owner of the business will be better able to get the best possible selling price for their business.

Aaron Muller is a partner of KRBrokers. Visit our website for Seattle business opportunities. Established in 1984 and located in Seattle, Bellevue and Redmond. KR Business Brokers has helped thousands of business buyers and sellers achieve and realize their financial independence and business ownership dreams.

You have always been interested in investing in a business, however you always hold back because you are scared of making a bad choice and losing your investment. However, there are some ways to evaluate businesses to reduce the risk you are taking when you invest. Of course, risk is never eliminated, but when you properly evaluate what makes a business worth investing in then you will more than likely have your answer whether the company will be a success or failure before you invest your dollars. The following tips will help you make the right investment.

Investment Tip #1 Management

When deciding whether a business is worth investing in or not you need to evaluate the management because a business really is only as successful as its management. Because of this you want to evaluate if the management is knowledgeable, rational, and able to make the right choices to make the company money and prevent it from losing money. Of course, this is an easy question although the answer is a little more difficult.

Investment Tip #2 Business Plan

A business plan that is well laid out and shows positives, negatives, and how the company and management will handle problems within the business is very important. A good business plan shows that management knows where the company is, where it wants to go, and what it needs to do to get there. Be sure you take a look at a company’s business plan before you invest.

Investment Tip #3 Return on Investment

The ROE, or return on investment, is also crucial when you are considering making an investment in a company. Of course, the ratio of equity to debt can be confusing, but if you evaluate the ROE and other economic factors you should be able to tell if the company is bringing money in or losing it.

Investment Tip #4 Room for Growth

Making sure the business has room for growth in its market is also important. A company that has little competition is preferable, but a company with a moderate amount of competition and a plan to be number one is ok as well. Just do your research.

When you are interested in investing in a company you need to take your time and evaluate the company, look over financial statements, talk to management and have all of your questions answered to your satisfaction. After all, it is your money and you aren’t going to give your money to just any company. So, be sure and confident in the company and have that backed up with proof and you will decrease your risk investing in a company.

SearchArticles.Net includes thousands of articles including tips and information on business, finance and investing. For more business, finance and investing articles, visit http://www.searcharticles.net/business-finance.cfm.

Two Immigrants Live The American Dream

Some may call it a purpose driven life yet the only thing religious about life for two middle aged British “resident aliens” living in Los Angeles is they rise at 5am and are usually asleep by nine.

They rack up about a hundred hours between them in their average work week and have been in the same business for the last four years. However, unlike most who boast the identical grind, Holly and Shirley Yanez, lifelong best friends who married and divorced American brothers, don’t have a 401K, medical insurance or cell phones. They work for themselves, one of the perks, accrued vacation time.

Although both women have excellent backgrounds, one an ex business owner with a five million dollar turnover company, the other, a seasoned technical sales executive, when desperate, found it impossible to get jobs in LA. After submitting hundreds of applications, resumes and cover letters, the 39 and 47 year old women were even turned down for receptionist and retail sales assistant positions due to lack of experience.

With no one to rely on, no friends and family for support, the women, willing to work hard, had to build a business from scratch that could support them and two small children if they were to survive in a new country.

They needed a low cost product they could market globally for free. With very little investment available and no established credit, their only way of effectively and cheaply marketing anything was over the internet.

After relentless research they discovered 55% of all books published in the U.S. are self published and many first time authors have broken all the rules, springing from obscurity onto bestseller lists thanks to brilliant internet marketing strategies. The Naked Warrior and I Love My Life. A Mom’s Guide to Working From Home.

Although the women were not writers by trade both enjoy a good story and had hilarious journals of life in Los Angeles already written. After many committed hours at the keyboard they turned their parallel veracity into a book for less than $2000 online giving them their inexpensive, wholly owned product, to sell. Looking for Harvey Weinstein was born.

With absolutely no experience they started to build a channel to their buyer using the internet. Since the launch of their product at the beginning of 2004 they have developed their publishing house of one into a name that is all over the internet. They distribute through Baker and Taylor and Gardner Books and supply all the major retail and online chains here and overseas. They also enjoy profitable relationships with Amazon and E Online.

Using Bloggers, indie media, online book reviews, discussion boards and chat rooms they continue to market for free and strategic email blast campaigns are highly effective sales generators.

Due to the dynamic nature of the internet, the more places you are the more people see you and the more people see you, the more places you are. It’s magic marketing for a company with zero liquidity. High ranking on multiple keyword searches draws traffic to your website or blogger (free if you can’t afford a site) and the more traffic you receive the higher you rate on major search engines, all of which charge for placement but don’t make any promises.

The women no longer enjoy the lavish lifestyles they once took for granted and never imagined being stranded and penniless in a place where “resident alien” felt like “aliens in residence.” Nevertheless they have fought back, built a business and now have another story to tell. How, through adversity, they have lived the American …

The self published co authors of Looking for Harvey Weinstein available from http://www.amazon.com

Lenders and investors may see hundreds of business plans in a single day. Make your business plan stand out against the rest, and avoid these common mistakes.

1. Not proving that you have the management expertise to make it happen. The quality of your people will lend credibility to your ideas and even to your financial projections. If your management team is not as strong as it could be, join forces with a great board of advisors.

2. Not demonstrating where your revenue will come from – what customers pay you and why they pay you. Don’t be too aggressive in setting revenue projections or you will undermine your credibility.

3. Not proving that your business model and long term cost structure is good enough to make a real profit. How will your business make money – what is your margin structure, what are your costs?

4. Not being clear enough in your product description to allow the reader to quickly see the need and the niche for this product. It may seem obvious to you, but not so to the reader not educated in your business.

5. Not proving that the market opportunity is big enough to get interested in. How big is your market now and what will it look like in 5 years?

6. Not adequately acknowledging your competition. Investors know that if there is no perceived competition, there may be no market for what you are offering. The better you can describe your competition, the better you understand your market, and the more likely you will dominate it.

7. Not writing for the target audience. Although the core is the same, the plan should be written for the perspective of banks, equity investors, and others. Go as far as you can to tailor each plan to the audience’s specific interests to show you’ve done your homework and know to whom you are talking.

8. Starting with a boring, unenthusiastic executive summary. This is the first section to be read, and if it isn’t exciting the rest may never be seen. Make it fun and be enthusiastic. It should stand alone and generate interest for more. It deserves all the thought you would put into a professionally done promotional piece for your customers.

9. Poor presentation. If you have typos and grammatical errors in your business plan, the reader will assume the work you do in your business is sloppy too.

10. Saying too much. Keep the entire plan to a maximum of 30 pages, with an executive summary of 3 pages or less. If investors are interested, they will ask for any other information they need. Amateurs talk in the business plan about unimportant details because they don’t know what they should say and what they shouldn’t. Hire a professional editor to reduce the page count and help you emphasize your strengths.

About The Author

Jan B. King is the former President & CEO of Merritt Publishing, a top 50 woman-owned and run business in Los Angeles and the author of Business Plans to Game Plans: A Practical System for Turning Strategies into Action (John Wiley & Sons, 2004). She has helped hundreds of businesses with her book and her ebooks, The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself Game Plan Workbook. See www.janbking.com for more information.

This money generating method was recently passed on to me by a member of my mailing list, it is important to stress that this method involves the use of credit cards and takes advantage of the options that they offer you. It is no way illegal and I am not recommending that everyone uses this method but if used correctly it can generate a short term source of income to help your business.

What usually happens is that the 0% card is used to transfer the debt from your credit card that is charging you interest so that the payments you make pay off more of the debt on the new credit card as the interest rate is 0% for so many months. What you should be looking for is a credit card that offers the facility to balance transfer money into your bank account instead of just being able to pay off another credit card. The benefit being that you can then pay off other, non credit card related, debts. This process is going to be referred to as Adaptable Balance Transfers (ABT’s), my terminolgy not the credit card companies.

Let me use some examples:

You are looking to start selling DVD’s and need

Ever heard the expression to follow the money trail? Well, it is sage advice but someone forgot to mention where that money trail is located. One trail short-cut is business incubators. Business incubators can provide a solid path to capital from angel investors, state governments, economic-development coalitions and other types of investors. Many states offer listings of various business incubator programs but, what exactly is a business incubator and why should a new business owner consider it?

What is It?

Business incubators are designed to house several businesses under one roof or in a campus-style setting. They offer resident companies reduced rents, shared services and, in many instances, formal or informal access to financing. Business incubators are appropriate for pre-revenue-stage companies to early-stage companies that are selling products or services.

According to the National Business Incubation Association, there are approximately 1,000 business incubators in North America. Most North American business incubators (about 90 percent) are nonprofit organizations focused on economic development. About 10 percent are for-profit entities, usually set up to obtain returns on shareholders investments.

What type of funding is available?

Incubator programs can provide access to funding sources for as little as $500 or as much as $25,000 or greater.

How easy is it to get into one?

Gaining entry to an incubator can be easy or challenging. The simple truth is that even being in an incubator offers value to potential investors. Incubator managers are aware of this, and will carefully screen would-be applicants to see that they match certain criteria. The good news is that once you are in an incubator, the path to angels or other investors may be more direct.

Incubators attract sources of capital because they are simply convenient. Rather than searching for potential deals, investors can easily find a significant number of investment opportunities housed under one roof.

How do I find the right one?

Like with any other aspect of your business, you need to do your homework. Start by checking out the National Business Incubation Association website, for business incubators in your state and/or community. Once you created a viable list, start calling and asking questions such as: