Consider More Than Money When Selling Your Business

Sure you want a big payoff, but when it comes to selling your business, money should not be the only consideration.  You don’t want just any buyer, you want the best buyer. Surprisingly, sellers don’t always choose the buyers offering the most money. Would you consider a lower price for a buyer that fits the company’s culture?  Would you consider an offer that’s considerably lower if it meant the difference between years of seller financing and cash at close? It’s common for deal structures to include a variety of options which must be carefully evaluated, long before you get to the negotiating table. You may not realize it, but you’re positioning and negotiating from day one of a sale. Be sure your priorities are well thought out or you might give a buyer the wrong impression. A prospective buyer may ask how long you’ll stick around after the sale and you may casually respond that you’ll be around as long as needed.  Then you find out that the buyer is thinking about a two-year transition when you and your wife had been discussing a potential move to Florida. Something like that could blow up a deal. Had your initial response been that you would be around three to six months and then could provide consulting services from Florida, the buyer would not be counting on long-term support. As a seller, here are 7 important questions to ask yourself:

1. Financing – Do you prefer a higher offer with some seller financing or a lower offer with cash at close?

2. Transition – Are you looking for a quick exit?  Does the buyer expect a lengthy transition?

3. Employees – Sellers are often very protective of their employees.  Will the buyer relocate or replace staff?

4. Ownership – Are you looking to maintain a minority stake for yourself or your family?

5. Legacy – Most sellers don’t want to cash out and watch the company erode. Ten years from now they want to look at a successful business that they had a hand in building.

6. Real Estate – Is the buyer interested in your building?  Some sellers prefer to keep the real estate and draw rental income. If the buyer doesn’t want your facility, how soon can you fill it?

7. Trust – Do you trust the buyer?  Some sellers will pass up higher offers to work with a buyer they feel better about.

Even if you know your preferences, you may not get everything you want when making a deal.  A reputable Business Intermediary will be sure that the right questions are asked to help you organize your thoughts, review your priorities and understand what the market will bear.  In the end, you’ll find yourself in a better position to negotiate and close the deal—without sacrificing your goals. Contact the Sunbelt Nanaimo office @ 250-751-7917 or visit our local website at http://www.bcbusinessbroker.ca/.

2010 Highlights of Small Business in British Columbia

Published October 2010

BC - The government has released SMALL BUSINESS PROFILE 2010, a 36 page report that profiles small business growth and development in the province. Here are the key highlights.
Small businesses account for 98 per cent of all business in the province, with approximately 395,900 small businesses operating in British Columbia in 2009. Of those more than half (56 per cent) were self-employed and the rest (42 per cent) had fewer than 50 employees.
Only Saskatchewan, which has 89.5 small businesses per 1000 people, has a greater number of small businesses per capita. This puts BC, which has 88.9 small businesses per capita, well ahead of most other provinces (the national average of 72.0).
How does this translate into economic value? Small businesses provide enormous support for employment and also contribute to the province's gross domestic product (GDP).
Small businesses in the province account for 57 per cent of private sector jobs, the highest rate nationwide, and employed 1,045,400 people in 2009. On top of this are 443,800 self-employed worker, who tend to be older, are more likely to work longer hours than employees working for others and are also more likely to be male.
In terms of production, small businesses in the province accounted for roughly 32 per cent of BC's gross domestic product in 2009 and 41 per cent of the total value of goods exported from the province in 2008.
Read the report SMALL BUSINESS PROFILE 2010 to learn more about the state of small business in British Columbia.

Article: http://www.canadaone.com/ezine/briefs.html?StoryID=10Oct18_2

Not Ready to Say "I Do"?

Published in the October Issue of Nanaimo Magazine.

See published article here: http://www.downtownmagazine.ca/nanaimo/nanaimomag.php

Even though you know you’re ready, sometimes it’s still hard to commit—to leaving that is. When the perfect buyer finally makes you the offer you’ve been waiting for, you get ‘cold feet’ and feel the urge to run from the proverbial alter. And then come the questions: “Do you take this buyer as the long awaited answer to your succession plan, as long as you live? Does anyone here object to the marriage of this buyer and seller?” Hmmm, you think to yourself... yes, no maybe, no, you’re not sure…After all, you were the one who took the biggest risk. You were the one who planted the seed, watered it and nourished that business from its infancy into the successful going concern it is today. Are you really ready to let it go? Did you get enough money? Maybe you should have held out for more?

It’s not surprising that business owners, however excited they may be about hitting the golf greens, moving or starting a new venture, signing on the dotted line and handing over the keys can be difficult process. That’s where BC Business Brokers use their skills to work with their clients in reaching their goals. If you are feeling the jitters about selling your business and opening the next chapter of your life, here are 5 tips to help you warm your feet:

1. Recognize that it’s normal to have second thoughts for any event that requires a life-altering decision.
2. Acknowledge that people fear the unknown, especially when it means leaving something that’s been a big part of their lives.
3. Stay focused on your original goal—if you want to retire or change careers, feel the fear and DO IT anyway.
4. Stay grounded—don’t get greedy! Just like the stock market, those who hold out for the highest price often lose it all.
5. Realize that your perspective is strongly influenced by emotion and thus, your outlook may be skewed.

BC Business Brokers utilize their knowledge of the industry within the context of the current economy to bring perspective to every transaction. These professionals receive in-depth training through the IBBA University (International Business Brokers Association), achieving their CBI (Certified Business Intermediary) designation. Affiliated with the largest global business brokerage and a network of 300 licensed offices worldwide, effective business advisors bring together buyers and sellers and foster a mutually agreeable deal for their clients. We coordinate each business transaction by working together with our clients’ lawyers, accountants and financial planners. Business Brokerage is all about relationships and connections—helping clients overcome the hurdles so they can confidently say “I do!”

If you are interested in exploring business opportunities or are contemplating the sale of your business, feel free to give the BC Business Brokers office a call at 1-877-289-0969 or visit our websites at www.bcbusinessbroker.ca or www.sunbeltnetwork.com/vancouverisland.

For Sale By Owner?

You’ve made the decision. You want to sell your business. Perhaps you are seeking a change in career or you’ve done your time and the golfing greens are calling your name. For whatever the reason, your business is up for a transfer in ownership and you hope to find the right buyer who will recognize the value of your business. Where do you start? With the advent of several online marketplaces, sites where you can reach a large number of buyers, do you need the assistance of an expert or can you do it yourself? Professional Business Brokers, also called business transfer agents or intermediaries, assist business owners to sell their businesses by matching screened buyers and streamlining the selling process. Sounds easy? Perhaps, if you have the time and the skill. But, consider what an effective business broker does:

- Values the business utilizing multiple methodologies, providing the most probable selling price for the current market
- Presents to prospective buyers the true value of the business through “normalization” of financials
- Assists with “presale” preparations, helping owners best position their business for sale
- Markets the business using newspaper & internet advertising, internal buyer lists, targeted solicitations and web advertising
- Adds a layer of confidentiality by advertising the business for sale without disclosing its identity
- Screens and qualifies buyers and/or strategic partners, creatively structuring the deal
- Helps keep a complex process legal—business brokers have contracts such as Letters of Intent, NDAs (Non Disclosure Agreements) and can often reduce the owners’ legal fees
- Manages the progress of “due diligence” investigation with lawyers and accountants, pivotal to a successful closing
- Negotiates with buyers and closes the deal

Sunbelt provides outstanding resources, expertise and people who are dedicated to the success of its clients. You are welcome to visit www.sunbeltnetwork.com/vancouverisland or our local website www.bcbusinessbroker.ca, or call 250-751-7917 to learn more about what our business brokers can do for you.

Cowichan Valley Toasts A Passionate Wine Lover

After 25 years in retail, the new owner of Wine Kitz in Duncan is no stranger to the winemaking industry.  His love for winemaking began in 2002 sparking an entrepreneurial passion for high quality wines. “I knew I fit in well in this industry,” says Mr. Ron Tanguay, who previously owned and operated two restaurants in Cambridge, Ontario. Since the inception of Wine Kitz in 1959, the franchise has been the leader in the consumer winemaking industry and today is one the world’s largest and most respected winemaking retailers. And that’s what motivated Mr. Tanguay to seriously explore a career opportunity in something he loved: wine.

When to Sell a Business

Finding the right time to sell your business can prove to be quite a challenge. The following article shows a number of signs that indicate that it might be time to move on.

A survey of business activity nationwide shows that many sellers are taking advantage of the window of opportunity offered by today's favorable marketplace. In this recent survey, almost one-third of business owners responded that they are considering the sale of their business. The first question one might ask, given the relatively healthy financial climate, is WHY? Selling when times are good? The answer, for many sellers, can be a resounding YES! Here are some of the reasons why, followed by tips for getting the process started.

The Buyers Are Out There: The current economic upturn has depended to a great extent on trimming the corporate fat. Executives and middle managers out of work--and determined not to be "downsized" by big business again--are eyeing the advantages of being in business for themselves. Since 1990, the percentage has steadily grown of those corporate executives who leave jobs in order to become independent business owners. It isn't just the money they are dreaming of--it's the desire for more control over their lives.

The Importance of Succession Planning

Selecting an appropriate successor is crucial to the survival of a business. A good business plans today for tomorrow. The issue of succession, specifically aimed at British Columbia, is discussed in an article featured in BC Business Online:

With the majority of B.C. employers qualifying as small businesses, it’s no wonder experts such as succession-planning lawyer Don Sihota and the executive director of UBC’s Business Families Centre, Judi Cunningham, are warning small businesses about the danger of delaying succession planning.

This is “a huge issue, not only for business owners themselves, but really for the economy as a whole,” says Sihota. Cunningham points out that B.C. will see trillions of dollars passing between owners and their chosen successors within the next 15 to 20 years.