Tip #19
Will the business numbers look good to anyone else?

Business owners can operate their company as they wish, but when they are ready to sell, will it appeal to buyers?  If the numbers don't make sense or show profits, who would want to buy it?  Business owners who want top dollar for their company must be able to reveal all elements of owner cash flow that buyers and lenders will accept.  Otherwise, there will be only disappointing offers or no offers at all!

Tip #20
Business owners may have to finance the sale of their business.

In today's tough economy, obtaining financing for the sale of a business can be challenging.  Banks might not like the financials or might not be able to supply the funds even if they approved of the deal.  If a good qualified buyer doesn't have all cash, business owners may have to consider providing some if not all of the financing for the sale of their company.   Of course there can be risks to seller financing, but there are also potential advantages such as higher sale price, a greater pool of buyers and an easier closing process.

Tip #21
Leases can make or break the sale of a business!

The lease terms of the business space can be a major consideration for a buyer.  For example, a retail business with a long term lease on a good location can be attractive.  But a long term lease on a business needing more space to grow could be a detriment. Or there can be concerns for an expiring lease when the landlord might demand a large increase.  When it comes time to negotiating a new lease, business owners must carefully think through the timing of their plans for exiting their business.

Tip #22
So, where is that Pot of Gold at the end of the rainbow?

That Pot of Gold will only be there for businesses that have been structured to sell – easy to read financials, profitable bottom line, key employees in place, growing market, quality products and services - a whole host of issues.  Business owners who are too aggressive on minimizing taxes and fail to show profits might be very disappointed in the value of their business when it comes time to sell.  Business owners need to understand what buyers are looking for and need to put plans in place to get there.

Tip #23
“You can’t always get what you want!”

The title to the 1969 song by the Rolling Stones seems to echo what the market is telling many business owners these days.  There is no question that prices for many businesses are down and for various reasons.  But if there are offers on the table, a business owner must take a hard look at any offers and be realistic as to what has to change in the business or the economy for the price to go up.  Sing along as you listen to the song.

Tip #24
Some businesses may need a whole new direction!

Unfortunately, there are businesses whose market has changed so drastically that their products or services now have limited demand.  And it might not be the slow economy!  Those business owners may have to consider a whole new business model and get into the research and creative thinking mode.  A good starting point is searching for ideas on the internet. Click here to see a video on Re-Inventing Your Business Model from the Harvard Business Review - it will make you think.

Tip #25
Burying excessive personal expenses in the business financials can lower business value!

The most popular method of valuing a business uses a multiple of earnings over a period of years.  Business owners should be aware of that while attempting to reduce the bottom line with personal expenses to minimize taxes. Though there are a number of deductions that may be added back to determine true cash flow, not all add-backs are considered legitimate by buyers or lenders.  Being too aggressive in minimizing taxes today may cost a business owner big dollars at closing.  Click here for article on legitimate tax deductions.

Tip #26
Owner Burnout is Bad for Business!

Many business owners have operated their companies for too long and have lost their interest or drive.  As a result, the business can flounder and stop growing.   Not only do revenues and profits suffer, but the value of the company goes downhill.  And it only gets worse in a down economy.  When a business owner hits burnout, he or she must learn how to deal with it – click here to read article – or take steps to sell the company.

Tip #27
Who will survive?

Many businesses are going through very tough times with no end in sight.  But as we know, as bad a situation as people may be in, it can always be worse - much worse.  Business owners have to be strong, optimistic and provide leadership in these difficult times.  They also need to seek good advice and make smart decisions to keep their businesses surviving until things improve.   Or in some cases, they might have to consider selling their company before the situation gets even worse. 

Tip #28
Without a plan, business owners could end up with a "Value Gap"!

Most retiring business owners expect that their financial needs will be met when they sell their companies.  Unfortunately, that is not always the case.  Business owners should have a business valuation performed by an independent professional and then create an "Exit Plan" to close the value gap if one exists.  Click here for a brief MSNBC video on preparing to leave your business.

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