Embrace the Changes or Sell Now
In the early 1970s, I watched my father install a computer in his business. It took a whole room, extra cooling, different flooring, and months to set up. Today, it takes minutes. I’ve lived the whole stretch in between. An electric typewriter was a new thing when I was in high school. I went from a pager to a bag phone to a car phone to a flip phone, and now none of us can...Read More
Buyers Pay for Today’s Business, Not Tomorrow’s
Ask a buyer why they want to own a business and you’ll hear the same two answers almost every time. They want to control their own destiny. And they want to pay less in taxes, because the truck, the phone, and the health plan get paid for with business dollars instead of what’s left of a paycheck. Both of those things come out of one place: what the business earns today. That’s the...Read More
Overprice It and the Best Buyers Don’t Come Back
The first buyers who look at your business are very often the best prospects you will ever get. They’re the ones who were already searching the MidSouth for a business like yours, already funded, and ready to move the day your listing went live. If we lose them with too high a starting price, they don’t come back. That’s the whole problem with “let’s start high and come down later.”...Read More
A Hot Industry Doesn’t Sell a Business. Profit Does.
If you think your industry is hot, you might be right. But an industry doesn’t sell. A business does. And your business is hot if it’s putting $500K or more on the bottom line and has management staff in place. That’s what a buyer is looking at. Not the headlines about your sector, not the demand everyone at the trade show is talking about. The profit your company produces, and the...Read More
Goodwill Is Earned in the Last Five Years
Thirty years in business does not raise a value that is determined by the last five. That is the hardest thing I say to an owner about goodwill when they are selling a business here in Mississippi, and I say it early, because the longer it goes unsaid the more it costs. Goodwill is real. It is often the biggest piece of what a buyer pays. But it is not a reward for longevity, and it...Read More
Trust But Verify, Then Write It Down
Trust and paperwork are not competing with each other. They’re answering two different questions. Trust tells you this is someone worth going into business with. Paper tells you what happens when the two of you see something differently, and you will, because nobody has ever partnered with someone for years without hitting at least one moment where they wanted different things....Read MoreNew SBA Rules Reshape How Acquisitions Get Financed
On October 1, the SBA’s updated lending rulebook, SOP 50 10 8.1, took effect. It applies to applications issued an SBA loan number on or after October 1, and the acquisition requirements now live in a standalone Appendix 15 with new categories, underwriting thresholds and documentation requirements. The bar is higher in several places. First-time buyers now need debt service coverage of...Read More
No Two Buyers Are Ever the Same
No two buyers are ever the same, even when they’re the exact same type. I say that to every seller who walks in already sure they know who they don’t want buying their business. It’s tempting to sort buyers into boxes before you’ve even met one. Maybe you’ve decided you don’t want a private equity group poking through your books. Maybe you...Read More
Your Business Is Your Favorite Coffee Cup
You’ve probably heard the coffee cup experiment. Give someone a coffee cup, and ask them what they’d sell it for. Then ask someone else, who’s never held that cup, what they’d pay for it. The numbers never match. The person holding the cup always wants more, because it’s not just a cup to them anymore, it’s theirs. Your business is your...Read More
