30 Jan Around the Web: A Week in Summary
A recent article from BizBuySell entitled “2018 Set New Small Business Sales Record as Buyers Eagerly Exit Corporate World” discusses the state of the current market and projections for 2019 based on surveys and the latest BizBuySell Insight Report.
2018 was the third year in a row that the number of businesses sold reached a record high, with 10,312 total businesses sold by year end. This is a significant jump from the 2016 high of 7,842. While some express concern at the seemingly ‘too good to be true’ state of the market, according to surveys, the majority of buyers and sellers both remain optimistic about the future. Not only are more and more baby-boomers entering the market to retire every day, the businesses that are available are notoriously more financially well off and stable than they have been historically. This translates to a large selection of healthy businesses for aspiring entrepreneurs and existing businesses looking to grow by acquisition to choose from, and better sales prices for business owners looking to exit.
A recent article from Divestopedia entitled “7 Fundamentals to Due Diligence You Need to Know” explains the due diligence process and what it means regarding sellers and buyers and their roles in the process.
Whether a company is being sold or it is merging with another company, it is standard practice to go through the due diligence process. Therefore, they should be aware of all the factors involved with the due diligence process. The fundamentals of due diligence can be broken into 7 categories:
- Historic and Projected Financial Information
- Technology Developments and Intellectual Property
- Customers and Revenue Streams
- Contract Agreements and Insurance
- Key Staff and Management
- Legal and Compliance
- Tax Issues
In each of these 7 critical areas, the buyer and the seller each have to do their part in order to see the deal make it to the finish line. The seller has to be open and honest with the attorneys, their advisory team and the potential buyer; and the buyer has to be thorough in examining and combing through all of the information provided.
A recent article from Forbes.com entitled “The 8 New Year’s Resolutions For The Sale Of Your Business” compares the process of preparing your business for sale to the New Year’s resolution of losing weight before a beach vacation.
When you have the end-goal of looking good on a beach by your planned vacation in the summer time, it is easier to and more likely that you will remain diligent while sticking to your resolutions. However, if there is nothing specific that you are aiming for, then you are likely to return to your old habits. This is relative to the sale of your business if you’re looking at the completion of the sale as your ‘end game’ and the 8 areas you need to focus on as your resolutions. The article recommends that you take a month to create a detailed plan on how you will address each of the following 8 areas leading up to the sale of your business, and then spend the following months following through on this plan. These areas are:
By assessing each of these areas and addressing their strengths and weaknesses one at a time, your business will be in a better position when it comes time to sell.