25 Nov Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Entrepreneur entitled “Why Seller Financing Could Save Your Acquisition Deal From Disaster” discusses what seller financing is and what benefits it brings. While an all cash sale may be more appealing, it is often a good idea to consider seller financing.
Seller financing is when the seller allows the buyer to give a down payment and then make payments over a pre-determined period of time. Seller financing involves an interest rate, terms, collateral, etc.
By offering seller financing, you may be able to attract more buyers which increases your chances of finding the right buyer and perhaps get a higher sale price. Tax benefits exist since you will have per year capital gains tax instead of all at once. Seller financing can also be the catalyst to actually get your business sold.
A recent article from BizBen entitled “8 Items Buyers Of Small Businesses Find Critical When Reviewing Businesses” analyzes the results of BizBen.com’s recent Business Buyer survey. The survey asked buyers what they look for and what they avoid when looking at business for sale postings online.
The survey asked buyers about 20 different posting characteristics. Based on the answers, 8 characteristics stood out as most important:
- Provable numbers
- Lots of details
- Easy to contact and hear back from the broker
- Readily available financial information
- The story of the business
- Lease information
- Pre-qualification for buyer financing
- Resources for closing
A recent video from Divestopedia entitled “What Is Goodwill?” discusses something that people often have heard of but don’t always fully comprehend: goodwill. Goodwill impacts the value of your business, so it is important to understand.
Goodwill is the value of the intangible assets of your business. Examples include your brand, trade name and customer relationships.
When determining how much of your total business value is attributed to goodwill, it’s important to be realistic and to be able to justify it. If you feel your business is worth $500,000 and the tangible assets are worth $300,000, can you actually justify $200,000 in goodwill to a potential buyer?