30 Dec 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 newsletter from IBBA entitled “Main Street News December 2020” offers insights and knowledge across a variety of topics all prudent to the business brokerage profession.
Key topics covered in the newsletter include:
- A letter from IBBA Chair Barry J. Berkowitz reflecting on 2020
- The impact of the pandemic on the business brokerage industry and tips to get through it
- How to improve deal communications with virtual data rooms
- PPP loans and recasting
- Business ownership vs. being an employee
- Congratulations to 2020 CBIs
A recent article from Forbes entitled “Should You Buy An Existing Business?” discusses the advantages and disadvantages of buying an existing business as opposed to starting a new business.
Advantages of buying an existing business include:
- Already having consistent revenue and profitability
- Financing can be easier to obtain
- You might save time and money if the business has already figured out what works
- Existing customer base
- Immediate cash flow
Disadvantages of buying an existing business include:
- It can be challenging to get all of the facts before you buy
- Equipment may be old or neglected
- Company culture may need improvements
- Unknown liabilities such as past due payroll or sales tax
- You may not have expertise or experience specific to the industry
A recent article from MarTech Series entitled “Merger Magic: How Agencies Can Prepare to Sell” discusses the current state of M&A and how digital marketing agencies can prepare for when the time is right to sell.
Due to the pandemic, a significant volume of M&A deal activity has been on pause. However when it comes to digital agencies, many are pursuing expansion and M&A is part of their recovery plans. So if new M&A activity is on the horizon, how can an agency prepare now for a future sale?
The first step is to ask yourself if you and the business are ready. Consider how the business is performing financially, what its projections look like, what type of transaction you are seeking and how you envision your involvement with the business after the sale.
Patience and communication are critical. It can take a long time to sell your business, and some steps in the process can be much lengthier than others, so stay patient. Once the sale is complete, it is important to be prepared to effectively communicate the news to key stakeholders.