26 Mar 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 Exit Strategies Group entitled “8 Situations in Which Setting an Asking Price for Your Business Makes Sense” discusses pricing a business for sale. Sometimes businesses go to market without an asking price in an auction format, and sometimes they go to market with an asking price.
Scenarios where it might make sense to go to market with an asking price include:
- If it is a main street business
- When the seller wants to exit quickly
- If similar businesses have been selling at comparable valuations
- When primary value consists of underlying tangible assets
- If there are no immediate buyers and the business will be widely advertised
- When selling to a related party
- If the business is highly unique
- When required to for legal or regulatory reasons
A recent article from Entrepreneur entitled “5 Things You Need to Know About Acquiring a Business” discusses how to approach growth by acquisition strategically. Acquiring another business is an excellent way to scale as well as gain knowledge and capabilities.
When contemplating an acquisition, consider the following:
- Make sure your company DNA supports acquisitions
- Prioritize getting a good business over getting a good deal
- Conduct due diligence with people and spend time with the team
- Get out of your comfort zone and spend time at the business
- If the acquisition is right, be willing to pay up front
A recent article from Exit Oasis entitled “Pursue Velocity Not Speed if You Want to Win the Buy a Business Race” offers insights for buyers to help facilitate a more successful outcome when trying to purchase a business.
Buyers often try to move quickly, looking at several businesses for sale and jumping from deal to deal. They are moving with speed in many directions. But what if instead they moved with velocity, moving in one direction towards the right deal?
Consider splitting the process into two parts. The first part is identifying the characteristics of the type of business you want to buy. The second part is trying to buy the kind of business you have identified by researching active listings, talking to businesses that are not on the market, and learning about the industry. Now you are moving in one direction, towards an eventual deal, with velocity.