28 Jul 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 Forbes entitled “The Pros And Cons Of Buying A Franchise” offers insights for those considering the purchase of a franchise. While franchising can alleviate many hurdles you might face when starting a business from scratch, it’s not necessarily the right fit for everyone.
Some of the pros of buying a franchise include:
- Having a proven concept
- Established brand recognition
- The ability to quickly enter a new industry
- Support from the franchisor
- Existing corporate partnerships
- Less risk
- Network of fellow franchisees
Some of the cons of buying a franchise include:
- The franchise fee
- The royalties
- Limited creative control
- Territory restrictions
- Negative happenings at other franchise locations can reflect poorly on your location
A recent article from Portland Business Journal entitled “7 things to expect when selling a manufacturing business” discusses common stages of the sale process for businesses such as manufacturing companies. This scenario is specific to asset sales of privately held businesses.
7 common stages include:
- Non-disclosure agreement (NDA)
- Valuation and initial diligence
- Letter of intent (LOI)
- Due diligence
- Purchase agreement
- Deliverables for the transaction
A recent article from Exit Strategies Group entitled “Know the 3 types of business buyers and what motivates them” explores the primary types of buyers when it comes to the sale of a business. These buyer types have unique motivations which are important to understand as a seller.
Individual buyers may include a first time buyer looking to escape the corporate life and control their own path, as well as serial entrepreneurs who have already successfully exited a business and are looking to take over another business.
Financial buyers may include private equity firms who are looking to put their investors’ money to work in a scalable business, family offices who are looking to invest money from a high-worth family, and search funds which are typically individuals backed by investors looking to buy a business and get a return.
Strategic buyers may include businesses in the same industry looking to grow their market share via acquisition, businesses looking to expand their offerings by acquiring a complimentary business, and businesses looking to grow vertically by acquiring up or down the supply chain.