27 Oct 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 “5 Important Factors To Consider Before Selling Your Business” discusses the importance of developing a structure for your business early on to help it sell in the future. Taking this step can lead to a higher valuation, save time, and make the business easier to run.
When developing a structure, consider the following factors:
- Automate, outsource and hire so you can focus on growing the business and so that the business is easier to transition
- Take a vacation to stress test the business to see if it can run without you, and if it can’t then cross-train and create operating procedures
- Focus on what’s working and bringing in profits, and avoid tempting distractions
- Put yourself in the buyer’s shoes and be transparent in providing what they will be looking for
- Understand the process of selling a business and seek the help of experts
A recent article from Inc. entitled “What to Think About When Buying a Franchise Resale or Opening a New Location” addresses considerations for opening a new franchise location and buying an existing franchise location. Each opportunity is unique, so it is important to think about it carefully.
When it comes to opening a new franchise location, consider the following:
- Why are you seeking franchise ownership
- Is the franchise available in your area
- What are the advantages and risks of a new location
- What are the costs of building out a new location
- Are you prepared to hire and train a staff
When it comes to buying an existing franchise location, consider the following:
- Success affects price
- Evaluate the history of the existing franchise location
- You will likely inherit an existing staff which could be good or bad
- Review licenses, leases, permits
- Make sure you thoroughly understand the franchise brand’s agreement
A recent report from BizBuySell entitled “BizBuySell Insight Report – Q3 2021” reviews key findings from the most recent quarter’s business transaction data. This report analyzes listing prices, sale prices, valuation multiples, closed transaction rates and more.
Some of the key findings from Q3 2021 include:
- Median sale price increased 17% compared to 2020 and 40% compared to 2019
- Seller confidence is up while buyer confidence is down
- The economic recovery is being slowed by labor and supply chain issues
- Corporate refugees are making up the largest segment of buyers
- More businesses are expected to hit the market as baby boomers retire
- Digital changes in how businesses operate are here to stay