Home: Message List - Event: How to buy and sell your business

Event: How to buy and sell your business

SBOCTeam — Thu, 23 Oct 2008 16:03:46 GMT

Have you thought about buying an existing business? Do you feel that you've worked hard and now want to sell it? Mike Handelsman of BizBuySell.com will be joining the Community to answer questions like:

What is a fair asking price for the business I'm interested in buying or selling?
How do I assess the value of a business?
When and why should I consider buying a franchise?
Should I work with a broker?

BizBuySell is the Internet's largest and most heavily trafficked business for sale marketplace. It has more business for sale listings, more unique users, and more search activity than any other service. BizBuySell currently has an inventory of over 50,000 businesses for sale, more than 800,000 monthly visits, one of the largest databases of sale comparables for recently sold businesses and one of the industry's leading franchise directories.

http://www.bizbuysell.com

Mike Handelsman is General Manager of BizBuySell's operations, including the business-for-sale marketplace, Franchise Directory, and other BizBuySell products. Mike brings over 15 years of strategy, marketing, operations and business management experience to BizBuySell, including 8 years with online technology and/or real estate companies. Prior to joining BizBuySell, Mike served as the head of Marketing and/or Product Management for HomeGain, AllPosters.com, and Pictopia.com, and was the Vice President of Business Development for BabyCenter.com. Prior to his online experience, Mike began his career in Brand Management with Procter & Gamble, and also worked as a Management Consultant with McKinsey & Company in Chicago and San Francisco.

Post your question here and then check back on November 13th at 2:00PM EST for Mike's response. You can also pose a question to Mike anytime during the event.

Re: Event November 13: How to buy and sell your business

SBOCTeam — Thu, 13 Nov 2008 20:07:07 GMT

Community members, while our session with Mike has now concluded, please feel free to discuss today's session and the questions answered. Again, if you'd like more information about Mike and BizBuySell.com, visit:

http://www.bizbuysell.com

Thanks again,
The SBOC Team

Re: Event November 13: How to buy and sell your business

mhandelsman — Thu, 13 Nov 2008 20:00:34 GMT

Thanks SBOC Team, I appreciate the opportunity to participate today.

With over 50,000 businesses for sale on our bizbuysell.com and several hundred thousand buyers using our site each month, our goal at BizBuySell is to help business buyers and sellers transact successfully. For those who participated, please keep in mind that BizBuySell can help you find a business broker (our database is the largest in the U.S., with over 4,000 business brokers searchable by state and county), value a business, find a franchise, or buy or sell successfully. Good luck to all of those existing and aspiring business owners who participated.

Re: Event November 13: How to buy and sell your business

SBOCTeam — Thu, 13 Nov 2008 19:56:57 GMT

Mike,

Its looks like we're approaching the end of our hour together. Are there any words of wisdom you'd like to leave for the Community? Any advice for aspiring entrepreneurs?

Thanks for your time!

The SBOC Team

Re: Event November 13: How to buy and sell your business

mhandelsman — Thu, 13 Nov 2008 19:56:26 GMT

Hi Ferriss - I'm always glad to see an entrepreneur pursuing their dream, so congrats on starting your new business. It sounds like you've done a good job on the first step of deciding which franchise might be right for you by evaluating competing franchises on their start-up cost, royalty structure/fee, brand support, and other marketing and service support. Now that you're down to your final two, I would suggest that you dig as deeply as possible to understand which one will give you the best chance to succeed. You should certainly interview a minimum of 2-3 existing franchisees from each company (the one's that you contact on your own are probably better resources than ones the company might put you in touch with), and ask them a detailed set of questions about franchise support, help with opening, ongoing operational support, any fees that you might now know about, etc.

Then I would evaluate the franchises in terms of how they fit with your skills and experience. For example, if you have strong operating and management experience, but little marketing experience, maybe one franchise provides more marketing support which better enhance your ability to succeed. Good luck with your decision!

Re: Event November 13: How to buy and sell your business

ferriss — Thu, 13 Nov 2008 19:47:10 GMT

If I narrowed down my choices to two competing franchises, what advice can you give me in my decision making process? What type of criteria should I be using?

Re: Event November 13: How to buy and sell your business

mhandelsman — Thu, 13 Nov 2008 19:48:54 GMT

Hi Simon07 - This sounds like a good opportunity for you. Whenever you have an owner who wants to sell, and you have involvement and good knowledge of the business, that sounds like a rare opportunity. You are uniquely positioned, given your knowledge of the business, to make the most of buying this business.

I would suggest first getting your ducks in a row in terms of what purchasing the business might entail, in other words, see if you can understand what the business might sell for, and how much cash flow it generates. If you know this information, you might then determine if you have the resources to purchase the business, or might need another form of financing (more likely). Once you have some information on potential sources of funds, then you might approach the owner with your interest in buying the business. Hopefully your understanding of the potential price and access to funds will convince the owner to consider you a serious buyer.

Good luck!

Re: Event November 13: How to buy and sell your business

simon07 — Thu, 13 Nov 2008 19:42:59 GMT

I heard that the business that I am working at may soon change hands. The owners are looking to retire. If I'm looking to purchase the company I currently work at, how do you suggest I approach management? Having intimate knowledge of the company, is there anything I can leverage to my advantage?

Re: Event November 13: How to buy and sell your business

mhandelsman — Thu, 13 Nov 2008 19:43:15 GMT

Hi Caffeinated - I'm sorry to hear that you're struggling with your business. The fundamental question about your business is if it is sellable. What usually determines if it is sellable is if there is a cash flow from the business that will allow someone to make a living from it (or if it has the potential to have that cash flow). I'm guessing from your question that it might not have that cash flow. In that case, your choices are to continue to run the business to the point that it is successful enough to sell, or to dissolve the company and sell whatever assets you might have (inventory, fixtures, etc.).

If your business is sellable, and you've decided it's time to get out, then by all means prepare for the sale. This would involve pulling together your historical financial documents (2-4 years of tax returns and books), preparing the business physically for sale (painting a worn building, cleaning up a dirty warehouse, etc.), and making sure that your lease and employee situations are right for a sale (secure long-term lease, employees who will stay upon transfer of ownership).

I hope that helps!

Re: Event November 13: How to buy and sell your business

caffeinated — Thu, 13 Nov 2008 19:38:03 GMT

Hi Mike,

Is there a point of no return where I should consider to flat out dissolve my company? Or should I always be thinking sell sell sell?

caffeinated