Total Addressable Market (TAM) The concept of Total Addressable Market (TAM) refers to the maximum total revenue a business can generate if it captures 100% of the market demand for its products or services. Business owners are better able to prioritize the allocation of capital expenditures, new product development, and marketing efforts while more efficiently … Read more
Owner-Dependent Business Model When selling a small business, it is imperative to analyze the level of owner-dependency. The owner-dependency refers to the degree to which the owner is actively involved in running day to day business operations, fostering client relationships, and maintaining the competitive advantages that sets the business apart in the marketplace. A business … Read more
Preparation Improves Valuation of Auto Repair Shops Preparing to sell an auto repair shop or auto body shop may take months or even years in order to improve the business model and make the shop more attractive to potential buyers. The reward of a premium valuation when it comes time to sell often more than … Read more
What is Gross Margin? A company’s gross margin represents the percentage of gross profit divided by total revenue. Gross profit is total revenue minus the Cost of Goods Sold (COGS) where COGS is the labor and material costs in producing goods or services. Thus, a business with $1M in sales and $600K of COGS will … Read more
What Is A Break Up Fee? A break up or termination fee is a contractual penalty imposed on one party of a business deal for failing to close on the transaction. Break up fees are very rare in small business sales. Constructing and negotiating the terms of a break up fee involves hefty legal costs … Read more
Prepare Your Chiropractic Business for Sale Most owners of chiropractic businesses spend many years building up their patient base and improving the efficiencies of their practice without giving much thought to selling. Whether the practice is a single location or multiple locations employing other chiropractors, preparing for the sale is essential to getting a premium … Read more
Disclose All Material Facts Unlike the sale of a home or piece of real estate, the sale of a business involves material facts that change over time and are impossible to discover without the seller’s full cooperation. The seller or business owner is bound to disclose all material facts which affects the valuation of their … Read more
Selling Graphic Design Businesses Graphic design businesses creatively produce websites, marketing and promotional materials, logos, and product packaging for customers seeking to promote their branded identity. Often times, the owner functions as the lead product designer of the company, particularly in smaller boutique agencies. When it comes time to sell a graphic design business, the … Read more
Founder-Owned Businesses In Demand A founder-owned business is owned and managed by the individual or team of individuals who originally formed the company. Many business buyers – particularly private equity groups – desire to purchase founder-owned businesses because they are often stable and successful enterprises with a long-term track record of success. Founders of businesses … Read more
Retaining Customer Base Critical to Valuation The retention of the customer base by the buyer after purchasing a business is perhaps the most important component of many business deals. Since the valuation of virtually all businesses is predicated upon its future cash flow, the buyer must be assured that the future cash flow – and … Read more