Business Valuations The value of a business is generally a multiple of its profits (or adjusted owner benefit) generated by the current owner of the business. The mean valuation multiple for businesses is about 2.5x its annual adjusted owner benefit but varies significantly by industry and by the specific attributes of the business. An accurate … Read more
Confidential Business Sales Confidentiality is a critically important element for many business owners when selling their business. The vast majority of business owners do not want their employees, customers, suppliers, or competitors to know that their business is for sale. Business owners fear disruption to their business if word of the sale gets out, which … Read more
What Is Seller-Financing? Seller-financing is where a seller of a business accepts partial payment of the purchase price from a buyer in the form of a Promissory Note. The buyer pays the seller the balance of the Note after the closing via negotiable terms over a negotiable period of time. Accepting seller-financing is inherently risky … Read more
Customer Concentration Risk The level of customer concentration for a business refers to how its overall revenue is spread out among its various customers. A business is deemed to have high customer concentration risk when its top customer constitutes at least 10% of its overall annual revenue or when its top five customers constitute at … Read more
Representations and Warranties Impact Business Sales The term ‘representations and warranties’ (also known as reps and warranties) refers to facts and assurances given to a buyer by the seller of a business as a part of the purchase agreement. Reps are statements of facts about the present and past condition of a business. An example … Read more
What is Return on Investment? Return on Investment (ROI) is a performance measure used to assess the profitability of an investment. In the context of business sales, ROI is a useful metric which gauges the percentage return that a buyer of a business expects to receive on the annual profits of a business compared to … Read more
Selling A Cleaning Business A wide range of cleaning businesses are frequently bought and sold in the South Florida market. Residential cleaning companies service individual homeowners whereas commercial cleaning or janitorial companies focus on servicing office buildings and businesses. Many cleaning companies are part of a franchise because of the benefits from the goodwill, trust, … Read more
What is A Listing Agreement? A business listing agreement is a contract between a business broker and business owner concerning the sale of the owner’s business. The listing agreement spells out the broker’s commission percentage, the listing period, the listed price, and other terms governing the broker-seller relationship. A legitimate business broker never charges up … Read more
Selling Computer and Smart Phone Repair Stores Stores that sell, buy, and repair computers, laptops, smart phones, tablets, and other electronic devices have become commonplace in South Florida. With the near universal adoption of laptops and smart phones, consumers often want a local store in which to repair, replace, or purchase their favorite communication devices. … Read more
Selling ‘Large’ Businesses In the context of businesses sold by professional business brokers, a large business is defined as being worth about $2M-$20M. This contrasts with the median price of $329K for the average business sale. What sets large businesses apart from small businesses? Often it simply takes time for small business to grow organically, … Read more