• Smaller companies don’t always have internal controls or internal reporting.
• Smaller companies don’t get as much media attention.
• Smaller companies don’t have as much external analysis or forecasts associated with them.

But the difficulties for a business broker to provide a business valuation for these smaller companies might have something to do with the companies themselves, too. For instance, small businesses might not have a product or service that can be diversified beyond a small region, or they might not be able to access significant amounts of financing. Branching out to other markets is complicated and even the smallest shifts in the economy can dramatically effect a small company’s outlook.

Additionally, the issues might have something to do with the internal workings of a company. The management might not be as experienced as is required to be effective. The company might not be able to take risks for fear of losses that could permanently affect liquidity and they might not be able to place any sort of influence on regulations.

Another potential set of problems with smaller businesses in terms of business valuation is the things they may not have like adequate avenues of distribution, supplier relationships, customer relationships, brand name, customer loyalty, high quality investors, savings, and qualities that differentiate it from the competition.

The Appeal of Business Brokers

While the seller and buyer can both evaluate a business, the best method is to use a business broker to provide an unbiased business valuation. A business broker will look at things like product differentiation, company outlook, management, finances, and assets to determine worth and how much a business could be fairly sold for. It’s vital that the seller provide all the appropriate materials so the business broker can develop an accurate appraisal.

When hiring an appraiser or broker, make sure you set everything down in writing before getting started. This includes a projected budget, an estimated deadline, and a schedule for deliverables. Avoid paying for a business broker using tiered or percentage-based fee systems. This could result in a business valuation that is lower or higher than its actual worth.

Wrapping up Business Valuation

If the valuation is performed in the context of an acquisition, the broker will present how the seller’s company would perform under the new buyer’s control. This would provide estimates for day-to-day operations and allow the buyer to understand its function beneath numerous variables. This must include projected income, costs, assets, intangible assets like industry contacts and customer lists, and accounting practices. If everything is in good order, the business valuation should be quite high. However, many aspects are difficult to pin down since they involve things that can’t be properly measured like community reputation, customer satisfaction, and future projections, which can change on the tides of the market.

It is only by taking every aspect of a business into consideration that a business broker can provide an accurate business valuation. So, if you’re looking for a place in which to put up a business for sale—in Atlanta or otherwise—you will need to understand and embrace this complicated yet necessary process.

Selling a business isn’t something that even the most experienced business owners do all the time. Most people haven’t the slightest idea of where to begin, and the ones that do, often think that it’s really easy. The truth is that selling a business takes a great deal of knowledge and preparation, in order to yield the very best results. Here are a few things you ought to avoid when attempting to sell your business.

1. Choosing the wrong business broker to represent your business

Selling your business all by yourself is a mistake. Successful business brokers have a great deal of experience getting great deals for business owners just like you, but just make sure you check their credentials. Too often business owners choose to work with the first business brokers they meet, which sometimes costs them wasted time and money, in the long run.

2. Failing to market or promote yourself

Sure, the business broker will get your name out there, and hook you up with some high quality interested buyers, but you know your business best, so in some respects, your more than qualified to find good prospects. With the broker’s vast experience, and your in depth knowledge about your own business, your bound to end up with a great deal sooner or later.

3. Giving your business an unrealistic price tag

You can’t label your business with a very high price, and then expect loads of potential buyers to flock towards the opportunity. You need to set the price within the context of the industry and economy, as well as other businesses similar to your own.

Also, be sure not to price your business too low. Often times, business owners will price their business low because they are tired, and just want to get rid of the business as soon as possible. If you take the advice of experienced business brokers and consultants, though, they will not advice this. The key is to get the most out of what you’ve put into the business.

If you haven’t generated a whole lot of profits though, one thing you can do is to have a “going out of business sale.” A “going out of business sale” sale can provide you with instant cash flow, as well as a very fast turn-over rate. There are so many business owners that have not turned a profit, or that have cash flow problems, never try this easy money maker. Many business owners just aren’t motivated enough or have a loss of energy, because they may not want to admit defeat or failure.

4. Taking the first or second offer

Although you may be extremely anxious to let your business go, selling it to the first or second party who’s interested, may not be your best offer. Selling your business for the maximum amount of money, with little or no money down along with an extended contract, may lead you to lose it all. Interestingly, business sales often go bad after the new owner takes over. This is usually because the new owner doesn’t have proper experience, or because they are closed-minded and not open to advice from others. It’s best to wait a while, take a look at all of your options, and think long-term. When business sales are made with the long term future in mind, it makes tremendous opportunity for both business owners and the success continues.

If you’re interested in selling a business or want to find out more about what we do, don’t hesitate to contact Sunbelt Atlanta, your premier Atlanta business brokers.

The first and most popular type of Businesses for sale in Atlanta is your average restaurant. No matter where you go, it seems like there is always a closed down eatery that’s up for sale and ready for the next owner to do something great with it. In fact, you can probably just drive around the main streets in your area, and you’ll see plenty of restaurants available for purchase. The great thing about these places is that they are usually in a great location, giving your business fantastic visibility and a location that everyone is familiar with. The only downside is that the building will usually be constructed in a way that’s conducive to a restaurant, so if that’s not what you’re wanting to put in, you may have to spend quite a bit of money on remodeling, or you’d be forced to just make the current setup work.

In addition to restaurants, you’ll also find stores for sale in Atlanta. These could be former grocery stores, a local Mom & Pop store, or any other type of shop where people went to buy things. Often times these stores will go out of business, leaving a building that’s great for the opportunistic buyer. The plus side to buying a store building is that they are typically located in the commercial part of town, where people are already used to going to buy things. You’ll grab some visitors from the surrounding buildings who are interested in checking out the new place that just went up. As mentioned above, the downside with a store is that it may not be set up exactly how you would want it for your business, so you’ll probably have to do some remodeling.

There are many other types of Businesses for sale in Atlanta, in addition to just restaurants and grocery stores. If you’re interested in buying a business in Atlanta, then you would be wise to contact a professional agent that will help you in this process. If you’re a first-time buyer, you definitely want the assistance of an agent, so you don’t get taken advantage of during the buying process, or make any big mistakes. The internet is a great place to find such an agent, and there are many in Atlanta that are waiting to assist you in purchasing your next business.

Income Valuation

The restaurant industry fixes the price of a restaurant through one of a few different ways, but the “income valuation approach” tends to be the most standard and effective – your Atlanta business brokerage firm ought to be extremely familiar with this method. A restaurant with profit/loss statements valued with the “income valuation approach,” usually has the most attraction for people buying a business in georgia (particular restaurants).

With proof of income, a restaurant buyer in Atlanta could ideally purchase a restaurant with around twenty percent down, and receive a small business administration secured loan for the balance. All in all, the income valuation approach is the best way for buyers to figure out how much they should pay for their restaurant.

Pricing a Restaurant For Sale in Georgia

Atlanta business brokers tend to list a restaurant at a price that’s based on “potential earnings,” or what a new owner could make, if he/she ran the business better, but this isn’t right. The earnings that come from “better operation” go to the business buyer as a bonus, but can’t be added into the earnings. Add-back calculations tend to serve only one purpose, and that’s to determine price a the restaurant for sale.  It only makes sense that the seller not be paid for benefit they themselves didn’t establish.

Seller Discretionary Earnings

These are used as a base to multiply in deciding on the price for the restaurant. For example, restaurants in Atlanta for sale trading around 2-3 times earnings. Factors effecting the multiple are varied, including:

• Is it a franchise restaurant?

• How consistent is the profits/losses with regard to the time of year and location?

If you’re looking for restaurants or other businesses for sale in GA, don’t hesitate to contact Sunbelt Atlanta, your premier Atlanta business brokers!

The following article was found in the New York Times, and it’s writer makes reference to a prior article that was written (which we followed), that was about an elderly Atlanta woman who had a decades-old, successful restaurant with no buyers. In the article below, she gives some poignant tips on how to sell your business.

“Can This Business Be Sold?

Last week, NBC Nightly News featured the story of Ann Price, who is proprietor of Ann’s Snack Bar in Atlanta and has been struggling to sell her business. While Ann’s is a beloved regional icon, both the NBC Nightly News feature and this New York Times video that was published in November (along with this article) offer some wonderfully visual examples of classic problems that can make it very hard to sell a small business.

Problem No. 1: The business revolves around the owner.

The personality of Ann’s Snack Bar appears to reflect her no-frills, I’ll-do-it-my-way approach to business ownership. The interior of the building has a small counter with just eight stools. Ms. Price, known to her many fans as “Miss Ann,” is content to let customers wait in line two to three hours for one of her signature “Ghetto Burgers.”

Ms. Price, who is in her late 60s, runs the business pretty much by herself. In essence, she has created a job, not a business. That’s O.K.; there’s nothing wrong with what’s sometimes called a “lifestyle business.” In fact, there are plenty of people looking to buy a job for themselves and be their own boss. But Ms. Price’s job has entailed working 12- to 13-hour days for 38 years, with no vacation. This is not a job that most people would be willing to pay for.

Solution: Remove yourself from daily operations.

Ms. Price may want to pop in around lunchtime to chat with her loyal customers, but she needs to hire employees and let them do the actual work. She may have a hard time doing this, given her business philosophy: “You can’t depend on someone else, you’ve got to do it yourself,” she says in the Times video. But if she really wants to sell her business, she will have to structure it so that it can run without her.

Problem No. 2: The asking price is based on what the owner needs to retire.

The business was originally priced at $1.5 million; she is now asking $450,000. Obviously we don’t have any background on these valuations, but we do have Ms. Price’s own words: “I have all my money – all my savings – tied up in the business,” she told NBC. “I need to get enough to retire on, or I’ll keep running the business.”

This is a common attitude among small-business owners. The tendency is to approach the issue of pricing the business for sale based on what the owner wants, or needs, not on what a willing and able buyer would reasonably pay. In my experience, this is not a winning strategy.

Solution: Have the business professionally valued and consider creative deal terms.

The most common approach to valuing a small business is based on a multiple of earnings. If the cash flow of the business cannot support the purchase price — including mortgage payments if real property is involved — then it may be difficult for Ms. Price to sell.

If she needs a lump sum of money for retirement that she cannot get through the sale of the business, Ms. Price may want to consider what kind of monthly or annual income she needs to maintain her current lifestyle. Perhaps she could sell the business, hold back a portion of the purchase price with a promissory note, and collect monthly payments on both the note and a lease on the real property. It’s hard to make suggestions when you don’t have all of the facts in front of you, but the point is that Ms. Price may be able to sell her business if she’s willing to consider alternatives to getting all cash at closing.

On the one hand, Ms. Price provides a wonderful portrait of an authentically American, entrepreneurial free spirit. She serves up wisdom, as well as burgers, with irresistible frankness and charm. “You can’t let a handful of no-good customers run you away,” she tells us. Amen to that. On the other hand, like a lot of business owners, she probably could have positioned her business better for sale.

Still, I congratulate Ms. Price on building a much-loved institution that has inspired decades of support from her community. And I hope the next story I read about her and her business tells of a happy ending.

What do you think? Can Ann’s Snack Bar be sold?”

If you’re interested in learning more about how to sell your business, don’t hesitate to contact Sunbelt Atlanta, your Atlanta business broker leaders!

1. Try not to rush yourself

Don’t just run out and purchase the first business that interests you. The key is to look for several businesses for sale – researching only the ones that really excite you, and that you can afford.

2. Make many visits

Be sure to make several trips to the office, plant, or various other facilities they may have, and analyze it for possible repairs, safety concerns, etc. This is crucial when determining a selling price.

3. Meet with some key employees

As you get closer and closer to buying the business, meet with some employees to get a feel for the environment and how they run the business.

4. Consider transaction costs

Transaction costs include all of the money you’ll have to spend to get your newly purchased business up and running under your management. This may include marketing, advertising, repairs, etc, etc.

5. Take the business broker into account

Chances are, there will be a business broker involved. Business brokers are great for helping the transaction move along smoothly, but just remember, the seller will probably be paying them a small percentage of the purchase price. Often, the seller will add this amount to the asking price for their company.

6. Due Diligence

A complete due diligence examination of all the records of the company, as well as all the equipment and inventory, is an extremely vital part of the business buying process. Have an accountant assist you in reviewing these files.

7. Seek Legal Help

Purchase agreements can be extremely complicated documents, and it’s usually in your best interest to seek the help of an attorney, before signing your life away to the company.

If you’re interested in buying a business in Georgia, don’t hesitate to contact Sunbelt Atlanta, your premier Atlanta business brokers!

The first thing you need to know about selling your business is that you can’t do it alone. As much as you might not want to admit it, the help of highly experienced business brokers with a track record of success, is your key to closing a great deal. Here are the important factors you ought to consider when searching for the best business broker for you:

1. Consider the size of your business and the financial transactions that will be made

While investment bankers usually deal with very large businesses (100 million + in annual revenue) business brokers tend to handle businesses that make under 10 million. When searching for your local business broker, ask them whether or not they have experience working with businesses with a similar revenue range as your own.

2. Gauge the reputability of the business brokerage firm

The easiest way to do this is by finding out how many successful business transactions they’ve dealt with. If the type of business you’re selling is relatively common, it might be appropriate to see how much experience the brokerage firm has in selling businesses similar to your own. However, if you are in a very specific niche industry, you’re not likely to find too many business brokers that have handled these types of business. Also, it doesn’t hurt to ask friends about their business brokers, even if they’re in an entirely different industry. You never know what could result from a good referral.

3. Look for a brokerage firm staff with credentials

When selling a business, you want to make sure the business brokerage firm has several highly credentialed members on staff. Looking at the education and previous experience of each individual staff member is key. Depending on your business, sometimes several brokers at a single firm will pool their diverse knowledge and experience together, in order give you the greatest possibility of getting the best deal. While one staff member might be good at pricing, another might be an expert at closing – all vital elements in selling your business.

4. Find out what type of contacts the business brokers have

A business brokerage firm is likely to keep a large database of potential buyer prospects.  This is often developed from buyers that inquired on past opportunities. A large brokerage firm likely handles a greater transaction volume, and has more potential buyers from which to draw upon.

5. Do a face-to-face interview with the business brokerage firm

Although you may have learned about many of the above issues, either on the phone or via their website, it’s vital that you meet with your prospective business brokers in person. Selling a business can take many months, and sometimes even years. So, you want to make sure you’re comfortable with who’s handling your business. And, since business brokers often get paid on their success as opposed to an hourly rate, it’s important that they meet with you to discuss your business thoroughly, so they can decide whether or not they’re investing their time wisely.

All in all, the selling of a business is carried out best when you have the experience of friendly and experienced business brokers to help you. They’ll prepare the marketing package, deal structuring, negotiations, etc – things you’d probably have difficulty handling on your own. Simply follow the steps above, and you’ll be sure to have a high return on your investment, upon selling your business.

If you’re interested in selling a business in Atlanta, then don’t hesitate to contact Sunbelt Atlanta, your premier Atlanta business brokers!

NEW YORK, NY, March 7, 2011 — Sunbelt Business Brokers has been selected for the 2011 Best of Atlanta Award in the Business Brokers category by the U.S. Commerce Association (USCA).

The USCA “Best of Local Business” Award Program recognizes outstanding local businesses throughout the country. Each year, the USCA identifies companies that they believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and community.

This is the first year that a business has qualified as a Four-Time Award Winner. Various sources of information were gathered and analyzed to choose the winners in each category. The 2011 USCA Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the USCA and data provided by third parties.

About U.S. Commerce Association (USCA)

U.S. Commerce Association (USCA) is a New York City based organization funded by local businesses operating in towns, large and small, across America. The purpose of USCA is to promote local business through public relations, marketing and advertising.

The USCA was established to recognize the best of local businesses in their community. Our organization works exclusively with local business owners, trade groups, professional associations, chambers of commerce and other business advertising and marketing groups. Our mission is to be an advocate for small and medium size businesses and business entrepreneurs across America.

SOURCE: U.S. Commerce Association

CONTACT:
U.S. Commerce Association
Email: PublicRelations@uscaaward.com
URL: http://www.uscaaward.com

Cash Flow

Although a buyer might be sincerely passionate about the business’ products or services, perhaps not surprisingly, the primary thing business buyers are look at is income. Whether that cash flow is for a living wage, or for a return on investment, buyers sometimes base their entire decision to purchase around the amount of income they’ll be able to generate.

Stability

The buyer also wants the “trading-of-hands” to happen securely, and they’re obviously interested in maintaining the business’ stability for years to come. Buyers will undoubtedly be turned off by unorganized records, unpredictable employee behavior, and other concerns that might lead them to believe that the business isn’t on stable ground.

Financing

Buyers become more interested in a particular business when their is a substantial amount of financing involved. The truth is that most business sales include some seller financing even if the business qualifies for third party financing. All in all, it’s a major perk for the buyer and gives him/her confidence that he can rely on the seller’s support post closing if necessary.

Up-to-date Knowledge

Business buyers want to stay “in the know” about the latest happenings with the business they’re interested in. Even though the seller might be tired of the business and ready to bow out, it’s important to keep things running quickly and efficiently. The buyer is really interested in seeing how well the company can flourish.

Quality Business Valuation

Obviously, nobody likes overpaying, and this couldn’t be more true when buying a business. After all, it’s a massive investment, and making a mistake could be detrimental. That’s why it’s important for the seller to work with a highly experienced business broker to get an adequate reading on exactly how much the business is worth. Doing so will make things so much easier for the buyer.

If you’re interested in selling a business in Atlanta, don’t hesitate to contact Sunbelt Atlanta. We’re your premier Atlanta business brokers!