Andrew Rogerson's Blog, page 47

SBA lending increases in 2016

Whether we like it or not, the SBA program remains the primary engine behind third party loans between a buyer and a seller of a small business. The incentives for the banks, credit unions and others to underwrite SBA loans instead of a conventional loan are simply too strong. This is because if a loan goes bad, the bank, credit union or other type of lender will get a bail out of approximately 75% of the loan from the Small Business Administration or SBA.

Now for the good news.

For 2016 it looks very positive that the total amount of money available for the SBA to make available for SBA loans will increase substantially over 2015.

Read More: Here is more information about the benefits to a seller of an SBA loan.

Through the authorization of the US Congress, the SBA’s main lending program for the 7(a) program, had lending authority for 2015 to $20.5 billion. However, for 2016 the lending authority for 2016 is $23.5 billion or an increase of $3 billion.

The 7(a) loan volume has already hit historic highs in the first few months of 2015. In 2014, the SBA approved 52,044 7(a) loans totaling $19.2 billion and an additional $1 billion was appropriated in a last-minute supplemental authorization to avoid turning small businesses away. The increase is needed to avoid a program shutdown this year as the current demand is set to surpass the initial lending cap of $18.75 billion.

Read More: Here is more information about the benefits to a buyer of an SBA loan.

All this is good news for the economy and the small business community. Since the 7(a) program is funded entirely through fees paid by borrowers and participating SBA lenders, the increase of this authorization means there is no subsequent cost to taxpayers.

If you have questions about an SBA loan to buy or sell your business call Andrew Rogerson on 916 570-2674.

The article SBA lending increases in 2016 first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Small Business Sales Continue to Get Stronger

Small business sales continue to get stronger according to BizBuySell. BizBuySell provides one of the many websites in the business-for-sale marketplace that advertises businesses for sale. They either get paid a fee by the owner of the business that wants to sell on their own or from business brokers such as myself that wish to sell the businesses they are representing for sale with authorization from the owner of the business.

A report that BizBuySell has just put together shows there continues to be a steady decline in the median number of days it takes to sell a small business. The report was first started in 2012 and provides a quarterly review that brings it up to date to the end of the 1st quarter of 2015.

Here are some highlights from the report.

The 2nd quarter of 2012 shows the median business sale time of 200 days. By the 4th quarter of 2014 this was down to 153 days which is the lowest of any quarter since BizBuySell first began tracking sales data in 2007.The 1st quarter of 2015 did see an increase in sales time but this is consistent with the seasonal time of year due to the holidays. The overall trend of the last three years however is clearly downward; and so that’s the good news.Small business sale times remained relatively consistent from 2007 to 2010 despite the recession that hit in mid-2008. However, from Q3 2010 to Q2 2012, sale cycles dragged on much longer. The median sale time during this period rose 22% to 200 days, likely coinciding with a still sluggish economy and unsure future.

As is customary with a recession, the demand to buy a small business is weak with capable buyers hard to come by. Part of the reason is that the majority of the recession affected those who were attracted to buy a house and as a result, borrowed significantly. When housing prices crashed and the borrower had more debt than equity, there was no incentive for the borrower to continue to repay their loan and so they chose to walk away from paying their loan. One of the side effects of this action was that they now had a negative impact on their credit report and this prevented them from being able to qualify for a loan. An even more important aspect was that they lost the ability to use any equity they may have in their house to use as a down-payment to buy a business. From my perspective, this is a critical reason why California continues to struggle with an uptick on the sale of businesses in some areas.

Read More: Here is more information about the steps to sell a business.

If you have an interest for more information, click the following link to reach the BizBuySell Insight Reports.

Information available with supporting graphics looks at the data for each quarter for Median revenue and Median cash flow and breaks this down from the first quarter of 2011 to the first quarter of 2015. This information and charts includes:

Closed Small Business Transactions.Key financials of Sold Small Businesses.Small Business Sale Price vs Asking Price.Small Business sales by industry sector. The industry sectors include Retail – Restaurant, Retail – other, Service, Manufacturing and Other.Small Business Sale Price Multiples.Small Business Listing metrics by Geography for First Quarter, 2015.Closed Small Business Transaction Metrics by Geographic Market for the Full-Year 2014.Closed Small Business Transaction Metrics by Sector for the Full-Year 2014

Once again, bear in mind the numbers are based on what’s happening at a national level. The reality is that selling or buying a business is all local and so if you are thinking it is time to sell your business or buy a business, do your research to understand what’s happening in your local market.

If you would like more information about selling a business, selling a medical practice or valuing a business, please visit my website Rogerson Business Services.

The article Small Business Sales Continue to Get Stronger first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Asset Preservation by Deferring Capital Gains Tax

Bill Angove was my guest on Money 2.0 to talk about the work he does at Asset Preservation, Inc. where Bill is the Vice President. Asset Preservation specializes in helping clients defer capital gains tax using a 1031 Exchange.

No business owner enjoys paying more tax than necessary. Bill gives background on the 1031 Exchange, which he explains is a piece of the IRS code that has been around since 1921. He says anyone selling an investment property can take advantage of the 1031 exchange. Bill gives general examples of the types of 1031 exchanges. He also notes that there are times they advise clients that it is too late or not a best fit for a client to do a 1031.

Bill says their consultants at Asset Preservation Inc. walk clients through the entire process to help clients understand the options. He says there is some flexibility with 1031s, however it is good to understand your options early on as there are timelines that must be respected.

If you would like to hear my conversation with Bill Angove, please click here.

The article Asset Preservation by Deferring Capital Gains Tax first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Content Management System vs. Digital Asset Management

The amount of data that’s generated every day is overwhelming to even think about. According to Science Daily, 90 percent of all the data in the world has been generated in the last two years. Many businesses enlist the services of a content management system or digital asset management service to access and manage this enormous amount of data. Often, “content management system” and “digital asset management” are used as interchangeable terms, but they’re not. Let’s look at the differences between them and some of the benefits each provides to users.

What Is a CMS?

Content management systems (CMS) were created as a means to simply website development processes by making them streamlined and flexible. By giving users one core hub in which to edit and publish their content, the CMS was the user-friendly interface that many had hoped for. CMS comes in as many forms as the content it manages, and can be very different from system from system. The content it manages ranges from PDF files and images to audio and video, and CMS are designed for non-technical users to stop worrying about the behind-the-page aspects of website management.

The benefits of CMS technology come in many forms. It can streamline scheduling by giving you an easy-to-use overview of all content statuses, letting you know what is in the draft stage and what has been published. It makes it easy to plan content for release on a schedule, and many CMS systems offer auto-posting features that allow you to step back and let your content upload itself while you worry about creating new content.

Some CMS services are dominating the industry because of their ease of use. OpenSourceCMS reports that there are more than 2.2 million sites that use WordPress as a CMS with more than 100 million page views between them. Holding down 65 percent of the market share, WordPress is the most popular with individuals and many small businesses because it is simply designed and easy to learn and implement. Content management is a popular solution for many companies and individuals looking to outsource some of the technical aspects of maintaining content online or looking to make content production more accessible.

What is DAM?

Digital asset management (DAM) is a tool kit for organizing, searching and converting files. WebDAM, a leading digital asset management service, calls DAM a “centralized digital library” that provides clients and employees with access images, audio, video and other digital assets with ease and simplicity. Implementing DAM is about improving access to digital experiences.

The benefits of using a DAM system is that it can provide users with the tools to create applications and projects that use shared digital resources with minimal hassle. This gives improved project management and helps to reduce redundant assets. This is especially useful to dispersed project teams in the modern global creative scene, who often have significant volumes of digital assets to work with and many people in positions of management. Digital asset management systems optimize performance on your website and improve end-user experiences with faster load times. With all the different digital resources available to a company, having a system to manage them is critical.

The article Content Management System vs. Digital Asset Management first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

How do I Start a Franchise

Business is good, the industry is good, the economy is good, finance is readily available and therefore to sum it all up, the future looks good. What’s the next challenge? Perhaps continuing to grow your business by franchising? How do you start a franchise?

To start a franchise is fairly easy.

1. Register Trademark:

If your business concept is sound you will be building a brand. If you are building a brand you need protection as there is no point expanding what you do for someone else to simply copy and move into your market. I recently had a client on Clarity ask what he should do to protect his business. His business was selling and distributing a unique brand of jewelry globally. His gross sales were over $3 million and margins were great. At first I was a little confused why he didn’t file Trademark applications to protect what he was doing and then he explained the problem. He was able to sell this product anywhere in the world except Canada because the designer of the jewelry lived and distributed the jewelry in Canada. That is, my client did own the intellectual property. He said there was no problem creating other products and expanding the range of jewelry however he was not the creator. Worse for him, the creator was in his mid-fifties and saw no reason to sell as the creator was earning passive income from my client as my client was required to pay the creator a royalty on each sale.

2. Create marketing support

You can have the best product or service in the world but if nobody knows about it, your sales will be limited. Therefore build the best marketing support material you can even if it is just initially to use to make presentations to attract marketing professionals and other professional help you need such as investors, lenders, attorney’s, CPA’s, landlords and maybe even some initial franchisees. Creating the marketing material will force you to develop your concept and by presenting what you have built to others, get some constructive feedback.

3. Register with the States

In the US there are 14 states that will not allow you to sell a franchise concept unless it is registered and approved by the state. That can be a mix of good news and bad news. The good news is that you could skip these states as it will save you some money and time to navigate their process. Conversely, you could approach these states before you take your concept to franchisees as the state requirements will make your presentation stronger. The fee to register with a state is about $500 plus time. Your time will vary depending on how many iterations you need to make to get your application approved.

Next steps to build your franchise:

There are three steps to take to get the approval of your franchise concept going. You can take these steps yourself or you can have a third-party do them for you. If you want a third-party to help with these steps give me a call on (916) 570-2674 and I will introduce some options for you.

There are many factors other than the above to build and grow a franchise brand. This list is not exhaustive, but here are some other things to consider:

1. Authentic: The franchise brand and system must be authentic or at its simplest, something that everyone believes in. When you think of McDonald’s, Carl’s Junior, Maaco, Dunkin Donuts and Massage Green Spa if you have heard of the name you have a positive or negative opinion. For a consumer, that’s as complicated as it gets. As a franchisor and franchisee there are so many moving pieces be they the size of the franchise in both number of units and total gross revenue. It also includes the number of years in operation, how the corporate office presents, good and bad public image including the brand, the strength of the owners, it’s management, training and many items in its operating system to state just a few.

2. Differences: Whether we like it or not, we vote for a politician be it for the party they are affiliated or for something we like that we don’t like as much in other candidates. The same applies to a franchise. The end user buys from a brand they like and are willing to support be it due to proximity, price, service, a different product or a strong marketing message that highlights a difference be it real or imagined.

3. Training: The success of a franchise and its brand depends on its ability to repeat the best customer experience each time. This is why customers keep coming back. The training not only needs to be strong but relatively short. A complex franchise is not only hard to maintain standards, but it is also hard to train. This is why you don’t see any franchises for attorneys, CPA’s or doctors.

4. Repeatable: A good franchise is able to be successfully repeated over different geography’s be they in the same country or in different countries around the world. Australia has a very high adoption rate for franchise concepts. However, the US market has different consumer taste and preferences.

5. Prototype: The franchisor typically builds the first model to perfect its operation. A strong prototype then provides the foundations of the franchise, partly because potential franchisees can come to see and decide if this franchise is right for them and provides a positive experience. Plus the product or service continuously evolves and this is where all the refining takes place.

6. Systems: All successful businesses have systems. All successful franchises have systems and what makes them successful is that everything is written down including policies, procedures, forms, and business practices in a comprehensive and user‐friendly operations manual and/or computer‐based training module. If you need to check this any further simply read the books from Michael Gerber called the E-Myth and the E-Myth revisited.

7. Affordable: We’d all like to drive an Aston Martin and be like James Bond or a Lamborghini to impress our neighbors but there is a reason there is a complete range of cars with different price points. The same applies to franchises. A franchise has to be affordable by the potential franchisees the concept targets.

8. ROI: A franchise buyer is making an investment in the concept. They are therefore looking for a Return on Investment. It is as simple as that. This is not set in stone but a good rule of thumb is for the franchisee to achieve a ROI of at least 20 per cent by the second or third year of operation.

9. Sustainable: The economy and the market are constantly changing be it due to different tastes, changes in demographics, competition or new and improved technologies. A successful franchise brand has to adapt so it is sustainable over the long haul.

10. Capital: Franchising can be a lower cost option to expand and grow a business. That doesn’t mean it comes with a need not to have the necessary capital to fund and grow the franchise. Like all business concepts that wish to grow, the amount of capital needs to be available or the efforts will be unsuccessful. This therefore requires careful budgeting and execution.

11. Win-Win: A good franchise is not only a success for the franchisor but also the franchisee. Many franchisors don’t focus on the success of the system especially the franchisees and the brand falls away. A franchisee is allowed by law to talk to any franchisee in the system and understand their success or lack of it. Successful franchisors focus on a win-win so it is mutually rewarding for the franchisor and the franchisees.

12. Leadership: Possibly the most important factor in any franchise is the leadership. A good leader understands what is happening at all levels of the franchise system and making the necessary adjustments. A good leader also understands they need to build a team around them that will reflect and reinforce the quality of the brand and for what it stands. There are so many moving pieces in a good business including legal, accounting, tax, franchise marketing, sales opening and closing, technology, training and operations management.

Once again, there are many steps to take a franchise concept to market. You can take these steps yourself or you can have a third-party do them for you and more. If you want a third-party to help with these steps give me a call on (916) 570-2674 and I will introduce some options for you.

If you would like more information about buying a franchise please visit my webpage Buy a franchise or buy a copy of my book – Successfully buy your franchise.

For more immediate help with buying a franchise, send an email to Andrew Rogerson or give me a call on 916 570-2674.

The article How do I Start a Franchise first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Create a Customer for Life

Smart business owners know that good customer care is invaluable. In fact, customers will often drop their patronage with a company if they perceive indifference or they feel there is a lack of acknowledgement and appreciation. To go beyond a simple thank you and show your gratitude, here are five customer appreciation ideas to will leave a memorable impression and make your customer a customer for life.

Handwritten Note

One of the simplest and most traditional ways to thank your customers is through a handwritten note. While this gesture of appreciation may seem outdated, it is still one of the best ways to leave a great impression on your customer. Receiving a handwritten note makes the customer feel you’ve taken the time to show your genuine gratitude. John Kralik even wrote a book on the power of the handwritten note and how it makes people feel profoundly appreciated. Make sure to write a message that is personalized and specific.

Sweet Treat

Sending your customer a thank you gift will surprise and delight them. A fun, decadent gift basket; is a wonderful gesture to show you care. With so many choices for contents, make sure your customers receive something personalized to their interests. Also add a note for an extra touch.

Celebratory Gift

Help your customers celebrate the special occasions in their lives to make your relationship grow beyond a limiting, strictly business relationship. Take note of birthdays, wedding anniversaries and other special occasions with a customer care calendar. It will make them feel like they are part of a big family if you send out a small gift or note to congratulate or recognize them. Celebrating with your customers will show them they matter to you and your business.

Special Opportunities

If your customer makes a special request that may be outside your realm of services, try to go the extra mile to accommodate the request. There are a slew of amazing customer service stories online. You’ll find that the places that receive the highest reviews have at least one thing in common: they go above and beyond the customers’ requests or expectations.

Take for example, the video game company and creators of Halo, Bungie. A father reached out to Bungie while his young son was to receive liver transplant surgery over the holidays. The Bungie company responded by building a custom Halo helmet for the young boy, sent him a get-well card as well as apparel, toys and art from the games designers. This gesture to connect with the boy and his father left an unforgettable impact; a story that’s been shared many times and is indicative of the company’s superb service.

Keep in Touch

There are a number of ways you can stay connected with your customers. A weekly newsletter, which provides updates on progress or current promotions is a great way to make your customers feel involved. Loyalty programs can make patrons feel like VIPs. Design a program that provides rewards and special opportunities like an annual discount, first look at new products, customer spotlights or bonus upgrades. Meet and mingle with your customers, in person, through parties and events.

The article Create a Customer for Life first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Who is Approving SBA Loans

Looking to buy a business and need third-party finance? Looking to sell your business and don’t want to offer seller finance? The SBA program is a source of finance for buyers to use to buy a business and become an entrepreneur. The Federal Government administers the SBA or Small Business Administration and is therefore a program backed by the US Tax payer.

For a buyer to qualify for a loan they need to meet a minimum set of criteria. The SBA sets the loan criteria with all loan applications made through the national, state and regional banks that have been approved to handle loan applications.

An SBA loan is of great assistance to the buyer and seller of a business. However, it’s important to check the SBA loan performance data in 2015 to find out which banks are lending; especially in Northern California as not all banks are willing to lend to all buyers in each industry. Some banks prefer to not approve loans for certain industries as they are considered more risky such as restaurants while some lenders like lending for gas stations and liquor stores while others do not. The SBA loan program is not available for buyers that wish to buy a business that includes gambling or the sex industry.

In addition to loans being available to buy a business, they are also available to buy a franchise. The franchise can be an existing franchise owned by a franchisee or a brand new franchise opening in a local market.

Read More: Here is more information about finance/SBA loan to buy a business or franchise.

Who is approving SBA Loans?

The SBA has its head office in Washington, DC. Spread around the United States are support or regional offices that provide different services including support to the lenders in their region.

The SBA has a regional office in Citrus Heights, CA. Citrus Heights is located in Sacramento County. Because the SBA is a government agency, they also provide reports to the public on SBA lending. If you would like to know the total amount of SBA loans approved through the SBA Sacramento District Office, SBA loans approved by bank and SBA loans approved by county from October, 2014 to May, 2015 the details are available below.

Click this link to see: SBA Sacramento District office loans approved from October, 2014 to May, 2015.Click this link to see: by bank from October, 2014 to May, 2015.Click this link to see: by county from October, 2014 to May, 2015.

If you would like to apply for an SBA loan to buy a business or franchise it is a formal process. There are many forms to complete and you will need to have a good credit score, a good credit history and a downpayment of about 20% of the amount you wish to borrow if you are buying an existing business or franchise with an SBA 7(A) loan.

Read More: Here is more information about the benefits to a seller of an SBA loan.

If the funds are to buy an existing business, the lender will want to see management experience in that industry.

If you own a business and are thinking of selling, one of the steps I take is to get the business pre-approved for an SBA loan. This means contacting SBA lenders, provide background on the performance of the business so they can do an analysis to see if the business meets their lending criteria. If it does, they would provide a written confirmation. It does not mean the lender will definitely approve a loan to a buyer but’s its half of the process. Each buyer would be reviewed and approved on their own merit. If you have questions, give me a call on 916 570-2674.

Read More: Here is more information about the benefits to a buyer of an SBA loan.

If you wish to buy a piece of real estate with a building you will want to get an SBA 504 loan which requires a downpayment of 10%.

If you would like more information about selling a business, buying a business, buying a franchise or a related service such as valuing a business, please visit my webpage Services and choose from the drop down menu the information you would like.

For more immediate help, you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.

The article Who is Approving SBA Loans first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Qualify for a Loan to Buy a Business

It’s unusual if not bad form to buy a business and pay all cash for the purchase. If you pay cash and have no debt, surely that’s good business? Here’s why that’s not the case.

If you buy a business with a loan, the interest is tax deductible.If you buy a business and pay cash of $300,000 that generates an annual profit of $100,000 that sounds great. However, if you buy a business for a price of $600,000, make a downpayment of $200,000 and borrow $400,000 and it makes $200,000 per year doesn’t that sound better? I understand you need to re-pay a loan of $400,000 but if this is an SBA loan repaid over 10 years at an interest rate of 6.5%, the monthly payment would be $4,542. Over 12 months this totals $54,504. In this scenario as the buyer of the business, you get to keep $100,000 of your $300,000 to invest somewhere else, the annual profit is $200,000 less an SBA loan payment of $54,504 meaning as the owner you get to keep $145,496 and the interest on the loan is tax deductible.

If you are comfortable servicing a loan to buy a business and if you have the cash downpayment available, how do you qualify for a loan to buy a business?

How do I qualify for a loan?

To qualify for a loan there are four steps to take and if you are successful completing these four steps you will pre-qualify for a loan. Being pre-qualified for a loan does not mean your loan is approved. It does mean however, to keep looking to find the right business and make an offer. If you and the seller are both able to come to an agreement on the price and terms, you’ll have a much greater probability of being able to close the deal and become a business owner.

The four steps to take are as follows:

Complete a Personal Financial Statement. Click this link if you would like to download a sample SBA Personal Financial Statement.Review your credit. Different lenders have a different process. Some lenders will allow you to download and provide your own credit report. These lenders understand that having a lot of activity against your credit report is not good and so will work with you. Other lenders wish to get your authorization so they can run the report themselves.Provide a current bank statement showing you have the downpayment available.Provide a current copy of your resume. This step is critical if you plan to get an SBA loan because the lender wants to see you have experience in the industry of the business you are buying. Additionally, if you have management experience, make sure to detail this clearly including the job description, how many direct employees were reporting to you and over what period of time. The number one reason SBA borrowers are not successful is because they don’t have business management experience.

Read More: Here is more information about the steps to buy a business.

What happens if your downpayment or part of it is in the form of a gift or will come from an ‘investor’? The lender will wish to see the downpayment in a bank account in your name so they know the money is available. Some lenders may have a conversation with the person making the gift or investor. Often this is to know if it’s actually a gift or a short-term loan that needs to be repaid. If it’s a short-term loan then the bank will treat this as part of the total debt servicing of the deal.

Did I mention the best part about a Prequalification Letter?  Most, if not all lenders, will provide this letter to you at no cost.

What are the advantages of pre-qualifying for a loan?

If you pre-qualify for a loan it gives you a number of advantages. These include:

Showing a seller you are serious about buying a business.Showing a seller your finances and credit have been reviewed by a third party and if the business presents well, the lender would be willing to approve finance to close the transaction.Allow the transaction to close much quicker than a buyer who is yet to start this process.Provide you with a competitive advantage if there is more than one buyer looking at buying the business. If the other buyer doesn’t have a Prequalification Letter, the seller will invariably go with the buyer that does have one.What are the reasons SBA loans are declined?Poor Cash flow. A business relies on cash flow to feed the owner, pay wages, pay rent and more. A business with a strong cash flow will mitigate many other weaknesses in the loan application process.As mentioned above, lack of direct industry experience and management experience.Not enough down payment. As the banks say, they want to see skin in the game.Poor trends in the industry. If an industry is going through lots of change then the cash flow may be compromised.The amount the buyer wants to borrow is too large for the amount of collateral or assets to secure the loan. Almost without exception an SBA lender requires a personal guarantee on the assets of the borrower. Also, loans with over $500,000 of intangibles now need at least 25% downpayment between the buyer and the sellers note.What happens if I’ve had a personal bankruptcy?

If you are applying for an SBA loan you are required to let them know if you have ever filed a personal bankruptcy. You are also required to declare if you have not paid a Federal Student Loan or had an IRS Tax Lien settlement.

Read More: Search our database of businesses for sale.

Don’t forget your Life Insurance

If you plan to get an SBA loan, one of the requirements to close the transaction is to make sure the lender appears as a beneficiary on the life insurance policy. This often takes time to process so don’t leave it to the last minute.

If you would like more information about buying a business please visit my webpage Buy a business or buy a copy of my book Successfully buy your business.

For more immediate help with buying a business you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.

The article Qualify for a Loan to Buy a Business first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

Entertaining Clients: Dos and Don’ts

Any successful businessperson knows that business deals are like friendships; they are often forged over drinks, dinner and shared experiences. Not only is spending a little money on your clients a great way to earn their business, it’s tax smart too; you can write off up to 50 percent of your entertainment expenses. Developing and managing client relationships is vital to your business, and here are a few tips and tricks for showing your clients a good time.

A Sea of Potential

For many, the idea of chartering a boat to entertain a client seems absurd, but if you can hire a catamaran for one day and gain eight new clients, suddenly the costs start to make sense. Chartering a boat is an excellent way to impress a client. Sites like Boat Bookings make it easy to find a boat of any size in your area, and you might be surprised at how inexpensive it can be to charter a crewed vessel if you shop around.

Fun and Games

Inviting a client to see a concert, play or sporting event is often a great way to show you know your client’s interests on a more personal level. Taking a client to an event doesn’t have to break the bank, either; simply order tickets online through a ticket vendor like Telecharge. Be careful not to choose something that’s going to make talking business impossible, even if it’s a show you think your client would like. For example, a heavy metal show might not be the right venue to discuss a paper sale.

A Real Meal

Taking a client out to dinner doesn’t have to be about impressing them with the best restaurant in town. A good way to create a memorable experience is to take your client to a restaurant where you personally know the owner. Seeing you interact with the owners of another business can send a strong message about your personality to a client. A place where you know the owner is also more likely to go out of their way to show you and your client a good time.

Find Balance

It can be easy to forget while you are having a good time that you need to balance that recreation with responsibility and business acumen. For example, if you plan to have cocktails with a client, be sure to offer food at healthy intervals throughout the evening and have a back up plan if it turns out your client is prone to indulge. The last thing you want is an evening with a client that ends with them embarrassing or hurting themselves. At best, they’ll have a negative association that will make further dealings more difficult, and at worst, they may never speak to you again.

Remember that the goal of entertaining clients is to stay in business with them, not to drink them under the table. If you spend too much or too lavishly, it may seem like you overcharge for your services or products, so show some restraint. You want to entertain, not overwhelm.

The article Entertaining Clients: Dos and Don’ts first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson

How Quickly can I Sell My Business

How quickly can I sell my business? This is one of the questions that comes up in every meeting with every seller and it’s almost without exception in the first meeting. Once a business owner decides it’s time to sell their business they generally want to start the process and get the business sold as soon as possible. Unfortunately there are many variables that affect how quickly a business will sell. Here’s what’s happened in real transactions when looking at the question of “How quickly will my business sell?”

Selling a business is complicated

Without exception, the process is more complicated than sellers expect. For a buyer to invest their time and take the process seriously they want all the information up front and disclosed as quickly and as soon as possible.

I’m currently working one transaction that started just on three years ago. To get the business to market it required the office manager employed by the sellers to get the necessary information to me. The office manager was not motivated to see the sellers sell and so simply delayed getting documents to me. Without the right documents there is no point going to market as the buyer will have questions and if those questions are unable to be answered then the transaction will simply come to a grinding halt; frustrating all parties.

Sell a business from a position of strength which means being totally organized and anticipating as many buyer questions as possible. You can’t anticipate all questions but if there is a good foundation of knowledge, it’s easy to answer unexpected questions quickly and easily to keep the buyer engaged.

In another transaction the buyer and seller exchanged Letters of Intent. The Letter of Intent was used as it was not binding and allowed both parties to scope out the main points of the deal. In this particular transaction there were 22 Letters Of Intent over a period of many months. Yes; the deal did close but it took patience and perseverance.

What are you selling and why does that matter?

What are you selling? This may seem a silly question but very basic to the successful sale of a business. Why does it matter? The majority of a healthy business being sold is goodwill. Sure it includes some hard assets such as fixtures, furniture and equipment and it may be a business with physical inventory. However, the sale of a business also includes phone numbers, possibly a lease, employees, processes and procedures, legal agreements and more which don’t have any physical value but they do have intangible value. How is that value measured? The value is measured from the cash flow of the business.

Click this link: To see a sample business valuation or medical practice valuation.

The cash flow of the business is shown with the financial statements of the business including profit and loss statements, balance sheets and most importantly, tax returns. If the business cannot produce a set of quality financial statements then the cash flow cannot be shown, no lender will lend against the business and a buyer will be unwilling to close the sale.

Quality financial statements matter

Recently I tried to sell a medical practice and its sales exploded. In fact the practice grew so fast the owners didn’t have time to hire the right Chief Financial Officer and so made mistakes with the quality of their financial statements. When they finally understood the documents they were producing were inaccurate, it was too late as the payroll tax being paid to the IRS was not correct and this meant the owners paying unnecessary fines and penalties and in fact, putting the success of their practice in jeopardy. What was even worse is that there were 2 buyers ready to make offers but the sale had to be put on hold while the financial statements were corrected.

Do you really want to sell?

It’s been my privilege to work with some wonderful doctors to sell their practice who would like to retire. Being a doctor is a life time vocation that requires continuous learning, changing with new medical and computer technologies, constant changes in government laws and regulations and more. If you are able to qualify to be a doctor and wish to then run a practice, it is not for the faint-hearted. Deciding to sell presents its own challenges as it requires letting go of what you’ve done including the personal interactions you’ve had with your patients over the years.

One of the first questions a seller needs to know is what they will do once they have sold. This is a fundamental question and if not answered, will present a final decision being made to sell to a buyer; even after months of work and negotiations.

Are you thinking about selling your business and move to your next challenge? Would you like to know the value of your business? If you would like more information please visit my website Business valuation.

For more immediate help you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.

The article How Quickly can I Sell My Business first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson