Tim Fawcett
BCA, CEPA, CEMA, CBC
When it comes to acquiring or selling a business, negotiation is vitally important. But it can also be complicated. Unfortunately, many prospective business buyers and sellers overlook the significance and complexity of negotiation.
There are four basic ways to negotiate. It is wise and worthwhile to consider your strategies before the time to buy or sell arrives.
DetailsWhen it comes to your deal being completed, having a signed letter of intent is great. While everything may seem as though it is moving along fine, it is vital to remember that the deal isn’t done until many boxes have been checked.
The due diligence process should never be overlooked. It is during due diligence that a buyer truly decides whether to move forward with a given deal. Depending on what is discovered, a buyer may want to renegotiate the price or even withdraw from the deal altogether.
DetailsOwners often fail to understand their leases, and this can be problematic. If your business is location-sensitive, then the status of your lease could be of paramount importance. Restaurants and retail businesses, for example, are usually location-dependent and their owners need to pay special attention to their leases. But every business owner should understand in detail the terms of their lease.
There are many key factors involving leases that should not be overlooked. If you adhere to the following guidelines, you’ll be much more likely to control your outcomes.
DetailsWhen selling a business, several things can go wrong. A number of these issues come with advance warnings: “red flags.” If sellers keep their eyes open for these warnings, it is possible to avoid bigger problems further along in the sale process.
Rarely does a “white knight” ride in and rescue a business with no questions asked. And if this were to happen, you should be asking, “Why?” Until a deal is officially inked, sellers need to evaluate every aspect of a transaction to make sure something isn’t happening that could ruin the deal.
DetailsBuyers, seller, advisors, and intermediaries often mention use of a “term sheet” prior to the creation of an actual purchase or sale agreement, but rarely will you hear the term explained. What is a term sheet and why is it important? This post will address these questions.
DetailsWhen it comes to selling a family-owned business there are no shortage of complicating factors, but one pops up quite often. This article contains a true story about a popular family business that was built from the ground up only to later meet a very sad ending. While this is just one story, there are countless similar situations across the country.
DetailsNot everyone wants to sell when they feel as though they must sell. Life changes, such as divorce or illness, can trigger the sale of a business. Everything from declining business revenue to partnership problems and more can send business owners scrambling for the exit sign. However, selling isn’t always an option, especially for small businesses. In this article, we will take a closer look at one such scenario.
DetailsIf you are an independent business owner, you will most likely also become an independent business seller somewhere down the road. Fewer businesses are being passed on to future generations today, so selling has become a fact of independent business life. No matter at what stage your own business life may be, making specific preparations now can help you stay ahead in the selling game.
DetailsValuing a business is a complex undertaking. In part, this complexity lies in business valuation being a subjective process: the person conducting the valuation determines the company’s value. Adding another layer of complexity is the fact that the business valuator has no choice but to assume all the information provided is correct and accurate.
Beyond these two issues, a host of complex variables are considered in the process of valuing a business. In this article, we will identify six issues that must be assessed.
DetailsCan two companies in the same industry have drastically different valuations? In short, the answer is a resounding, “yes.” To discover how this is possible, let’s consider the example of two companies that both have an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of $6 million, but with two very different values. Business One is valued at five times EBITDA, which prices it at $30 million, whereas Business Two is valued at seven times EBITDA, meaning it has a value of $42 million. What things factor into this huge difference?
DetailsFamily businesses are different, for many reasons. Sometimes there are advantages to working with relatives; other times, drawbacks. One specific disadvantage of the family business is that familiarity can lead owners to be more relaxed and important issues relating to the future can be overlooked.
DetailsSelling your business doesn’t have to feel like online dating, but for many sellers the experience is fraught with the same kind of uncertainty and confusion. They find themselves wondering, “What exactly do buyers want to see before buying my company?” Working with a merger and acquisition advisor is an excellent way to take some of the mystery out of this often-elusive equation. In general, there are three areas sellers should focus on to make their businesses more attractive to buyers.
DetailsThe old saying, “There is no replacement for experience,” is a truism that has stood the test of time. When it comes to businesses, and selling them, inexperience can dismantle a deal.
DetailsIf you are unfamiliar with corporate social responsibility, you are certainly not alone, but you will be hearing a lot about it in the coming years. According to Global Affairs Canada, “Corporate Social Responsibility (CSR) is defined as the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.”
In this article, we’ll look at how CSR can positively impact your company and its operation when it is implemented with sincerity.
DetailsWhen a business owner has worked hard to establish or grow a business—often from the ground up—why would he or she choose to sell? After investing innumerable hours, energy, ingenuity, and effort to make one’s business known and successful, it appears selling might be the last thing an owner would be tempted to do. But businesses sell all the time and for many valid reasons.
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