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Construction: How to Get a Competitive Edge

Interview with Matt Stevens, AllBusiness.com's Construction Advisor

Buying and Selling a Business

A business broker, entrepreneur, and executive who has been involved with buying and selling companies for almost 20 years offers advice to help you plan for the sale or purchase of your business.
Latest Posts

“I Just Want To Put 2010 In The Bank”
August 06, 2010, 12:10 PM
A number of companies that engaged our sell-side services over the past several years are “on hold” owing to declining revenues and profits. In many instances, we would have completed a transaction for some of these clients if they had ...

When Competition is Good
August 02, 2010, 7:00 PM
Usually we want our businesses in a uncontested markets, but sometimes a competitor is exactly what we need.

Trip Report – Flying South
June 19, 2010, 11:30 AM
My trip reports are a combination of flying journeys by small plane and reports on the types of companies that are coming on the market. I haven’t done a trip report for a while, so this one combines a few ...

Overburdened with Debt and Bankrupt, How One Company Found a Solution
June 12, 2010, 10:40 AM
Some companies, although fundementally sound, are overburdened with the easy debt of the past few decades. This is how one company was able to find an investor to pull them through and recapitalize the company.

Healthcare Sector Attracts Capital and Deals
June 09, 2010, 5:35 PM
I knew that healthcare has remained a strong sector throughout the recession but Pitchbook, private equity research firm, released a new report that shows the extent that this industry has attracted attention in 2010.

Do Business Buyers Pay a Premium for a "Quality" Business?
May 26, 2010, 11:05 AM
Do buyers pay a premium for a "quality" company? Let’s say we have two companies, A, Inc. and B Co. that each have $1 million in earnings for the past five years and are in similar industries. What could make ...

The End of the Great Cash Stash?
May 20, 2010, 11:00 AM
During the twelve months ended December 31, 2009, cash held by the members of the S&P; 500 index increased by more than 30% to $960 billion. Deloitte consulting reports that as conditions have stabilized and signs of a recovery become ...

Built to Sell – Marketed to Sell
May 11, 2010, 4:30 PM
The book, Built to Sell, by John Warrillow did a very good of describing the typical process of selling a business using most M&A; firms. However, we are not typical. Here is how we are different.

Built To Sell
May 05, 2010, 4:55 PM
I recently read the book, Built to Sell, by John Warrillow, on how to position and turn your business into one that you can sell. It is a valuable book, simple and practical, and definitely worth reading for anyone interested ...

Private Equity Firms Seeking Add-on Acquisitions
April 28, 2010, 12:10 PM
What types of companies are PE firms looking for in an add-on? Well, for any company you can almost always find a PE firm that has a similar portfolio holding. However, I did run across a list of industries that ...



Latest Comments in Buying and Selling a Business posts

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By: fvfdv on 7/15/10 at 10:49 PM
M&A; Market for Mid-Sized Companies Strong
I think this article outlines some of the major points. We have a service which provides a marketing selling channel for owners selling direct, business brokers and agents in Australia, New Zealand and the Pacific Islands and we have seen that owners that the successful direct sellers of business tend to be either experienced at selling a business (i.e. done it before with or without a broker)or the business they are selling is an easy to understand business e.g. tourist lodge, motel business. This is not to say that other business owners have not sold a business without a broker but gives a good guide. We at BizOptions.com (http://www.bizoptions.com) provide a free guide to selling your business to help those that choose to sell their business directly, but we also fully endorse brokers and agents as they play a major part in selling a business for the majority.
By: Ed Whiting on 4/29/10 at 3:01 PM
How to Sell Your Business Without a Business Broker
Theoretically, inventory is included. Everything needed to create those earnings are included in the sale. Otherwise, given a liquor store and a dry cleaner generating the same earnings and priced at 3x, why would someone buy the liquor store if they had to pay 3x, and then pay for the inventory too?

For larger businesses this is almost always the case (inventory included). BUT, for smaller businesses brokers sometimes use rules of thumb that are different. For example, liquor stores may have a rule of thumb that says, 2x earnings plus inventory, or even .75x revenue plus inventory (although revenue multipliers are rarely used anymore). But the earnings multiple will be less than the multiple used if inventory included.

A good valuation expert if doing a valuation on a liquor store will get comps nationwide, and then execute a regression analysis on the series of data. That analysis will tell them if inventory levels are a statistically significant variable in the selling prices of liquor stores. If it is, inventory is included in their valuation calculations and they may end up with a formula such as: Market Value = Earnings times 2.6 plus inventory times 0.3. If including inventory is not statistically significant, the analysis tells them that they may as well completely ignore inventory levels as it does not affect the price. In that case, only earnings are included.
...
By: on 4/28/10 at 12:11 PM
The Essence of Business Valuations, Part II - Discretionary Earnings
Great series. Is inventory typically included or excluded from the 3x cash flow calculation. For example, if valuing a liquor store, would a fair value determination be 3x cash flow + inventory, or simply 3x cash flow?
By: Justin Timbalake on 4/1/10 at 9:45 AM
The Essence of Business Valuations, Part II - Discretionary Earnings
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By: Scott Radin on 10/24/09 at 7:39 AM
How to Become a Business Broker or M&A; Advisor

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