BizBuySell’s Post

When it comes to determining small business value, one of the most common question buyers ask is, ‘If I buy this business, how much money can I make?’ Yet, it’s important to look beyond the financial records when determining small business value. Oftentimes, financial records can be inaccurate or incomplete. Furthermore, they are intended to help minimize taxes, not show how well the business is doing. It is crucial to conduct adequate preliminary due diligence before purchasing a business. https://bit.ly/3TJu7hm

Choosing the Right Business Structure Choosing the right business structure is a key decision for anyone running a business, whether it’s small or large. This decision doesn’t just apply when you start the business but can also be important throughout its operation, as there may be advantages to changing structures over time. https://lnkd.in/gR-Ys2Ms

Today we would like to talk about the balance sheet of your business. A balance sheet is a sort of snapshot of your business taken on a certain date, reflecting assets and liabilities. Assets are the holdings of your business (real property, inventory, cash, etc.); liabilities are the sources for acquiring such holdings (equity and liabilities). For every business, managing assets and liabilities is essential. This is the aspect of the business that any counterparty would check before contracting you. It is the balance sheet that business partners, competitors, any stakeholders, tax authorities, banks, suppliers, buyers, etc., would look at. Being external advisors, our mission would be to suggest how to structure your balance sheet to make it attractive and enticing for potential partners. Sometimes it is critical to have a look at your business from an outsider’s viewpoint. Are all your assets really assets? Do they all work and bring you profit? Are all your liabilities actual liabilities? Is it actually possible to turn your liabilities into equity or reduce them, at least a certain portion of them? This is the vision that we offer to businesses. Assets should work for your benefit. Let us have some examples. If you hold some real property and you regard it as an asset, despite its failure to generate any profit, incurring lots of expenses through its maintenance instead, then it should not be an asset of your operating business. If an asset has been collecting dust for a few years, like funds in an account that generate no profit, this is not exactly a working asset. The same goes for inventory items — if the goods are not selling, you need to understand the reason why, make a decision and dispose of them at a saleable price. Never be afraid to sell goods below their purchase price. Goods that do not sell freeze up funds that could be working. They only take up warehouse space, entailing storage costs — sometimes quite significant ones. In this case, it is not an asset. And this is just the tip of the iceberg in the sea called Your Balance Sheet. We are well versed in navigating this sea and will help you make your assets and liabilities work for you. The coming ‘Notes on Wealth’ edition will focus on liabilities, offering some advice on how to manage them.  

No one passes on a good deal, including you… So why not build a business that will automatically be the best deal the buyer sees in 2025? This is how I help my clients create a financial plan that attracts potential buyers 1.     Have a Separate business account Most small and mid-size businesses tend to mix their personal and business accounts. This practice makes it very difficult to know how much the business makes. I advise my clients to separate the two accounts so the buyer will have an easy time knowing how much the business makes. 2.     Conduct your own valuation twice before You cannot know the true value of your business only once before you sell it. You need to know the real value six months 6 months prior so you have an idea of how much you will make in the end. Doing a valuation earlier also gives you a chance to know how you can make necessary improvements in time to better the business. 3.     Build as much Cash flow as possible If you have more ways of bringing in good cash flow to the business one year before you sell, you will fetch more at closing. So, exploit as many options as you have and have more money getting in so that you have a better multiple when selling your business in the end. If you have no idea of how to value your business on your own, check this post on how to do it in few simple steps. 

Buying a business is hard enough. Buying a business when something doesn't smell right? That can destroy you. Here are a few questions to ask as you go through a business purchase…

Here is how to increase the value of your business before you Sell it for Big Money No one passes on a good deal, including you… So why not build a business that will automatically be the best deal the buyer sees in 2025? This is how I help my clients create a financial plan that attracts potential buyers 1. Have a Separate business account Most small and mid-size businesses tend to mix their personal and business accounts. This practice makes it very difficult to know how much the business makes. I advise my clients to separate the two accounts so the buyer will have an easy time knowing how much the business makes. 2. Conduct your own valuation twice before You cannot know the true value of your business only once before you sell it. You need to know the real value six months 6 months prior so you have an idea of how much you will make in the end. Doing a valuation earlier also gives you a chance to know how you can make necessary improvements in time to better the business. 3. Build as much Cash flow as possible If you have more ways of bringing in good cash flow to the business one year before you sell, you will fetch more at closing. So, exploit as many options as you have and have more money getting in so that you have a better multiple when selling your business in the end. If you have no idea of how to value your business on your own, check this post on how to do it in few simple steps.

Here are some tips that might help you out! ➡️ ✔️Figure out your cost of running a business. Before you can even think about how much profit you can make, you need to make sure you are charging enough to cover your expenses. Your expenses include materials, but also your time and miscellaneous overhead costs. If you know this number, you'll know for sure that you're not pricing your services at a loss and it gives you the foundation you need to price for profit. ✔️Know your value: Do some research to see what other competitors are pricing their services or products at. After you know this information, you can see where your products and services fit in terms of value. If you offer a premium service, then your pricing should reflect that due to the value that you offer. You don't want to price yourself out of the market, but you need to make sure your pricing aligns with your brand and the great benefits that you offer. ✔️What's your profit margin? This is where you'll want to do some math, you want to figure out what you want your profit margin to be and add it to your BASE (the pricing from the other 2 slides). Your prices should not only cover your costs, but also make sure you have profit that allows you to grow your business. Having someone on your team who can help you with these tough financial decisions and run the numbers can give you a sense of peace and confidence in your business. So message us to see if we can help!

Buying a business is hard enough. Buying a business when something doesn't smell right? That can destroy you. Here are a few questions to ask as you go through a business purchase…

Knowing your numbers. A critical element to any successful business. How about a salesperson's business? Looking at your territory through a business owner's lens (you own your territory, even if you work for a company) can help make sure you are not leaving money on the table.

The three essential strategies for shaping a business you, your team AND customers love. Your small business should be a win/win. Most aren't. Most small businesses are win/lose. Owners and teams slog away working too many hours for too little money to provide a good service or product to their customer. Customer - Win Owner & Team - Lose This happens naturally without the right strategies in place because it's in our nature to want to help others and undervalue ourselves. Having these three strategies in place guarantees that can't happen - that's why it's always the first thing I check in on with clients. 1) Owner Strategy What do you want from the business? Why did you start it? What makes it worth it? This is usually a combination of freedom, finance and impact. 2) Financial Strategy What do the basic numbers of the business need to be? This will be dictated by owner goals, desired size of team, gross margins net profit targets etc. 3) Business Strategy What's the purpose behind the business? What gap do you fill in the market? How do you appeal to your ideal client? Although these might sound complicated each can be boiled down to a single page. When all three are aligned you have a win/win business - or the plan for a win/win business. If you're feeling frustrated with or stuck in your business - check it against the three strategies. Which are you missing? Which do you need to revisit and improve?