The Rise of Women Business Owners

The National Foundation for Women Business Owners (NFWBO) identifies trends relating to the small business climate for women. New studies examining the role of female entrepreneurs by the NFWBO have yielded some surprising and eye-opening results.

A joint IBM, NFWBO study of the top fifty women business owners as well as 10 additional “up-and-coming” business owners reached several interesting conclusions. The women in the study covered a diverse array of industry categories including 27% in manufacturing, 25% in retail and 10% in real estate. 46% of the women inherited a business and over 50% started their own businesses, with 34% starting businesses themselves and another 17% starting businesses with others.

A Preference for Flexibility

One key part of the study centered on the fact that women business owners, in general, appear to prefer smaller operations. Among the 8 million women-owned businesses in the U.S., a full 75% are one person operations. Through ownership of these businesses women achieve a high level of flexibility in their work schedules. It is believed that this flexibility improves the odds of women keeping their home lives satisfying and rewarding.

Overall, millions of women are ignoring the notion that small businesses do not equate with success. While NFWBO research indicates that fewer than 1% of small women owned businesses generate over a $1 million in sales, there is no doubt that women are showing their strength in numbers.

Tackling Loan Issues

One major obstacle women business owners have faced comes in the form of bank loan inequities. Recently, for the first-time women owned business are experiencing access to business loans on par with male owners; this may be due in part to the increasing number of women in high bank positions as well as banks now seeing the previously untapped potential of women-owned businesses. The NFWBO has also discovered that women tend to direct loans towards business growth.

Internationally Owned Businesses

On an international scale, the NFWBO studies have shown that women business owners often come from similar backgrounds and express the same concerns regarding business issues. Today, female business owners represent between one-quarter and one-third of the world’s independent business owners and have become increasingly vocal as evidenced by female participation at an international conference in Paris sponsored by the Organization for Economic Cooperation and Development (OECD).

A Trend Towards Progress

To date, many obstacles have been overcome. Simply stated, the future looks very bright for women-owned businesses around the globe.

Copyright: Business Brokerage Press, Inc.

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The Tremendous Importance of Simply Saying, “Hello!”

Far too many customers have grown to expect poor customer service. Whether its rude employees and customer support or impersonal robotic phone system responses, customers are often shocked when they receive pleasant customer service. In such a climate, it is clear that businesses that simply treat customers well are taking advantage of a huge opportunity.

If you’ve ever personally called a credit card or cable company looking for help, then you already know that it can be something of a depressing and even Kafkaesque experience, leaving you feeling drained. More than likely you don’t feel too positive about any automated experience that bounces you around from one hold menu to the next. Summed up another way, hold music is never a fun or rewarding experience.

Communication is Always Changing

In the “old days” a telephone call was often a customer’s first experience with a business. Now, the game has, of course, changed, with most customers first experience being via the business’s website. While we can’t predict with 100% accuracy how businesses with be communicating with their customers in the future, we do know one fact for certain. The human touch will likely be valued for a long time to come.

Your Website is a Valuable Tool

The initial point of communication with a client, whether it is via telephone or your website, is of critical importance. If a customer has trouble finding key information about your business, such as your location, hours of operation or an easy to understand menu of what goods or services are offered, then they will take their business elsewhere. Consumers don’t generally wait for businesses to get their “act together.” They simply move on.

Simply stated, you want your business’s website to be very user-friendly, streamlined and intuitive as possible. Keep in mind that you understand your business and what it offers, which means you may not be the best judge in spotting flaws in your website presentation. For this reason, it is best to test your website designs with many different potential users who have little or no information about your business and what goods and services you provide.

In the end, every single client is valuable. For every client you lose represents both a potential loss of revenue and revenue being placed in the pocket of your competitor. Don’t let customers slip away simply because there wasn’t a friendly voice answering the phone or your website lacked clarity.

Copyright: Business Brokerage Press, Inc.

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Three Signs You May Be Experiencing Burnout

Burnout is a strange phenomenon in that often a business owner doesn’t know that he or she is experiencing it until it is too late. Owners who feel beleaguered and over stressed frequently want to sell their business and move on. However, buyers are not so eager to accept burnout as a believable reason for why an owner wants to sell.

It is the responsibility of every business owner to be on guard against potential burnout. After all, it is better to “cash in” than to burnout. In this article, we will examine a few of the key warning signs that you may be on the verge of burning out.

Sign 1: There is No Joy in Owning Your Business

Once upon a time, you were likely excited about your business. But if those days are long gone, then it might be time to move on. Owning a business is hard work and eventually it can take a toll. If you find each day to be boring, then it is probably time to sell, move on and start a new chapter in your life.

Sign 2: You Feel Exhausted

Just as feeling no joy is a potential sign of burnout, the same holds true for feeling exhausted. If you feel exhausted all the time, then it is unlikely that you can run your business effectively over the long haul. In short, it may be time to consider selling.

Keep in mind that if your business is doing well, growing and expanding, then there will be more demands on your time, not less. If you feel exhausted a large percentage of the time and your business is expanding and seems poised to expand even more rapidly in the future, then cashing in may be your best bet.

Sign 3: You Feel Overwhelmed Almost on a Daily Basis

Business owners who frequently feel overwhelmed are likely teetering on the edge of burnout; this can be particularly true for business owners who are operating a “one-man show.” Operating a small business, especially one where you are doing most of the work, can be both mentally and physically exhausting.

There is certainly something to be said for being proactive and tackling burn out before it tackles you. In this way, you’ll be able to sell your business on your own terms. The last thing you want is to try and sell your business after you no longer have the energy to keep sales going in the right direction.

Working with an experienced business broker is one of the easiest and quickest ways to get your business ready to sell. Don’t let burnout put the fate of your business in a vulnerable position.

Copyright: Business Brokerage Press, Inc.

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The Top 3 Unexpected Events CEO’s May Encounter During the Selling Process

When it comes time to sell a business, not everything goes as planned. You may be one of the lucky ones and find that selling your business is a streamlined process with only a few unexpected occurrences. But most CEO’s looking to sell a business find they can expect the unexpected. Let’s take a closer look at some of the top surprises CEO’s experience during the sale process.

Unexpected Occurrence #1 – Surprisingly Low Bids

CEO’s looking to sell their businesses need to be ready for almost anything. One of the larger surprises that CEO’s face are surprisingly low bids. Don’t let low bids shock you.

Unexpected Occurrence #2 – A Huge Time Commitment

CEO’s have to make sure that everything from an offering memorandum to management presentation and suggestions to potential acquirers are ready to go. The offering memorandum is considered the cornerstone of the selling process and is typically at least 30 pages in length.

Most business intermediaries expect the potential acquirers to submit their initial price based on the information contained in the memorandum. Management presentations are also time consuming, but it is common to have these presentations ready before the final bids are submitted. Ideally it is best for the CEO to show the benefits involved in combining the acquirer and the seller as well as the future upside for selling the company.

Unexpected Occurrence #3 –The Need for Agreement from Other Stakeholders

You, as the CEO, are able to negotiate the transaction, but the sale isn’t authorized until certain shareholders have agreed and done so in writing. Until the Board of Directors, shareholders and financial institutions who may hold liens on key assets, have agreed to the deal, the deal simply isn’t finalized. Often this legal necessity turns out to be an issue that gets in the way of a successful deal.

Sellers can take their “eye off the ball” during the time-consuming process of selling a company, however, this can be a serious mistake. CEO’s must understand that potential acquirers will be examining monthly sales reports with great interest. If potential acquirers notice downward trends they may want to negotiate a lower price. No matter how time consuming the sales process may be, CEO’s have to maintain or even accelerate sales.

Ultimately, there can be a wide array of surprises awaiting a CEO who is looking to sell a business. Avoiding these kinds of issues is often, but not always, a matter of excellent preparation. However, it is vital that they keep in mind that even with the very best preparation and diligence, there can still be surprises when selling a business.

Copyright: Business Brokerage Press, Inc.

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Do You Really Understand Your Customers?

The time you invest getting to know and understand your customers is time very well spent. The feedback you get is gold, pure gold. Yet, there are other reasons why this is a prudent move. Let’s take a look at some of the key reasons you should learn more about your customers and their specific needs.

Today’s world has become increasingly impersonal. Most of us spend a shocking amount of time looking at one type of digital screen or another. Personal interaction isn’t what it once was, and you can use that fact to help build your business.

The Ultimate Form of Customer Service

Good old fashioned human contact goes a long way when it comes to keeping customers happy, loyal and returning. The personal touch can go a long way towards building your business by improving customer service. Customer service has become, in general, a very impersonal experience for most people in the modern world.

In most businesses, the owner is more of an impersonal theoretic concept that an actual being; after all, how often do you meet the owners of the businesses that you frequent? As a business owner, when was the last time that you got on the phone or had lunch with a good customer? The truth is that customers and clients enjoy working directly with owners, and it makes them feel more connected with a business. An owner who is working directly with his or her customers or clients is engaged in a powerful form of customer service.

Building Relationships

Investing time to build your business’s key relationships is a prudent step. When was the last time that you took a moment to contact your accountant, banker, legal adviser or other key people that support your business, such as key suppliers? The time you invest communicating with these key people and institutions is time well-spent especially should a problem ever arise. Since most communication is now done online, a handwritten thank you note or a quick phone call can go a long way towards maintaining and building relationships.

It is important to rise above all the background noise of life. One of the best ways of doing so is to invest the time to add a personal touch.

Owning and operating a business shouldn’t be a stealthy activity. Instead, you the business owner should be out front meeting with customers, suppliers and other key people. Running a business isn’t a “backroom” operation, so go out there and meet your customers and other key people! This is how you build and protect your business.

Copyright: Business Brokerage Press, Inc.

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Do You Really Know the Value of Your Company?

It is common for executives at companies to undergo an annual physical. Likewise, these same executives will likely examine their own investments at least once a year, if not more often. However, rather perplexingly, these same capable and responsible executives never consider giving their company an annual physical unless required to do so by rule or regulations.

Most Business Owners Don’t Know

Recently, a leading CPA firm undertook a study that was quite revealing. In particular, this study concluded that a whopping 65% of business owners don’t know the value of their company and 75% of the surveyed business owners had their net worth tied up in their businesses. Phrased another way, 75% of business owners don’t know how much they are worth! Perhaps most striking of all was the fact that a full 85% of business owners have no exit strategy whatsoever.

Having Recurrent Valuations is a Must

Business owners should know what their businesses are worth at least on an annual basis. Situations, both personal as well as in the economy at large, can change very rapidly. A failure to have a valuation leaves one exposed if issues suddenly arise involving estate planning or divorce or even partnership issues. These are just two examples of potential problems.

It is also vital to understand how your business compares to last year and previous years; after all, valuations should be increasing not decreasing. A valuation can also help you understand how your business compares to other businesses. Perhaps most importantly, an annual valuation can help you spot and fix problems.

“Buy, Sell or Get Out of the Way”

If you don’t know your valuation, then you truly don’t know where you are headed. As former Chrysler CEO, Lee Iacocca once stated, “Buy, sell or get out of the way.”

Standing still isn’t an option. You need to know your valuation in order to take full advantage of opportunities. You may feel that an acquisition isn’t the right move at the moment, but that doesn’t mean you shouldn’t be ready! Having a current valuation means you’re ready to go if opportunity does, in fact, knock!

You never know when a potential acquirer may enter the picture. Imagine missing out on a tremendous opportunity because you didn’t have a valuation in place. Often hot offers and hot opportunities depend on speed. The time it takes to get a valuation could mean that the opportunity is no longer available. An accurate annual valuation of your business provides a valuable option whether you choose to exercise it or not.

Copyright: Business Brokerage Press, Inc.

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Understanding Issues Your Buyer May Face

Not every prospective buyer actually buys a business. In fact, out of 15 prospective buyers, only 1 actually makes a purchase. Sellers should remember that being a buyer can be stressful. The bottom line is that buying a business is usually one of the single largest financial decisions that a person can make. In this article, we are going to explore a few of the reasons why being a buyer can be both stressful and taxing. Keeping a buyer’s perspective in mind will help you on the road to successfully selling your business.

A prospective buyer has many decisions to make before he or she decides to buy a business. Many prospective buyers are employed, and that means they will have to leave their existing job in order to buy a business. Simply stated, a buyer will have to leave the safety and security of their job and “strike out on their own.”

There are also other substantial financial concerns for buyers as well. The majority of buyers will, in fact, have to take out loans in order to purchase a business. Additionally, the new owner will need to execute a lease or assume the existing list. At the end of the day there exist an array of weighty business decisions that a buyer must make.

Ultimately, a buyer has to decide whether or not he or she is ready to take a giant step and purchase a business. This is more than just a financial decision. The enormity of the decision to purchase a business is such that touches every aspect of a person’s life. Owning a business can be very time consuming and demand a great deal of one’s attention. The end result, is that buying a business has a direct impact on both one’s financial life and one’s personal life. Owning a business can be extremely time consuming and this is particularly true for new business owners.

Prospective buyers need to weigh all the factors involved in buying a business. Caution must be exercised. Buyers need to step back and fully assess whether or not owning a business is right for them both on a personal and financial level. When sellers put themselves in their buyer’s “shoes,” things begin to look a bit differently.

When it comes to buying or selling a business, the assistance of a business broker is invaluable. A business broker understands what is involved in owning a business and can help both buyers and sellers evaluate the pros and cons of any transaction.

Copyright: Business Brokerage Press, Inc.

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The Six Most Common Types of Buyers: Pros & Cons

Business owners considering selling should realize that they have many different types of prospective buyers. Today’s prospective business buyers are more sophisticated and diverse than ever before. Let’s take a closer look at the different types of prospective buyers and what you should know about each of them.

1. Family Members

Family members often buy businesses from other family members. There are many reasons this happens. For example, a family member is already very familiar with the business. If a family member is treating the responsibility seriously and has prepared years in advance for the responsibility of owning the business, then selling to a family member can work.

However, there are many potential problems when it comes to selling a business to a family member. One problem is that the family member simply lacks the cash to buy the business. This can cause disruptions. If the family member is unprepared to run the business, then the business can suffer a range of disruptions leading to a loss of business. Any family member that buys a business must be ready for the responsibility. An outside buyer usually solves all of the problems that come along with a family member buying a business.

2. The Individual Buyer

Most owners of small to mid-size businesses like the idea of selling to an individual buyer. Often these buyers are older between the ages of 40 and 60, and bring with them a good deal of real world business experience acquired in the corporate world. For these buyers, owning a business is a dream come true. Many individual buyers have the funds necessary to buy.

An individual buyer who is looking to replace a job that has been lost or downsized is often an excellent candidate. On the downside, individual buyers quite often have not owned a business before and may be intimidated by what is involved. At the end of the day, the individual buyer is often easier to deal with than other types of buyers.

3. Business Competitor

It is quite common for business owners to look to their competitors when it comes time to sell. No doubt, the approach of selling to a competitor makes sense, as a competitor already understands the business and will likely see the value.

Additionally, a buyer may see buying a similar business as an easy way to expand and increase cash flow. That stated, it is extremely important to work with a business broker in this situation. By going through a business broker, it is possible to have a secure confidentiality agreement in place so that the prospective buyer doesn’t learn the name of the business or other details before signing the agreement.

4. The Foreign Buyer

Foreign buyers often have the funds they need and look at buying an existing business as a way of addressing such issues as language barrier, licensing difficulties and other problems. Business brokers can be very helpful when working with foreign buyers, as they have experience with the obstacles a foreign buyer may face.

5. Synergistic Buyers

A synergistic buyer is one that feels that a particular business would complement his or her existing business. The idea is that they can combine the two businesses and in the process, lower their cost and acquire new customers. These are just a few of the advantages for a synergistic buyer, and that is why they are often willing to pay more than other buyers.

6. Financial Buyers

Financial buyers can come with a long list of demands, criteria and complications, but that doesn’t mean that they should be discounted. With the assistance of a business broker, financial buyers can still be good prospective candidates.

It is, however, important to remember that these buyers want maximum leverage and are often a good option for the seller who wants to continue to manage a company after it is sold. It is common for financial buyers to offer a lower purchase price than other types of buyers. After all, buying the business is strictly for financial purposes and it isn’t attached to fulfilling a dream or a family tradition. Financial buyers are looking for a business that is generating sufficient profits so as to support the business and provide a good return to the owner.

Working with a business broker can help you find the right kind of buyer for you. Every business is different and every prospective buyer is different. A business broker can help you navigate the possibilities so you find the right buyer for your business.

Copyright: Business Brokerage Press, Inc.

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5 Things You Need to Know About Confidentiality Agreements

Confidentiality is a major concern in virtually every business. Quite often business owners become a little nervous when it comes time to sell their business; after all, business owners usually want to keep the fact that they are selling confidential. Yet, at the same time, business owners want to receive top-dollar for their businesses and sell that business as quickly as possible. In order to sell a business quickly and receive top-dollar, it is usually necessary to present the business to a range of prospects. The simple fact is that you can’t sell a business without letting prospective buyers know that it is for sale.

All of this adds up to one simple conclusion: you will need a confidentiality agreement when selling a business. Let’s look at a few of the key points your confidentiality agreement should cover.

  1. Type of Negotiations

First, your confidentiality agreement should cover whether or not the negotiations are open or secret and exactly what kind of information can be disclosed.

2. Duration of Agreement

Your confidentiality agreement must specify exactly how long the agreement will be in effect. In most circumstances, it is prudent for the seller to seek a permanently binding confidentiality agreement.

3. Special Considerations

There are other considerations as well, for example, does your business hold any patents? A buyer could learn about your inventions during a buying process so you’ll want to make sure that your confidentiality agreement protects your patent and copyright interests as well.

4. State Laws

Additionally, your confidentiality agreement must factor in different state laws if the other party is based in a state different than your own.

5. Recourse in the Case of Breach

Finally, your confidentiality agreement should outline what recourse you will have if the agreement is breached. Having a confidentiality agreement does not offer magical protection against a violation. However, a confidentiality agreement does ensure that prospective buyers understand the seriousness of the situation and that there are indeed severe consequences if the agreement is not followed.

It is important for all parties involved to realize that a confidentiality agreement is a legally binding agreement that is enforceable in a court a law. Thanks to a confidentiality agreement, a seller can share confidential information with a prospective buyer or business broker so that a business can be properly evaluated.

With so much on the line, it is vital that you have your confidentiality agreement drawn up by a legal professional. A good confidentiality agreement is an investment in your business. It is possible for a business owner to sell his or her business and do so with some degree of confidence that information shared with prospective buyers will not be disclosed.

Copyright: Business Brokerage Press, Inc.

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Financing the Business Sale: 6 Questions to Know

How the purchase of a business will be structured is something that must be dealt with early on in the selling process. The simple fact is that the financing of the sale of a business is too important to treat as an afterthought. The final structure of any sale will be the result of the negotiations between buyer and seller.

In order for the sale to be completed in a satisfactory manner, it is vital that the seller answers six key questions:

  1. What is your lowest “rock bottom” price? It is important for sellers to know what is the lowest price they are willing to accept before they begin negotiations. Far too often, sellers have not determined what price is their “lowest price” and this can literally cause negotiations to fall apart.
  2. What are the tax consequences of the sale? Just as sellers often don’t know what their lowest price is, it is also true that sellers often don’t think about the tax consequences of the sale.
  3. Interest rates are no small matter. It is important to determine what is an acceptable interest rate in the event of a seller-financed sale.
  4. Have unsecured creditors been paid off? Does the seller plan on paying for a portion of the closing costs?
  5. Will the buyer have to assume any long-term or secured debt?
  6. Will the business be able to service the debt and still give a return that is acceptable to a buyer?

Studies have indicated that there is a direct relationship between more favorable terms and a higher price. In particular, one study revealed that offering favorable terms could increase the total selling price by as much as 30 percent!

Business brokers are experts in what it takes to successfully buy and sell businesses, and this is exactly the kind of insight and information that they have at their disposal. Experienced brokers are able to use their knowledge of everything from current market conditions and financing strategies to the knowledge of previous sales and a given geographic region to help facilitate successful deals.

Usually, selling a business is one of the most important things that a business owner does in his or her professional lifetime. Business brokers understand this fact, and they understand the importance of making certain that the deal is structured correctly. The facts are that the way in which a sale is structured could mean the difference between success and failure.

Structuring a deal in such a way where it is the best possible deal for both the buyer and seller, helps to ensure that a deal is successfully concluded. Working with a business broker is one of the best way to ensure that a business will be sold.

Copyright: Business Brokerage Press, Inc.

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