Getting Away With It: Selling Your Business for a Profit

Not every entrepreneur gets into the game to never get out. Even when your passion as a business owner is one of your defining features, for most of us, there comes a time to sell or take the risk of going under. If you’re among the lucky few that can honestly say their business sets the standard for your industry, it might be time to start looking around for prospective buyers. But before you go full bore—and even if you already have suitors—there are a couple of things to get straightened out before you bring that beauty to market.

selling your business

In fact, one of the very things that probably makes your company an industry leader, especially in small business, is not just the recognition of your logo, but a little buzz that goes off in the minds of people who have used your product or service, and who subsequently fell in love with it. If you have this kind of brand equity, you’ll be able to cash in on it. But you can’t sell your business on the basis of that equity if the potential buyer is out of the local loop and is trying to swoop in and give you pennies on the dollar for all the years, blood, sweat, and tears you have put into your operation. So before you start shopping your business around, make sure it is completely obvious how well you are loved, not just how well you are established. This can be achieved by looking deeper than sales and profit margins. It can be gauged by customer recommendations, online mentions, your social media presence and popularity (how many fans or followers you have and how often they are chiming in about how much they love what you’re doing.)

Knowing the value of your small business means you’ll have to do some research as we are unlike a person trying to sell their home gets comps on similar homes in their zip code, try to ascertain the value of your local competitors. How have their sales been going? Do they seem to be in a place of desperation with all kinds of gimmicky sales promotions? Is their blog active? When’s the last time they posted on Facebook or Twitter, and how responsive is their following? If you ask yourself all of these questions and find that your business is coming out on top every single time, you’ve got empirical data that proves your brand is worth something—and this puts you in a position to confidently turn away potential buyers trying to purchase a new business for a steal.

If you’re not the kind of person (or entity) that cruises around buying out businesses and flipping them for a profit, then you have to keep your decision to sell on the down low. Meaning, if you are a true blue small business owner, don’t mention your plans of selling all around town. There are a couple of reasons this is a bad idea. First, if your loyal customers find out your business will be changing ownership, they could jump ship very quickly, and this downturn in business will hurt your profit margins, giving a potential buyer a bargaining chip they wouldn’t otherwise have had. Secondly, when your business is for sale, having word spread around town could have people begging you not to sell, and this can quickly become emotional for you. After all, you started this business, it’s helped put your children through school, allowed your husband or wife to stay home and be with the kids, and let’s face it, you’ve created a legacy you’re pretty proud of. When your brain is clouded with these emotions, you may decide to back out of selling, and ultimately this could wind you right back where you started just several months down the line.

When you get that intuitive sense it’s time to sell, and you know you have the brand equity to do so, go for it. Get some help from a business broker whose reputation is exceptional. Make anyone who knows about your plans to sell the business sign a nondisclosure agreement (NDA). And last but not least, take pride in the fact that you built an empire, no matter the size. If buyers are already courting you, you’ve raised that business right.

Image Credit:
Stuart Miles – FreeDigitalPhotos.Net

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Increasing Capital with Small Business Finance

It is a fact that bigger businesses and corporation shave bigger coffers than small businesses. The operations of smaller businesses are more limited in terms of both product and reach. This is so because of the limited capital that small business owners have. There are ways, however, to get more money in order to expand a profitable small business. Small business finance packages are available from different financing companies and banks. Small businesses can increase their capital with these financing options when the right prep work is done early on.

small business finance

Before any bank or financial institution lends money to anyone or to any business, it has to take steps in order to determine the credit worthiness of the loan applicant. Such is the function of the application form, the documentation requirements, and the credit investigations. All information about the business and the business owner are evaluated to come up with a small business finance package. These loans have lower interest rates that commercial loans, but the maximum loanable amount is also low. It is best for small business owners to take the necessary steps to prepare for their loan application and to increase their chances of getting more favorable terms.

One of the things that are important in applying for small business finance is the business plan. The financial institutions would naturally want to know that you know where you are going with your business. How can you possibly promise to pay off your small business loan when you do not know how profitable you will become in the near future? In fact, even without a loan to worry about, you should have a business plan that tells you where you want to go and how you intend to get there.

If you have already availed of credit products in the past, you need to make sure that none of these products have been mismanaged. Keep your credit score high and make sure that your small business’ assets are properly accounted for. The business owners’ personal credit reports could also get into the picture. Essentially, this factor tells your lender that you are responsible enough to manage your finances well.

Image Credit:
Stuart Miles – FreeDigitalPhotos.Net

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Why VoIP Works for Small Businesses

In today’s technological age, more and more businesses now prefer VoIP over traditional phone lines for their communication needs. Aside from having business telephone numbers that are not restricted geographically, VoIP or Voice Over Internet Protocol is more cost-effective, more flexible and more efficient than landlines. With better phone models that can be used for VoIP as well, this telecommunications solution is fast becoming the choice of small business start-ups.
voice over internet protocol

Cost Effective. Making long distance and international calls entails steep fees when done using a traditional phone line or even a mobile phone unit. This is where VoIP is best used for as VoIP calls are routed over the Internet and are not charged additional fees on top of what you are paying for your broadband connection. VoIP, in effect, provides you with unlimited long distance and international calls. The initial cost of setting up a VoIP system may be expensive but the business stands to save more in the long run.

Flexible. VoIP can grow with your business. It allows you to add extra phone lines as your business grows and requires more employees. Also, hosted VoIP solutions can be configured according to your company’s specific requirements. It not only provides you with up-to-date telephony technology, it also provides scalable configuration for future expansion. Traditional phone lines such as PBX systems do not provide this flexibility and scalability.

Efficient. With VoIP, you can call your employees directly on their laptops, PCs and tablets – wherever they are. This also makes conference calls and teleconferencing easily accessible and forwarding calls to mobile phones possible. Software used in VoIP solutions can also respond to changes in the market fast and most have customizable management portals with a simple interface that facilitate effective communication. The easy-to-use features and functionality of VoIPs for business communications make it much more efficient than traditional phone lines.

Unlike landlines though, VoIP requires good Internet connection and could not be used during power outages. It may also be vulnerable to malware, viruses and even hackers. Nonetheless, the benefits far outweigh the disadvantages as these cons can be easily addressed by installing safeguards. As such, it is highly advisable for small businesses to go with the VoIP solution. Ideally though, a business must have both a landline and a VoIP system.

Image Credit:
Renjith Krishnan – FreeDigitalPhotos.Net

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Financing Options for Small Businesses

Small business owners sometimes find themselves unable to take advantage of opportunities because they lack the necessary financial resources. This often puts them at a disadvantage especially when they have to go against bigger corporations with deeper pockets. One solution that could put them on equal footing with big leaguers, at least in terms of funding, is a business loan. There are institutions that provide various financing options for small business owners. The fund from these business loans can be used for various business purposes including expansion, building construction, equipment purchase, and purchase of inventory. As each business would have different financing needs, it is necessary for the business owner to consult with a financial advisor or a financing consultant to determine exactly what kind of business loan he should avail of.

small business financial options

To get the best possible financing package, small business owners would have to ensure that the company is in good financial condition. They might not have much in capital, but their books should show that they are not on the red. Business plans are sometimes required by the financing company to determine the extent of risk that they are taking on when they lend money to the company. These plans should show how much the company is expecting by way of revenues in the coming months and years. The better the prospects are and the more realistic the projections look, the more likely the business owner will get the loan package he is applying for.

Financing options come at a cost. Business owners have to pay these loans back with interest. It is, therefore, not wise to get a loan unless it is absolutely necessary. There should be a clear purpose for the money that will be borrowed. And, the purpose for which the money would be used for should yield revenues that exceed what the borrower would have to pay in interest. Otherwise, the businessman would not benefit from such a financing package. Diligent and realistic number crunching is recommended before a businessman takes on financing options.

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Taking the Big Leap – What It Takes to Be in the Big League

Many of the entrepreneurs who start small have dreams of making it big too. They might have limited working capital now, but with some hard work and maybe a little bit of luck, they hope to join the corporate giants sometime in the near or distant future. Some would say that this is wishful thinking. There really is no harm in aiming for the big league. If this is what you want to achieve, you simply have to be ready to take the big leap sooner rather than later.

Taking this challenge, however, should not be done haphazardly – ever heard of the saying that “you might be getting out of the fying pan and into the fire?” Small businessmen can actually lose everything they have when they go big prematurely. You have to set things up for success. This means knowing exactly what needs to be done for you to be able to compete with the big guys. You need to have a plan. You need to be patient about results. And, you need to recognize the signs that say it’s the best time for you to make the jump. The right planning, resources, market conditions, and timing are necessary in any business expansion endeavor.
proper business planning

Turning your small business into a big enterprise starts with a vision. Think about how far you are willing to take your business. You can even go as far as visualizing your dream enterprise. With this in mind, you can focus all your business planning and operations towards achieving this dream in the soonest possible time.

Proper business planning and action will lead you towards your vision. Give yourself a timeline to work on your dream. This timeline should be realistic. Find out what resources you need and how you can acquire these resources. Create an action plan that is doable. Commit to following your action plan. Even the best business plan could fail if you do not follow through.

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