When most business owners decide to sell and they wish to be the one to start the process, the first and obvious place to start is with a business valuation. A business valuation gives the owner a reference point as to whether the price they hope to get for the business will be reasonable and/or achievable.

Some business owners choose the selling price for the business based on what they want in order to sell. They may have a certain amount of debt they wish to retire, money they need for retirement plus an ache that makes them think there business is worth a certain amount of money. Not a good basis for trying to convince a buyer about the asking price for the business.

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The following is an article by Chrystal Jarvis of the Birmingham Business Journal about good news for Small Businesses looking for positive news about finance for their business.

The U.S. Small Business Administration is looking to offer more government-backed loans to commercial businesses.

The government agency has proposed increasing the size standards for 71 different types of businesses, two-thirds of them in retail trade sectors. The rest are in accommodations and food services and other services.

If adopted, more small businesses will become eligible for government loans and will have access to the SBA’s financial assistance, contracting and other programs.
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Buying or selling a business is complex task as there are so many moving parts. The moving parts obviously include the buyer and seller but may also include lenders, landlord, franchisors, attorneys, accountants, customers, suppliers, competitors, employees and others. Just as you can get help from a residential real estate to buy or sell a house, there are also business brokers or intermediaries who provide the services of an intermediary. If you are looking for the help of an intermediary or business broker, consider the following.
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The question of whether to sell your business is a difficult one. It is, no doubt, the biggest financial transaction you’ll ever make. Yet every successful business owner must face it eventually.

There are several things to consider when selling your business:

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As baby boomers begin to hit retirement age, many who are business owners are ready to sell. It’s created a market that has many businesses for sale. 

At the same time, concerns about the economy had made it tough to get financing for many potential deals. Seller financing is one option that could be the solution to get many deals done.

Seller financing involves a seller helping to finance the sale of the business by taking back a second note on the business. It differs from a traditional Small Business Administration (SBA) loan because the seller essentially extends credit to the buyer against the purchase price of the business. However, seller financing is misunderstood by many, even though it may be the best way to sell a business during a stagnant economy.
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Selling a business and walking away can be very difficult. But in many cases, there’s a transition (“training” and/or “consulting”) period dependent on the size of the company and the role of the owner. Transitions may be as short as a month or two or as long as a year. In most situations, the buyer wants the seller to remain on board to shorten the learning curve and help with the smooth transfer of key relationships.

In the typical business sale, a transition period of four to eight weeks is included, and sometimes a “telephone consulting period” is added (e.g., 6 months of telephone consulting not to exceed 5 hours per month). Also, the seller may additionally be retained as a consultant at a negotiated rate. In some instances, a long-term employment contract is negotiated and the seller maintains daily involvement for a much longer period of time. READ MORE

As you prepare to put your house on the market, you get the word out to as many people as possible. The “For Sale” sign is placed in the front yard, you invite people into your home during an open house and you put ads in the newspaper and online. You want everyone to know your house is for sale.

However, that’s not the case when selling a business. Place an ad that your business is on the market and people start to wonder. It creates an air of uncertainty that can be detrimental to your bottom line and put the company in jeopardy.

To increase the likelihood of a successful sale of a business at an optimum price, keep it confidential!

What’s likely to happen if people find out the business is up for sale?
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There are more than 15 million family businesses in the United States, ranging from giants like Wrigley and Marriott to the local corner grocery store. Yet, history tells us that less than one-third of family owned companies will make it to a second generation. 

One reason for the disheartening statistic may be that business owners tend to forget about succession planning. It’s often not a priority and it definitely can be an emotional issue. Many owners just can’t imagine the business succeeding if they aren’t involved or they may be too busy with day-to-day operations to take the time to adequately plan for someone else to take the reins when it’s time to step aside. 

But as more and more baby boomers approach retirement age, the time for succession planning is today. Tomorrow may bring a serious illness, disability or even death. Having a well thought out plan is critical to the continuation of a business, particularly for a small, family-run operation.

Plan early.
Developing a succession plan early will help to smooth the transition. You may think the plan won’t be implemented for years, but unexpected factors may move up the timeline. 
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The baby boomer generation spans many years creating a unique situation in the business world. Aging boomers are looking toward retirement, while many younger boomers find they’re ready to be their own boss. For those younger boomers, and others looking to be a business owner, buying an existing business is a great option; especially as a means to grow your existing business.  

But be aware that buying a business is a timely process. Some buyers never find the right opportunity, while others spend too much time exploring too many options. 

• Consider a step-by-step approach to get you where you want to be owning your own business.
• Ask yourself some important questions – Why do I want to be an owner? What types of activities do I like? What lifestyle is important for me? You’ll also want to be sure to include your family as part of the assessment.

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Below are some provisions of the economic stimulus package that may be of interest to small businesses.

• Fifty Percent Bonus Depreciationis extended for expenditures made in 2009.
• Small Business Expensing Rules
  In the 2008 stimulus legislation, Congress increased the expensing provisions for small business to $250,000 for assets purchased in 2008, and phased out the limitation for businesses that purchased more than $800,000 in assets. This rule is extended for 2009. Businesses can deduct up to $250,000 of assets acquired during 2009 without having to depreciate them over multiple years.

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