Portland, OR Business Broker Could Be Your Next Best Friend

A Portland business broker could be your next best friend if you would just give him a chance. If you are planning to sell your business but do not have an inkling on how to go about the sales process, contact a reliable business broker to help you out. Selling a business could be a daunting task. It is not as simple as signing a piece of paper, cash in your money and goodbye business. A business sale process is an extremely structured system that must be followed religiously, if you want to make a quick sale.

So before putting your business up in the market for sale, call a Portland business broker and start learning the art of selling a business. You have to choose a broker that you can trust. Keep in mind that not all business brokers are trustworthy. You may end up with the wrong broker who neglects your business shelved in some archived gathering dust. Choose a business broker that can increase your selling power with his proven skills and record of accomplishments.

Find a business broker based on traits. There are hundreds of business brokers out there but the good ones share some distinguishable traits:

Specialized Experience: He must be specializing in the category of business sales that is related to your line of business.

Find a Portland, Oregon business broker that sells businesses in Oregon and Washington geographic markets.

A Verified Track Record:  As your prospective broker for his credentials and record of accomplishments. If you are given a list of previous clients, call and verify to follow up on the most recent entries. Ask about his personal attributes and selling style. Also ask leading questions as to your prospective broker’s strengths and weaknesses. Take a moment to analyze the personal information and think about how his attributes and style will fit into your own personal style.

Connections: A boastful business broker who brags about having the capability to take your listing from start to closing is waving a big red flag. Politely decline and say goodbye.

Ask about his business connections. An experienced Portland business broker should have a network of business professionals that may be able to help in the course of the business sales process. This should at least comprise a group with local professionals, accountants, and lawyers that he may be able to call, in case you request to be introduced for future assistance. Should you decide to employ your own legal counsel and accountant, your business broker’s circle of professional friends may come as a big help.

Truthfulness: When selling a business, the price and terms are the most common blockades in consummating a good deal. Your Portland business broker should be able to advise you on matters regarding adding value to your business and the selling price valuation. If a Broker cannot tell you honestly how much your business is worth, you might just as well end up selling your business by yourself. Do not fall for flattery. Remember that all brokers tend to raise any selling price basically because they get their income from the commissions on the sale. Greg Roberti of Westwood Benson Business Brokers is one of the top performing Portland Business Brokers.

Contact Greg Roberti at Westwood Benson, Phone: 800-761-8460.

Determining Business Valuation

What Would Your Business Sell For?

Determining Your Business Value

Going through a process of business valuation is a requirement for a sellers and buyers to determine the business worth. The key is to do things right from the very start and this means giving the idea of selling or buying a business a lot of thought and preparation with well-calculated assumptions designed to achieve positive results. Westwood-Benson, a Portland OR Business Appraiser, is known for its expertise in preparing business appraisals and valuations. Westwood-Benson shares the following guidance to business sellers.

Determining Business Valuation

Business Value

Every business is unique and there are no rules carved in stone to determine a business’ value. Some business sellers may assume that their business value depends entirely on strong business connections established through dedicated service to the customers they serve. Other business owner’s may look back into their history and track record of high business income.

For business buyers, gauging a business value is in part understanding the general economic trend and conditions that affects the competitive selling prices. How a business is being offered for sale also affects business valuation. A business buyer would think twice when presented with a fast sale in an auction situation verses a business offered for sale that is professionally presented with a thorough and detailed offering memorandum designed to highlight the business strengths and the opportunities available to the would be buyer.

Simply put, the expected or assumed business selling price is what a business is worth. A well-thought out business marketing plan by a professional Portland, Oregon business broker will greatly help in achieving a maximum business value.

First valuation method is looking at the assets and liabilities of the business in question and comparing it to a scenario of starting the same business from scratch. How much will it cost to start a new business of the same nature that can yield the same benefits as that of an established business for sale.  The end result, which is the difference of this comparison, is the business intangible value.

The second method is reviewing actual market place sales. Looking at the business comparable market value with businesses with the same products or services helps both business sellers and business buyers determine competitive selling prices and eventually satisfy their respective interests.

The third method is more popular with business buyers. It is looking into the history of the generated business income and applying the “what if” scenario. Here the practical reason for owning a profitable business is no doubt the end goal. Relative to this approach is taking risks as to what future benefits may be garnered. An experienced business broker uses two ways in using this method – capitalization and discounting.

The formula in capitalization is dividing the business’assumed earnings by capitalization rate. Assuming that the capitalization rate is twenty five percent, the business value is most likely four times the annual earnings.

Discounting is done by projecting the generated income of the business over a defined time frame or holding period, and then determining the appropriate discount rate given the risks of getting the projected income over the specified period of time. The terminal value or final residual value (selling price) is then determined and the annual cash flows are discounted back to a final present value.

Both approaches serve their purpose for business valuation. The difference in what income input to use. Whereas, capitalization utilizes one income measure, like the average earnings over a period of time, the discounting approach uses multiple income values over the years. Capitalization method is a good measure for businesses with a smooth sailing income yearly while discounting is best applied for businesses with variable income generation.

Sacramento-business-broker

Do the right things.

Measuring a business’ worth using the income valuation yields different end results and is highly recommended by expert Portland Oregon business appraiser, Westwood-Benson, as the best method in determining a business worth. No two businesses are the same and the valuation method utilized should be chosen based on the attributes of each individual business.

If you are considering selling your business, contact Westwood-Benson Portland Business Appraisers for a free consultation.

Westwood-Benson, business appraisers and business brokers.  Phone: (800) 761-8460

Portland Oregon-Business-Appraiser

Selling Your Portland, Oregon Business

There are several reasons why a business owner decides to sell his business. Selling a business is not the easiest decision to make for a business proprietor who had built his business out of blood, sweat and tears, so to speak.  Needless to say, It is not easy to just turnover the intricate process of selling the business to a business broker (though this is the most recommended move) if the seller has no idea at all of how to go about the process.

Avoid the unexpected. When deciding when to sell, do your homework and carefully plan your selling strategy. Anything may go wrong or completely head towards the opposite direction of your end goal in selling the business. Even if you have decided to sell with the help of a professional business broker, preparation is the key to a successful business sale. Treat the process of selling, as would a good business broker do, with utmost care like what you did in building and developing your business. After all, who, in his right mind, would buy a business that is haphazardly offered with only the urgency of the business seller to dispose of the business at stake?

Remember to put into consideration both internal and external factors in the crucial moment of decision making. Before deciding to sell, part of the internal preparation is to dig into your books and do the balance sheets for at least the last few years of operations. Allot some time in updating your financial records. Relatively, put some weight in the external factor, i.e. prevailing economic condition that affects stability of continuing operations. Not all considerations on circumstances may align perfectly but still you are now prepared to hurdle any obstacle.

When fully decided and cleared of any backroom hinges, think of the people who may be or may have been a part of your team, i.e. silent partners, friends or family who, at one time or another, may be stakeholders in the business you are selling. Even how small their shares are, they are still legally entitled to have a piece of the cake, (do not laugh, but prepare to let go of the icing tooJ)

Determine your business value or worth as this will also be the basis for setting your asking price. Know the market and sell at the right time. Until such time, that you have a well prepared plan, never discuss your selling-out moves to employees and other beneficiaries of the business. You will never know their reactionary moves (just assume the “negative worse”) that may thwart or block your goals.

After business valuation and determining the selling price, researching for similar businesses that are up for sale in the market would be an inspiring move regardless of size or price. Now, that you are done with due diligence, it is now time to find buyers for your business. Initially, you may want to sell the business to your employees because among all other prospects, your employees know your business well and are more than capable of running it. In a gist, employees are extremely motivated and would be top candidates to ensure the business will move forward when incentivized with power to own the business.

Have your legal adviser set up a payment scheme wherein the employee buyers could purchase and pay in easy installment plan with support of your financing or outside resources. In 1978, the Employee Stock Ownership Plans or ESOPs was established and required by law as part of the benefit plan for employee retirement. The ESOP is equivalent to the “profit-sharing plan” where companies benefit for the purpose of continuing business, incentivizing and enhancing motivation among its employees.

Your next best prospect is your business competitor. You would not expect this recommendation but it is a win-win scenario – you are getting your business worth and peace of mind knowing your business is in good hands, while competitor-buyer is more than happy to have one less competition in the block.

Contact: Westwood-Benson at 800-761-8460, www.westwoodbenson.com

When To Sell Your Business

There are a number of reasons why a business owner would want to sell the business. Some may be facing lawsuits, a looming divorce, an expiring lease contract and other obstacles that may impede business development. A business broker can lay out the groundwork for any business owner that may be faced with a dilemma on selling the business or not.

A lot of considerations before selling the business are at stake that must be put in a proper exit plan. It is good to project the right time to sell but it is better to know when the “good time” or “bad time” is with the following guidelines:

It is a good time to sell when:

  • The exit plan is well-thought of
  • Everybody is buying
  • You cease to enjoy doing business
  • Looking forward to a well-funded retirement plan
  • Receiving an unexpected offer
  • Foreseeing a more productive lifestyle after selling the business
  • Your business is in the upward scale
  • Your successors are able and ready to take over the business when you retire

It is a bad time to sell when:

  • There is an economic plunge
  • You are threatened by an upcoming competitor
  • Faced with serious health conditions
  • Facing serious disputes or lawsuits
  • Your products or services are in a downward trend
  • Your managing partners are not performing well
  • A business problem impedes a sale
  • Lease contracts are expiring

Careful preparation and meticulous planning should be your foremost concern before selling out. It is necessary to consult an experienced business broker to help get your business in tip-top shape as far as operations and physical attributes are concerned. The selling process begins with preparation starting with proper documentation of financial statements and other important data. The following are a few pointers to start with:

Review your expiring lease contracts particularly the stipulations in the terms, options, rentals and assignments. Correct any errors or add any provision that may have been missed.

  • Check your inventory: Are your products obsolete or overstocked?
  • Get a breakdown of your receivables
  • Check status of payables.
  • Are deliveries of goods updated?
  • Do you maintain good customers that are happy over goodwill prices?
  • Check for marketplace trends.
  • Are your business permits and licenses updated?
  • Prepare the tax returns from the last three year of business operations.
  • Make certain that all insurance policies are active.
  • Prepare audited financial data from the first day of operations to the current year.

If you do not have time to clean up all facets of the business, then it is recommended to hire professional help. An experienced business broker to perform these necessary tasks for you. Professional help is more appreciated when your see that your business worth is established based on industry and appraisal standards, buyers are pre-qualified to full quality potential and assurance that you can get your desired price for the sale. You should also consider getting advice from certified financial accountants to help analyze your business worth through the process of business valuation based on your business’ earning power, intrinsic value, market comparisons and goodwill.

Finding A Business Broker In Portland, OR

What is a Business Broker?

A business broker is one who is engaged in the business of facilitating the sale of a business which is up for sale in the market. He serves as the mediator between business sellers and business buyers in all the stages of processing the transaction.

How Can a Business Broker help in a Buying/Selling a business?

  • The Pre-screening Process.

A good business broker only accepts listings that are properly documented, i.e. business owners are required to provide a complete financial disclosure particularly for those businesses that are being sold way up above the fair market value. An experienced business broker can “smell” the bad risks and can protect the business buyer, most especially the first-time buyers, by pointing out these avoidable risks.

  • Zero in on target goals.

Not all buyers wanting to have a business of their own are intelligent business buyers. A business broker comes in handy when analyzing what the business buyer may really need based on his interests and skills. Most often, professional business brokers act as matchmakers, helping the buyer select the right business and satisfying the business seller’s asking price.

  • Negotiations.

The process of negotiating the business sale is the most crucial stage. This is when both parties would come to appreciate the business broker’s support in the discussions leading to a successful compromise in finally closing the deal. As a professional negotiator, he can thresh out the differences in opinion and regulate the transactions without taking sides to come to a unified solution for everyone at stake.

  • Documentation

Closing the business sale is just the beginning of a long paper trail in completing the deal. Professional business brokers are adept in going through the whole caboodle of obtaining business permits and licenses. Needless to say, a business buyer’s wisest decision to make is to hire the best business broker to do the paper work. Government rules and regulations are tough to beat but business brokers have mustered their way through all the “red tape”.  For a minimal 5-10% broker’s commission,  a business buyer gets peace of mind knowing that he had purchased the right business for the most reasonable price while the business seller gets full satisfaction of getting back his business’ worth and more.

Where to Find a Business Broker?

Congratulations! You would not have read this far if you did not take the initial step in finding a business broker. You may have gone through checking the newspapers ‘classified ads or “leafed” through the yellow pages but the quickest way to finding the best business broker is just a click away in this worldwide web.

If you are still in doubt, then ask for referrals from other business sellers, seasoned business buyers who have hired experienced business brokers . Ask your friends, friends of friends who may know bankers and financial institutions that come in contact with professional business brokers.

What to Look for in a Good Business broker?

A good business broker’s worth is gauged on how fast he can help both business seller and buyer in closing a business sale. He basically acts as a sounding board between both parties. An experienced business broker can easily facilitate a productive discussion as he represents a neutral ground where buyer and seller may come to agreeable terms and conditions prior to closing a sale

Buyers on the look-out for an existing business for sale can use a good business broker that will go an extra mile in knowing the buyer’s specific needs such as target location, business size, the industry niche and all other parameters. At the end of the day, it is still the “gut” feel that matters, like “love at first sight”, you know you have found the right business broker when communications do not end with “Goodbye!”

Find A Portland, OR Business Broker

Checklist for Finding the best Portland, Oregon Business Broker

You’ve established and built a successful company and experienced financial success. Now that it’s time to sell your business, you want to get the best selling price for it. It is important to get the best price, but it’s also important to get the best terms and to make sure the transaction closes.  That’s why it’s critical to find the right Portland business broker.

A business broker’s job is pretty much the same as that of a real estate broker’s job in selling real estate. Like selling real estate, there is a process to go through and lots of preparation prior to selling your business. If you have spent time and efforts in building a profitable business, you should do the same before letting it go. Having a professional Portland business broker on your team can make all the difference in the world and is worth every penny at the end. Westwood Benson Business Brokers has an established track record of success helping company owners sell their company.

A top business broker can sell a company for a higher price and more effectively than what a business owner can generate on their own. There is a series of standard procedures that a professional business broker executes – from evaluating the business for sale, knowing the market trends and connecting and finding the right business buyers.

When looking a business broker, it’s critical to get to learn about the person and the company. Before setting up an appointment to discuss a business for sale, you should prepare a checklist of interview questions in order to confirm the expertise of the broker.

Business Broker Checklist

Interview Checklist

Below are a few questions that can help you, as the business seller, evaluate prospective brokers:

  • How long have they been working as a business broker?  (A long record of experience in selling business is definitely a plus factor)
  • How many successful closing deals has the business broker made in the last couple of years and in what particular industry?  (It is good to know the business broker’s track record in closing business sales)
  • Are the business broker’s clients happy with their transactions? (Ask for testimonials if possible)
  • How do they find business buyers and qualify them?

A meeting to discuss selling a business will not be complete without questions that will be asked by the business broker.  At this point, the business seller can gauge a the business broker’s capability and experience in selling businesses.  Below are samples of critical questions from business brokers that are not only helpful in determining a good business broker, but also aid in determining what business buyers are looking for.

  • Is your company brand popular?
  • How many employees do you have?
  • How many loyal customers do you have?
  • Do you have multiple income streams?
  • Is your business finance record updated?

The answers to the questions above work both ways for both seller and buyer but leading to only one goal – finding the right Portland business broker to help successfully sell the company for a price that will satisfy the company owner.

Checklist: Westwood Benson Portland Business Broker