Created in 2012, the IBBA and M&A Source Market Pulse Survey was created to provide business owners and their advisors with a clear understanding of ever-changing market conditions. 

Through this survey, it is possible to gain clarity on businesses being sold in Main Street (values $0-$2MM) and the lower middle market (values $2MM -$50MM). Scott Bushkie served as the originator of the Market Pulse Report with IBBA and M&A Source and has continued to play a key role since the report’s inception. 

A core finding of the IBBA and M&A Source Market Pulse Survey for Q2 was that there has been a big shift between the turmoil of 2020 and the climate of 2021. Across the spectrum of sizes and price ranges of businesses, sellers now have an advantage or are at least in a better position to sell their business. This is quite different from the situation in 2020. 

The market has shifted towards being a seller’s market for a variety of reasons including the fact that many private equity groups are now looking for ways to grow their money. Acquiring an existing business has become an increasingly attractive option to buyers due to the current labor pool conditions. 

Buyers are now looking at existing companies as a way to bypass attracting talent. Instead, they can secure that talent via acquiring a new business. In short, many buyers are looking to buy versus organically build to meet their talent needs.

Another reason that now is a good time for sellers is that many buyers are looking to leave corporate America. This situation has likely been accelerated by the pandemic and people seeking to control their own destiny. The increase in global uncertainty has made the idea of becoming a business owner increasingly attractive.

The shift in climate from 2020 to 2021 underscores the value of the IBBA and M&A Source Market Pulse Survey. Through this revealing survey, it is possible for business owners and their advisors to gain a clearer understanding of market conditions and what to expect.

Copyright: Business Brokerage Press, Inc.

Line Arts/BigStock.com

The post Market Trends Reported in the IBBA and M&A Source Market Pulse Survey: Second Quarter 2021 appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

You understand the finer points and potential of your business better than anyone; however, that doesn’t mean that prospective buyers will instantly see your business’s various strengths. When you are looking to sell your business, you have two very important jobs. The first is to get your business ready to be sold. A second essential job is to showcase your business’s greatest strengths. At the end of the day, you must be the one to articulate why your business is worth buying. This effort, of course, will be supported by your Business Broker or M&A Advisor. 

Understand Who Will Buy Your Business 

Most people have never sold a business before and don’t fully understand what is involved in positioning one’s business for sale. The bottom line is that not every business is a good fit for every buyer. Finding the right buyer for your business will greatly expedite the process. This is yet another reason why it is critically important to work with experienced professionals. Business Brokers and M&A Advisors not only know what buyers are looking for, but also what sellers need to do to get their business ready to sell.

How to Navigate Roadblocks 

Selling a business, especially if you attempt to do so without professional help, is a very time-consuming and often draining process. Successfully running a business requires attention to detail and focus. Unfortunately, these can both suffer when owners attempt to put on yet another hat and handle the sale of their business. 

While you are attempting to sell your business, it is critically important that you maintain normal operations. The last thing you want is to weaken the finances of your business while you are waiting to find a buyer. Remember that it takes months, a year, or even longer to find a buyer for the typical business. Don’t let your business suffer damage in the interim. 

Think Like a Buyer

Preparing your business to be sold isn’t as simple as making a few cosmetic changes and calling it day. Instead, you’ll want to think like a buyer. 

What would you want to see if you were buying a business? You would want to know a great deal about that business and how it operates, who its key employees are, how likely those key employees are to stay, who the main customers and suppliers are, and the strength of the business location and competitors. Of course, you would also want a very detailed picture of the business’s financial situation. 

In short, you would want to clearly understand what the business does and what it’s really worth, how financially healthy it has been in the past, what the business’ prospects are moving forward and, in general, how much effort the business will take to operate. These are exactly the kind of key facts that any serious buyer will want to know. It’s only to be expected that a buyer would expect to learn this information before making a decision. 

At the end of the day, working with a Business Broker or M&A Advisor is one of the easiest ways to streamline the sales process. Thanks to years of experience, they already understand the pitfalls that you may experience as well as what is needed to position your business so that you can find the right buyer quickly and receive the best price possible. 

Copyright: Business Brokerage Press, Inc.

LeeYiuTung/BigStock.com

The post Put Your Strengths First When Selling Your Business appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

The post Questions Business Buyers Want Answers To appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

When the owner of a business makes the decision to sell, he or she is taking a giant step that involves the emotions as well as the marketplace, each with its own set of complexities. Those sellers who are tempted to undertake the transaction on their own should understand both the process and the emotional environment that this process is set against. The steps outlined below are just some of the items for a successful sale. While these might seem daunting to the do-it-yourselfer, by engaging the help of a business intermediary, the seller can feel confident about what is often one of the major decisions of a lifetime.

1. Set the stage.

What kind of impression will the business make on prospective buyers? The seller may be happy with a weathered sign (the rustic look) or weeds poking up through the pavement (the natural look), but the buyer might only think, “What a mess!” Equally problematic can be improvements planned by the seller that appeal to his or her sense of aesthetics but that will, in fact, do nothing to benefit the sale. Instead of guessing what might make a difference and what might not, sellers would be wise to seek the advice of a business broker–a professional with experience in dealing regularly with buyers and with an eye experienced in properly setting the business scene.

2. Get the record(s) straight.

Although outward appearance does count, what’s inside the books is even more important. Ultimately, a business will sell according to the numbers. The business broker can offer the seller invaluable assistance in the presentation of the financials.

3. Weigh price against value.

All sellers naturally want to get the best possible price for their business. However, they also need to be realistic. To determine the best price, a business broker will use industry-tested pricing techniques that include ratios based on sales of similar businesses, as well as historical data on the type of business for sale.

4. Market professionally.

Engaging the services of a business broker is the key to the successful marketing of a business. The business broker will prepare a marketing strategy and offer advice about essential marketing tools–everything from a business description to media advertising. Through their professional networks and access to data on prospective buyers, business brokers can get the word out about the business far more effectively than any owner could manage on an individual basis.

Copyright: Business Brokerage Press, Inc.

Wavebreak Media Ltd./BigStock.com

The post Selling Your Business? Do-It-Yourself is Risky Business! appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

Buyers, as part of their due diligence, usually employ accountants to check the numbers and attorneys to both look at legal issues and draft or review documents. Buyers may also bring in other professionals to look at the business’ operations. The prudent buyer is also looking behind the scenes to make sure there are not any “skeletons in the closet.” It makes sense for a seller to be just as prudent. Knowing what the prudent buyer may be checking can be a big help. A business intermediary professional is a good person to help a seller look at these issues. They are very familiar with what buyers are looking for when considering a company to purchase.

Here are some examples of things that a prudent buyer will be checking:

Finance

• Is the business taking all of the trade discounts available or is it late in paying its bills? This could indicate poor cash management policies.
• Checking the gross margins for the past several years might indicate a lack of control, price erosion or several other deficiencies.
• Has the business used all of its bank credit lines? Does the bank or any creditor have the company on any kind of credit watch?
• Does the company have monthly financial statements? Are the annual financials prepared on a timely basis?

Management

• Is the owner constantly interrupted by telephone calls or demands that require immediate attention? This may indicate a business in crisis.
• Has the business experienced a lot of management turnover over the past few years?
• If there are any employees working in the business, do they take pride in what they do and in the business itself?

Manufacturing

• What is the inventory turnover? Does the company have too many suppliers?
• Is the business in a stagnant or dying market, and can it shift gears rapidly to make changes or enter new markets?

Marketing

• Is the business introducing new products or services?
• Is the business experiencing loss of market share, especially compared to the competition? Price increases may increase dollar sales, but the real measure is unit sales.

When business owners consider selling, it will pay big dividends for them to consider the areas listed above and make whatever changes are appropriate to deal with them. It makes good business sense to not only review them, but also to resolve as many of the issues outlined above as possible.

Copyright: Business Brokerage Press, Inc.

pressmaster/BigStock.com

The post What a Buyer May Really Be Looking At appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

There is no doubt that the times are definitely changing. The COVID-19 pandemic has caused a shift across many industries, and the simple fact is that many industries will never return to the old normal. Success in the 21st century will require a good deal of adaptation and the ability to evaluate where you stand today and where you need to be tomorrow.

Flexible Thinking

One of the cornerstones of being successful in life and in business is to embrace flexible thinking. A flexible approach to problems can lead to finding new and highly effective ways of tackling problems. Being able to find success in the 21st century is about much more than simply riding the next technological wave or trend. Instead, it is about being amongst the first to use flexible thinking to spot trends and developments ahead of the competition and exploit those developments first. Technology and the world are changing faster than ever. Being able to utilize fluid, flexible thinking to identify problems and then seek out cutting-edge solutions to those problems will be a key aspect for success in this century.

A Solid Plan

Flexible thinking is essential for success, but so is having a plan. Just as business leaders needed a plan to achieve final success two-thousand years ago, the same holds true today. In many ways, evolving technology has not reshaped basic logic. 

You’ll want your business plan to strike the right balance between being rigid and flexible. At the same time, you’ll need a solid business plan that includes specific written goals and concrete time frames.

Embracing Technology

The days of ignoring technology or “working around” it are simply gone. The modern business landscape has integrated not just digital marketing, but digital financial transactions as well. This trend is only going to become more pronounced in the coming years. 

The business landscape means understanding and embracing the fact that commerce now has a massive digital component at every level. The pandemic has served to accelerate this fact and has very likely permanently changed how business will be conducted in the future. Whether it is meeting clients or customers online for a Zoom or Skype meeting, embracing digital marketing, or a range of other changes, it is essential for business owners to recognize change and incorporate it into their business and their long-term plans.

You can try to fight the future, but in the end you will fail. Charting the right course for the future means having the right mindset and a great support team in your corner. Business Brokers and M&A Advisors are experts at helping business owners prepare their businesses for sale. Demonstrating that your business has adapted to the dynamic and ever-changing environment will help you make your business much more attractive to prospective buyers.

Copyright: Business Brokerage Press, Inc.

AndreyPopov/BigStock.com

The post Do You Have What It Takes to Find Success in the 21st Century? appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

There can be no doubt that selling your business stands as one of the most complex and important decisions you’ll likely ever make. It is quite often the case that a business represents decades, or even a lifetime, of dedicated work. In this article, we’ll examine some of the key steps that you should take when it comes time to sell.

One of the most important steps that any seller can take is to begin the sales process far in advance of the date that he or she plans to put the business on the market. Working with an experienced business broker or M&A advisor (and doing so preferably years in advance) is one of the single best ways to ensure that you’ll be ready to sell your business when the time comes. It will also help you to avoid the numerous pitfalls that potentially await.

A good brokerage professional can also help identify weaknesses in your business and help you address those issues; however, this is only the beginning. Your broker can help you with everything from strategy and negotiations, maintaining confidentiality and establishing the market value of your business, to connecting you with other seasoned professionals, such as accountants and lawyers.

A third key point that all sellers should consider is their own psychology. It is vital that all sellers remain flexible in their approach to selling their business and also remain respectful of prospective buyers. It is important that you put yourself in the shoes of your buyer and try to think of what they will need to feel confident in their decision. 

The right seller psychology is also absolutely essential. Sellers should not attempt to rush or force a sale or overprice their business. In short, you need to keep “your head in the game” and as much as possible, keep your emotions out of the process. 

Sellers also need to realize that the statistics strongly indicate that seller financing is likely. Only 75% of sellers ultimately receive their asking price, and businesses that are listed as “all cash” generally don’t sell. Reasonable sales terms will greatly increase the chances of successfully selling a business. It is common that sellers fail to realize just how much interest they can generate by financing the sale of their business. A reasonable down payment is also another way to improve the odds of selling a business. Being willing to offer financing makes a clear statement to a prospective buyer that you believe in the business and its ability to generate revenue. From a buyer’s perspective an “all cash” demand can be a red flag.

At the end of the day, an open mind and steady temperament will increase your chances of selling. You may want to sell your business and completely move on to new things. But the reality of selling a business is such that “walking away” may not be feasible. Transitioning your business into the hands of a new owner is usually more of an ongoing process than a “sign on the dotted line and receive a check” type of situation. Understanding this fact, and working closely with a business broker or M&A advisor in advance of selling your business, will help to streamline the sales process and greatly improve your chances of a successful outcome.

Copyright: Business Brokerage Press, Inc.

insta_photos/BigStock.com

The post What You Should Know About Selling Your Business appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

Companies of all sizes frequently fail to handle customer complaints appropriately.  In the digital era, where complaints can be seen by hundreds, thousands or go viral to millions, it is essential that customer complaints, especially serious ones or ones backed by considerable emotion, are treated seriously and dealt with in a timely manner.

If you are failing to provide good customer service, this should be corrected.  After all, offering decent customer service is neither costly nor overly complicated.  At its core, good customer service can be reduced down to listening to the customer, letting the customer know that his or her complaint has been acknowledged and cataloged, and then working to remedy the situation if possible. 

A good positive attitude and staying calm when dealing with irritated or dissatisfied customers can go a long way towards keeping a customer happy and halting them from expressing their feelings in an online public forum.  Let’s look at five tips for dealing with customer complaints in an effective manner.

Tip #1 – Take a Proactive Stance 

A good attitude and a proactive stance can go a very long way towards diffusing an unhappy or angry customer.  A disappointed customer wants to know that he or she is being heard and that steps are being taken to remedy their situation.  Clearly communicating that you are working to fix the situation and doing so in a positive manner will diffuse most negative customer scenarios.

Tip #2 – Take Quick Action to Fix the Problem

Once a customer is calm and is feeling a little better about your company, there is still more work to do.  When you state that a problem will be addressed, it is essential that the problem is indeed addressed.  This is vitally important for the reputation of your company.  A failure to follow up on a promise to fix a situation could actually backfire and leave customers feeling as though they were initially manipulated.

Tip #3 – Always Stay Calm

If a customer is unhappy enough to write an email or post a negative review online, then they are obviously displeased.  However, if a customer is angry enough to pick up the phone and call, you can be fairly certain that the customer in question is rather upset.  This anger may boil over on the phone call. That’s why customer service people need to be ready to deal with that anger in a calm and collected fashion.  Customer service team members or salespeople should never match the anger of a customer.  Instead, they should focus on demonstrating that they are committed to fixing the problem.  It may benefit you to invest in employee training so that employees are ready to deal with angry or disappointed customers when the time arrives.

Tip #4 – Look for Customer Dissatisfaction Problem Patterns

If the same complaints and issues come up again and again, then it is very likely that there is a larger problem that must be addressed.  Numerous customer complaints from different customers shouldn’t be treated as a “headache.”  Instead, it should be viewed as a great opportunity to improve your goods and/or services.  Once you have detected a negative customer service pattern, be sure that you and your team move quickly to remedy the problem.  Your business will be stronger for doing so in the long run.

Tip #5 – Track Your Success

It is important to never assume that you have successfully addressed customer service issues until customers have, in fact, verified that the situation is resolved.  For this reason, it is wise to follow up with customers and ask for feedback via either questionnaires in the mail, email follow ups, or even phone calls.

Customer complaints that are not appropriately addressed can fester and become larger problems.  The time, effort, and money you invest in boosting the quality of your customer service team will yield significant positive results for the long-term.

Copyright: Business Brokerage Press, Inc.

luckybusiness/BigStock.com

The post 5 Tips for Dealing with Customer Complaints appeared first on Deal Studio – Automate, accelerate and elevate your deal making.