Buying/Selling a Business
At any given time there are a number of business transactions going on in the prospering commercial landscape found in the Omaha Metro, with buyers looking for opportunities matching up with sellers who are moving on to other things. At either end of the spectrum there are many variables to consider and items needed to be brought to the table for a successful transaction. Luckily for those who aren’t familiar with the process and for those who are alike, there are experienced professionals in the Omaha Metro to help at any stage of the game. All things considered, buying or selling a business is complicated enough a process that it isn’t something that’s advisable to go about doing on your own.
Before even taking the steps towards buying or selling a business, it is imperative that you understand the current economic conditions and how they could potentially come into play. The seasonality of a business, possible rising interest rates, market competition, life cycle of a particular business, necessary capital expenditures, and government regulations are a few key examples. In order to accurately assess these types of variables and any others of relevance, working with a professional business brokerage proves to be an asset in the process.
Similar to buying a home, representing yourself is discouraged because there are so many moving parts and critical details to evaluate. A professional business brokerage is very familiar with the process of buying and selling a business as they do these activities for a living. This expertise will save you a lot of money and issues in the long run, guaranteed.
No Coast Business Advisors offers buyer representation in addition to helping parties who want to sell their business find a qualified buyer and get the deal done.
“Before actually pulling the trigger on buying a business, I’d offer anyone three tips towards having a seamless exchange; require proof of any key details that would affect the transaction, at closing before you sign, confirm that all of the equipment works (you have already done your walk-through, but once you sign you are purchasing it as it is represented), and lastly, talk to the bank early and often–especially if you are buying something you are not paying cash for!” advises Jethro Hopkins of No Coast Business Advisors. “Buyers should always do their due diligence. For example, you can pull a previous year’s tax returns on a business to make sure that they match up with the returns that the seller is giving to you. You would be surprised how easy it is to change these with a computer. Or, if they are only giving you profit and loss reports you can pull the tax returns yourself once you have a signed offer. The takeaway here is to make sure that everything is as it should be before you go through with such a major transaction. These are things that are second-nature for a professional to check.
When it comes to selling a business, there are many things that a professional business brokerage will handle. This might include establishing a market value, knowing which business a bank will loan on and what dollar amounts are available for loans, protecting the confidentiality of the seller, conducting background checks to confirm that the buyers are qualified before proceeding so nobody’s time is wasted, utilizing lenders and alternative forms of financing, and more. Additionally, these professionals are the ones who tend to catch the mistakes as they comb through the details with a fine-tooth comb.
As the seller’s representative, everything goes through the broker, which helps to eliminate any number of hassles from fielding incoming phone calls to get all of the necessary items in order and meeting with the other parties who are a part of the transaction. Here’s what it looks like for a business owner who is actively trying to sell his/her business without any outside assistance: you are not only fulfilling your role as owner and performing any other jobs as you would normally, but you are putting yourself in a position where you will also be fielding all of the random inquiries and putting together the promotional items as well as figuring out legal paperwork, accounting, and responsible for addressing anything that comes up in a timely manner…and so on.
Direct representation also ensures the necessary confidentiality is upheld, which is important with financial information being disclosed, as well as the potential impact of the sale on employees and customers. When people find out a business may be for sale, any number of things can definitely go awry. A good broker’s primary duty is to protect you, and then to sell your business.
Regardless of whether you’re on the buying or selling end, it never hurts to have a professional review the deal that you are going to be potentially making. You do not necessarily have to hire one to work for you from start to finish, but at minimum, most competent brokers will sit down, and for a small fee, review and discuss everything.”
Not all business brokerages are created equal: As with any evaluating anyone you are choosing to do business with, it is important to know all costs you may incur in order to avoid the hidden ones. Particularly with respect to sellers, Hopkins further advises, “If we can’t sell it, we do not get paid. Advertising is one area in particular that can be murky as to who is responsible for payment. At No Coast Business Advisors, marketing the business through the appropriate channels is complimentary to those who are utilizing our services as a part of the package.”
Timing is also an important factor. “Small businesses are selling and this is the time of the year when the most buyers come out, but yet there are the least amount of sellers,” Hopkins explains. “If you are looking to sell, June, July, and August are the optimal months to get your businesses listed. If your paperwork is in order and I have what I need—the past three year’s tax returns, current year and previous year profit and loss, inventory, and asset reports/lists– then after a meeting with an owner, I can list the business within 48 hours, so there’s still time to hit that window.”
Franchises in particular present an excellent opportunity for potential buyers because they already come complete with infrastructure that has been proven to be successful for many other business owners as well as offering continued support long after the sale is completed. If you’re purchasing an existing franchise, this also comes with an established client base and a business that is already generating revenue, along with the staff and inventory remaining with the business, all of which are on the plus side in terms of setting the stage for a smooth transition.
It’s important to note that not just anyone can purchase a franchise—an in-depth screening process is conducted prior to determining whether a candidate is qualified.
“The franchise will be actively involved in the sale, as adding a business to the company’s portfolio or taking over an existing franchise is something that should be a good match for both parties,” says Scott Thompson of Premium Franchise Brands. “This is the case with our professional grade cleaning franchises Jan-Pro Cleaning Systems and Maid Right; we will facilitate the sale. Within our 8-step mutual process, the first step is ensuring that the candidate is qualified by meeting for pre-qualification and then a franchise application prior to moving forward. Once that is established, we then move forward to assess financials, address operations requirements, and conduct due diligence. After all requirements are satisfied and the sale is final, the new owner will benefit from the support of the franchise all the way; initially this includes two weeks of operational training provided by our field service directors.”
He adds, “For those in the Omaha area looking for to purchase an established local franchise, we have an opportunity available as Jan-Pro, which has been serving clients since February of 2003, is currently on the market. If you’d like to know more, please contact me at (678) 336-1780 or firstname.lastname@example.org.”
Indeed, while what happens during the transaction is of great importance, what happens afterwards is significant too as far as the buyer is concerned. When assuming ownership of an existing business, a time of transition is to be expected and with that, changes are almost always inevitable. As with branding, location is another signature component of a business that could be subject to change under new ownership.
A new business owner is going to make the decision to either keep the business in its current location and eventually expand, or alternatively, move or down size depending on the company’s needs and direction for the future. Whether a business is downsizing or expanding, HIP OffiCenters is there to help. Particularly for those in the Omaha Metro, HIP offers virtual offices so that a company outside of the market can have a presence in Lincoln, which would be helpful to those who are looking to expand after purchase.
“In addition to offering space and a wealth of amenities in our Executive Office Suite that’s centrally located in Lincoln, which we’ve designed to be ideal spot for business owners who need to conduct business here, we also provide virtual offices,” explains Michael Holroyd of HIP OffiCenters. “We’ve designed the space and offerings based on what would be ideal for a business owner, filling in the gaps that we’ve identified as being critical to operations. While renting from us, there are no upfront costs that one finds with build outs and adding infrastructure. High-speed fiber optic internet, an executive conference room, copy center, kitchen facilities, janitorial services, all utilities paid and free parking are all available on-site and included in your rent. Virtual offices in particular allow companies to expand their business into new areas without taking on more space. The purpose of our business is to make work life easier, so companies can focus on growing and managing their businesses.”
If you’re staying in the existing location, the furnishings will either stay with the business as a part of the sale or will leave with the previous owner. For the latter, you’ll need to move quickly on getting everything in place so that the environment is functional and inviting. While you might have the budget to buy new items, keep in mind that finding quality items at auction is a great way to save money that you could be investing in other parts of the business. As for sellers, liquidating assets at auction is often a necessary part of the exit process.
Tom Rine of Rine Auctioneers explains, “Depending on the situation of course, we are able to assist with liquidation and turning assets into cash. Most of our experience has been with liquidating items commonly found in commercial settings, industrial equipment, and office equipment. If you just bought a business and still need to furnish it, or even advice as to what would look nice in the space or best fit your business’s needs, feel free to contact us for a consultation and we will help you find high-end furniture at a good price.”
Once your location has been established and you’re all set up, you’ll want to focus on promoting where you are at so that people know that you are still open for business and where they can find you when they need you.
As searching for a business online one of, if not the most, popular way for people to find out information, you’ll want to ensure that all details of your online presence are accurate and reflect the business and brand under its new ownership. To meet this objective, you might even want to consider incorporating a new 360 degree image tour of the new space online.
“Customers like to know what they are getting into before going into a business, but much to their disadvantage, many businesses often overlook their online presence,” emphasizes Lori Black of MIT Images 360. “If the interior of a business is appealing to a person checking it out online, they are far more likely to actually go there. Adding a virtual tour to your website also improves your presence on Google, and thus, your chances of being noticed online in the first place.”
With the Google Street View Trusted Tour, your business’s interior will be visible on Google Search, Google Maps, and Google+. Additionally, MIT Images 360 can help with getting a business on Google My Business, Google+ page setup and management, blog writing, and video production.
Black notes, “Most businesses ignore their Google+ presence all together, and Google+ pages are very important when it comes to your Google rankings. Google is the number one search engine today. It’s how people find the businesses they use. Let’s face it, all businesses want to show up higher in Google search rankings. Enhancing your presence on Google can only improve your status with Google.”
One of the most pivotal aspects of a functioning business is its staff. A great team is required for day-to-day business and its success overall. When a business changes hands, while the current employees may choose or be offered the opportunity to stay, they may also opt to leave to pursue other opportunities for any number of reasons or the buyer may choose to let them go in favor of assembling their own team. As the sale of a business marks a time of transition, no matter the conditions of the sale, you’ll likely be addressing turnover. If your needs are few, then many times it is much easier to locate those key people that share your vision through networking, friends, and family. However, sometimes there are instances when more expertise is required to find the right people and that is where a professional employment agency can be of great assistance.
There are certain instances when it may be favorable to partner with a company who can handle specific tasks, outsourcing them as opposed to adding to your staff. For example, utilizing an answering service is a helpful way for a new business owner to ensure that excellent customer service is maintained during transition and that no balls are dropped or critical calls are missed. Executive Answering Service offers friendly telephone receptionists who can answer your phones whenever you cannot – whether you are on the other line, out of the office, with a client or spending treasured time with your family/friends. Many callers will hang up and call someone else when they receive a voice mail or busy signal, resulting in what could be hundreds of dollars of lost business!
“Hiring, training and then the overhead cost for a friendly and customer service oriented telephone receptionist – including salary, benefits, etc. – is expensive!” says Megan Lipert-Murphy of Executive Answering Service. “Our operators can obtain messages and/or seamlessly transfer calls to you or your staff, just as if they are working directly in your office. They are trained to be the best virtual receptionists in the industry. We don’t want to be just your answering service, our goal is to be a part of your team and your customers are our number one priority. Executive Answering Service is able to offer the quality of service that is aligned with your reputation and the communication technology that your business requires.”
Bookkeeping and payroll for employees is another area where you could choose to add to your staff, or alternatively, hire a company to handle it for you.
The associates at Payroll Professionals are experienced at helping new business owners with their bookkeeping systems and with the set-up of their payroll, and they will go the extra mile just to make sure your job as a new business owner is less stressful. “At Payroll Professionals we are able to set up bookkeeping systems along with implementing any other software systems that would benefit the business,” explains Kelly Burns of Payroll Professionals. “Additionally, if an existing bookkeeping system is in place that is working well for the business, we can help a new business owner by taking that over after it officially changes hands and evaluating whether any adjustments should be made. For any new business owner, it’s critical to get set up with the right agencies and professionals who will be able to help with areas that aren’t in that person’s particular skill set.”
As a word of caution to sellers, Burns also notes, “A common mistake we see when individuals are trying to sell their business is that they forget it is necessary to settle and close company accounts and notify the correct agencies regarding the ownership transition before completely removing themselves from the business.”
As yet another example of a need that would likely be determined after the sale, if you’re purchasing a business with a fleet and there’s no system in place for management, that’s something to look into as well.
Now You Know Fleet Management works with businesses in Omaha and surrounding areas to help them cut costs and run their fleets of transport more efficiently. “We provide cutting-edge GPS tracking tools and fleet management software that is able to not only save business owners money on fuel, but also increase employee productivity and enhance employee utilization,” advises Chad Harmening of Now You Know Fleet Management. “Our web-based software and mobile app allows you to track your business’s vehicles in a real-time environment and communicate with employees on-the-go.” With the help of NYK Fleet Management, there are hundreds of tasks that you can perform with a few clicks that will save you great amounts of time and money in the long run. You are also able to receive daily and monthly reports on fuel, routing, driver statistics, time, employee hours, and GPS tracking, amongst other things.
Once you’ve got the key players in place, from here on out it’s your job as the new business owner to develop the talent of your staff.
“Our team works with organizations of all sizes that want to develop great leadership for today and assure a continuum of leadership for tomorrow,” emphasizes Rose Mary Hefley of Achievement Unlimited, Inc. “It’s critical for new business owners to have the tools they need to lead the organization, and for their employees to have the tools that they need to do their jobs. To succeed, you have to have the right people in the right place doing the right thing at the right time, and that will likely present a challenge at first to a new business owner. We will work alongside you to implement a communication process, develop your business plan, and create benchmarking tools that will enable you to meet your objectives moving forward. This will start with identifying essential factors such as mission, vision, and purpose—who are you serving and why are you serving them? How do you fit into the marketplace, where do you stand with the competition, and how can you set yourself apart? There can be a lot of unknowns when taking over ownership of a business, and particularly for those who don’t have a business background, leadership development is key to being able to address them in a way that yields optimal results for all involved.”
As you can see, there are so many things to be considered and that would be of value to those buying or selling a business, just as much during the process as after the transaction has concluded. Bottom line: When the opportunity comes about to either buy or sell, don’t go it alone. There are many experienced professionals in the Omaha Metro that can offer help on either side, and who want to see you succeed in your efforts!
Click one of these links to see all of No Coast Business Advisors, Premium Franchise Brands, HIP, Rine Auctioneers, MIT Images 360, Executive Answering Service, Payroll Professionals, Now You Know Fleet Management, Achievement Unlimited Inc. News & Info on Strictly Business