20-year-old commercial landscaping business for sale. Annual gross sales over $4 million. $1.6 million in assets included.
- Business is run semi-absentee and is an ideal acquisition for a national landscaping company looking to branch into the Orlando market.
- Also suitable add-on for private equity groups.
Highly confidential. Prospective purchasers must submit confidentiality agreement and signed financial statement prior to showing. CPA-prepared income statements on file. Contact Jessica Hadler at 407-367-0100 for details or click here.
$3.8 Million
After receiving many emails from people interested in becoming business brokers and needing advice, I decided to post a some information about the backgrounds of many of my colleagues, and where to get started to see if this industry is the right fit.
Many professionals in my field enter the business brokerage industry as a second or third career. Prior to becoming intermediaries, some of my colleagues have been:
- CFO’s for large corporations
- Successful businesses owners who had sold their businesses using a business broker
- Sales professionals from a variety of industries
- Accountants and Financial Advisors
The rewards that one can gain from being in this business cannot be measured; however, how does one know where to start when there are few resources available about the industry?
Some questions I receive often include:
- Where can I meet experienced business brokers and intermediaries to ask questions about the career?
- Is there education available that is more than a series of textbooks?
- I don’t yet know if this industry is right form me? Are there courses and training in this industry I can take without having to commit to a particular firm that offers training?
I suggest that the best place to start would be the International Business Brokerage Association, a trade association of business brokers providing education, conferences, professional designations and networking opportunities. Members come from large and small firms, franchises and independent offices; members bring experience from the business community, whereas others are changing career paths or are recent graduates just entering into their first career. The IBBA is THE place to learn how to learn the business, and learn it right. Please feel free to call me at 407-770-8373 with your questions.
Must sell! Owners are retiring and are reviewing all offers! Contact Jessica Hadler at 407-367-0100 today to schedule a showing.
- Canon-based gear
- All equipment included
- Lighting, props, backdrops
- Fully-equipped framing center
Whether you are looking to go pro or expand your current studio, this is the deal to check out.
Jessica Hadler, licensed real estate broker. 407-367-0100 or email her for more info.
. . . and the impact your business will have on your intern.
Here is an essay from our recent intern, Becca, on the importance of internships to the upcoming young professional. Interns are so helpful in the office, but can also offer to business owners the rewarding experience of helping the next generation prepare for their careers.
There’s only so much one can learn from a textbook; it’s good for the basics, but does it really cover the “real-life” experiences? Over the years, I’ve come to realize that some of the best lessons in life—personal or business related—are learned through experience. One of the best ways to gain this practice is through internships. Whether the company is large or small, an internship really is the most efficient way to get a “hands-on” learning experience in the business world.
First off, let me introduce myself: My name is Becca and I currently live in my hometown Columbus, Ohio. I’m a business management and marketing student at the University of Dayton. During the summers back home, I’ve worked for our family-owned commercial real estate and development company as an intern for nearly three years. Although the experience has been very enriching, it’s still a family business and doesn’t quite give me the challenge I’ve been yearning for. Last year in pursuit of my hopeful business career, I was introduced to American Business Group and was offered a two-week internship in Orlando. My initial reaction was a bit uneasy—it was my first time away from home for that long, and I’d be living in an unfamiliar town. However, as my second time interning for ABG is coming to a close, I want to express how beneficial my years interning have been to my business career.
Like I said, there’s only so much you can learn from sitting in a classroom with a textbook in your hands. It’s the real-life experiences that’ll boost your knowledge of the business world. From the very start, I have been interested in business and knew I wanted business to be a big part of my life. At the time, I wasn’t very sure of which area of business I wanted to focus on—I wanted to explore all concentrations. Fortunately, my internship experience has broadened my horizons and ultimately exposed me to a number of different industries. By interacting with various types of companies and exploring different industries through my internship, I was introduced to the big world of business that was once so abstract to me.
Many people believe the notion that interns are hired just for the non-sense “busy-work” like filing, answering phones, and other administrative work. However, my experiences have been the polar opposite. Sure, I did do some basic clerical work like filing and labeling—it comes with the territory. But while interning, the majority of my time was spent attending workshops, seminars, luncheons, and a boat-load of other things that I still remember perfectly to this day. I would take notes at each seminar and when reviewing my notes afterward, I was surprised at how much knowledge I could gain just after one presentation (and for the record, I’ve kept every scratch of notes I took from each event and have frequently referred to them for information and helpful tips). Additionally, I attended business showings with perspective buyers and attended multiple business listing appointments that I never thought I’d get to experience first-hand. Believe it or not, I even got the opportunity to do things most young adults don’t get the chance to do such as establishing prospective business owner search criteria, organizing and executing direct mail campaigns, and learning about the importance of confidentiality and non-disclosure agreements. If it weren’t for my internship, I probably would’ve never attended such educational events nor gotten the opportunity to explore the different elements of such a great company. Better yet, I can guarantee I wouldn’t have the knowledge I do now if it weren’t for my internship experience. Additionally, my internship allowed me to take the things I learned and apply them to real-life experiences. For example, a breakfast we attended this summer was about social media and networking. A lot of what we discussed had to do with Facebook, MySpace, and other forms of networking. This subject was very appealing to me because not only am I an average teenaged Facebook user, but I’ve recently developed a strong interest in marketing and social networking. The presentation was fascinating and I really took a lot out of it. Since Facebook is something I use daily, it was neat to view this outlet from a business perspective versus the way I’ve normally viewed it.
Anyhow, I could go on for days describing how beneficial my internship experience has been—from learning how to talk on the phone with a professional “phone voice,” giving a strong and loyal handshake, and learning the importance of presenting a business card. However, time is precious and I must return to school to continue with my business education. With this in mind, I’ll leave you with a few final thoughts: it’s not easy to put yourself out there, but being an intern has possibly been the most rewarding and beneficial experience I’ve ever had. I’ve become so much more motivated and determined to have a successful career, and have ultimately learned important and essential tips that are commonly neglected in a classroom or textbook. Whether you’re a business looking for an intern, or an intern looking for a business, internships are so beneficial and should be taken advantage of in every way possible. There’s nothing like an internship that’ll help boost your career in the end. Ultimately, my years as an intern have shaped my life in more ways thought possible—get out there and let an internship shape yours too.
Here’s a great article by Martin Zwilling for Forbes.com on valuing young companies. Though some may argue that some of the methodology is not as relevant in this current economy, I think there are some key nuggets of information that would be of use for business owners. To see the original article, click here.
Say you’re lucky enough to find a willing investor in your young company. At some point (sooner rather than later), the guy will want to know: “How much do I have to pay for a slice of the pie–and how big a slice can I get?”
Placing a valuation on young companies is a tricky, subjective game, but it’s one small-business owners have to know how to play, especially when investment capital remains stubbornly scarce. Quote too low a figure, and you’ll give away the store; shoot too high, and the investor may blanch at your grasp of the underlying economics of the business.
Here are three techniques, some broken into parts, to help you put a value on your company. Your best bet is an amalgam of all of them. When it comes to impressing investors, the more ways you can speak their language, the better.
Technique No. 1: Asset Valuation
Of all valuation approaches, the asset approach–placing dollar values on all the assets on a company’s balance sheet and adding them up–is the most concrete.
Start with physical assets, including machinery, office furniture, computers, inventory, prototypes (and the cost to develop them). Young companies tend not to have much in the way of physical assets, but add up what you do have.
Placing a valuation on young companies is a tricky, subjective game, but it’s one small-business owners have to know how to play, especially when investment capital remains stubbornly scarce.
Then move on to intellectual property. This includes patents, trademarks and even incorporation papers (because the company’s name is protected). This approach may seem squishy, but the dollar amounts are real. A (rough) rule of thumb often used by investors is that each patent filed might justify $1 million increase in valuation.
Next up are all principals and employees. The value of most companies is in their people. In the dot-com boom of the late 1990s, it was not uncommon to see valuations rise by $1 million for every paid full-time programmer, engineer or designer. Don’t forget to include the value of sweat equity–as in the theoretical salaries that would have been paid to founders and executives who didn’t take them.
Also, don’t forget the customer relationships. Every customer contract is worth something, even those still in negotiation. Assign probabilities to active customer sales efforts, just as sales managers do in quantifying their teams’ forecasts. Particularly valuable are recurring revenues, like subscriptions, that don’t have to be resold every period.
Technique No. 2: The Market Approach
Another way to look at valuation is by estimating a company’s earning potential based on theoretical demand in the market.
Start by estimating the size and growth of your addressable market. The bigger the market, and the higher the growth projections (ginned up by independent analysts), the more your start-up is potentially worth. For a young, asset-light company looking to attract deep-pocketed investors, the target market should be at least $500 million in potential sales; if your business requires plenty of property, plants and equipment, the addressable market should be at least $1 billion.
There are also professional valuation consultants who can pitch in
Next, assess the competition and determine the barriers to entry. The stiffer the competition, the lower your valuation. On the flip side, the more fortified your company against new challengers (based on factors such as location, contracts with key customers, first-mover advantage, etc.), the more it’s worth. These intangibles translate into what’s known as goodwill–the amount a buyer might pay for your company above the value of the assets on your balance sheet. Goodwill can well bump up a valuation by a few million dollars.
Third, look at other similar companies that have managed to raise money–an exercise not unlike appraising the value of your house by comparing it to similar homes recently sold in your area. A thorough news search on Google might get you pretty far when looking for comparable deals. There are also professional valuation consultants who can pitch in–for a price, of course.
Technique No. 3: Income Valuation
The method, used extensively by financial analysts, involves projecting a company’s future cash flows and discounting them, at some rate, to arrive at their value in present dollars. The discount rate applied to start-ups is typically steep–from 30% to 60%. The younger the company, and the greater the uncertainty of its future earning power, the larger the discount rate should be. (Note: In the case of very young, pre-revenue companies, this technique may not prove very useful.)
A variation on this approach involves tallying your company’s earnings before interest, taxes, depreciation and amortization (EBITDA, to finance types) and multiplying that figure by some reasonable factor. Calculating typical EBITDA multiples for publicly traded companies in your industry is easy: Just take their market capitalizations (easily found online) and divide by EBITDA.
If running all these numbers sounds like a bit of work, well, that’s true. But, then, would you rather give away the store?
33-year-old photography studio for sale in Seminole County. $80K.
Owners are ready to retire and are entertaining all offers and are open to seller financing. Contact Jessica Hadler direct at 407-770-8373 to schedule a showing this week.
Friday, October 9th
If you want to buy a business in Orlando, the current asking price is about $195,000.
One year ago, at the end of third-quarter 2008, the median asking price for businesses in Orlando was $199,000.
The third-quarter 2009 data is based on 845 Orlando-area businesses listed at BizBuySell.com. It includes listings from local business brokers, as well as “for sale by owner” listings.
Looking ahead, the fourth quarter and first-quarter 2010 are forecast to show robust growth in the business-for-sale marketplace.
Businesses in the Orlando area listed in third-quarter 2009 had a median revenue of $330,000, down from $337,000 for the same period last year.
Nationally, the business-for-sale marketplace seems to have hit bottom and is turning around. BizBuySell saw a 24 percent drop in closed business-for-sale transactions. That’s an improvement from last quarter when closed transactions declined 50 percent year over year.
The BizBuySell data suggests sellers are dropping their prices, leading to greater alignment between sellers and buyers. The median price for closed transactions, for example, declined to $149,000 from $189,500 year over year. Similar downward trends were being seen in asking prices, sale-to-ask ratios, revenue multiples and cash flow multiples.
Looking ahead, the fourth quarter and first-quarter 2010 are forecast to show robust growth in the business-for-sale marketplace. Factors behind that optimism: Easing credit, recovering business fundamentals and a change in the Small Business Administration lending criteria with respect to goodwill.
With negative economic news grabbing the headlines in the United States, business owners may think it’s not a good time to sell their company. But fortunately for owners looking to sell, that’s not necessarily true. Business sales are still taking place with sellers capturing attractive prices and favorable terms, when the deal is structured properly.
Look at the buyer’s credibility – Of course, you want to find the best buyer possible. Whether it’s an individual, another company or a Private Equity Group, look for a potential buyer with business acumen, significant assets to pledge as collateral or a committed fund, as well as demonstrated success.
With a proven, credible buyer at the negotiating table, lenders are more likely to support the transaction.
Expect some seller financing – Oftentimes during a tight economy sellers must share the risks with the buyer and the lender in order to achieve the highest value.
With the right structure, deals are still getting done across the U.S.
In many instances the value of a successful business is greater than the fixed assets. In today’s tight lending environment, a seller can still get a strong value for the business, but the seller may need to finance more of the purchase price than before. Regardless of the capital structure or finance considerations, professionally crafted and creative deal structure is the key during a difficult economy.
Typically, seller financing has been somewhere between five percent and 15 percent. With the current lending climate, seller financing may approach 15 percent to 25 percent amortized over 10 years with a balloon payment between three years and five years.
After the buyer has proven themselves in the business and shown that the debt payments will be made, the lender will generally refinance the seller’s note. As a result, the seller receives full payment within three years to five years and the lender gets to loan more funds to a demonstrated lower-risk borrower.
While the economy has put a crunch on available financing, it has not had a dramatic impact on the number of potential buyers. With the right structure, deals are still getting done across the U.S.
The International Business Brokers Association® is the largest international, non-profit association operating exclusively for the benefit of people and firms engaged in the various aspects of a business brokerage and mergers and acquisitions.
