The Small Business Administration (or SBA) has been the provider of many loans for small businesses for many years. Technically, they do not process and approve the loans as banks and other loan originators do this. They in turn receive a guarantee from the SBA to underwrite a portion of the loan thereby helping to mitigate some of the risk of the banks and loan originators. Any small business owner is allowed to apply but not all applications are approved. There are many reasons loans are not approved and here’s 10 more reasons why this can happen.
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Here are some tips to successfully sell your business.  Bear in mind that to sell your business successfully requires a lot of preparation, attention to detail and organization.  Most sellers badly underestimate both what they need to do and what to do if a qualified buyer comes along.

A good rule of thumb is that it takes about ten buyer inquiries to reach a potential buyer who has the qualification to buy the business.  There is not a shortage of buyers; there is a shortage of buyers who have the right industry and management experience, a good down payment and credit score and the most important ingredient of all, the motivation to move through the process to buy a business.  So if you find the right buyer, you need to have your “A” game ready so your business sells in the shortest time possible.
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Do you want to sell your business and sell t quickly? According to the California Association of Business Brokers it is taking about 8 months to sell a business. That is the good news. The bad news is that only about 25% of businesses actually sell. If you want to sell your business and do it quickly consider the following suggestions.

1. Have a reasonable listing price.
2. Be prepared to negotiate.
3. Have a folder of information readily available for a qualified buyer.
4. Run the business as usual.
5. Make sure the business presents well; give it a “spit and polish.”
6. Get the business financial statements such as Profit and Loss up to date and keep them up-to-date.
7. Put together a current list of Fixtures, Furniture, and Equipment (FF&E).
8. Count all inventory so you know the value before you list the business for sale. This helps the buyer understand the final purchase price and reduces one of the many areas of negotiating a deal.

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Only negotiate when selling or buying a business.  This may seem an unusual heading to an article but it now keeps happening too many times and I feel compelled to write about it.

There is no question that selling a business is difficult as there are so many items to consider.  Equally, buying a business is extremely difficult not the least because the buyer may not know the seller but more importantly to the buyer, because they are yet to fully understand how the business works and what has made it successful.

When you put these basic unknowns together and add the imprecise art of valuing a business, both the seller and the buyer understand there will be a negotiation on the final purchase price of the business.  What is intriguing from my perspective is that sellers and buyers can spend a lot of time and negotiating energy to purely focus on the purchase price, which is important as the seller does not want to take less than they think the business is worth and the buyer does not want to pay any more.
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Successfully sell your business

Have you thought of using a transition plan when selling your business?  The process to sell a business is not quick and easy.  At the moment it is taking about 8 months to sell a business, if it sells.  This means the business is available for about 6 months.  The buyer and seller then complete negotiations on the purchase price including the terms of the deal.  The next main step is to start the due diligence and if both buyer and seller are still in agreement, escrow opens and then hopefully about 3 to 4 weeks later, escrow closes and the business moves from the seller to the buyer.

Even if the business closes escrow, almost without exception the buyer wants the seller to continue in an active role in the business in some capacity for a period of time.  The buyer wants time to meet and get to know the employees, set up arrangements with suppliers, put basic items in place like bank accounts, and a myriad of other items.  At the end of the day, however, it all needs to make sense for both the seller and the buyer and the best way to do that is to build a transition plan.
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To sell a business with an exit plan is simply good business.  A business is a ball of energy, never sitting still but reacting and moving in different directions as the economy changes, new tools and innovations come to market, the stress and strain from competition and the ever changing demands of customers.  The challenge to succeed, feed their family, help and create happy customers and other individual motivations are what gets a business owner out of bed every morning.  It also includes the chance to do something different, learn something new, to see the rewards of hard work, to plant new ideas and watch them grow or to help someone do something they thought they may not be able to do.

If the business owner loses the hunger to learn, be the vision and leader of the business, it’s time for a change.  Because a business is so dynamic, it requires leadership.  If this doesn’t happen it will shrivel and die.  Capital, time and energy must keep moving otherwise it will slowly die and fade away.
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Successfully sell your business

Why would you bother when selling your business to include a sales and marketing plan?  After all, the sales and marketing plan is a document that most business owners don’t have time to get around to put together.  I’m not sure why that is as it’s more important than the business plan and indeed complement it but more importantly, when the business owner wants to sell their business it can be the difference in the business selling or closing its doors.

Why is it more important than the business plan?  The business plan outlines the vision, strategic direction and business and financial goals of the business.  The sales and marketing plan breaks down the business plan to show how you are going to get there and the tactics to be used to attract the customers it needs.  Or more importantly, the sales and marketing plan is about growing the business and how to maximize the use of precious and limited resources including money, knowledge, expertise and most important of all; time.
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Owning and operating your own business is very much a part of the American Dream.  Not everyone is qualified to live this dream but to help qualified buyers, the US Congress through the Small Business Administration (SBA) has put together a third party lending program.  The SBA itself does not lend money direct to would be entrepreneurs, rather they allow qualified banks to manage and execute loan programs that meet criteria set by the SBA who will in return, underwrite a portion of the loan to lessen the risk of the banks.  The rules are complex and change in reaction to the economy.  However, a prospective borrower needs to put their best foot forward or their loan will not be successful.  Here are 10 reasons your request for an SBA loan more than likely will be declined.
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Hopefully you will make a New Year’s resolution which includes building a business plan and in it, your personal and business goals.  You will also do a budget to make sure you can afford to execute what is in your plans.  Hopefully you are rested and as they say, “all dressed up and ready to go.”  You are also saying “Bring it on.”  My question is therefore, you know WHAT you want to do but HOW are you going to do it?

Chances are you have a list of projects and tasks you want and need to do.  It probably does not include answering phones, sending and receiving emails, reading articles and newsletters, attending conferences, staying on top of compliance items that affect your industry but numerous day to day activities that lead most entrepreneurs at the end of the day to say “Where did the day go?”  That’s the point of a Productivity plan.

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The life blood of what we do as human beings and the glue that keeps us all together as a society whether at a local, regional, national or indeed international level is the ability to communicate with one another.  Many times that communication breaks down and many times this leads to negative consequences.  All entrepreneurs are familiar with a Business Plan and a Sales and Marketing Plan but not everyone has heard of a Communication plan.  So what is a Communication plan?

A Communication plan is an attempt to standardize the message that goes out from the business to its customers.  It complements and dovetails with a Business Plan and Sales and Marketing Plan.  In some instances there can be an overlap but essentially it includes all written, spoken and electronic communications.
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Buying or selling a business is a complex matter.  There is no question about it.  The complexities start from the moment a buyer and seller start interacting.  These include, for example, the buyer not having any history or knowledge about the operation of the business and so have to rely entirely on the representations of the seller.  Conversely, the seller lives and breathes the business, knows its ups and downs as well as its strengths and weaknesses.  My Golden Rule when assisting with a business transaction is for each party to put their feet in the shoes of the other party.  In other words, the seller should see things from the buyer’s perspective and the buyer should see things from the seller’s perspective.
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Does your New Year’s resolution include selling a business or buying a business?

Everyone is familiar with the Christmas song, The 12 Days of Christmas.  Without going into every verse of the song, the carol works forward with the first day of Christmas being a partridge in a pear tree, the second day of Christmas two turtle doves and so on.  The song is full of optimism and hope that the giver and receivers of the gifts will be thankful for life, the opportunity to share and hope for the future.

From researching the origins of the song, I came across something interesting.   One of the articles I read suggests the 12 days of Christmas is not about the 12 days prior to Christmas but in fact, the 12 days from Christmas until the beginning of Epiphany which begins on January 06.  When I thought further about this, it naturally combined with another favorite thing we do during the Holiday Season and that is to make New Year’s Resolutions.
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Selling a business or buying a business is unlike anything else. Not everyone will agree but I am sure it’s closer to the truth than one might think: buying or selling a business is unlike anything else of value. To support my argument there are a number of reasons. Let’s look at some of them.

The price of a business is determined by a valuation. The rules of a valuation come from the law and then legal cases as well as the Internal Revenue Code and custom. The price for most other items of value are determined by market comparables (for example, when valuing a house), looking up a book or some online site such as Kelly Blue Book (for cars) or results from eBay or some other online service (for any item you can think of). That is, there is no legal interference with the value of any these items except a business.
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The sales and marketing plan is a document that most entrepreneurs don’t have time to put together.  I’m not sure why that is as it’s just as important as the business plan and indeed complements it.

The business plan outlines the vision, strategic direction and business and financial goals of the business.  The sales and marketing plan breaks down the business plan to show how you are going to get there and the tactics to use to attract the right customers.

The sales and marketing plan can be as complex and as detailed as you wish to make it.  It can include a list of tactics you could deploy, it can list and detail only specific tactics you plan to use or a combination of both.  It’s important, though, that you understand how each idea is to be used but you have some idea of the expected results each tactic should bring to the business.  There is an old adage in business management: If you cannot measure it you cannot manage it.  There is also a famous quote that says “I’m convinced that 50% of my marketing is effective, I just can’t tell which 50%.”
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Use a Business Plan to sell a business.. Being an entrepreneur requires the need to constantly make decisions.  Being a successful entrepreneur requires constantly getting most of those decisions right.  No entrepreneur gets every decision right.  Just ask Tiger Woods.  Besides, if that was to happen it would be boring.  However, being an entrepreneur does require bringing your A game to business as much as possible.

One of the best tools that enable entrepreneurs to be successful is creating and working a business plan.  In simple terms there are two types of business plan.  The first type of business plan is for a brand new business that is moving towards entering the economy.  A new business or enterprise requires a different approach to an existing business as there is a lot of data gathering and initial research to build and make decisions.  Additionally, there are a lot of one offs to attend to such as researching and deciding the best legal entity, setting up and creating a proper set of financial records.  It also includes knowing what business licenses, permits and other regulatory requirements to meet, creating job descriptions and hiring the right people for those positions, researching technology options, buying the right equipment, getting it setup correctly including any necessary training, and the list goes on.
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