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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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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Everyone is familiar with the Christmas song, the 12 days of Christmas. Without going into every verse of the song, the carol works forwards 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 suggested that 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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Deciding to sell a business you own and operate and love like a child is rarely easy. Business ownership includes many practical matters such as providing an income, helping customers, paying your bills on time etc but it also includes many emotions. These include being successful, honest, going above and beyond to help customers and employees to name a few. If it’s time for you to sell your business, consider the following 5 tips to help you be successful.

1. Avoid using high-pressure sales tactics.
Buying and selling a business is a unique set of circumstances. No two transactions are the same. You can never “sell” a business; the buyer has to want to “buy” for reasons that make sense to them. The law recognizes this by defining it as a willing buyer and a willing seller with neither party under any compulsion to close the transaction.
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Owning and operating a business always comes with many challenges. For different reasons the current recession seems “the worst we’ve ever experienced.”  Whether that’s true or not, this particular recession is marked by how low the economy has gone, high rates of unemployment, but I think worst of all, how it’s taken so much longer than normal to work its way through the economic system.

Perhaps it’s a good time to remember that things don’t always flow smoothly and that bouncing back “to get on with it” is part of an entrepreneur’s tool kit of things to do. Here are some things to consider that will put a little spring back into your step.
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The typical business owner will only sell a business once. Understanding the complex process involved will help produce the best results. But don’t fall prey to the myths that can derail or seriously affect a potential sale.

Myth 1 – I Can Sell It Myself

Many owners believe they’re qualified to sell their business without professional assistance. Many owners are entrepreneurs and the key salesperson for the company. But selling a business is not like selling a product or service.

If you’re looking to sell on your own, confidentiality is lost. If word of a potential sale gets out, there are definite risks of losing clients, employees and favorable credit terms.
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The baby boomer generation spans many years creating a unique situation in the business world. Aging boomers are looking toward retirement, while many younger boomers find they’re ready to be their own boss. For those younger boomers, and others looking to be a business owner, buying an existing business is a great option; especially as a means to grow your existing business.

But be aware that buying a business is a timely process. Some buyers never find the right opportunity, while others spend too much time exploring too many options.

• Consider a step-by-step approach to get you where you want to be owning your own business.
• Ask yourself some important questions – Why do I want to be an owner? What types of activities do I like? What lifestyle is important for me? You’ll also want to be sure to include your family as part of the assessment.

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Are their benefits of buying a business versus starting a new business? This is an article for business buyers. But it also helps the seller of a business understand what a buyer should look for when acquiring a business.

So you want to be your own boss. Consider the options – work as an independent contractor…start your own business…buy an existing company. Certainly there are pros and cons to each option. If you do a careful analysis, you’ll learn what many seasoned entrepreneurs have discovered…the risk-to-reward ratio is tipped in your favor when you purchase an existing business.

Admittedly, as an independent contractor, your risk is minimal. The up front investment and overhead costs are limited. However, without the ability to leverage the work of an employee base, the returns are limited by your own personal capacity.
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Is it time to reject the recession and grow your business? Many economists are predicting that with GM filing for bankruptcy on June 01, 2009 that the economy has hit bottom and will start to improve. With this being the longest recession since the Great Depression and many “green shoots” in the economy starting to appear, it’s now time to prepare for future growth and not sit back and wait for it to happen. Besides, if you don’t do these things now when will you have time?

So here are eleven tips to be ready for growth:
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If you’re looking to sell a business, it’s critical to look at the value of the business. But a typical business really has two values. The “academic” value is the one determined by a professional business valuation. The other is the “true market” value. The academic value is arrived at with a formula based on the firms’ hard assets, cash flow, industry averages and multiples. The fair market value also takes those items into consideration, but then considers what buyers are really willing to pay.

For many small and mid-sized businesses hard assets like equipment, vehicles, land, buildings, and inventory may be limited. For some small businesses there may be no hard assets at all. Instead, their value is based on intangibles like employees, business processes, customer lists, location and business relationships.
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Are you thinking of selling your business? Perhaps you are thinking of selling your business or hiring a business broker? Any business owner who has sold a business on his of her own will tell you it’s a long, tedious and stressful process. It consumes time and distracts you from the day to day operation of the business. When your focus should be on maintaining or increasing the value of your business, all of your time and energy is directed to the sale process.

That’s where an experienced business broker can pay huge dividends. There are many areas where the business broker expertise pays off:
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Are you considering starting a business? Here are seven growth industries to consider if you are starting a business.

It goes without saying that starting or buying a business during a recession may not be the smartest thing to do. However, history would suggest you are wrong. Some of our strongest and most successful companies started during a recession. For example, Hewlett Packard started out of a garage during the Great Depression.

If you’ve decided to start or buy your own business one of the best strategies would be to choose an industry that’s performing well in spite of the recession. An analysis of data by Sageworks’ found seven industries that are experiencing growth despite the recession.

These seven industries are as follows.
1. Vehicle maintenance. Auto-repair shops increased sales an average of 2.4 percent over the past 12 months. In contrast, car dealers saw their sales drop 9.7 percent in the same period.
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As a business owner considers placing his or her company on the market, ascertaining the proper value for the company is critical. Too often the owner assigns an unrealistic and unachievable arbitrary value then proceeds into the sale process only to be disappointed with the market’s response. As a result, the asking price is reduced several times. During this unfortunate period buyer prospects and valuable time is lost.

In truth, a company’s value is determined by a compilation of factors such as the company’s sales, earnings, performance, market outlook, personnel, net book value and fair market replacement value of equivalent operating assets. But it can also be influenced by intangible assets like the company’s image, reputation and goodwill.

There are several approaches to valuing your business.
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Selling a business is rarely a simple and straight forward process. One of the biggest mistakes I’ve found is that the seller doesn’t put themselves in the shoes of the other parties be it the buyer, lender, landlord, employees, franchisor or whoever. This article outlines 5 suggestions for a seller to use when approaching the way to sell their business.

1. Get a professional third party valuation

This may sound obvious but naturally the seller wants as much money for the business as possible and the buyer wants to pay as little as possible. The place to meet is probably the “Warren Buffet place” with apologies to Warren Buffet. He’s on record as saying or something close to it – I would sooner pay too much for a good company than get a great deal on a company that won’t be around much longer.

2. Hire a qualified professional that you trust

Selling a business is not a quick or normally straightforward process. Each business has its own unique characteristics and is part of the dynamic global, regional and local economy as well as the specific industry it is in. Because of the complexities, ensure you have a qualified professional on your team that you trust and have complete confidence in. Apart from trust, other important components to look for include the professional qualifications from the International Business Brokers Association (IBBA) such as the CBI or Certified Business Intermediary or the state business brokers association (if one exists.) Some states require a real estate license – ensure your professional has any necessary license.
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As a Certified Business Broker and owner of a Sacramento, California office of Murphy Business and Financial, I am committed to excellence and an unwavering personal code of ethics. I am more than a business broker; I am your partner in success.

As a seasoned entrepreneur and business broker who has owned five businesses, I have the experience to help you with every aspect of buying or selling a business. I am also the published author of our books on business ownership. The titles are:

• Successfully Buy Your Business
• Successfully Buy Your Franchise
• Successfully Start Your Business
• Successfully Sell Your Business

I help small business owners that want to sell their business and those who want to buy a business.
When I work with buyers I can help them in one of two ways.
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