Portland Business Broker Thoughts

How does narcissism in a business seller or business buyer affect the deal

bizsale — Mon, 09 Jan 2012 20:31:01 +0000

There was an interesting summary of research in the January 7, 2012 issue of the Wall Street Journal about how a narcissistic CEO of both business buyers and business sellers can impact a business sale. In short: narcissistic CEOs at target companies (those being sold) get higher bids, while narcissistic CEOs of acquiring companies initiate and negotiate takeover attempts more quickly. However – and this is IMPORTANT – for both buyers and sellers, a narcissistic CEO lowers the likelihood the deal will actually be completed. So, if you are a business buyer or seller, you may want to check your ego at the door. Here’s a link to the article: The Ego Has Landed

Sell your business before capital gains tax rates increase by 59%

bizsale — Fri, 30 Dec 2011 05:50:03 +0000

Here’s a link to an excellent article from CNBC about why many business owners think now is an ideal time to sell: http://www.cnbc.com//id/45684006

If you’ve read my previous business sale posts you’ll likely recognize my agreement that if you want to avoid paying significantly higher capital gains taxes then the time to start the business selling process is in January 2012. Why? The average marketing time range for a small or lower-mid market business sale is 6-12 months, and on January 1, 2013 the regular capital gains tax rate is scheduled to go from 15% to 20%. In addition, as part of the Obama health care bill, there is an additional 3.8% tax on passive income (including capital gains) that goes into effect on that date for individuals making more than $200,000 and couples making more than $250,000 in taxable income. So, yes, capital gains tax rates will go from 15% to 23.8%. In other words, if you sold a business that had a capital gain of $2 million and it closed on or before December 31, 2012 vs. a day later on January 1, 2013, you’d save $176,000.

So, if you have been sitting on the fence when contemplating a business sale, now would be a very good time to get off that fence!

Sell your business for $320,000 – $960,000 more

bizsale — Thu, 13 Oct 2011 18:29:57 +0000

Would you like to sell your business for $320,000 – $960,000 more? According to the Association of Certified Fraud Examiners (ACFE) 2010 Global Fraud Study, the median loss caused by occupational fraud was $160,000. Most small to lower mid-market companies will sell for 2-6x EBITDA. Consequently, if your business is experiencing occupational fraud at the median level of $160,000, by discovering and remedying the problem you may be able to increase your business value by $320,000 – $960,000.

Here are some of the other findings:

* 80% of business fraud is committed by someone in one of the following departments: accounting, operations, sales, executive/upper management, customer service, or purchasing

* In 43% of fraud cases the perpetrator was living beyond their means

* In 36% of fraud cases the perpetrator exhibited signs that they were experiencing financial difficulties

* Small organizations are disproportionately victimized by occupational fraud. These organizations are typically lacking in anti-fraud controls compared to their larger counterparts, which makes them particularly vulnerable to fraud.

Here’s a link to the entire ACFE 2010 Global Fraud Study: http://www.acfe.com/rttn/rttn-2010.pdf

High Growth Roofing Company

bizsale — Sun, 11 Sep 2011 18:01:28 +0000

This week Codiligent business brokers started marketing a new business for sale: a roofing company serving the greater Portland, Oregon metro area

This roofing business has seen strong growth during the recession, at a time when many competitors have struggled financially. There are a number of reasons for this including: 1, a strong focus on quality, which in turn leads to good reviews and referrals; 2, quality systems that lead to efficiency, effectiveness, quality, and good communications internally and externally; 3, a well-trained, highly competent staff; 4, marketing, branding, and advertising activities that have lead to a continual source of quality leads; 5, exceptional customer service at all levels of the organization; and 6, no reliance on any single large client which lowers risk to the business if there are variations in business or problems with any given client (its largest client was responsible for less than 8% of revenue in 2010).

Following is a link to an introduction package on this roofing contractor. Please pass this information on to anyone who you know that is looking for a quality, well-performing roofing business:

Roofing Company Introduction Package & NDA

More money isn’t required to motivate employees to add value for a business sale

bizsale — Mon, 27 Jun 2011 17:06:27 +0000

Perhaps you would like to sell your business in a few years, but one of the weaknesses of your business is unmotivated employees and high turnover, and you are concerned that no matter how good of a job a business broker does in packaging your business for sale, acquirers will get hung up on your personnel issues. Maybe you’ve even asked business brokers, CPAs, or consultants what you should do and you’ve been told that you need to provide greater financial rewards. Yet, if you do so, that may reduce profitability which will negatively impact business value. New research shows that the business brokers, CPAs, and consultants you have been talking with may be wrong. While it is true that if people are paid too low then they may be unmotivated, the research indicates that giving high pay or bonuses for better performance may not work. Instead, what tends to motivate employees are: autonomy, mastery, and purpose. Check out the following video from RSA Animate to learn more.

For Sale: Relocatable Web Development Firm With IP

bizsale — Thu, 02 Jun 2011 19:08:04 +0000

Codiligent business brokers has just listed a new business for sale: a relocatable web development firm serving well-branded businesses throughout the Pacific Northwest. This business has significant unregistered Intellectual Property. Following is a link to an introduction package. Please provide this information to any business buyers you know for whom this may be an appropriate acquisition.

Introduction Package for Listing 1000008116

Contract & Intern Help With Preparing For A Business Sale

bizsale — Mon, 16 May 2011 17:20:42 +0000

Perhaps you want to sell your business in a couple of years, but you know there are some projects that you should tackle first to make your business more marketable and you need some help (if you aren’t sure what needs to be done – contact Codiligent we’ll be happy to discuss your business with you and help identify areas that may impact business marketability and value). Yet, you don’t want to add a permanent employee because the nature of what you need to do is more project based. While Codiligent would be happy to make referrals to local professionals, in the Wall Street Journal this morning there were a few web-based resourced that may be worth checking out:

YouTern.com This website uses a series of questions to match businesses and nonprofits with college students in search of internships, both summertime and year-round.

ExpertBids.com Check this out if you need to get personalized bids from lawyers, accountants, and other consultants.

Solvate.com This website gives entrepreneurs access to a database of about 2,000 US-based freelance consultants, whose talents range from bookkeeping to website development.

Building a Better Business by Questioning Assumptions

bizsale — Tue, 19 Apr 2011 15:28:22 +0000

How often do we all fall into the trap of doing things a certain way simply because that’s the way they’ve always been done?

Yet, if every day or even just every week or month, you could find one small aspect of the way you’ve run your business that you can improve to make it more efficient, effective, and add more value for others you will not only build a better business but also one that will be more valuable and marketable when you are ready to sell the business.

I saw a post on Guy Kawasaki’s blog, How To Change the World: A Practical Blog for Impractical People, titled “FAQ: How to Autograph A Book“. Most of us wouldn’t even give a second thought to how to autograph a book (if we’d written one!): if we were at a book signing we’d simply open the cover of the book, perhaps ask the person who it should be to, and then jot down some sort of personalized greeting inside the front cover.

Yet, Kawasaki thought about this simple process in a different way, and as a result, does it in a way that is not only more efficient, but also more effective and delivers more value. For the efficiency part: he signs on the front dust jacket of the book rather than on the inside of the book which saves him the step of opening the book, and he writes the same message on each book, “Resisting you is futile!”.

But how did he add value / or make it more effective? There are three ways: 1, the message itself makes readers feel good about themselves; 2, the main purpose of getting an autograph on a book is to show others that you know the author, so having the autograph on the cover makes this much more obvious; and 3, it helps readers meet people because the visible autographed cover can act as a conversation starter.

What systems and processes have you been doing the same way over and over because “that’s how we’ve always done things” or “that’s how everybody does it” that could be tweaked to make them more efficient, effective, and add more value?

What prospective business sellers can learn from a medical director of John Hopkins

bizsale — Mon, 28 Mar 2011 23:45:26 +0000

In the March 28th Wall Street Journal there’s an article, “The Secret to Fighting Infections” that describes the efforts of Dr. Peter Pronovost to prevent deadly bloodstream infections linked to central lines or catheters used in intensive-care units. Dr. Pronovost is medical director for Johns Hopkins University’s Center for Innovation in Quality Patient Care. One of his key tools: using checklists to make sure that procedures and best practices are followed.

Dr. Pronovost believes that if hospitals throughout the country simply used and followed a checklist there would be the potential for a significant decrease in fatalities from infections linked to central lines or catheters. He estimates that 31,000 lives a year could be saved just by consistently following evidence-based standards.

All too often one of the differences between small companies and large companies (and the very successful small business vs. the average business) is the quality and use of systems. Do you use checklists in your business? Do you have written policies and procedures and documented processes that employees follow? Not only will this contribute to a more successful business (and thus a more valuable business), but it may also improve the marketability of your business. When a buyer sees a business that has codified systems so that new employees could follow the same process to achieve results consistent with the past, it will give the buyer greater confidence of being able to successfully run the business. The confidence that these systems create will contribute to the marketability of the business. Creating and documenting systems is not an overly difficult task, it simply requires attention, will, and time. Contact me if you’d like a referral to resources that will help you to systematize your business.

Create something scarce vs. create demand for the ordinary

bizsale — Mon, 21 Mar 2011 18:27:12 +0000

In the November 2010 issue of Harvard Business Review there is an article by marketing guru Seth Godin, “To Win, Create What’s Scarce“, in which he describes why developing and selling a scarce and coveted good or service that others can’t deliver may be a better strategy for growing a successful business then working hard to create demand for something that is more of a commodity. Certainly if you are looking to build a business to sell at some point in the future, his advice merits attention.

I particularly like this excerpt from Godin’s article:

“What’s difficult? Creating beauty is difficult, whether it’s the tangible beauty of a brilliant innovation or the intangible essence of exceptional leadership. Beauty exists in an elegant and novel approach to a problem. Maybe it’s captured in a simple device that works intuitively, reliably, and efficiently or in an effective solution—a “beautiful” solution—to an organizational dysfunction. And it exists in the act of connecting with and leading people.”