No matter what your previous business experience has been, you most likely have learned that beating the competition is difficult. In almost every industry and marketplace, the competition is competent, capable and a worthy opponent. If you a are a small business owner in Tucson or Southern Arizona, or are thinking about buying or selling a business in the area, you should realize that achieving your personal income goals through growing your own business at the expense of your competitors is a very challenging proposition.
It is to be expected that if you steal one of your competitor's key employees to gain a leg up, someone else will do the same to you. Whenever you develop a new product or service offering that gains traction in the market, you know full well that it will soon be copied and your competitive advantage will be reduced. If you're an effective marketer of your own business, you must invest time and money to develop the program before you can be sure if it worked, but if it does it will surely be copied by a competitor who will not incur that upfront cost, almost immediately. These are the realities of a small business owner in a competitive marketplace.Does this mean that your goals of growing your income and personal net worth are unachievable? Not at all. It may be time, however, to consider a different path to getting there.
A savvy small business owner in Tucson or Southern Arizona will realize that growing the top line can happen much more quickly through buying the competition than from trying to outperform them. You might say "but there are no other businesses like mine to buy, or my competition won't sell to me." Well, who said you had to buy another business in the same industry? Buying another business in a different industry is a great strategy, as well. Mergers and acquisitions take place all the time in the world of larger enterprises for the same reasons, and we read about them regularly in the business press. With the right advice and guidance, small business owners in Tucson can follow this same approach to buying a new business in Tucson or making a Tucson business investment in a different industry. If the process of acquiring another business is well managed, achieving your growth targets can be accomplished much more quickly and economically than trying to invest more in marketing your current business as a way to increase revenue.
It may seem at first glance that buying a business in a new industry is risky, but it doesn't have to be. That's where retaining a professional licensed business broker can make the difference for you. Business brokers make an art out of helping investors determine what they're good at, what their return profile look like, what kind of businesses they think their skills are transferable to, and then bring to them different options for their considerations. In some ways, looking for a business to buy has a lot in common with looking for a job. If you only look in the classified ads, you'll only see a few businesses for sale. But in the same way that the really good jobs are usually filled before anyone knew they were available, few of the really great business buying opportunities will be in the papers either. But the business brokers know about them, and if you have one on your side you will learn about them too.
Want to increase your top line faster than you ever thought possible? Maybe build a small business empire while you're at it? Might be time to think about buying another business, instead of spending all your resources on advertising your current one.
Just a thought. If you feel like talking this point of view over, give us a call at 520-327-4454. There's a perfect business waiting for you to find it, if you just knew where to look.
If you'd like more information on this subject, please Contact Us.
Are you thinking about selling your Tucson business? If you are, you might be tempted to do what the guy in the photo is doing. You've got out your paint brush, and video camera, and you're getting ready to do it by yourself. You may think selling a business is easy, just liking parking your car in the corner lot and putting a for sale on it, and then getting a classifed ad in the local paper. It would be really great if things were that simple, wouldn't it? Before you jump in to the process head first, there are few things you ought to know or at least think about, and a business broker can help you.
As you think through this list, ask yourself: "am I capable and prepared of doing this well, or might I get more out of the sale of my business if I had professional help?" You wouldn't go to court without a lawyer expecting to win, would you?
- Set Realistic Expectations: You need to understand the reality of the market, and not let your wishful thinking set up unachievable expectations that could stand between you and a sale of your business at fair market value.
- Price Your Business Accurately: buyers aren't going to pay more than your business is worth, or pay for what might happen in the future. Your broker is an expert at valuation, and can work with you to document things in a way that shows the buyer your confidence in the business' future.
- Get An Outside Opinion: there are many things that escape your attention, at home or work, when you walk through a place everyday. From the smallest details of cleanliness and repair, to more material matters in your accounting, administrative and marketing practices, getting some honest feedback about the shape and saleability of your business is priceless before you put it on the market. That's part of a broker's job.
- Market Your Business: just like you market your products and services, you will need to market your business. Your broker should prepare a professional listing package including attractive marketing materials, and, more importantly, give your listing access to local and national networks of buyers and business sale intermediaries. In short, we know how and where to find buyers better than you do.
- Prepare For Buyer Visits: imagine that your business is a retail store. Rehearse the routine that you are going to follow as you walk a potential buyer around the facility. How will you greet them? What will you tell them in each location? Is everything in top shape? Your broker should help prep you before buyer visits.
- Analyze Offers Effectively: the offer you will receive from a buyer seeking to buy your business will be a fairly complex set of documents. You may not have seen them before, or be familiar with their purpose or the language they use. Having a second set of expert eyes to review these documents and decipher what they really mean is essential. Negotiation of a business sale is more effective when it is a team sport.
- Make The Best Deal Possible: it is often hard to negotiate effectively on your own behalf. Not everyone is a good salesperson, and everyone is less effective when emotionally involved in what they're selling. When you're selling your business, it will feel like you're selling a piece of your very soul. You've spent years building and running it. You're familiar with every detail. You'll get emotional, and possibly defensive, and this could derail an otherwise attractive deal. Let a professional broker negotiate for you, in the same way you'd let a lawyer try your case.
Now, if you're still thinking about selling your business on your own. you can find paint brushes and plastic door signs at the hardware store. Otherwise, give us call at 520-327-4454. We can help you with the rest.
If you'd like more information on this subject, please Contact Us.
Before you try to sell your business, try to make it more attractive to buyers (and more profitable and
enjoyable for yourself). Increase the value of your company.
The best consultants to small and midsize businesses have “plug-in” tools that enable clients to increase their company’s net cash flow. Some of them work within one week. Some take longer. But almost nothing takes longer than trying to sell a business that is not ready for sale.
Here are a few things you can do to increase the marketability and value of your company right away.
1. Begin seeing your business as a buyer will view it. Focus on the future. What will your business look like in a year?
2. Improve your financial ratios to be in line with or better than the average of other businesses in your industry.
3. Change your method of accounting to maximize the amount of profit you report.
4. Make an effort to increase productivity (without adversely affecting employee morale).
5. Review every expense; look for ways to cut costs.
6. Eliminate activities that have more downside risk than upside potential.
7. Do NOT do anything that gives your business a short term benefit at the expense of your business’ future. A buyer will detect short term fixes that can impair the long term, which means your business won’t sell or it will sell for less than it would have if you weren’t so short- sighted. (The right consultant can help you decide what to do and what not to do.)
8. Investigate opportunities to increase revenue and profit by adding products or another product line, expanding geographically, growing by acquiring another business, diversifying your customer list and/or raising prices.If you'd like more information on this subject, please Contact Us.