Sell Business. Buy Business. California. Mike Rapoport

Buy a Business, Sell a Business, or determine a business Valuation with expert knowledge
and Confidence.

Selling Your Business? Or Buying the Business. You need to Determine Its Value.

Know the Value of Your Business for FREE!


Buy Business	Sell Business	Valuation of your Business

We do not released, sell or exchange any information to the third party. All potential Buyers of your Business sign Confidentiality Information before any information will be released to them.

If you own a business, you need to know exactly what that business is worth. We provide a FREE business valuation which will tell you exactly what you need to know—and won’t cost you a penny. You need our business valuation if you are:


	Interested in selling your business.
	Trying to increase the value of your business.

When you list your property with us, we'll tell you exactly what that business is worth-for free.

We assess the financial worth of your business using one of the following methods:


	Multiple of Discretionary Earnings Method: This method is based on discretionary expenses-that is spending that you, as the owner, have control over. These can include salaries, benefits, vacation time, and other expenses that you make decisions on. These are combined with the business profits to give you a total figure for cash flow available. This cash is accessible to the prospective buyer, who can use it to pay off debt or to increase his/her wealth.
	Excess Earnings Method: This method of appraisal is utilized to evaluate a company's assets-both tangible and intangible. It places a value on a business by combining an asset-based and an income-based approach. Both types of small business valuations are FREE. Please contact us to inquire further.

Selling your Business

Selling a business is one of the most important transactions you will ever undertake. It is also one of the most complex. There is simply no time to learn "on the job." You need the steady hand of experienced professionals to steer you around the many traps and pitfalls that ruin deals for the unwary. You owe it to yourself, your employees and your family to work with the very best. You owe it to yourself to call Mike Rapoport

Getting Result

The range of values that different buyers may be willing to pay is staggering. Buyers pay for opportunity. The Buyer who perceives the greatest opportunity is the Buyer willing to pay the most for your business. Mike Rapoport exposes your business to powerful marketing program

TO GET YOUR FREE BUSINESS VALUATION OR FOR MORE DETAILS ABOUT A PAID BUSINESS ASSET
APPRAISAL, PLEASE CONTACT US.

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If You Really Want To Sell Your Business, It Is Essential You Price It Appropriately!

Pricing a business is more of an art. Sellers who have a broader outlook taking both deal structure and price in to consideration are more successful in selling their business than others. But what I generally see is a totally irrelevant valuation of the businesses which hardly attracts any customers. Being a consultant and having interacted with many people including business owners, brokers and agents, I often find the ways some of these guys use to sell their business, a bit irrational. And they hardly realize why they could not sell their business at all. In most of the cases I could see that the sellers and their agents focus on little irrelevant things rather than looking in to the total picture like-

	Whether the available cash flow of the business be able to pay the debt of the loan
	Will the deal attract finance sources by virtue of its structure and price
	“Cash price” vs. “note price
	How all these can be put in to a perfect transaction deal?

All that is needed is a simple but well structured business protocol which I can share with you. Four essential factors should be looked in to while selling your business-

	Market approach
	Adjusted Net income
	Multiplier method
	Deal structure and terms

Market Approach

The first and foremost factor in selling a business is to understand the time tested fundamentals of economics. Any business to be sold for a good price is influenced by the “supply and demand” factor. Where the supply is more than the demand, the price the buyers would seek would obviously be less. The more money a business can make, the more is its value- as explained by one economist who compared selling the business to a machine which has the purpose of making money. A profitable distribution business with few hard assets which has strong demand can fetch more money than a whopping $1 million worth large machine shop which does not have a strong demand

Adjusted Net income

The most essential information that a seller of a business should gather is adjusted net income. A prospective buyer will be more interested in knowing this adjusted net income rather the income generated over the past few months. Adjusted net income is the total money a business can generate. It includes –

	Profits
	The owner’s salary
	Cash related benefits enjoyed by the principals of small business
	Other benefits including use of company car, company paid premium for health, life and auto insurance
	Personal expenditure involved in travel and entertainment

It is important to include interest expense, accounting entries such as depreciation and amortization which can add to the owner’s income so that they never appear in the P&L. A seller should demonstrate all these earnings and should have adequate documentation to back up his claims.

Many a times, the business owners don’t document all the money generated by their business. Based on the type of business they do, they manipulate the categories of income to be included in the financial records. But at the time of evaluation, if they try to include all the unaccounted income to make the business look more profitable, the buyer may takes a back foot as he finds the seller unreliable since there are no documented records for the claims. So it is very essential to maintain a record of the adjusted net income to attract more buyers for your business

Multiplier method
The next step is to decide on the multiplier figure based on the expectations working in the market place. A multiplier figure tells what is going on in the market place. It is a figure calculated with cash flow for valuation of the business that is being sold. The business with a higher market demand and a low risk has a stronger multiple. Businesses done in a densely populated area with little competition falls in to this category. They may have a multiple as much as 2-3 times the annual adjusted net income. More buyers would try to buy these kinds of businesses. But on the other hand a business with a lesser market demand may hardly attract any buyer. These are high risk businesses with a multiple of one or two. A smaller business with a tough competition from a large company located nearby doing similar business falls in to this category. Like- wise businesses which are too common like restaurants will have a lower multiple and not many would try to take risk buying them.

The other factor which decides the multiple is the asset attached to the business like equipment, trade fixtures and inventory. A business with more assets can be sold with a higher multiple

Deal structure and terms
This is the final factor which helps the seller decide how to price his business. The way by which the transaction is done influences the final price of the business. A creative and sensible deal structure attracts more buyers and will command a higher market price for the business. Deal structure is vital in the valuation process. If the seller expects a complete cash payment in the process of transaction, he may get about 60%-80% of the money as down payment and the rest by financings

The seller must realize that the buyer should be able to pay him by the income generated in the business. No buyer would try to take a risk of paying money above that could be generated by the business and fall in to debt trap. The cash flow of the business should be adequate enough for the buyer to pay the price at the multiple used. If more money is expected to be paid than the available cash flow, there will no takers and naturally the price of the business will fall down to lower levels. But if the business has a good adjustable income which can support the buyer in making his payments, more buyers would be interested in buying that business and obviously the price would go high up.

Pricing a Business is more of an Art than a Science.

For more information call
Mike Rapport 323 304-5500

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