- Q: How do I build the value of my company?
- A: There are specific strategies that you can take to increase the value of your business prior to sale. Mostly, these strategies depend on your industry. Making sure that you are not reliant on any one customer or supplier, creating better than industry margins, offering products not offered by the completion, are all good strategies for any industry.
- Q: How to increase business cash flow?
- A: There are several easy solutions that can quickly increase cash flow for your business. Extending the time it takes to pay suppliers and speeding up the time it takes to get collections are the basic strategies. Depending on your industry, there are many other strategies that can be employed to help the company get out of debt and have more cash in the bank.
- Q: How do I know if my employee is ready to take over my business?
- A: This is a very tricky, yet crucial, question. One of the main keys to a transition’s success is placing the company in capable hands. We use employee assessments, interviews, and peer reviews to determine the leadership capabilities of any potential successor.
- Q: When is the right time to sell my business?
- A: The right time to sell a business is when you are ready. Obviously, the goal is always to “sell high,” but that is not always achievable. Figuring out with an advisor when the right time is for you personally, professionally, and when the business will be ready for a major transition is the first step. From there, you will know all of your options and will be prepared for when the right deal comes along.
- Q: How long does it take to sell my business?
- A: The typical “runway” to sell a business is 2.5 years. However, in certain economic climates or if you already have a buyer, you could sell your business much quicker.
- Q: How much does it cost to sell my business?
- A: Depending several factors, the cost of selling a business can vary significantly. It can depend on who you are selling to, if you need to solicit a buyer, or if you use a broker or just an attorney. Usually a broker’s commission is between 5-10% of the final sale price. If you are looking to sell to an insider, the fees are much less (depending on the size) because the main expense is the attorneys and advisors. For a company that is valued around $5,000,000, the fees could run between $50,000 and $100,000 depending on how complicated the deal is.
- Q: Do I need key man life insurance?
- A: Key man, or key person, life insurance is great protection for the business owner to get on his key staff. The idea is that in the event of untimely death or disability of a key employee, the policy will pay the company to replace the employee and/or the revenue they generate.
- Q: Do I need buy-sell life insurance?
- A: If you have partners in your business, buy-sell insurance is the best way to protect your family’s wealth in the event of untimely death of you or your partner. Click here to watch a video on how it works. There are also options for independent business owners to protect themselves in the event of an untimely death or disability.
