Evolution Advisors

Sometimes business owners aren't sure if their business is sellable, if they can find a buyer and achieve the financial success they want. We can sit down with you and figure that out. #evolutionadvisors #businessbrokerage #businesssales

Every business is impacted by real estate. Whether you own the building or are leasing it, that will have an impact on the sale of the business. #businessbrokerage #evolutionadvisors #businesssales

Working Together Powers Seller Success At Evolution Advisors, we work with sellers to find out what sets their business apart - and how we can market the business telling their story to as many buyers as possible. Consider these recent success stories:... After completing the valuation process with one automotive business, they were approached by a large regional outside buyer and opted to work directly with them. Eight months later the seller called to say they’d essentially been strung along and were stuck. We were able to create a very effective marketing package that attracted multiple buyers with an accepted offer within 30 days and closed 3 months later. (Remember: limiting yourself to a single buyer reduces your leverage as a seller.) We met with a rather frustrated seller of a manufacturing company that, having worked with two previous brokers, wasn’t very optimistic about selling. The business had developed a highly systematized process - but for an extremely specific manufacturing niche. When we determined their process could be applied to multiple industries, we marketed that value and found a buyer interested in expanding the business in a completely different niche. One wholesale distribution business we worked with owned the 36,000-square-foot facility they operated out of, not paying themselves market rent, just the mortgage rate. Because any buyer would have to pay them rent at the going rate however, cash flow valuations didn’t support a workable selling price. We suggested they try operating using less space. They would need to reorganize, lease half their facility with half the rent factor added back in, profitability improved enough for us to get the business sold. Evolution has provided an extra set of eyes in so many different transactions, we can often spot opportunities a seller immersed in their business might miss. In our experience, working together to tell the story of a business is a far more successful approach to selling your business than working alone.

Sellers Discretionary Earnings are important pieces of information needed to compare a business to other businesses that have sold. What questions do you have regarding SDE? #businessbrokerage #evolutionadvisors #businesssales

The Bulk Sales Process: Closing a Business Sale in California Some people think that selling a business means filling out some paperwork and walking away with a check. But in reality, closing a business sale is very similar to closing a real estate transaction in that escrow is often involved. In the state of California, most small business sales utilize escrow and go through the Bulk Sales Process. If you’re considering selling your business, here’s what you need to know.... The main reason the bulk sale process exists is to help ensure the buyer’s protected, and escrow is utilized to follow the items agreed to in the sales agreement. Escrow provides necessary business closing transaction services for buyer and seller. Escrow companies handle the bulk sale process, including: Requesting clearances from state agencies Notifying creditors UCC search- order payoffs if needed Prepare escrow instructions- bill of sale, note and security agreement if needed Requesting closing funds from buyer Escrow is set up separately for the business, its real estate, and any liquor licenses. Separate escrow arrangements are made for the business being sold, for any real estate parcels attached to it, and if it involves a restaurant or bar - for any liquor licenses it holds. The main thing for buyer and seller to understand is that following the California Bulk Sales Process and opening up escrow can help them reach the end of their business sales transaction successfully.

A lot of things happen when you are selling your business, a seller non-compete could be one of those. Have you had to sign a seller non-compete? Feel free to ask me any questions you may have #evolutionadvisors #businessbrokerage #businesssales

Are you planning on selling your business? If so, there are some important factors you need to be aware of. First, the buyer may want the seller to sign a non-compete agreement. This may involve a geographic restriction or a time restriction to ensure the seller doesn’t poach any existing business contracts that would undermine the business. Second, realize that you will likely need to be involved for some period of time after the sale of the business. This is because the bu...yer wants to ensure they have all the knowledge required to ensure they can operate the business. They may ask you to stay involved for one to six months or more. The amount of time can be negotiated as part of the purchase agreement. As you negotiate the sale of your business keep in mind the interests of the buyer to maximize the potential of the sale of your business. Contact Evolution Advisors to sell your business today: https://evobizsales.com/

In this episode, I discuss how concentration issues affect the sale of a business. #businesssales #evolutionadvisors #businessbrokerage

In most cases when a business is sold, there are real estate considerations which the buyer and seller should consider. Whether the business owns the real estate or leases the real estate, the transaction will be affected in one way or another. Let’s take a look at some issues which can come into play. The first thing to realize is that real estate affects buyers and sellers differently and often times in opposite ways. This is because the economics of the real estate, lease... rates, or real estate asset value, have a direct impact on the business valuation. It is for this reason that business sellers and buyers should think deeply about the real estate and what role it plays in the transaction. Consider the following scenario- a business seller has owned the building and has been undercharging themselves for a lease for the business. This in turns makes cashflows higher than they would be in actual market rate circumstances. As a result, the seller believes their business valuation is higher than it actually is. When the market rate lease terms are exposed in the business valuation process, the seller may discover their business is worth far less than they anticipated, which could jeopardize a transaction or even the ability to sell. In many cases, the real estate configuration is an integral part of the economics of a business and will directly affect the business valuation. Therefor it is worthwhile for a seller to strategically plan far in advance how they will position the real estate in the sale. Conversely, buyers should consider the ramifications of the real estate in order to ensure the optimal strategic arrangement for the success of the business post sale. At Evolution Advisors we help business sellers and buyers successfully navigate the intricacies of a business transaction. Call us to today for a complimentary consultation.

In this episode, I discuss when the right time is to sell your business? #businessbrokerage #evolutionadvisors

Why You Need a Broker Who Knows How to Market Your Business When selling your business, it’s important to ask how your broker plans to find the right buyer. There are essentially two types of business buyers. A financial buyer is usually someone looking to switch from employee to entrepreneur by buying a new job and lifestyle. They want to:... Replace their income, Enjoy what they do, and Meet expenses, while supporting their family A strategic buyer is usually another business entity looking for a company that fits their long-term goals. They want to: Grow their existing business, Get into a new area of their business, or Expand their marketing footprint There are also two ways to sell a business: through listing sites (passive marketing), or through outreach programs that leverage direct mail and telemarketing (active marketing). Some brokerages post businesses on a few sites and wait. Others like ours - get those listings in front of as many eyes as possible, while reaching out to buyers directly. Finding a buyer starts and stops with marketing: you’ve got to tell a story, put together the right materials, and create a customized plan because every business is different. For example, we once helped sell a niche manufacturing business that created screen printing and logos for train museums. By examining how their systems and processes might apply to other sectors, we effectively customized our marketing approach and attracted a buyer in the airplane industry. Remember, to maximize potential buyers and find the right one, it’s vital that you work with a broker who knows how to market your business.

In this episode, I discuss seller carry and how havign a seller carry option increase the close rate of the deal

Pay Attention to Seller's Discretionary Earnings to Maximize Business Valuation! If you are a small to medium sized business owner, when it comes to selling your business one of the most important metrics that you should be aware of is known as Seller’s Discretionary Earnings or SDE. SDE refers to the total benefits that an owner receives from owning a business. SDE is important because it is one of the metrics that is used to help establish the value of a business for sale.... (in larger companies EBITDA is typically used for valuation). One of the main ways that a business owner can jeopardize the valuation of their business is by running too many non business-related expenses through the business. While this does reduce taxable profit while the owner is operating the business, it can cause a bank to undervalue the business which could affect a buyer’s ability to finance the purchase. In addition to a potentially lower valuation, buyers will also wonder if the business is being operated effectively and that could also lead to lower purchase offer valuations. SDE is based upon Net Income before taxes, Depreciation, Amortization, Interest, one Owner's Compensation and Other Additions/Deletions which reflect how much salary a Buyer can take plus Tax Capability and Business Debt Carrying Capacity; A higher SDE will normally equate to a higher value or selling price. If you are considering selling your business in the next 1-4 years you should start thinking about your SDE now so that you can maximize the valuation when it comes time to sell your business. If you would like to discuss SDE or the sale of your business, please contact me at [email protected] for a complimentary consultation.

In this episode, I discuss the focus points when marketing your business