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Archive for January, 2014

Raising Prices Prior to Listing the Business for Sale Increases the Sale Price

By Hoke - Last updated: Wednesday, January 29, 2014

                [box] If you can, raising your product prices before the sale is a great way to increase the discretionary income and therefore the sales value of the business. The prices should be raised with enough time (2-3 months) that any customer reaction because of the price changes […]

Why a Buyer’s Business Broker Often Fails to Find a Quality Business

By Hoke - Last updated: Tuesday, January 28, 2014

Let’s discuss what goes on when you have most brokers perform an acquisition search. It is simple. They get on the internet Business for Sale websites and start looking. It is important to know that about 95% of internet business listings are from brokers, not principals. It is also important to understand that there is […]

Historical Comparisons or Key Factor Analysis, Which Business Valuation Method To Use?

By Hoke - Last updated: Tuesday, January 7, 2014

Key Factor Analysis and Actual Historical Sale Price Comparisons will give a range of slightly different Multiples. From this range, one can add local expertise and decide what Multiple to use, and what the initial Ask Price should be.

Good Faith Deposit / Beware of Broker Trust Accounts

By Hoke - Last updated: Friday, January 3, 2014

A Good Faith deposit is often required to accompany the offer. The amount is typically 10% to 20% of the sale price. Because it is impossible to really really know if the sellers claims are valid without solid verification, most reputable business brokers will hold the Good Faith Deposit uncashed until Due Diligence is successfully […]

Finding a Higher Net Income Business

By Hoke - Last updated: Thursday, January 2, 2014

High Income businesses are rare. Here is the approximate breakdown of all high income businesses for sale in California as a percent of total businesses for sale: $1 Million+ Annual Discretionary Income: 0.04% $500,000 – $1M Annual Discretionary Income: 1.3% $250,000 – $500,000 Annual Discretionary Income: 5% When the buyer discounts these percents for desired […]