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Archive for 'Preparing the Business for Sale' Category

How important are Tax Returns as a means of proving Discretionary Income?

By Hoke - Last updated: Sunday, August 1, 2010

Tax Returns are just one of several means to validate Income. Some Buyers think that Tax Returns are absolute. However, they are not foolproof. There are cases where the Business Seller overstated the Tax Returns. Commercial Banks typically require the recent three years of Seller’s Tax Returns when making a Business Acquisition Loan.

How important is the Initial Ask Price?

By Hoke - Last updated: Sunday, August 1, 2010

Getting the Initial Ask Price right is a key to maximizing sales value. If the initial price is too high, the business stays on the market too long creating doubt with Business Buyers and weakening the Business Seller’s negotiating position. If the Ask Price is too low, the business may sell quicker, leaving some of […]

My business makes a great living yet shows little profit.

By Hoke - Last updated: Thursday, July 22, 2010

A skilled Accountant will minimize Income and therefore taxes. A skilled Business Broker will be able to professionally recast the Financial Statements and Tax Returns to maximize Income and therefore business valuation.  As an example, Interest and Depreciation increase Discretionary Income for the purpose of a Financial Statement Recast. An understated Financial Statement Recast can […]

The Attributes of an Attractive Business

By Hoke - Last updated: Thursday, July 22, 2010

Stable or growing Revenues. Over three years in business (more is better) Good Accounting Records Easy to Run (or the Business Buyer has experience in this industry) Good Lease situation

The Month to Month Lease can be Problematic

By Hoke - Last updated: Thursday, July 22, 2010

The value of a month to month lease depends upon the disposition of the Landlord. A Landlord who values a new long-term tenant will be pleased to issue a favorable new lease. An opportunistic Landlord may attempt to dramatically raise the rent or add tough conditions thereby reducing the sales value of the business and […]