Planning To Cash In Your Business For A Comfy Retirement? You Have A 1 in 4 Chance of Success

Planning To Cash In Your Business For A Comfy Retirement?

Small Business Owners Have A 1 in 4 Chance of Successfully Selling Their Business.

Read on to find out some of the things that make small businesses less desirable than larger businesses, and this will give you some ideas about how to prepare your business to be sold.

Here are some statistics on sales of businesses in the U.S.

• Less than $750K revenue, 18% are sold
• $750K – $2M revenue, 25% are sold
• $2M – $30M revenue, 29% are sold
• $30M+ revenue, 33% are sold

Source: CABB & Tom West

This means that if your business has less than $750,000 in annual revenue, there is less than a 1 in 5 chance that you will be able to sell it. Even once you get up to $2,000,000 in sales, there is only a 1 in 4 chance of selling your business.

This means that the higher the revenue, the better chance of selling the business.

This is not so much just a revenue target, but reflects the fact that larger businesses have some things that smaller businesses generally do not:

1. More established operating systems & procedures
2. Stronger management teams
3. Specialized, experienced staff
4. Better marketing strategies and tools
5. Ability to effectively compete in their target markets
6. Broader product or services offerings
7. Deeper client bases with repeat customers
8. Wider geographic reach
9. More established partner, alliance and vendor relationships

If your retirement plan and golden years are relying on you successfully selling your business for a nice, big chunk of cash, you may have some work to do between now and then to increase your odds of achieving that comfortable, leisurely retirement.

Learn more about exit strategy planning and some of the things you can do before you try to sell your business that will attract buyers to your business.

Please let us know if you have any questions.

Thank you for your time and interest.

The Endorphin Difference: What Makes Endorphin Advisors Unique and Effective?

In this new video, Erik Bunaes from Endorphin Advisors discusses the philosophy of Endorphin Advisors and how our unique, consultative and coaching-oriented approach to management consulting has brought new energy, confidence, clarity and success to our clients.

For more information about Endorphin Advisors, please see the following venues:

Web Site: http://www.EndorphinAdvisors.com

Endorphin Blog: http://blog.EndorphinAdvisors.com

Facebook: http://www.facebook.com/EndorphinAdvisors

LinkedIn: www.linkedin.com/companies/endorphin-advisors

YouTube: http://www.youtube.com/user/endorphin1995

Twitter: https://twitter.com/ebunaes

Thank you for your time and support.

Erik Bunaes

Endorphin Advisors

New Web Video About Endorphin Advisors (from Erik Bunaes)

Endorphin Advisors adds new video on its Flagship web site at www.EndorphinAdvisors.com.

In new video, Erik Bunaes, President & Principal, discussing Endorphin Advisors’ services, capabilities, experience, team and web properties.

More videos are on their way.

Thank you for your interest and support.

Business Owners’ Perilous Decision: When Do I Sell Out?

We Boil Down The Most Difficult Decision Every Business Owner Must Make At Some Point In Their Lives

One of the single most important calculations to a business owner at some point in time, particularly when contemplating their retirement or “end game,” is the balance between “what is my business worth?” and “will that be enough to comfortably meet my retirement needs?”

In most cases, both of these figures are relatively vague – or completely unknown – numbers when the typical business owner begins to factor in the variety of economic, business, financial, personal and estate planning variables that likely have an effect on those two main figures.

Value of Business Side of Equation

On the “what’s my business worth today?” question, the true value is what a buyer is willing to pay for your business at a given time.  Potential buyers will take into consideration all kinds of factors including:

1. profitability and revenue trends of a business
2. asking price
3. presence of intellectual property
4. expansion opportunities
5. quality of financial and accounting statements and records
6. relationship with landlord(s) and lease obligations
7. experienced employees and managers
8. quality and distribution of customer base
9. market trends of customer base
10. industry outlook
11. barriers to market entry or competitive advantages maintained by seller
12. economic conditions and outlook
13. availability of financing and credit

This is not an exhaustive list, but you can see some of the different factors affecting the value of a business from a buyer’s perspective.

From the seller’s perspective there are the inevitable “what’s the multiple for my business” question.  That refers to vague rules of thumb such as “X business is worth 1.5 times revenue” or X business is worth 2 times EBITA, net earnings or some other units of measure.

The problem with rules of thumb is that they vary from industry to industry and company to company.  More importantly, they are vague and often misleading.

The right route is to obtain a certified opinion of value (COV) from a certified business appraiser.  For a generic small business, this examination should run in the $4,000 to $6,000 range (higher or lower depending on size of business, it’s complexity, and the appraisal firm engaged).  For larger and more complex businesses, the cost can be multiples of that cost.

Just remember that a “certified opinion of value” is an opinion of value and not a sale price.  While the COV is based on objective analysis and uses direct comparison to relevant, current industry data, the actual “value” of a business is the value of it in the eyes of the buyer.  There is no guarantee that you will get a sale price as high as the opinion of value.  You might get higher.  Or lower.

Retirement Needs Side of Equation

Now on the other side of the larger equation of “should I sell now,” is the “how much do I need to comfortably meet my retirement needs?” question.

For this side of the equation, it’s prudent to address this in consultation with a qualified wealth management professional.  There are many variables and scenarios that should be included, along with some detailed financial calculations (net present value of money, estimated investment returns, estimated interest rates, projected taxes, etc.), to do this with any accuracy.

Steps Forward to Addressing Equation

To avoid the vague soul searching of “should I sell now” and “how much is my business worth,” the two gut-wrenching parts of this decision, there is a relatively clear path forward.

The solution is to seek the counsel of two qualified, experienced experts: a business appraiser, and a wealth management professional.

Undertake the two exercises of obtaining a current COV from the business appraiser and a retirement needs analysis from the wealth manager.

Now One Clear Equation

Using the retirement needs analysis as your baseline, does the COV exceed your desired retirement needs?

If so, you have the green light, all other things being equal, to move forward with putting your business up for sale.  (Now comes the part of finding a qualified, experienced mergers and acquisitions advisor, investment banker or business broker to handle the marketing and sale transaction of your business.  Which type of professional depends on the size and complexity of your business).

If the COV does not exceed your desired retirement needs, hold off selling your business for now.

Selling My Business Now Is Not In The Cards

If selling now doesn’t look like the right move, spend your time on improving your business so that when you do an update of this analysis, and the light is green to sell, you are ready to go!

Exit Planning Services From Endorphin Advisors

Endorphin Advisors has an experienced team of advisors to help you through this process.  We offer confidential, expert advice, counsel and project management services to business owners contemplating the sale and exit from privately held businesses.

Endorphin Advisors has a full workshop on preparing companies to be sold.  Please contact us if you are interested in learning more or wish to schedule a workshop.

Exit Planning Services From Endorphin Advisors

Please let us know if you have any questions.

Thank you for your continued interest and support.

Erik Bunaes

Endorphin Advisors

5/11/10

Small Businesses Are Small For A Reason – It Could Be Professional Negligence

I have worked with – and interacted with even more – small businesses over my consulting career. Often, I am inspired, impressed and occasionally totally blown away by the talent of many of the small businesses and their owners. These professionals and work-a-day folks alike are all trying to live their dream, make a living, compete on their own or build a company out of a hobby or skill they have seen in themselves and enjoy.

I’d like to talk today about the businesses and business owners that do not fit into this group. Today I’d like to talk about the business owners that I have seen, met and worked with that are small for a reason. Perhaps they are small for many reasons.

Let’s not ruminate today on specific businesses, business owners or examples. Let’s try and learn something from our experiences and observations, so that the business owners and professionals out there trying to survive, grow and build lasting businesses and companies can learn from – and hopefully avoid – some prevailing mistakes made by small business owners.

Briefly, here are some of our top observations preventing small business owners from successfully building larger businesses:

1. Failure to understand the selling process, and prepare for the selling cycle.
2. Not understanding the importance of the lifetime value of a customer.
3. Allowing ego to override requirements of bringing onboard talented help (whether full-time, part-time or outside consulting services).
4. Allowing ego also to prevent business owner from seeking help, in new ideas, capital, etc.
5. Negligence in defining and communicating a clear vision and purpose for the organization and its employees.
6. Ill-defined target customers
7. Failure to follow through on efforts to build and promote their brand effectively at all times.

I’ll come back to explaining my thinking in future blog posts, however, I will make the following comments.

It is surprising how business owners who are staking their livelihoods, careers and sometimes their dreams on their businesses fail to follow through on building up the brand of their business. This is often true even for experienced business owners, and it is often clear to even the business owner themselves.

In fact, if there was a court of law for small business owners where observers could walk in and tell a judge that the business owner knows or has an idea what to do, but that they are not doing it and know it, we’d have business owners being convicted of negligence.

Now I am not talking about legality here. I am talking about just plain failure to act on what is known – or good ideas that you are aware of – in detriment to your own business. I’m clearly stretching and distorting the term negligence here, but it is congruent enough to meet our needs in this situation.

Don’t be negligent with your business. Act on what you know and see and hear and learn.

Perhaps we will single out some particularly horrific examples of grossly negligent business owners as case studies in future posts.

In the meantime, thank you for your continued interest and support.

Erik Bunaes
Endorphin Advisors
5/9/10.

Endorphin Advisors – SlideShare

Endorphin Advisors has a SlideShare account where we post copies of presentations, courses, workshop content and a wide range of other useful information.

Please see our SlideShare account at: http://www.slideshare.net/ebunaes.

Let us know if you have any questions or would like to have us lead a workshop, class or training session on one of the business, strategy, leadership or marketing topics in which we specialize.

Thank you for your support.

Endorphin Advisors – New One Page Menu of Services

Endorphin Advisors is a management consulting firm and marketing agency.

To easily review the range of services offered by Endorphin Advisors, we have published a new one page menu of services.

See the Endorphin Advisors “News” page to view this summary.

Strategic Business Advisor? Who Needs a Coach (or Advisor)?

Some of The Smartest Folks Around Use Strategic Advisors or Executive Coaches.  What Can a Professional Advisor or Coach Do For You?

If we think of this from an athlete’s point of view, top athletes have a host of coaches.  From Derek Jeter of the NY Yankees to 7-time Tour De France champion and cancer survivor Lance Armstrong, from Olympic gold medalist and two-time World Cup overall champion alpine skier Lyndey Vonn to football quarterback Brett Favre.  They all have coaches.  Strength coaches, skills coaches, nutrition coaches, business advisors, agents and even media coaches.

Why not have advisors and coaches for what is likely one of the top two or three priorities in your life, next to your family?  That is, your career.  It may be wise to think of your career as if you were a professional athlete.  Get coaching, practice and drill skills, learn new skills, strategize and role play for big meetings, presentations or sales calls, learn new approaches to your business or career.

If you are a business owner or experienced professional, you know how many different skill sets you need.  These include:

1. Practicing and continuing to develop your particular skill, service or product

2. Creating new marketing strategies, products and services

3. Marketing your business

4. Building new customer relationships and maintain existing relationships

5. Hiring, motivating and managing employees

6. Hiring outside vendors

7. Managing the financial, accounting and tax side of your business.

8. Envisioning, purchasing (or building) and managing complex technology.

9. Keeping up with federal, state and local regulations.

That’s just a start.

Do you honestly excel at all of these, and can you with a busy work schedule maintain and manage all of these on your own?

As a business owner or entrepreneur, you have no choice.  You must manage and excel at all of these skills, and more.  Even as a professional or an employee working at a company, you must excel at one or more of these areas, too.

Who do you talk to for help in managing your work (as an owner, entrepreneur, executive or career professional)?

If you think that having a strategic advisor or executive coach on your side might benefit you, give us a call and let’s talk about it and how we have helped others.

Endorphin Branding Services

1. Brand Consistency Audit

The Brand Consistency Audit is designed for those businesses that already have a full or partial suite of marketing materials in place.

These marketing tools may have been created by different designers, at different times over the course of months or years. There may be differing claims or benefits, inconsistent use of visual elements and/or colors, changing environmental or competitive factors or there may be conflicting information contained across the spectrum of these tools.

Inconsistent, or outright conflicting, information weakens your marketing message, and will create confusion about your brand and the value you provide. Confused customers mean they will shop somewhere else.

We will perform an on-site evaluation of all your existing marketing and brand-related materials and will provide recommendations on how you can make them more consistent with your image or brand.

We will determine which visual elements closely represent the image your business wants to project today, and what can be done to bring all of your marketing materials into alignment.

The Brand Consistency Audit package includes: on-site consulting session, evaluation of existing marketing tools, detailed marketing questionnaire, research of the company, industry, and competitors, written report containing recommendations.

2. Company Branding Package

Do you need a comprehensive marketing package that sets you apart from the competition? Is your current brand outdated or is it just time to breathe some new life into your image? Do your marketing pieces accurately represent your company today?

With our branding package, we can help you harness the power of a strong, clearly-defined company brand that attracts attention to your company and gives your staff renewed energy and excitement.

We begin with an in-depth analysis and discovery session which helps uncover your company and culture, your unique attributes, and what makes you different and exceptional. We listen to your needs, and help highlight your strengths and goals. We then translate this vision into a custom logo, stationery package, brochure, and pocket folder that speaks to your customer. The result: an invaluable suite of powerful and distinctive tools that projects a professional, sophisticated image to your customers.

Packages include consulting session, logo development, one (1) design for business card, letterhead and envelope, 8.5″ x 11″, 4-page brochure, and standard 9″ x 12″ pocket folder.

For clients who desire to take advantage of some of the features of this package, but not the whole offering, customized programs, individually priced, are available.

3. Logo Development Package

A logo should possess all of the following attributes:

1. Be descriptive
2. Be memorable
3. Be unique from competitors
4. Effective without color (black and white only)
5. Be scalable (readable in various sizes and media)
6. Create recognition
7. Communicate product or service’s message and personality
8. Speak to the audience
9. Create credibility

With so many roles and responsibilities, it is important to get the logo just right.

We have a time-tested, clearly-defined process that delivers results in developing powerful logos. Our Logo Development packages include: consulting session, detailed marketing questionnaire, research of the company, industry, and competitors, five (5) initial logo designs, two (2) sets of revisions to one (1) final design, color palette selection, font selection, and final logo file formatted for print and web.

Contact us today and take big, bold steps forward in your branding

Business Workshop – Turning Numbers Into Valuable Information

Turning Numbers Into Valuable Information

Projections – A basic guide to the business practice every business owner needs for profitable decision-making

Date & Time: Monday March 15, 6:30 pm – 8:00 pm.

Location:
BZHIVE Coworking
80 Mark Drive
San Rafael, CA 94903

http://www.bzhive.com

415-251-6454

Financial spreadsheets with rows and rows of numbers make most people’s eyes glaze right over. Most people would rather hit themselves in the head with a hammer than open an Excel spreadsheet.

However, business owners and entrepreneurs need their businesses to generate enough money to pay the bills to stay in business. To keep on top of how a business is performing – and to make the best decisions for moving forward – it is essential to have a clear picture of how much money you are spending and how much you are bringing in.

You have the numbers, so let’s turn those into valuable information to answer important questions: When can I hire more staff? When can I buy an office (or just get an office)? When can I afford to buy that piece of equipment? How much can I spend on marketing next month?

In this introductory course, we’ll help business owners, entrepreneurs, managers and independent professionals use the numbers they have to make the best possible decisions. We promise, no jargon and no acronyms!

In this course, we’ll teach you:

1. What are financial projections?
2. Why are they important?
3. How can projections help you?
4. 5 key elements of projections
5. How to develop a basic model for your business (and give you a sample)

This workshop includes practical application strategies that you can implement right away, the Endorphin Advisors PowerPlan™ Financial Projection template, plus a bonus 30-minute, one-on-one coaching session.

Workshop developed & presented by Erik Bunaes, Principal, Endorphin Advisors. For more information about Endorphin Advisors, please visit www.EndorphinAdvisors.com and http://blog.endorphinadvisors.com.