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If there is one thing I’ve learned about the marketplace for small to mid-size business it is that it is both very opaque and inefficient.  Because you take great pride in your business and feel you have a great operation, you might be tempted to believe anybody in their right mind would seize the opportunity to purchase it.  Guess again. It is much more likely that finding a person, who agrees with your price, is financially qualified and who is ready to buy your business could be difficult. In short, the right buyer for your business could be a needle in the proverbial haystack.

When you sell a business, there are many steps involved and a multitude of considerations before the transaction can be fully completed. There are specific points to be aware of that can help the process go along as smoothly as possible. By narrowing your focus to these big rocks, you will be able to identify the constraints,  set goals and streamline the process to achieve the end result selling your business. 

How Much is it Really Worth?

Determining the value of the business is one of the most important aspects that need to be considered at the start of the selling process. The business owner should always have a solid understanding of the value of their business before attempting to sell it. The business valuation, also known as an “opinion of value,” can be performed by a business broker or third party valuation firm. The goal is to obtain a reasonable valuation estimate to serve as an objective and unbiased assessment of the most likely selling price.  Often this is very different than the formal and expensive appraisal completed for estate planning, legal matters or other purposes. The valuation process begins with a one-on-one consultation with the business owner to understand the true “owner benefit” of operating this business. Once all the pertinent documents have been submitted to the evaluating company, the entire process should take 1 to 3 weeks. A good valuation report will consider comparable recently sold businesses and utilize three to four different valuation methods.

The primary outcome of the entire valuation process is the production of what is called the Opinion of Value. This detailed valuation report is a key document in the valuation process and shows a normalized assessment of the company’s financial performance over the past 3 to 5 years. Prospective buyers will be able to see how the business has performed in the past and make their own determination as to how well it is likely to perform in the future.

Tax Consultation

Once the business has been thoroughly assessed by a business broker, the owner should meet with their accountant to assess the impact of a sale from a tax perspective. Outlining specific goals that the seller would like to meet can make the process easier and more effective. The tax impact of the selling the business can greatly affect the amount of cash on hand after a sale. Your CPA can review the what if scenarios and assess how it will impact your tax planning. The seller will want to consider what they will want to accomplish financially with the sale of their business. For many business owners considering selling, retirement is an attractive option. Others may wish to simply put their children through college, pay off a mortgage and move across the country. Regardless of the specific financial goals, outlining these objectives before the sale and meeting with an accountant or financial planner will help to ensure that those goals are met. The accountant can help to structure the negotiated Asset Allocation in such a way as to help minimize tax consequences.

Using an Intermediary

When selling a business, it is logical and well advised to use a business broker/ intermediary. Working with a specialist to help you navigate one of if not the biggest financial event of your life is foundational to lowering your risk.  A recent IBBA study has proven that on average, business brokers increase the sale price of a business by 20%! In addition, they increase the probability and speed of selling and help you avoid many pitfalls during the process.   If you’ve spent 15 or 25 years building your business, it’s probably not wise to risk turning one of your most valuable assets into a “do-it-yourself project” unless you are prepared to start and build another business if the transaction doesn’t turn out as expected.  Business brokers advise the business owner and use proven techniques to maximize value, organize deal structure, screen prospective buyers, facilitate negotiations and manage many details involved in the complex sale process. In addition, a business intermediary can offer a fresh and unique view of the business since they are viewing it from the outside and know what buyers are looking for in a business.  They will be able to offer advice that is unbiased and to ensure that the accountant, attorney, lender and all other parties keep your interests front and center at all times.  An expert business broker is like an experienced pilot that guides you through a treacherous mountain pass, saving you time and money while keeping you safe.

There are several common questions your business intermediary may pose. For example, has the business been expanding yearly or has it been stagnating or even declining? Is your business concentrated between a wide variety of clients or do you have 2 or 3 primary clients? Who is the primary manager of your business? Are they committed to continuing their position once the sale has taken place?  What will add to or detract from the total value of your business? Thinking about these considerations early on will allow you to have a more positive experience. A strategizing session and comprehensive analysis with your business intermediary can help you to get a firm grasp of where you’re business stands and where it needs to be before considering a sale. Once you have had an analytical interview session with your business broker, you will have a more complete understanding of the selling process overall as well as how your business may be improved and when you should sell it.

Being diligent and methodical is critical throughout the selling process.  The entire process, from choosing a team of professionals to closing the sale, may seem slow and tedious at times. It is imperative to take the time required to go through a methodical process and to not rush through it. Taking the time to complete each step of the process will guarantee that the sale goes smoothly, pitfalls are avoided, and all important aspects are covered. A well-qualified business intermediary will also be able to refer proven professionals such as a closing attorney, a CPA specializing in taxes, and other resources to ensure that the business owner receives the best advisement possible.

To locate a qualified business transaction professional, I recommend that you do your research and interview a few business brokers and check their credentials. Are they a CBI (Certified Business Intermediary)?  The difference between a CBI and an uncertified business broker is comparable to the difference between working with a bookkeeper and working with a CPA.  The key to success is diligence and a determination to take the necessary steps to ensure that everything is in place for a smooth and stress free sale.


By taking the time to identify and partner with skilled professionals to assist with a business sale, you as the business owner will be able to have more peace of mind throughout the transaction process. In addition, by taking these three points into account (business valuation, assessment of the tax implications, and consultation with a business intermediary), the seller can rest assured that the process of their business sales process will be optimized and most likely to achieve their financial and personal goals during this momentous turning point in their life.

Edward Valaitis, CBI – A Certified Business Intermediary “CBI” designation is your assurance of the highest level of training, expertise and integrity in the business intermediary profession. Mr. Valaitis has more than 25 years of experience building, managing, and leading commercial lending, CPA and consulting firms. Merger, Acquisition and business broker services provided throughout Florida.             800.975.3198     ed@marketchief.com     www.marketchief.com  Serving markets including Tampa, Sarasota, St. Petersburg, Clearwater, Orlando, Tallahassee, Pensacola, Panama City, Fort Walton Beach and Destin, Florida.


If you are looking to buy an insurance agency in Florida or anywhere else in the United States there are some very important factors that you will need to take into account.  Awareness of these factors can increase the probability that you will end up with a great buy and be completely satisfied with your acquisition of an insurance agency.

It should be apparent to you that the financials of the business are amongst the most important aspects you must consider when you want to buy an insurance agency or any other kind of business. You need to ask yourself careful questions.  For example, what is the real reason the owners have agreed to sell such a valuable asset with a recurring revenue stream?  On some occasions they may reluctant to give you the whole truth.  In this case, you will need to get the information for yourself.  The financial records always tell a story and will reveal a lot about the business situation over the past several years.  It is good to start with a bit of skepticism.  Keep in mind that often, there have been financial difficulties or future fiscal troubles envisaged that led to the decision to sell. The timing of the sale is hardly ever an accident or coincidence.  You will need to be as careful as you possibly can when you start to look the company over and sift through the financials to look for trends, expenses and income.

One of the very first things you will need to do is a cash flow analysis of the insurance agency. Cash flow is one of the best ways of getting a clear picture of the true valuation of any business.   Fortunately, it is also a very difficult thing to mask or represent inaccurately. There must be clear documentation about the circulation of funds, corroborated by bank statements and tax returns. As a potential acquirer of the insurance agency you will need to pay special attention to new insurance policies issued via the agency, as well as renewals rates and commissions paid by the insurance carriers. Make sure to examine each and every revenue-generating source in the business. This will give you the whole picture about the present and future long-term earning potential of the insurance agency. Recurring expenditures like rent, salaries and advertising, amongst others, should also receive your attention. The reason for your interest in these company expenses should be apparent.  It will give you a good idea of exactly where reductions and cut backs can come into play almost immediately so as to ensure that profitability is on the rise shortly after you acquire the business.

It is also advisable for you to look at the financial and tax return records of the insurance agency over a period of three to five years.  This will allow you to discern trend lines regarding commissions, carriers and expenses that may provide key insights into the future of this insurance agency. The quality of carriers and your ability to retain those carriers after you’ve acquired the agency are fundamental considerations in determining the fair valuation of an agency.

Naturally, not everyone is experienced or skilled at deal structuring, due diligence and accounting. Since most buyers will not know precisely what to look for, it would be highly advisable for them to seek the services of a business broker with experience in the buying and selling process.  He or she can act as your quarterback by leading the process, providing priceless insights and helping you assemble the right team of professionals to evaluate a potential business acquisition opportunity. There is an art to consummating successful transactions and you want the artist on your team to be a master at his craft.

Other areas you will need to carefully analyze when you are considering whether to buy an insurance agency are the current marketing and advertising strategy and the contracts the agency has currently committed to. What do they have running in the yellow pages? What about billboards, website SEO, DBA name?  Apart from the obvious fact that you might be taking over responsibility for the payment of these contract advertisements, you will also need to take careful note of the telephone numbers and other key branding and identity elements you will be acquiring.  Contact telephone numbers, e-mails and websites are vital assets to take into consideration during the purchase process. Many who want to buy an insurance agency miss out on such small but essential details and focus only on the larger items. Failing to account for small details can come at a great cost to the purchaser.

By the time a potential buyer has been through all these key factors, you will have a pretty good idea of whether you want to go forward with the acquisition or not.  At this point, you have looked over the key information and are hopefully still very much interested. You will need to examine the agency management system of the business you want to buy. Is it up to date? Is it accurate? Can you build and grow this agency with this management system?  A very important area of management systems will be the client data and the kind of policies they hold. Poor management systems lead to customer service issues and the loss of prime marketing opportunities.  It can even impact customer retention during the insurance coverage renew period and/or cross selling other insurance products.  Next, the buyer must understand the quality of the staff and whether you’ll be able to retain some or all of them with the acquisition. This will be a critical subject that needs attention if the buyer is going to make a successful acquisition as well as transition the customers.

Other factors that could be very important are the location and lease terms of the insurance agency you want to buy.  The location of a business is very often a significant factor in its’ success or failure. If you must change locations, it is difficult to predict how many customers will be lost, gained or retained because of the move.

I’m happy to answer any further questions as these are only some of the areas to consider when preparing to buy an insurance agency.  As you can imagine good insurance agencies are in demand.  This means you will probably need professional help to locate, negotiate an agreement and close on a quality agency because these days the demand exceeds the supply.

Edward Valaitis, CBI – The Certified Business Intermediary designation is your assurance of the highest level of training, expertise and integrity in the business intermediary profession. Mr. Valaitis has more than 25 years of experience building, managing, and leading commercial lending, CPA and consulting firms. Merger,  Acquisition and business broker services provided throughout Florida. 800.975.3198  ed@marketchief.com     www.marketchief.com  Serving marketings including Tampa, Sarasota, St. Petersburg, Clearwater, Orlando, Tallahassee, Pensacola, Panama City, Fort Walton Beach and Destin, Florida.

As firms all across the country have cut their staff and face dwindling revenues, it may seem to be the wrong time to buy a temporary staffing agency. After all, temporary staffing would seem to be among the worst hit industries. However, business brokers who specialize in buying and selling temporary employment agencies believe this conventional wisdom is wrong. While it is true that times are hard for companies all across the country, not all temporary staffing agencies have been affected to the same degree.  Historically, as the economy improves the temporary staffing industry benefits early in the economic recover cycle as a leading indicator.

Since temporary staffing agencies depend on personel demand, the market value of such agencies often depends on the particular industry niche they serve. Many businesses reduce head count significantly, only to discover later on that they have laid off too many people. At that point, these companies are reluctant to initiate the hiring process all over again. Because of this phenomenon, there are many temporary staffing agencies that see increased business during recessions, especially if the agency deals with industries that thrive in the midst of bad economic times, such as health care and bankruptcy support services.

Some business owners worry that the value of their business has been drastically reduced when compared to its’ worth during the recent economic boom. However, the perceived loss that these owners experience from selling their businesses can well be offset by another business or career opportunity that awaits them. In other words, they need to find a way to move on and discover the best and highest use of their time at that point in their lives. If the owner has the right view toward a situation such as this, it does not really matter if the business they are trying to sell has dropped from its former value – the price of another similar business has also dropped by the same ratio. For this reason, while some business owners feel that they should wait until the market improves before they decide to sell, many more are taking the opportunity to sell their current business and invest in a new direction. In many cases, the reduced valuations on the market make this an ideal time to buy a business, especially a temporary staffing agency.  Economic upturns and downturns are part of a natural, unavoidable cycle. Unfortunately, we’ve all recently been reminded of that reality. However, no downturn can last forever. Soon, the economy will start to grow once more. Buying before the growth is apparent affords a business buyer the best opportunity to strike a good deal.

Many business sale transactions are still being completed, even though the terms and conditions of these deals may differ significantly from what they would have been, say, three years previously. Bank funding has dried up to a substantial degree, forcing both sellers and buyers to resort to deferred payment options such as seller financing. In this situation, many buyers have also begun utilizing the services of business intermediaries who can find the good opportunities and understand how to structure a win/win arrangement for the buyer and seller.  As it turns out, this economic environment can be very advantageous for any buyer who is interested in a temporary staffing agency. Sellers realize that their options are limited and that if they do not sell according to a reasonable buyer’s terms, there are many other business owners who will.

The current market presents great opportunities for entrepreneurs and acquisitive companies who understand that this just might be the best time to buy a temporary staffing agency in the next decade.

While the market is ripe for buyers who wish to invest in temporary staffing firm, it is definitely not a good choice for those who have absolutely no experience in temporary staffing.  No matter how good the deal may seem on paper, without solid expertise in operations and marketing, the probability of success is low. Temporary staffing is all about day to day execution, requiring a sense of urgency, efficiency, and resourcefulness that comes from experience.

A key qualification in this industry is being able to effectively deal with people and match them with a set of both technical and cultural customer needs.  The success of a temporary staffing agency is dependent on the expertise of the people working for it. If the buyer does not know how to handle the core employees and how to effectively motivate them, the expected returns can never be realized. If the buyer has no idea how to go about this, they would be well advised to pursue another opportunity. A temporary staffing agency is a place where the abilities to coach, motivate and evaluate people are the key drivers of success. The main asset of the “temping” agency is the talent and dedication of its staff. This is why it is so difficult to carry out the business valuation of a temporary staffing agency in concrete terms. The buyer is, to put it simply, buying people, and before the deal is closed, the entire business must be evaluated thoroughly before funds are committed.

Make sure you retain an advisor who understands how to maximize your opportunity to succeed whether you are selling or buying a business.

Edward Valaitis, CBI – The Certified Business Intermediary designation is your assurance of the highest level of training, expertise and integrity in the business intermediary profession. Mr. Valaitis has more than 25 years of experience building, managing, and leading commercial lending, CPA and consulting firms. Merger and Acquisition services provided throughout Florida. 800.975.3198  ed@marketchief.com    www.marketchief.com

As we begin the holiday weekend I thought this was a great time to reflect on some pearls of business wisdom and a little humor from business brokerage industry guru Tom West.

  • “The first offer is almost always the best one!”
  • “The real selling price is half-way between what the seller thinks it’s worth and what the buyer thinks it is.”
  • “The figure the seller provides for annual sales is usually the best year the business hador even the figure the seller thinks the business is capable of doing.”
  • “The profit the business can make is what the seller dreamed up in his or her wildest dream.”
  • “It’s true that 90 percent of buyers will buy something other than what they first were interested in.”
  • “If the business buyer’s wife is opposed to her husband
    buying a business, there will be no deal. The reverse is not true, but a wife will buy a business regardless of her husband’s opinion.”
  • “Only one out of 12 to 15 interested potential buyers will result  in a sale.”
  • “Every business sale falls apart at least twice before it closes.”

I’ve added a few tips on the subject of selling your business to increase your profits and joy in your life.

  • To win big, sell your business long before you need to.
  • What you invested or paid for it is a sunk cost and has no bearing positive or negative on value.
  • Remember it’s not just price, but terms that make a good deal.
  • You can replace money, but you cannot replace time.  Choose wisely.
  • Understand the difference between what you want and what you need.
  • Hope is not a strategy so take action.

Edward Valaitis, CBI – The Certified Business Intermediary designation is your assurance of the highest level of training, expertise and integrity in the business intermediary profession. Mr. Valaitis has more than 25 years of experience building, managing, and leading commercial lending, CPA and consulting firms. Merger and Acquisition services provided throughout Florida. 800.975.3198  ed@marketchief.com    www.marketchief.com

If you’re considering selling your company, make one last investment before you place the company on the market. Take the time to prepare and groom the company for sale.

Common activities include organizing the facilities (inside and out), reducing customer concentration, securing key employees, write-off bad inventory/receivables, re-negotiating vendor contracts, secure solid facility lease and most importantly cleaning up the company’s Income Statement.

All of this may take anywhere from one to two years, but it’s worth it. A well-organized company and clean set of Tax Returns for several years showing strong profits will significantly improve the value of a company. Don’t let increased taxes be an excuse that stops you! The increase in business value resulting from your time and effort in preparing the company for sale will significantly outweigh any taxes you’ll pay.

Once in a lifetime opportunity to own a $1 million + revenue gourmet restaurant and lodge on a Florida river minutes from Gulf of Mexico. Historic property where former presidents have dined. Reputation for serving scrumptious seafood, steaks and ribs. A fisherman’s paradise, with boat docks for restaurant and lodge guests. Plenty of opportunity to expand and grow this quality restaurant and Inn. Offered at $2.9 million for the 2 profitable businesses and waterfront real estate. Owner is retiring.

Edward Valaitis, CBI – A Certified Business Intermediary is your assurance of the highest level of training, skills and ethics in the business intermediary profession. Mr. Valaitis has more than 25 years of experience building, managing, and leading commercial lending, accounting and consulting firms. Merger and Acquisition services provided throughout Florida. 800.975.3198 ed@marketchief.com http://www.marketchief.com

It is not unusual for accountants, attorneys and tax advisors to be deal killers.  Their training and core competency is to protect and advise their clients about minimizing financial, legal, and tax risks. They don’t want to give risky advice, such as encouraging you to accept an offer, and possibly lose a customer or generate ill will if something goes wrong with the deal. The safe answer is
always no. The “right” answer may be yes or it may be no.

Selling or buying a business does come with significant risk. It is therefore not unusual for an attorney, accountant or tax advisor to offer conservative advice.  If both the buyer and seller receive overly conservative advice there is a real risk the “deal gap” between the two sides will become a Grand Canyon.  Don’t let what may be the opportunity of a life time to buy a business or sell a business be destroyed by well-intended, but short-sighted advice that doesn’t meet your primary objective.

Bottom line: Let’s be clear a great accountant and/or attorney can be an indispensible part of your deal team, but make sure they are pragmatic and have significant business sales experience this is no time for amateurs.  It is important that your advisors are brought into the discussions at an early stage and have a complete grasp of the situation.  Make sure you have advisors who will give you balanced advice on how to achieve your primary goal, not just how to avoid every conceivable risk. No risk, no reward.

Edward Valaitis, CBI – A Certified Business Intermediary is your assurance of the highest level of training, technical skills and ethics in the business intermediary profession. Mr. Valaitis has more than 25 years of experience building, managing, and leading commercial lending, accounting and consulting firms. Raised in an entrepreneurial family he takes his responsibility seriously to help business owners realize their dreams and exit on their terms. Main Street and M&A services provided in Florida. 800.975.3198   www.marketchief.com