…..Just a couple of reasons you might consider. www.UTAHBIZsales.com
Author Archives: Rick Krebs, CPA - M&A Advisor
Expanded Drilling Utah
The Bureau of Land Management announced plans on Dec. 28, 2013 to allow the drilling of 5,750 new wells in Utah. To reduce the footprint of these wells, they plan to do directional drilling and multiple wells on one pad site. This is good news to the local economy of Duchesne and Uintah Counties. Drilling means jobs to local economies. According to the BLM director, this Utah’s BLM Director, Juan Palma said “the project achieves the right kind of balance.”
See the full article at by clicking here.
Park City Utah Named “The Best Town in America to Live”
We have known it for years, but Utah is a great place to live!! Recently our very own Park City was named the Best Town in America to live by Outside Magazine. According to the writer:
“There’s no better blend of small-town friendliness, absurdly easy access, and five-star culture than Park City…”
The business environment in Utah is friendly to business. Low taxes, cost of living, and a skilled workforce make Utah an excellent state to own or start a business.
Avoiding the Pitfalls of Selling a Business
As I’ve been in the Broker world for the past 3 years I’m amazed at how many people do not know who to call when they need to sell their business. Often people go to a reputable real estate agent to sell a business which can prove to be a huge mistake. Real estate agents are not necessarily the best people to use to sell a business because selling a business is VERY different than selling commercial or residential real estate in the following ways:
- Books and records are thoroughly examined when selling a business.
- Due Diligence is required for selling a business and is more intensive.
- Lease/landlord involved in selling a business, but not in real estate.
- Legal issues are more complex with a business.
- Earnest money is handled differently.
- Earnest money is generally fully-refundable when selling a business.
- Liability of the Sellers is different.
- Seller Training is done when selling a business and not real estate.
- Non-compete agreements are an integral part of selling a business but not real estate.
Because of these reasons, business owners can put themselves at risk by hiring the wrong professional. Common mistakes that I’ve seen are
- Using a residential real estate agent to sell a business when he/she does not have experience selling business.
- Using a commercial real estate agent who does not specialize in selling businesses or mergers and acquisions thinking all commercial agents can sell businesses.
- Putting up a sign at the business that it is for sale.
- Advertising the business for sale.
- Failure to screen buyers.
- Lack of experience selling businesses.
I’d like to elaborate on a couple of the above mistakes because they can be very costly. Putting up a sign that a business is for sale is like saying: “we are going out of business”. It can immediately cause sales to plummet. Customers do not want to do business with you and if they do, they want a discount. It also hurts morale of the employees because it instills uncertainty in their minds about their jobs.
So, how do you avoid the pitfalls mentioned above?
- Hire a professional Business Broker or Mergers and Acquisition Professional to sell your business.
- Ask for references and check references.
- Ask questions about the experience of the broker. Be specific and ask for specific examples of his/her experience selling businesses similar to yours.
- Read the Listing Contract carefully before signing. I would not recommend signing a Contract that has an automatic renewal clause in it. This can come back to haunt you.
- Ask for a 30 day notice to be let out of the contract if you are not happy with the service the Broker is providing
Selling a business is an important transaction and the bottom line is you want to hire the best person you can to help you or it will cost you money….sometimes a LOT of money.
Rick Krebs
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Rick is a Principal with Business Sales Group. He brings a unique blend of sales, entrepreneurial, and financial experience to every business he sells. He began his career as a CPA, working in Nevada and Utah where valuable financial experience was gained. He uses those skills every day. He graduated with a Master’s of Science Degree and Bachelor’s Degree from Utah State University. As a business owner he started Liberty Mortgage, a mortgage bank licensed in 23 states nationwide. He eventually sold the successful company to an investor from California. He has been helping people sell their businesses since July, 2010. During his first year as a business broker with BRC, he listed and sold more businesses than the entire office combined.
As a sale-side advisor for Mergers and Acquisitions transactions he brings a unique blend of financial, advisory, accounting, and management skills to the table helping sellers maneuver the intricate details of the deal through closing.
Recent Sales – 2 businesses sold!!!
Our Small Business Division has recently completed the sale of two excellent businesses: an Automotive Repair Business and an International Importer of Beauty Supplies including a retail store/salon. We congratulate the new owners and are looking forward to their success!
Buy a business….sell a business….Business Sales Group can get the job done!!
M&A Division completes sale of Oil Field Services Company
We are pleased to announce that our M&A division just completed the sale of an Oil Field Services Company. It was purchased by two Private Equity Groups from California. This transaction brings capital and expertise to the Oil Field Services Company which will catapult this great business forward in the next few years. The complexity and completion of this transaction required the expertise and collective thinking of M&A experts from across the US.
HIGH US TAX RATES HURT US BUSINESSES
I just came across an interesting article on how high US tax rates are hurting the US businesses. Ten percent of the fortune 500 companies have relocated their corporate headquarters to reduce tax burdens by as much as 50%. I’m just wondering when Washington will realize that higher taxes hurt business?
See the interesting article below:
HOW TO PREPARE FOR A TOUR WITH A POTENTIAL BUYER
We often have questions from Sellers about what to do and how to handle a meeting with a potential buyer. This article is to help Sellers prepare for meeting a Buyer for the first time.
SITE PREPARATION
This may seem obvious, but it is important and needs to be mentioned. The saying that first impressions are lasting impressions is true. You only have one chance to make a first impression so do everything you can to make it a lasting impression. Make an assessment of where you will be meeting and then take steps to ensure that it is tidy and clean. Having the janitorial staff make an extra stop the day before the meeting is a good idea. If you own the building then make a call to your landscaper/groundskeeper and have him tidy up the outside of the building and clean up any trash that may be around. If you will be meeting in an office then clean that office. Remove the clutter from you desk; dust and organized the files that have been sitting around for a while. All of these things will help make a good first impression and lasting impression on the Buyer’s mind which is what you want to do.
DRESS
On the day of the tour you will want to dress as you normally dress when you go to work. Make sure your clothes are clean and without holes if your business is more casual. If your business requires business attire, then wear your best suit, shirt and tie. As a broker, I will prep the Buyer as to how he/she should dress to match the occasion. Believe it or not, the Buyer’s also ask me how they should dress. We try to match Buyer with Seller so both parties feel comfortable.
WHAT TO SAY
- Be natural and express the passion you have for the business.
- Highlight the good things about your business and what you do.
- Listen to the Buyer and do not talk over him/her. The conversation should be natural and not rushed.
WHAT NOT TO SAY
- Don’t point out all of the flaws of your business. Highlight the positive. Don’t elaborate on all of the reasons you are selling the business and how much you don’t like your business. There is a difference between being straightforward and being real drag. Straightforward is find, being a real drag is not.
- DO NOT LIE. Buyer’s will sniff out a lie and be onto the next business in the blink of an eye. If you do not feel comfortable telling the Seller a potentially bad piece of information then defer to the Broker.
- Answer their questions but don’t answer the questions they don’t ask. Sometimes Sellers will go on and on with an answer to a question they think is important but that Buyer did not ask. Once you have answered the Buyer’s question then stop. Let them ask another question. Don’t feel the need to blabber on and on.
- Do not talk about the terms of the deal without your Broker. You hire a Broker to represent you so let him/her do his job. You will be far better off and get more money for your business by using your Broker to handle the negotiation.
WHAT TO DO IF YOU GET A QUESTION YOU DON’T WANT TO ANSWER?
Sometimes we get a Buyer who asks a question that the Seller doesn’t want to answer. For instance: “What is the name of your top customer?” This information is proprietory and you as a Seller don’t want to divulge it. If this happens then defer to the Broker. You could say something like: “You are going to have to talk to my Broker about that”. You may also turn to your Broker and say: “What do you think about that?” This is another way of saying: HELP!
WEB SITE AND SOCIAL MEDIA
Take a minute before the tour to go to your web-site and make sure it is working properly and everything is updated. Buyer’s will do due diligence prior to the tour and going to your web-site is very common. Also, go to your Facebook account, Linked In account and any other social media account you have or your business has. Look at each of these and update the information if needed and remove anything that may not be appropriate. I recently had a deal that did not go through because one party did not have a web-site that was working. For weeks the site showed that it was under construction and the other party did not want to deal with it. He thought it was a bad sign as a representation of the Company.
KEEP THE MEETING TO AN HOUR OR TWO
You want the Buyer to see your business and have an opportunity to meet you, but you do not want to make it an all-day meeting. You have work to do and the Buyer needs to assimilate the information he receives. If you give him/her too much information it is the same as giving a person a drink from a fire hydrant—they can’t handle it.
CONFIDENTIALITY
I prep my Buyers ahead of time as to the confidential nature of the tour. Buyer’s should know that they are not to ask questions in front of the staff. The meeting should be held in a place that is without interuption and private. If this is not possible, then have the meeting at a place other than the business.
QUESTIONS FOR THE BUYER
It is a good idea for a Seller to have questions for a Buyer as well. These may include:
- How does the Buyer plan to fund the purchase?
- Does the Buyer plan to relocate to run the business or will he/she be an absentee owner?
- What is the Buyer’s experience?
- What is the Buyer’s motivation for purchasing?
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By Rick Krebs, Business Broker
Business Sales Group
Utah ranked #1 business-friendly state 3 years in a row.
Utah has been ranked the Number One state in America for business…3 years in a ROW!!
See the full article at
We have all know that Utah is one great place to live and do business. Now we are getting national attention. If you are looking to buy or sell a business….Utah is the right place.
See related articles in Salt Lake Tribune and Deseret News.
Rick Krebs - Business Broker / M&A Professional 