Just Closed–Printing Business in Salt Lake and Summit County. We just closed this excellent business with 2 locations. The Purchaser commented that “he was pleasantly surprised that the numbers on the profile matched the actual numbers on the books.” According to him, “that is not usually the case.” He has big plans for the Company and we look for good things from him! Congratulations!!

As a business owner you, at some time, will likely consider selling your business.  Some business owners consider this every day!  For others, it is only considered occasionally. Selling your business is an event that takes careful consideration since it can be one of the most important decisions you will make when you consider the amount of money involved.  Selling your business is often the largest financial decision you will make in your life.

The Sales Process. The first question that comes to mind is how to influence the sales process?  Selling a business will require the help of a M&A professional (usually for businesses with EBITDA over $1 million) or a business broker (for businesses under $1 million).  The reason I make this distinction is larger businesses require a slightly different skill-set and you will want to hire the professional to handle what could be the most important financial decision of your life.

The first thing to consider is you will want to optimize the cash flows of your business leading up to putting your business on the market. Minimize non-essential expenses. Ensure that capital expenditures support your growth model. Reduce working capital needs by addressing inventory, accounts receivable, and accounts payable.

Since businesses sell based on a multiple of EBITDA (earnings before taxes, interest, depreciation, and amortization) you will want to increase EBITDA as much as possible.

Managing your multiple. Since your multiple of EBITDA is so crucial to your selling price, you will want to define and carefully monitor future cash flows once you put your business on the market.  Make sure you have a strong management team in place.  Perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis of your business. They Purchaser will do this so it is a good idea for you to do it as well to be prepared for his questions.

Accuracy of information.  It is crucial for you to provide accurate information to your M&A Professional or Broker.  This may seem rudimentary, but do NOT lie to a potential buyer.  If you have issues or think of issues talk to your M&A Professional or Broker before hand to get his advice about how to handle problems before you market your business or before the buyer is informed about them.

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Rick J. Krebs – Business Sales Group

Rick brings a unique blend of sales, entrepreneurial, and financial experience to Business Sales Group.  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.

Park City Utah Named “The Best Town in America to Live”.

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.

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.

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.

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:

http://features.blogs.fortune.cnn.com/2013/05/21/actavis-the-latest-fortune-500-company-to-leave-the-u-s-for-tax-reasons/?mkt_tok=3RkMMJWWfF9wsRokuqzKZKXonjHpfsX56u0rWaazlMI/0ER3fOvrPUfGjI4ARcVgI%2BSLDwEYGJlv6SgFS7fDMapx0bgNUxY%3D