Preparing to Sell Your Business

Thinking about selling your business? If so, take the following steps now to ensure that you get the most money possible for all your hard work and make the process as swift and painless as possible.

1. Keep good records: This is the first thing potential buyers and their advisors will want to see when buying or valuing your business. With today’s computer technologies and programs, you have no excuse not to have your business records completely automated. This way you can produce up-to-the-minute profit and loss statements and a current balance sheet. Any bank considering financing the acquisition of your business will look at three years of earnings to decide how much it can lend to the buyer. If the buyer cannot get enough money from a bank, you have two choices: Finance the sale yourself, or sell for less. Keep good records and you’ll be more likely to sell for a higher price.
2. Grow earnings: Up trends are very important. A buyer will value your business’s future earnings based on past results. If the numbers on the chart are rising, future earnings will have a growth trend, too, and the value will be higher. To grow earnings, implement a new marketing and advertising plan, hire those new salespeople, and get revenue moving. Don’t wait to sell when your business is tailing off.
3. Deposit all cash in the bank: Most buyers place a value only on revenue they can see. That means what’s in the bank and on the tax return. Yes, you will pay more in taxes today doing so, but you will get a multiple of that cash back when you sell.
4. Separate fringe benefits from real expenses: Only run legitimate expenses through the business. Rather than having to explain all the personal expenses you are paying through the business, just clean it up. A bank will not recognize these personal add-backs when considering a loan.
5. Put proper management and staff in place: A business run by family members will be difficult to transition to a new owner. Your best bet is to phase the family out and keep or hire staff that will stay on after the sale. Also, no buyer wants to work 60-plus hours a week. If you work that much, hire and train a manager you can delegate to before you try to sell.
6. Have room for growth: If your business facility is cramped or the business is limited by the current location and equipment, that ceiling of revenue and profit will be reflected in your valuation. Either sell before your business gets to this point, or buy needed equipment and move to a larger location before selling.
7. Keep your facility in good repair: Your business’s value will be higher if everything works and looks nice. Buyers will want everything in working order at the day of closing, even that old piece of equipment you don’t use anymore.
8. Control, manage, and document inventory: Don’t play with inventory as a tax-savings strategy. It will catch up with you someday, and you could face large tax consequences. Plus, you need to keep your inventory lean and moving. If it’s old, donate it or mark it down. Your balance sheet will shine, and so will your business ratios.

Once you’ve prepared your business for sale, you’ll need to decide how to sell the business and how to close the deal.

List Of Small Business Ideas – How To Start A Small Business

Are you so incredibly passionate to start a business and are looking for a list of small business ideas to answer the million dollar question, “What business should I start?” Well, you’ve come to the right place…

MySmallBiz.com helps thousands of people every day – people just like you – come up with profitable small business ideas and begin to learn how to start a small business.

Whether you’re looking for home business ideas, internet and online business ideas, or even looking for franchises to buy, we’re here to help.

If you’re like most of our visitors, you were born with an entrepreneurial flame. An unquenchable thirst to be in business for yourself. You’ve dreamed of learning how to start a small business forever…working for yourself…building something that matters…and making some money!

What are your fears? What’s holding you back?

But yet, something has kept you held back…

• Maybe it’s a fear of failure. The fear of not succeeding has simply paralyzed you. A lack of confidence has “frozen” any chance of your getting started.
• Or maybe it’s a lack of capital. Not having enough money to fund a startup or sustain one’s family during the beginning phases of the business are concerns that keep many of us locked behind our desk in a nine-to-five grind. Or worse.
• Or maybe you just don’t know where to start – you have limited business ideas. Believe it or not, many potential business owners never get started because they have trouble coming up with a list of small business ideas. They lack that special creative spark that ignites the entrepreneurial flame.

While all three of the above startup concerns are valid (and need to all be addressed), the purpose of this website is to help you with the last point – coming up with that elusive list of profitable small business ideas.

You see, once you find the right business idea, the rest of your fears – the obstacles standing in your way – become much easier to conquer.

The Right List Of Small Business Ideas

Learning how to start a small business and growing it into a sustainable venture isn’t easy. Sure, the scam artists out there (and there are thousands) want you to believe you can make money without the blink of an eye. That’s pure B.S. It’s hard work. But you’re absolutely up for it.

This is your vision and some honest elbow grease is a small price to pay for reaching your lifelong dream. You know that – and you’re up for it.

Okay – back to the list of small business ideas and what’s holding you back. Based on our experience and plenty of honest feedback from our visitors, it’s the business idea that serves as the fulcrum to help tilt your entrepreneurial teeter totter in the right direction.

Breaking Through – Achieving Business Success

Have you ever surprised yourself by accomplishing something you didn’t think you could? Maybe the success was the outcome of sheer effort. Or did it almost seem effortless – like you were guided to success by an invisible coach who calmed all of your fears and doubts and allowed you to focus on the one thing that mattered…your success.

What we’re trying to say is that if you’re passionate about your small business ideas, there’s very little that can stand in your way. It’s the passion you have for your business that will help you conquer your fears and finally learn how to start a small business that you always wanted.

This is where we can help. The MySmallBiz.com site lists hundreds of categorized small business ideas to help you brainstorm and research what business you want to start. That’s pretty much all we do here…write about the best small business ideas to help you brainstorm the concept that gets you excited and most importantly – gets you started.

How To Use The MySmallBiz.com Site

Our list of small business ideas won’t automatically make you rich. Only you can do that. We’re just trying to help you get your creative juices flowing. Find an idea you like and make it your own. Shape it. Sculpt it. Mold it. Find your niche. To succeed in small business, you must find your niche.

Brainstorm with our list of small business ideas, find a concept and think about ways that you can fine-tune the business to exactly meet the needs of your local market. There’s no cookie cutter approach here. One size does not fit all in small business. If you can’t differentiate your business from the competition, you can surely bet that your prospective customers can’t either.

There are two good ways to get started using the site. You can click on one of our categories of small business ideas such as home business ideas, internet business ideas, or low cost business ideas. You can then browse and read about the business ideas under each category. Or you can use our new Biz Finder utility that allows you to select multiple categories for your research and create your own list of hot new business ideas.

The Inception of a Business Idea

Every successful business starts with an idea. If you haven’t been immediately struck with inspiration, then coming up with a concept for your small business can be difficult and frustrating. However, there are some tried and tested methods you could use to come up with an idea that suits you.

Firstly, you could try doing some research into current start-up trends. The UK government publishes statistics on start-up types as part of their Small Business Service. Mintel also conducts market research on the growth of different sectors. It is generally advisable to enter a market sector that is either already well-established or is growing rapidly. Although these sectors will be crowded, at least there is a guaranteed market there for you to fight for a share.

Some entrepreneurs find it easier to look for gaps in a market and attempt to fill them. For example, if you learn about products that are doing well in other countries then you may be able to adapt them for sale here if no-one else is doing it. Other variables such as the location of your business and its opening hours could result in a business opportunity. If you can find a gap in the market that there is a genuine demand for, you could be on to a winner.

Other entrepreneurs have found business success simply by taking old ideas and breathing new life into them. Try to work out why a previously popular idea has been on the decline and then come up with a way of making it popular again. A small business can be very successful just by taking an existing idea and doing it better or differently to everyone else.

The Internet is a great way of modernising an existing concept. Many successful web enterprises are based on very basic ideas that have simply been adjusted to make the most of technology. The Internet can add extra value to many business ideas, either because of the 24/7 convenience it provides or by how it simplifies things that were previously time-consuming.

If you are determined to invent something unique, look for problems that require a solution. New inventions can be a legal minefield involving copyrights and patents, but some of the best business ideas are often things that are so simple it is hard to believe no-one else thought of it first.

Top 5 Small Business Tips for the Holidays

1. The Xmas period is an excellent excuse to conduct marketing activities and contact the people who have purchased from you in the past.

2. It is important to be prepared for the festive season well in advance. If you know that deliveries will be affected, stock up on what you expect to need.

3. If you are relying on the postal service to deliver items to customers for you over the festive period, take into account the increased volume of deliveries and the potential for adverse weather conditions.

4. Make sure that you are available for urgent enquiries over the Xmas period, even if your business is closed. Getting a mobile phone that can handle email is a good way of doing this.

5. Have a Plan B in case things unexpectedly go wrong. It doesn’t matter how well you plan, things can go wrong extremely quickly over the holidays

Top 5 Tips for Reducing Small Business Debt for the New Year

1. Make sure that you stick to a strict budget from now on, even if it has been difficult in the past. Accurate estimates of your monthly payments and expenditures are now essential.

2. Whenever possible, choose the cheap option over luxury. Small things, such as preparing a packed lunch rather than eating out, will all add up over the long term.

3. Switch to using cash on a daily basis rather than credit cards. It is too easy to just stick things on a card and add to a mountain of unpaid debt.

4. Alway pay off your highest interest credit cards first. Try to reduce all of you cards to below 50% of the limit or else your credit score could be affected.

5. Look for additional work outside of your small business. Unfortunately, sometimes the only way to get your business out of severe debt is to work two or more jobs.

What time is the right time for starting on your own?

You have a great idea; you have gone through several rounds of testing and validating your idea with a sample of your target customers. You have even sounded out your idea with the experienced bigwigs or maybe even with someone from a VC circle! But the thought of acting now [quitting your high paying job] gives you chills. Why? You start to make a list of things [reasons] why it is not a very good idea to go for it now and maybe go for it sometime later. The list of reasons would typically vary with the stage of life you are in. Many of the working professionals in India go through this bafflement and hence are unable to start on their own. There are two predominant stages, when one usually feels the entrepreneurial restlessness set-in, and hence holdups during these stages need to be understood. I have divided the type of reasons that would probably emerge based on one’s stage of life.

Stage 1: 10-13 years of work experience

[Age - early 30s]

Pending Housing Loan: You have recently bought a house towards which you are paying EMIs calculated on an average at the interest rate of 9%. That’s a big chunk of money if the outstanding loan amounts to 80% of the total cost of the house or an apartment. The cost usually hovers around 60-70 lacs for a luxury 3 bedroom apartment which the people of this age group would prefer given the needs of their families. This is usually the trend with this age group. The real estate cost can be much higher in cities like Mumbai.

Kids’ education: You have a family and your kid/kids are in school. You want to provide them with the best education and would want to send them to a school which can develop your child into a well-rounded confident adult. But then the school fees are very high and constitute a significant amount of outflow from your annual budget. Add to this the dire necessity of putting your child into as many extra-curricular activities as possible. All of these are expenses which cannot be ignored.

Spouse is a homemaker: When you entered the marital world you probably never imagined the extent of ensuing responsibilities. Your spouse stopped working as she had to raise the small kids.

Ever increasing inflation: It is tough to fight the ever increasing rate of inflation. No matter what the statistics say, the actual inflation faced by the people is way higher than published by the authorities. The rate of salary growth does not usually match the actual rate of inflation.

Provisioning for the future: You need to plan for the future also apart from meeting the current needs. Some of the obvious things are college education of the kids, your retirement plans and unforeseen medical expenses.

In this case a good practice would be to understand the financial outflows vis-à-vis the savings that you would have made. You will most probably understand the duration for which you can forgo any income. You should also do equally diligent financial planning for your start-up in order to understand the duration till when there will be no income. An ideal situation would be to develop a bootstrapping model for your venture. Read my article ‘Bootstrapping Mantra’ published earlier to understand this better.

Stage 2: 1-2 years of work-experience

[Age - mid to late 20s]:

You are fresh out of college and have some corporate experience. You may not have yet gotten into the above scenario. But because of short work-experience you may not have yet saved enough or generated wealth enough to both invest in your start-up as well as think of taking up further responsibilities of marriage etc. Also, if you get into entrepreneurship early, and if the venture does not succeed, you are risking your career, since getting back to job with an entrepreneurial tag is very tough. Moreover you may find yourself in a situation where you would have to lose on number of years and start from where you had left.

As suggested above, here too, it will be an ideal situation if you chalk out a plan to bootstrap your venture at least till the time you think it is appropriate to approach for external funding.

The above analysis is based on a strong assumption that people considering entrepreneurial way do not have the buffer of significant inherited wealth or assets. In both the cases above, the person has to make a trade-off. In either case if there are better incubation facilities and small investor networks with proper mentorship, then the entrepreneurship can be a preferred career by many.

I’d like to invite here suggestions and opinions from the reader community, as every experience and situation is different. No matter how many permutations and combinations are discussed, no two situations will ever be same for this topic. The more the opinions are shared the more solutions will surface.