— August 14, 2018
According to Inc, 2017 was a record year for buying and selling small businesses and franchises. In 2017, the stock market rose 25%, giving both sellers and buyers the economic confidence to close deals and invigorate the business-for-sale market for years to come. According to the California Association of Business Brokers, retiring business owners are projected to sell $ 10 trillion in assets, held in more than 12 million privately owned businesses, over the next 20 years.
So when it comes to leveraging the latest trends in a hot business-for-sale market, smart sellers are using the latest technologies and business-transaction services to attract even the most risk-averse entrepreneurs. Meanwhile, business buyers are leveraging tools to calculate potential growth, cash flow, and drive lifetime value, making it easier than ever for buyers to identify a great deal when they see one. From managing transactions to transitioning business ownership, leveraging the latest trends may make the business-for-sale market your next best financial move.
Use accessible resources to understand the market
With a wealth of demographic and industry data available, smart business buyers are doing their research before entering a negotiation. Before considering purchasing a small business, research the age, gender, and income of the surrounding area, and whether local demographics are expected to shift, to determine if your target customer base is accessible. Conduct research to predict how economic forecasts might impact the business health, for better or for worse. Use online tools to identify close-proximity competition or equitable digital services in your space.
If you’re purchasing a franchise, look into Franchise Disclosure Documents (FDD) at national, regional, and local levels to determine if the franchises have been successful recently, and if they are on a track for future growth. For large franchises, buyers can also find data around market position, brand recognition, financial outlooks, and customer demographics.
Efficiently obtain and manage financials with digital tools
Online platforms are helping small businesses everywhere keep their financials and critical documentation in order. When buying a business, investors are looking at dozens of documents, including tax records, business activity statements (BAS), balance sheets, profit and loss statements, sales and supplier contracts, and more. If you’re a buyer dealing with a prospect that has disorganized financial records, request that they be moved to a digital format (verified by your legal associate) prior to your review. Whether that’s moving accounting records into QuickBooks or scanning legal documents into PDFs, leveraging online resources can help buyers easily and efficiently access, track, and compare important information.
Once you purchase a business, move your financials, contracts, and legal records online. Automated payroll systems, tax services, and mobile banking systems can help get your documentation organized, ensure reporting accuracy, and allow you to keep thorough track of your business.
Consider using technology to scale
Before buying a business, think about how it can adapt to a changing market. Innovative business buyers need to position their small business in the future of tech. For example, can your franchise partner with popular food delivery services like GrubHub, Postmates, or UberEats? Do you offer a service that could be transformed digitally, implementing anything from automating appointment bookings and scheduling to offering online consultations? Do you have merchandise that you could sell on an ecommerce site?
Research related services or technologies that would make the business experience better for your customer. Think about how you could expand your reach, or take a business in a fresh direction. Then, map out an implementation plan and price and find case studies for businesses that have used similar technologies to determine if it’s realistic.
Leverage online services to streamline your acquisition
There are online services for just about anything that has to do with your business. Finding the right online service provider or business with an online system can help streamline your transaction, lower your costs, and simplify administrative tasks. Do research to find the right online service for your needs and budget.
Third party brokers
Online business advertisers and broker services can list your business, connect you to qualified prospects, and help facilitate a deal at a lower cost than a legal broker. Additionally, you can find a lot of great experts insights about buying or selling your business to help you determine which industry is right for your interests and needs, give you expert financial tips, and much more – all without hefty brokerage advising fees.