It’s Time to Exit. Are you Ready?
Thinking about whether or not you are ready to exit is an important question. It’s something that every business owner will have to address at some point. Importantly, you don’t want to wait until the 11th hour to prepare to sell your business. There are far too many pieces in this particular puzzle to wait until the last minute. You’ll want to begin the process sooner by asking yourself some key questions.
Determining Value
First, you’ll need to determine the actual value of your business. It is a harsh truth, but what you think your business is worth and what the market feels that it is worth may be two very different things.
This point serves to underscore the importance of working with a business broker or M&A advisor early in the process. An experienced broker knows how to go about determining a price that will generate interest and seem fair. Remember that at the end of the day, it will be the marketplace that determines the value of your business, but working with a seasoned professional is an excellent way to match your offering price with what the market will ultimately bear.
Going Within
Secondly, you’ll want to consider whether or not you truly want to sell. It is not uncommon for business owners to begin the process of selling their business only to realize a few hard facts. Wanting to sell and the time being right to sell are often two different things.
Upon placing your business on the market for sale, you may learn that you’re not emotionally or financially ready. If this happens to you, consider it a learning experience that will serve you well down the line.
Get Your Ducks in a Row
If you have done a financial assessment, a little soul searching and have begun working with a business broker or M&A advisor to determine that now is a good time to sell your business, then there are several steps you’ll need to take. You can be sure that any serious prospective buyer will want a good deal of information regarding your company.
At the top of the list of items potential buyers will want to see are three years of profit and loss statements as well as federal income tax returns for the business. Other important documents ranging from lease and lease related documents, lists of loans against the business and a copy of a franchise agreement, when applicable, are all additional documents that you will need to provide. You should also have a list of fixtures and equipment, copies of equipment leases, lists of fixtures and equipment, and an approximate amount of inventory on hand. A failure to not have this information organized and ready to present at a moment’s notice could be a costly mistake.
Working with professionals, such as accountants, lawyers, and brokers, is a savvy move. Owning and operating a business can be a complex process, and the same holds true for selling a business. Investing the time to seek out experienced and professional advice is the first step in selling your business.
Copyright: Business Brokerage Press, Inc.
Read More
What to Know About Businesses for Sale in Soho
Want to understand how businesses for sale in a given New York City neighborhood are faring? Our New York Business Insights series takes a deep dive in to each of the zip codes in Manhattan to understand the opportunities and risks they present.
The Business Environment in 10012 (Soho and Noho)
verall, the business environment in 10012 is down, with the number of establishments having a yearly growth rate of about -0.55% per year from 2012 through 2017 (the last year of publicly available US Census data). In absolute terms, the estimated number of business establishments in the 10012 zip code was reported to stand at 2,871 as of 2017. As is to be expected from a falling count of business establishments, the total number of employees in 10012 is also down — averaging a drop of about 7.04% per year over the period observed. Given its boundaries, rangebound traders may find it compelling to entertain selling, as we are nearer to the top of the range. Interestingly, the decline in establishments and employees in 10012 is actually resulting in higher average salaries: the average salary in 10012 has been increasing by about 5.38% annually. Is this suggesting that business activity is declining, and establishments are favoring preserving higher wage employees? Incidentally, the average salary residents in this zip code is about $68,809 — which puts it in the top 2% of New York City zip codes.
A Look at the Demographics of Noho & Soho
Looking at the most recently available tax returns from the IRS (2017), we see that there were 12,540 filed from the 10012 zipcode, giving it more filed tax returns than 85.78% of the New York City zip codes we’re observing. In other words, this is one of the more densely populated areas of New York City, and thus a potentially interesting location for any business that thrives on a large local population. Also of note is that less than 2% of tax filters reported an unemployment claim, further supporting the notion that the zip code is home to a substantial amount of wealth, even by New York City standards. The chart below illustrates some other demographic attributes of the 10012 zip code.
Have additional questions on buying or selling a business in 10012? We’ll be happy to help you as best as we can. Just drop us a line.
Read More
Is Stuyvesant Park an Opportunity for Small Businesses?
VNB Brokers is developing a series of blog posts centered on specific neighborhoods in New York City to help buyers and sellers of small businesses alike understand the risks and opportunities in the various regions within the city. For other posts in this set, visit the New York Business Insights section of our web site.
The Business Environment in 10010 (Stuyvesant Park)
Overall, the business environment in 10010 is down, with the number of establishments having a yearly growth rate of about -0.56% per year from 2012 through 2017 (the last year of publicly available US Census data). In absolute terms, the estimated number of business establishments in the 10010 zip code was reported to stand at 2,983 as of 2017. Interestingly, though, the decline in establishment is NOT coupled with a drop in employee count; employee count in the zip code is actually growing by about 0.84% annually. A drop in establishment count coupled with an increase in total employees suggests the potential for some kind of industry consolidation to have occurred. The decline in establishments and the rise in employees is met with a rise in average salary, as salaries have been rising by about 0.24% annually. Falling business establishment count, coupled with rising employee and salary count, may suggest mature industries are finding their home in 10010, and thus a degree of consolidation and stability is occurring in the area.
As for which industries are growing quickly in 10010, Caterers may be worth looking into. There are only about 5 caterers in the zip code, but the number has been growing annually — and caterers are also a growing industry in the neighboring zip code of 10009. For entrepreneurs seeking trends, this may be something worth digging deeper into.
A Look at the Demographics of 10010
Looking at the most recently available tax returns from the IRS (2017), we see that there were 17,540 filings from the 10010 zipcode, giving it more filed tax returns than 92.62% of the New York City zip codes we’re observing. If population age is a factor for businesses you’re buying or selling, note that in 10010, the 65+ age group makes up about 20.81% of the tax return filers — in other words, this is a demographic populated by senior citizens. Moreover, about 20% of returns report a mortgage, so Stuyvesant Park has a reasonable representation of landlords/homeowners in its confines.
Here’s a chart summarizing the key demographic attributes of 10010:
Have additional questions on buying or selling a business in 10010? We’ll be happy to help you as best as we can. Just drop us a line.
Automated Insights by SixJupiter
Read More
What You Need to Know About the Golden Age of Business Acquisitions
Business acquisitions are red hot, and all kinds of businesses are being snapped up. Some people are under the impression that only large businesses are being acquired, but this is far from the reality of the situation. It would surprise many to learn that so much of the “action” is, in fact, small businesses buying other small businesses.
In his Forbes article, “Take Advantage of the Golden Age of Business Acquisitions,” author Christopher Hurn explores the true state of the “acquisitions game.” His conclusions are quite interesting. In Hurn’s opinion, there has never been a more active time in the realm of business acquisitions.
If you own a business and are looking to grow, then you may want to consider acquiring a competitor in order to consolidate the market. As Hurn points out, there are many reasons that you might want to consider acquiring a business in addition to consolidating the market. These reasons include acquiring a new product or service, acquiring a competitor that has superior technology or even identifying a business that you believe is primed for substantial growth.
Yet, there are other forces at work that are combining to make this moment the “golden age of acquisitions.” At the top of the list of why now is a good time to investigate acquiring a business is demographics. According to a 2019 study by Guidant Financial and Lending Club, a whopping 57% of small business owners are over the age of 50. The California Association of Business Brokers has concluded that over the next 20 years about $10 trillion worth of assets will change hands. A mind-blowing 12 million businesses could come under new ownership in just the next two decades! As Hurn phrased it, “The stars are aligning for the Golden Age of business acquisitions.”
This all points to the fact that now is the time to begin understanding what kind of acquisition would best help your business grow. Hurn believes that turning to the Small Business Administration in this climate of rapid acquisition is a savvy move.
In particular, he points to the 7(a) program and a host of reasons that the SBA can benefit small businesses. Since the SBA lowered equity injection requirements, it is now possible to finance a staggering 90% of business acquisition deals with loan terms up to 25 years and lower monthly payments. Additionally, the SBA 7(a) program can be used for a variety of purposes ranging from expanding or purchasing an existing business to refinancing existing business debt.
Hurn truly does have an important insight. Baby Boomers will retire by the millions, and most of them will be looking to sell their businesses. With 12 million businesses scheduled to change hands in just the next 20 years, now is a highly unique time not only in the history of acquisitions but also in the history of business.
Business brokers understand what is involved in working with the SBA and acquisitions. A seasoned business broker can point you towards opportunities that you may have never realized existed.
Copyright: Business Brokerage Press, Inc.
Read More
What’s it Like for Small Businesses in 10009? (East Village)
VNB Brokers is developing a series of blog posts taking a deep dive into the opportunities available for small businesses in each of New York City’s inner neighborhoods. To help buyers and sellers of small businesses alike understand the risks and opportunities in businesses for sale throughout New York City, VNB Brokers is creating a series of blog posts exploring opportunities in the various zip codes of New York City. For other posts in this set, visit the New York Business Insights section of our web site.
The Business Landscape in 10009
The total number of business establishments in 10009 have been averaging a yearly growth rate of about 1% annually over the past year (as reported by US Census data). In absolute terms, the estimated number of business establishments in the 10009 zip code was reported to stand at 1,236 as of 2017. As you might expect to be the case when business establishment count is rising, the total number of employees in 10009 is also up — averaging an annual growth rate of about 2.15% over the period observed. To complete the trifecta is the growth in average salary: the current average salary in 10009 is estimated to be $45,354, and has enjoyed a growth rate of approximately 2.43% over the past 5 years. Growing establishment counts, employee counts, and average salaries suggests the business climate for 10009 is pretty hot.
In terms of the specific industries that are growing in 10009, Caterers is one that seems to fit that bill. It now has about 7 establishments in the zip code, and has been growing at about 6.96% per year. For those interested in riding trends, that may be something to watch.
A Look at the Demographics of 10009
First, it should be noted that this is one of the most populous zip codes in New York, as it reports more IRS filings than 99% of other zip codes in the city. As such, if your business thrives on a locally dense population, 10009 may be an interesting geography for you. On a proportional basis, this zip code is wealthy enough to have a sizable percentage of its population saving for retirement: the proportion of IRS returns from 10009 with an individual retirement account (IRA) contribution is greater than that reported by over 90% of IRS returns. But while 10009 is good, relatively speaking, at saving for retirement, this population does not have the attributes typically associated with homeownership; specifically, 80% of zip codes in New York City have more individuals with mortgages than 10009 has. If this fact can be extrapolated to suggest the population of homeowners is relatively low, that may be an interesting point to consider for businesses that are sensitive to the degree of transience in its local population.
Here’s a chart summarizing the key demographic attributes of 10009:
Have additional questions on buying or selling a business in 10009? We’ll be happy to help you as best as we can. Just drop us a line.
Automated Insights from SixJupiter
Read More
The Business Climate is Hot in Tribeca
VNB Brokers is developing a series of blog posts taking a deep dive into the opportunities available for small businesses in each of New York City’s inner neighborhoods. To help buyers and sellers of small businesses alike understand the risks and opportunities in businesses for sale throughout New York City, VNB Brokers is creating a series of blog posts exploring opportunities in the various zip codes of New York City. For other posts in this set, visit the New York Business Insights section of our web site.
The Business Landscape in Tribeca (10007)
Overall, the business environment in the 10007 zip code (Tribeca) is up, with the number of establishments having a yearly growth rate of about 1.7% per year from 2012 through 2017 (the last year of publicly available US Census data). In absolute terms, the estimated number of business establishments in the 10007 zip code was reported to stand at 1,523 as of 2017. As is to be expected from a growing count of business establishments, the total number of employees in 10007 is also up — averaging an annual growth rate of about 7.05% over the 6 year period observed. To complete the trifecta is the growth in average salary: the current average salary in 10007 is estimated to be $102,671, and has enjoyed an annual growth rate of approximately 3.84% over the past 5 years. Growing establishment counts, employee counts, and average salaries suggests the business climate for 10007 is pretty hot.
As for which industries have an outsized presence in 10007, Lawyers may be worth looking into. There are about 370 law offices reported to be in Tribeca in 10007, though the number of offices has essentially remained flat over the past 6 years.
A Look at the Demographics of 10007
10007 is a wealthy enclave, even by New York City standards; it has a higher reported income on its tax returns than 98% of New York City zip codes, and total reported income from businesses in this zip code surpasses that of 96% of other Manhattan zip codes. This wealth appears to be running parallel to a growth in household size; the number of joint returns from 10007 is growing at 1.6% while the number of returns with dependents claimed is averaging nearly 2.0% annual growth compounded — a growth rate that surpasses 91% of other New York zip codes. In sum, if your business caters towards wealthy, growing households, Tribeca may be an opportunity for you — if the price is right, of course.