Even if you are yet to consider to sell your business, every business owner should know these three things. Know the answers! What is my business worth? Will my business be ready to sell when I am? How can I get the most for my business?

1. Legacy Businesses Your business is an income generating legacy Its legacy reflects your hard work, philosophy and character It is unique to every other business The strength of that legacy impacts the return you will get for your business

2. Know the answers! What is my business worth? Will my business be ready to sell when I am? How can I get the most for my business?

3. What Is the Value of Your Business? Fair Market Value The hypothetical price at which a transaction occurs between a: Willing buyer Willing seller Both reasonably informed Neither acting under any compulsion Both of whom have the financial capacity to engage in the transaction

4. SANITY test In the final analysis, the final price of a business must pass the SANITY test - Must cover debt service - Must provide a reasonable income for the buyer - Must allow for working capital fluctuations Turnaround Opportunities – Businesses with a negative cash flow may not pass the sanity test but may be a good acquisition candidate for the right buyer. While the Broker assists the seller in finding the best method to price a business, the final price and terms are determined by the seller.

5. What Buyers Look For Provable books and records Reasonable price Leverage and terms Living wage FF&E (current FMV, not overstated) Appearance Lease (reasonable term and cost) Training (by seller for 1–6 months) Covenant not to compete Good reason for sale Time is of the essence No last-minute surprises

6. What do businesses sell for?

7. Sold Price to Sales

8. Sold Price to Adjusted Net

9. Get the Most for Your Business There are dozens of benchmarks to consider when preparing to sell your business for the highest selling price Act now, even if you don’t plan to sell your business at this time Here are a few examples

10. Earnings Show every dollar Example Assume $1,000 not recorded Assume 40% tax bracket (no help from CPA) Assume business sells at 2.5 times net profit Save $400 in taxes each year Loose $2,500 when your business sells Tax at least six+ years to make it worth while

11. Sales Trend Up Keep the growth effort up and sell before your company feels any “burn out”.

12. Operating Records Get it out of your head and on to paper. Make it a system like Ms. Fields Cookies.

13. Customer Data Base Your customers are a special part of your business that makes it worth buying versus starting a new company Keep it updated, detailed and very confidential

14. The Brand, not the Owner Get people to fall in love with your company and note you (the owner). Ray Kroc bought McDonald’s and kept the name – the brand became valuable

15. Key Employee Retention Have a system that will help key people stay around after you are gone

16. Prepare for the Unexpected Have insurance and other tools for life’s unexpected curve balls

17. Know Where You Stand Update your business valuation each year and prove you are growing value

18. Position for the Future Keep your company ready for the marketplace change (Kodak went digital, Apple went IPod…) Look for signs

19. The Golden Rule Stand in an Investor’s Shoes - Try to objectively and critically think as if you were outside looking to buy

20. Impressions Mean a Lot Freshen your look and style without breaking the bank. It matters.

21. Maintain Confidentiality It is almost always best to not let your employees, customers, and vendors know your business is for sale

22. Reach the Masses The best price is reached when a wide range of buyers can consider your business. The more potential buyers that know, the better chance of getting your price

23. Race to the Finish Line No sale is done ‘til its done So keep the business going strong until the sale is complete Lance Armstrong

24. Patience It can take a while to sell your business (from weeks to over a year)

25. Be Proud Nearly 50% of Americans desire to own their own business Fewer than 5% of shopper ever buy In this great and free country, it is a shame not to pursue one’s dreams You are one of the few

26. Thank You If you ever care to contact us, our conversations and transactions will be completely confidential Check us on the web at BuyBizUSA.com Call us at 813 571 7700 Thank you