fcbb-east-tennessee-262

Creating a Budget for Your Small Business

Thu, 21 Aug 2025 19:50:43 GMT

Why Every Small Business Needs a Budget

A budget is more than just numbers on a spreadsheet. It’s your financial roadmap. With it, you can:

Forecast income and expenses.

Spot cash flow gaps before they become crises.

Plan for growth and reinvestment.

Prove financial responsibility to lenders or investors.

Without one, small business owners often end up overspending, underestimating costs, or missing growth opportunities.

Step 1: Estimate Your Revenue

Start with your expected income. Look at past sales, market trends, and any new contracts or clients in the pipeline. Be realistic—if last year’s revenue was $250,000, don’t jump to $400,000 unless you’ve made changes that clearly support that growth.

Pro tip: Build in a conservative estimate. It’s better to be pleasantly surprised by extra revenue than caught short by missing your target.

Step 2: List Fixed and Variable Costs

Fixed costs stay the same each month (rent, insurance, salaries).

Variable costs change depending on activity (supplies, utilities, shipping).

Knowing both gives you a clear picture of what expenses are predictable and which can be adjusted when cash flow is tight.

Step 3: Don’t Forget Periodic Expenses

Some costs don’t show up monthly but still hit your bottom line—like annual software renewals, tax bills, or equipment upgrades. Build these into your budget so they don’t catch you off guard.

Step 4: Allocate for Savings and Emergencies

Even a small business should set aside funds for a rainy day. Whether it’s an unexpected repair, a slow sales season, or an investment opportunity, having cash reserves protects your business and your peace of mind.

Step 5: Monitor and Adjust Regularly

A budget isn’t a “set it and forget it” tool. Review it monthly:

Compare actual income and expenses to projections.

Adjust categories if you consistently overspend or underspend.

Use the insights to guide hiring, marketing, and investment decisions.

Tools to Make Budgeting Easier

You don’t need fancy accounting software to start. Tools like QuickBooks, Xero, or even a well-structured Excel sheet can help you track income and expenses effectively. The key is consistency—pick one system and stick with it.

Final Thoughts

Creating a budget may feel overwhelming at first, but it’s one of the most powerful tools you can give your business. Think of it as both a shield and a compass: it protects you from unexpected financial hits and points you toward long-term growth.

With a clear budget in place, you’ll have the confidence to make smarter decisions and the flexibility to seize opportunities as they come.

Contact First Choice Business Brokers of East Tennessee and Nashville today.

Creating a Google Ads Campaign That Delivers Result

Wed, 13 Aug 2025 19:01:42 GMT

Launching a Google Ads campaign is more than just picking a few keywords and hoping for clicks. It’s a strategic process that, when done right, can put your business in front of customers exactly when they’re searching for what you offer. The goal is simple: connect the right audience with the right message at the right time.

The first step is defining your objective. Are you trying to drive sales, generate leads, or increase website traffic? Google Ads offers multiple campaign types — Search, Display, Video, Shopping — and your goal will determine which is best. For example, Search campaigns work well for direct intent, while Display ads are better for building brand awareness.

Once your objective is clear, it’s time to research your keywords. Use Google’s Keyword Planner to identify high-intent search terms your customers are using. The key is balance — choose keywords with enough search volume to make an impact, but with competition and cost per click that still fit your budget. Group your keywords into tightly themed ad groups so your ads can be highly relevant to each search.

Next comes the ad copy and creative. Every headline and description should speak directly to the user’s intent and highlight your unique selling points. Strong calls-to-action like “Get a Free Quote” or “Book Today” make it clear what you want them to do. If you’re using images or video, keep them clean, on-brand, and visually engaging.

Targeting is where you make sure your ads show up for the right people. Beyond keywords, you can set geographic areas, audience interests, demographics, and even times of day when your ads should appear. This level of precision helps you avoid wasting budget on unqualified clicks.

Finally, launch your campaign — but don’t just set it and forget it. Monitor performance daily in the first week and regularly afterward. Look for click-through rates, conversion rates, and cost per conversion. Test different ad variations, adjust bids, and refine your targeting to improve results over time.

Creating a Google Ads campaign is both an art and a science. With a clear goal, smart targeting, compelling ads, and ongoing optimization, you can turn clicks into customers and make every dollar count.

Contact First Choice Business Brokers of East Tennessee and Nashville today.

Crafting a Unique Value Proposition: Why It Matters and How to Get It Right

Tue, 05 Aug 2025 20:41:22 GMT

Whether you're buying a business, launching a new brand, or preparing to take an existing one in a new direction — one thing is clear: you need a strong, clear, and unique value proposition. In a market full of choices, your value proposition tells your audience why they should choose you — and more importantly, why they should trust you.

But here’s the challenge: most business owners and buyers skip over this part or settle for something generic. They focus on operations, logistics, or pricing — and forget to answer the core question every customer is asking:

“Why should I choose you instead of someone else?”

Let’s dig into what makes a value proposition powerful, and how you can build one that actually works.

What Is a Value Proposition, Really?

A value proposition is more than a slogan or a clever tagline. It’s a focused message that articulates:

Who you serve
What you offer
Why it matters
And how it’s different from others in your space

In other words, it’s the promise you’re making to your customer — the reason they should engage with your business, buy your product, or commit to your service.

Whether you’re buying a business and looking to attract new customers, or preparing your company for sale and want to make it more attractive to buyers — a sharp, authentic value proposition is critical.

Why It’s Crucial in the Acquisition Process

When acquiring a business, buyers often focus on numbers: revenue, margins, expenses. But the value proposition is what breathes life into those numbers. It answers:

Why are customers loyal to this brand?
What makes this business stand out in the market?
Is there a meaningful foundation to build on and grow from?

On the flip side, if you’re the seller, your value proposition helps a buyer understand what they’re actually buying — beyond the financials. It becomes the story that justifies the price and inspires confidence in the future.

How to Craft a Strong Value Proposition

There’s no one-size-fits-all formula, but every great value proposition has three key qualities:

1. Clarity

Avoid jargon, fluff, or industry buzzwords. Your message should be clear enough that anyone — regardless of background — can immediately understand what you do and why it matters.

✅ Example: “We help busy families eat better with ready-made, organic meals delivered to their door.”

2. Specificity

General statements don’t resonate. Be as specific as possible about the results you deliver or the problem you solve.

✅ Example: “We cut average HR onboarding time by 60% through our automated platform designed for mid-size companies.”

3. Differentiation

What makes you different from your competitors? Price, convenience, customization, service, speed, culture — something should stand out.

✅ Example: “Unlike other logistics firms, we specialize in same-day freight for hard-to-serve rural markets.”

Questions to Help You Discover Yours

If you’re struggling to pin down your value proposition, start by asking:

What do your current customers love most about the business?
What problems are you uniquely solving?
What results or transformations do you help people achieve?
Why do customers come back — or refer others?
What feedback do you hear over and over again?

Your value proposition often already exists — it just hasn’t been written down clearly yet.

Final Thoughts

In today’s market, clarity wins. Buyers, customers, and even potential partners need to understand, quickly and confidently, what makes your business worth engaging with.

So whether you're preparing to buy, sell, or grow, crafting a strong value proposition isn’t just a branding exercise — it’s a strategic move that influences everything from marketing to pricing to long-term growth.

You don’t have to sound like everyone else. In fact, you shouldn’t.

You just have to sound like you — clearly, confidently, and with purpose.

Need help identifying or positioning your value proposition during the sale or acquisition process?
Contact First Choice Business Brokers of East Tennessee and Nashville today.
�� https://easttn.fcbb.com
? ? https://nashville.fcbb.com

Content Marketing Strategies That Actually Work

Wed, 30 Jul 2025 20:50:31 GMT

In a world overflowing with digital noise, content is more than just a marketing tool—it’s how you build trust before the first conversation ever happens.

But content without a strategy is just noise. To make your efforts count, you need a plan that connects with your audience and delivers consistent value. Here's how:

1. Know Your Audience

Stop guessing. Start answering real questions your buyers and sellers are asking. Use client conversations as fuel for blogs, videos, and social posts.

2. Be Helpful, Not Just Loud

One insightful post or video is more valuable than ten forgettable ones. Focus on creating content that educates, builds trust, and positions you as the expert.

3. Mix Your Formats

Blog posts build SEO. Videos build visibility. Emails build relationships. Choose the formats your audience actually consumes—and show up consistently.

4. Stay Consistent

Content marketing isn’t about going viral. It’s about showing up regularly with content your audience comes to rely on. Build trust over time.

5. Always Include a Next Step

Don’t leave your audience hanging. Invite them to take action—whether that’s booking a call or watching another helpful video.

Done right, content marketing doesn’t just attract attention—it builds a reputation.

Contact First Choice Business Brokers of East Tennessee and Nashville today.

Conflict Resolution in the Workplace

Mon, 21 Jul 2025 12:46:49 GMT

Conflict in the workplace is inevitable — but it doesn’t have to be destructive. In fact, when handled well, conflict can lead to stronger teams, clearer communication, and better results. The key is knowing how to navigate it with care, professionalism, and purpose.

Workplace conflicts can arise from miscommunication, competing priorities, differences in work styles, or even personal misunderstandings. Ignoring these issues often makes them worse, creating tension, lowering morale, and hurting productivity. That’s why having a clear approach to conflict resolution is essential for any business.

Effective conflict resolution starts with listening. Give each person the chance to share their perspective without interruption or judgment. Focus on the issue, not the personalities involved, and look for common ground. When possible, encourage the parties to brainstorm solutions together — people are more likely to commit to a plan they helped create.

As a leader, it’s important to stay neutral, set clear expectations for respectful behavior, and follow through on agreed solutions. Sometimes, bringing in an outside mediator or HR professional can help when emotions run high or issues are complex.

The goal isn’t to avoid all conflict but to manage it in a way that builds trust, encourages collaboration, and helps the team grow stronger. By fostering a workplace culture where open dialogue is welcomed and problems are addressed early, you set your business up for long-term success.

Contact First Choice Business Brokers of East Tennessee and Nashville today.
➡️ https://easttn.fcbb.com
➡️ https://nashville.fcbb.com

How to Buy a Small Business: A Step-by-Step Guide for First-Time Buyers

Wed, 14 May 2025 05:28:52 GMT

Buying a small business is one of the most exciting — and high-stakes — decisions you'll ever make. Whether you're ready to leave your 9-to-5 or expand your entrepreneurial portfolio, purchasing an existing business in Knoxville can help you hit the ground running with established operations, loyal customers, and predictable cash flow. But without the right guidance, first-time buyers can quickly feel overwhelmed by listings, legalities, and negotiations.

This guide walks you through each step of the small business acquisition process and shows how working with professional business brokers in Knoxville can streamline the experience, reduce risks, and help you find the right small business for sale in Knoxville, TN .

Step 1: Define Your Goals and Budget

Start by understanding why you want to buy a business. Are you looking for a lifestyle change, long-term investment, or an opportunity to be your own boss? Your goals will shape what kind of business makes sense, from a local service company to a franchise resale.

Just as important: set your budget. Consider how much capital you have, your financing options, and how much working capital you'll need after the purchase. A typical down payment for SBA financing ranges from 10% to 30% of the purchase price.

Tip: Working with a Knoxville-based broker can help you target businesses that match your budget and goals.

What Types of Businesses Are Easiest to Buy as a First-Time Buyer?

Certain industries are more approachable for first-time buyers due to lower barriers to entry, proven demand, and straightforward operations. Common examples include service-based businesses, light retail, cleaning franchises, and existing food service businesses with solid staff in place.

These businesses typically offer easier transitions, require minimal specialized training, and often come with existing vendor and customer relationships. Your broker can help match you with listings in these categories based on your experience and risk tolerance.

Step 2: Work with a Business Broker

Professional business brokers in Knoxville do more than just show you listings. They:

Provide access to vetted businesses that may not be publicly listed : Many quality listings are kept confidential to protect the seller's operations. Brokers give you insider access to these hidden opportunities.
Help you understand valuation and fair pricing : Brokers will analyze financials and market conditions to ensure you're not overpaying.
Connect you with lenders and attorneys : A good broker has a network of trusted professionals who can assist with financing, legal reviews, and deal structuring.
Guide negotiations and offer support during due diligence : From making offers to reviewing documents, brokers help you avoid common pitfalls and keep the deal moving forward.

A reputable broker like First Choice Business Brokers East Tennessee brings the benefit of local knowledge, national reach, and decades of experience in helping buyers succeed.

Step 3: Evaluate Listings Carefully

Not all listings are created equal. When you browse small businesses for sale in Knoxville, TN , ask yourself:

Does this industry align with my skills or interests? Consider whether you have the background or passion necessary to run the business successfully.
How profitable is the business? Look beyond top-line revenue. Focus on cash flow, gross margins, and net income trends.
What are the seller's reasons for exiting? Understanding motivation helps you assess urgency, potential deal flexibility, and possible red flags.
What do the financials look like (revenue, cash flow, margins)? Analyze multi-year data to identify patterns, growth opportunities, or warning signs.

A broker can provide key documentation like P&L statements, balance sheets, and seller disclosures so you can make informed decisions.

Step 4: Conduct Preliminary Due Diligence

Once a business piques your interest, begin preliminary due diligence. At this stage, you’ll:

Review high-level financials : Get a snapshot of the company’s revenue, expenses, and net income.
Assess lease agreements or real estate : Evaluate whether the lease terms are favorable and sustainable, or if real estate is included in the sale.
Understand staffing and management needs : Determine if key employees will stay post-sale and what your role will be in day-to-day operations.

Confidentiality is critical. Most sellers will require you to sign a Non-Disclosure Agreement (NDA) before releasing detailed information.

Step 5: Make an Offer

With your broker's guidance, you’ll submit a formal Letter of Intent (LOI) or offer to purchase. This outlines your proposed purchase price, terms, and contingencies (like financing or inspection requirements).

At this stage, negotiations begin. A broker is invaluable here — they can:

Structure win-win deals : Help create terms that work for both parties, including payment schedules and seller transition periods.
Handle counteroffers professionally : Keep communication open and effective without becoming emotionally involved.
Manage timelines and documentation : Ensure the process stays on track and all required materials are exchanged promptly.

Step 6: Deep Dive into Due Diligence

After your offer is accepted, full due diligence begins. This is where you:

Examine detailed financials and tax returns : Confirm that the business’s earnings, expenses, and tax obligations match those presented.
Interview key employees : Learn about team dynamics, leadership roles, and potential retention post-sale.
Review customer and vendor contracts : Ensure ongoing relationships are stable and transferable.
Analyze market conditions and risk : Assess the business’s competitive landscape, seasonal impacts, and any regulatory concerns.

This phase protects you from surprises after closing. Potential buyers, alongside their CPA and attorney, make sure that nothing is overlooked.

Step 7: Secure Financing

If you're not buying in cash, you’ll likely seek financing through one of the following:

SBA loans : Backed by the U.S. Small Business Administration, these loans offer favorable terms for qualified buyers but require documentation and lender approval.
Seller financing : In this arrangement, the seller finances a portion of the purchase price, which may reduce the amount of upfront cash needed.
Conventional loans : Provided by banks or credit unions, these loans often have stricter qualifications but offer flexibility in some situations.

How to Improve Your Chances of Loan Approval

Lenders want to see that you’re financially responsible and that the business you’re buying is stable. Improve your odds by:

Preparing a personal financial statement and resume : This shows your qualifications and financial health.
Gathering your last 2–3 years of tax returns : Lenders want a clear picture of your income and assets.
Having a clear business plan helps justify the investment, especially if you plan to expand or change operations.
Showing post-sale working capital projections : Demonstrates that you can manage cash flow after purchase.

Step 8: Close the Deal

Once financing is secured and due diligence is complete, you’ll move to closing. This involves:

Signing the purchase agreement : Finalizing the legal contract that outlines all deal terms.
Transferring licenses and permits : Ensuring all regulatory or professional licensing is properly updated.
Completing final payments and escrow : Disbursing funds and releasing payments per your purchase agreement.

Your broker will coordinate with attorneys, escrow agents, and accountants to make the process smooth and compliant.

Step 9: Transition and Take Ownership

Even after closing, there’s work to do. You’ll need to:

Onboard staff and introduce yourself : Meet with employees and outline your plans to build trust and continuity.
Meet with key customers and vendors : Reassure stakeholders and maintain the relationships that drive revenue.
Take charge of operations : Learn the systems, manage inventory, and monitor finances.

Many sellers stay on for a transition period to train the new owner and ensure continuity.

With the right prep, your first few months can set the tone for long-term success.

Common Mistakes to Avoid When Buying a Business

First-time buyers are especially vulnerable to a few common missteps:

Skipping due diligence : Always verify what you’re told with documentation.
Falling in love with the idea—not the numbers : A great concept still needs solid cash flow.
Going it alone : Trying to manage a deal without a broker, attorney, or accountant can lead to costly errors.
Not planning for post-sale needs : Ensure you have working capital, a transition plan, and operational training if needed.

Why Knoxville Is a Smart Place to Buy a Business

Knoxville offers an appealing mix of affordability, growth, and community support for small businesses. From tourism and retail to professional services and manufacturing, the city has a diverse economic landscape that attracts both local entrepreneurs and out-of-state investors.

Knoxville consistently ranks as one of the most affordable cities to start or buy a business, with a favorable tax climate and growing metro population. According to the Knoxville Chamber, small businesses make up over 90% of the region’s economy. Neighborhood revitalization and investments in infrastructure continue to attract entrepreneurs to areas like Downtown, Bearden, and Farragut.

Working with local business brokers in Knoxville means you benefit from insight into regional trends, buyer demand, and available small businesses for sale in Knoxville, TN that match your vision.

Final Thoughts

Buying a small business is a life-changing decision — one that requires careful planning, professional guidance, and informed choices. For first-time buyers, the process doesn’t have to be overwhelming. By partnering with experienced business brokers in Knoxville, you’ll gain access to exclusive listings, expert deal support, and a team that helps you navigate every step from search to ownership.

Frequently Asked Questions

Ready to explore businesses for sale in Knoxville, TN? Visit easttn.fcbb.com to browse our listings, request a no-obligation consultation, or speak with a local broker who can help you take the next step toward business ownership.

Why Business Valuation Matters for Knoxville Entrepreneurs

Thu, 08 May 2025 05:45:42 GMT

For Knoxville business owners, knowing your company’s value is about preparing to sell and making informed decisions every step of the way. From securing funding to estate planning and strategic growth, business valuation is the financial compass that keeps you on course.

Whether you run a main street retail shop in Bearden or a growing logistics company in the Knoxville-Oak Ridge Innovation Valley, understanding your businesses worth can unlock opportunities and protect your long-term interests.

In this guide, we’ll explore why business valuation matters and how working with experienced Knoxville business brokers can help you understand and improve your company’s market position.

What Is Business Valuation?

Business valuation is the process of determining a company's economic value. This includes analyzing the business’s assets, earnings, market conditions, and industry trends to establish its fair market value.

There are several standard valuation methods, including:

Asset-Based Approach : This method calculates your business’s value by adding all its tangible and intangible assets and subtracting liabilities. It’s often used for asset-heavy companies like manufacturing or real estate firms.
Income Approach : This approach focuses on your business's future earning potential, discounting those earnings to present value. It’s beneficial for service-based or recurring revenue models.
Market Approach : This compares your business to similar businesses recently sold in your area or industry. It’s effective when market data is readily available and is often preferred by buyers and lenders.

The right method depends on your business type, size, and reason for valuation, which is why it is so important to work with professionals familiar with business valuation in Knoxville .

1. Valuation Is the Foundation for Selling Your Business

If you're considering selling your business — now or in the future — a professional valuation sets realistic expectations and maximizes your return.

Without a valuation, many owners either overprice and deter buyers or underprice and leave money on the table. A broker-backed valuation provides:

A fair, defendable asking price : Your listing price is based on actual financial analysis and comparable sales, rather than emotion or guesswork.
Stronger negotiating power : Buyers take your offer seriously when supported by credible valuation data, giving you more leverage during discussions.
Credibility with buyers and lenders : Providing documentation from an established broker boosts your reputation and creates trust.

Experienced Knoxville business brokers understand local buyer trends, demand by industry, and regional economic conditions that directly influence your selling price.

2. Valuations Attract Financing and Investors

Lenders and investors want numbers, not guesses. When applying for a business loan or attracting outside capital, having a current valuation can:

Demonstrate the business’s financial health : A valuation provides a snapshot of your cash flow, assets, and earnings, which builds investor confidence.
Support your growth plans with reliable metrics : You can justify your need for capital and show how the investment will yield returns.
Instill confidence in your leadership and planning . A formal valuation indicates that you take your business seriously and manage it professionally.

A lender is more likely to approve financing when they see a professionally backed valuation, especially by trusted Knoxville business brokers who understand the regional landscape.

3. Valuations Support Succession, Exit, and Estate Planning

Valuation plays a critical role if you're preparing to retire, pass on your business to family, or simply plan for unforeseen circumstances. Accurate valuation helps with:

Structuring buy-sell agreements : These legally binding contracts allow co-owners to buy out a departing partner’s share. They depend on accurate business value.
Gifting or transferring ownership shares : You can make tax-efficient decisions when giving shares to heirs or family members.
Setting fair terms for partnerships or inheritance : Prevent disputes by clearly defining the company’s value in legal documentation.

Documentation of your business's value ensures your exit is financially and legally sound.

4. Valuations Help You Understand Your Business’s True Performance

Many owners rely on gut feeling to assess business health, but your financials may tell a different story. A valuation clarifies:

Cash flow trends help you track how money is moving through your business and identify areas for cost-saving or investment.
Market position relative to competitors : See how your business stacks up regarding revenue, margins, and market share.
Strengths and weaknesses in operations or asset management : Discover inefficiencies or underutilized assets that could be optimized.

It’s a valuable tool for self-assessment, even if you’re not planning to sell anytime soon.

5. Valuations Add Leverage in Strategic Negotiations

Are you planning a merger, partnership, or supplier deal? Knowing your business’s worth gives you an upper hand in negotiations. With complex numbers to back up your position, you:

Build confidence and transparency : Showing that a third party conducted your valuation reinforces your credibility.
Justify premium pricing or terms : If your business outperforms others in your niche, a valuation helps you ask for better terms.
Protect your interests in deal-making : Prevent being undervalued or overlooked during collaborative arrangements.

A strong valuation can differentiate you from the competition in Knoxville's tight-knit business community.

6. Valuations Establish a Baseline for Growth Planning

A valuation doesn’t just give you a snapshot of today — it becomes your benchmark for tomorrow. Business owners who conduct regular valuations:

Set measurable growth goals . This will help you assess your current situation and set clear financial and operational targets.
Track improvement in profitability or efficiency : See how initiatives affect the bottom line over time.
Align marketing and investment strategies with ROI potential : Use valuation insights to prioritize areas that yield the highest return.

If you’re serious about scaling your company, a valuation is the first step toward data-driven planning.

Why Local Insight Matters in Knoxville

East Tennessee’s business landscape is unique, from downtown Knoxville’s redevelopment to the manufacturing hubs near I-40 and beyond. Partnering with local Knoxville business brokers ensures your valuation reflects:

Local buyer behavior and expectations : What buyers in Knoxville want and value may differ from national trends.
Knoxville-specific market comps : Your valuation draws from regional transactions, not just national databases.
Regionally relevant economic indicators and trends : Brokers understand how local taxes, zoning, labor availability, and financial initiatives affect valuation.

At First Choice Business Brokers East Tennessee, our experience in the local market equips us to provide realistic, defensible valuations tied to regional performance indicators.

The Business Valuation Process

Here’s what typically happens during a formal valuation:

Initial consultation : A meeting to define the purpose of the valuation, whether for a sale, financing, estate planning, or another reason.
Document review : Collect and review key financial and legal documents, including income statements, balance sheets, tax returns, asset inventory, and lease or loan agreements.
Financial analysis : Apply valuation methodologies to assess business performance, risk, and value drivers.
Market comparison : Evaluate how your business compares to similar businesses that have sold recently in Knoxville and surrounding regions.
Final report : Provide a comprehensive, written summary with valuation conclusions, supporting data, and key insights that guide decision-making.

When performed by experienced brokers, this process is confidential, efficient, and tailored to your industry and location.

FAQS About Business Valuation in Knoxville

Final Thoughts

Business valuation is more than a number — it’s a strategic tool that helps Knoxville entrepreneurs lead with clarity, confidence, and financial insight. Whether you’re preparing to sell, raise capital, or simply understand your company’s standing, the right valuation partner can make all the difference.

Interested in a professional business valuation tailored to Knoxville’s market? Visit easttn.fcbb.com to schedule a confidential consultation with our experienced team.

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or investment advice. For personalized guidance, please consult a licensed broker, attorney, or CPA familiar with Tennessee regulations

Conducting market research

Mon, 10 Mar 2025 19:37:08 GMT

Choosing the right domain name

Mon, 03 Mar 2025 15:46:01 GMT

Challenges and opportunities in the post-COVID world

Mon, 24 Feb 2025 14:57:42 GMT

Buying an existing business

Mon, 17 Feb 2025 15:44:24 GMT

Building a strong company culture

Mon, 10 Feb 2025 14:55:31 GMT

Building a professional business website

Mon, 03 Feb 2025 15:39:32 GMT

Choosing the right time to sell your business

Thu, 30 Jan 2025 16:18:44 GMT

Business broker vs. DIY sale Pros and cons

Wed, 29 Jan 2025 16:56:42 GMT

Attracting strategic buyers for your business

Wed, 29 Jan 2025 16:42:25 GMT

A Strong Exit Strategy Equals A Smooth Transaction

Mon, 26 Feb 2024 19:33:20 GMT

An exit strategy is simply a plan you put in place as a business owner to ensure a smooth exit from your company.

It is a crucial step in the selling process and one that all owners should have at their fingertips when it’s time to sell.

There are many steps to creating an exit strategy, but each is equally important.

Step 1: Define Your Goals

First, you have to know what you want to achieve by selling. Are you looking for financial security? Ready to retire or make time for other business ventures?

Step 2: Receive a Valuation

Work with your financial partners to get a thorough valuation of your business so that you understand its worth. You also need to know its marketability and growth potential.

Step 3: Explore Exit Options

Selling your business outright is not the only way to let go of this responsibility. You may also consider management buyout, employee stock ownership, IPO, or liquidating your assets.

Step 4: Prepare Your Business

When you have made the decision to sell, it’s time to clean up the financials, reduce debt, expand your customer base, and have a well-developed and defined succession plan.

Step 5: Assemble Your Exit Team

In addition to yourself, you should also work with a business advisor, such as First Choice Business Brokers, an accountant, and a lawyer.

Step 6: Choose The Timing

Selling a business is a strategic decision dependent upon market conditions, business performance, and personal goals. All three of these need to align to make it the optimal selling time.

Step 7: Market Your Business

Marketing a business resale is not easy. You need to be confidential and use the right marketing materials. This is where a partnership with First Choice Business Brokers is so valuable. We can keep your confidentiality while marketing and negotiating effectively until you are ready to announce your exit.

Step 8: Do Your Diligence

One of the last and most important steps is to be diligent and know that your buyer is providing the right information to take over your business. While this may not be the final piece of the process, overlooking the diligence aspect of selling can leave you scrambling for another buyer.

This is not intended as a full guide to creating your exit plan. Instead, the above can help you get a better idea of what’s expected throughout the process. Talk to your First Choice Business Brokers advisor if you’re ready to sell your East Tennessee business, and let our professionals guide you through the process.

Budgeting Your Small Business

Thu, 08 Feb 2024 19:30:15 GMT

Creating a business budget sounds like a complex process. And it can be.

However, if you keep the following in mind, you can put yourself on a path to having a balanced budget without driving yourself crazy in the process.

Getting Started

There are a few things you need to know before you set a budget. These include your income, expenses, and the cost of goods sold (COGS). While these may vary, you should have a fair understanding of how much money you typically spend, make, and intake based on your costs.

Your income should include all revenue streams – look for historical data or industry benchmarks of similar businesses if you are just launching. Your expenses include fixed costs (loan payments, rent, utilities, salaries, insurance, etc.) along with variable and one-time expenses, such as inventory and equipment purchases. Cost of goods sold refers to the direct costs of making the things you sell.

Revenue And Profit

Other information to know before planning your budget are your revenue and profit margins, which are not the same thing. But for budgeting purposes, you need to know how much money your business generates in each budgeting period. Your revenue minus your expenses equals your profit. This is where knowing your COGS is crucial.

Analyzing Your Expenses

It’s time to categorize your expenses. This can make it easier for you to identify areas where you can cut back on spending without sacrificing your customer or employee experience.

Budgeting Methods

Now, you have to decide which type of budgeting method you use. Zero-based budgeting means that you place every dollar earned into an expense category. Percent-based budgeting allocates a percentage of your income and revenue toward different expense categories. You can also utilize a hybrid approach to combine elements of both to create a customized budget that works for you. Many small businesses in the East Tennessee area utilize a hybrid method.

Creating The Budget

Input all of the information that you’ve gathered into a spreadsheet (or, alternately, your budgeting software) so that you can have a visual way to track your income and expenses. You’ll then want to project your incoming and outgoing funds for the next month, quarter, or year.

Creating a budget is really just a matter of knowing how much you make versus how much and where you spend. It is the details in between that can be challenging for small business owners. Best practice here: seek professional help. If numbers aren’t your niche, find a bookkeeper, consultant, financial advisor, or accountant who can help you do the math needed to keep your business afloat.

Are you ready for business ownership? Contact First Choice Business Brokers today. Our professionals can help you choose a business that matches not only your budget but your needs and goals as well.

Buying A Business: Financial Challenges

Mon, 29 Jan 2024 20:54:43 GMT

Buying a business is a huge investment that can have a major impact on you and your family for years to come.

Buying a business is a huge investment that can have a major impact on you and your family for years to come. And whether you are on the buying or selling end, it’s important to know the types of challenges that you or your potential buyer might face. This will ensure that you have a game plan on how to handle the hurdles.

Financing

Financing a business is not always easy. There may be high upfront costs that may require you or your buyer to take out a loan or deplete your savings. Some banks also require collateral for a business loan, making a new purchase difficult for those with few existing assets. Other considerations include interest rates and loan terms, which can vary significantly from situation to situation.

Cash Flow Management

Even if you or your buyer has the cash to complete a seamless transition, the initial costs are not the beginning and end of cash flow concerns. New and existing businesses alike have operational expenses that never go away. Inventory, insurance, staff … The list goes on. Buyers must be prepared to write checks from day one.

Hidden Cost And Liabilities

Once a business is up and running smoothly, there are still other kinks in the proverbial chain that buyers must be aware of and that sellers must consider before accepting an offer. These include unexpected repairs and maintenance and, for buyers, potentially undisclosed liabilities. As a buyer, you should also know that any safety or environmental violations can be costly to rectify, so do your diligence before you sign the papers.

Other Potential Expenses

Any time you run a business, there is a continual in and outflow of cash. Your expenses may include everything above, plus employee salaries, retention, retraining, branding and marketing, market changes, personal expenses, and the risk of failure.

Mitigating Challenges

As mentioned above, doing your diligence is one of the best ways to sidestep potential challenges. You also need to prioritize financial planning and diversifying your portfolio. First choice business brokers can provide a list of professionals to help you gain a better understanding of your financial situation.

Want to learn more? Contact Russell at First Choice Business Brokers today to talk to one of our experts about buying a business or selling your current business. Our staff can guide you through potential challenges and concerns so that you can make an informed decision…no matter which side of the transaction you’re on.

Choosing Between A Broker And A DIY Business Search

Fri, 19 Jan 2024 19:14:21 GMT

The decision to invest in a new business is a personal choice.

The decision to invest in a new business is a personal choice that comes with huge financial implications. For this reason, it makes sense to work with a knowledgeable professional in the industry who can help you make the most of your investment. But is a broker always necessary? Maybe not.

Benefits Of Using A Business Broker

One of the primary reasons to choose a business broker to help with your deal is that they have industry and market knowledge that most people simply don’t have. They can help identify suitable businesses and negotiate a better price. Importantly, a broker can also walk you through the complex and detailed legal and financial aspects of the process.

A business broker can also help bring perspective to the negotiation process to help reduce the chances of you making an emotional decision. It can also take less time to navigate the buying (or selling) process when you have an expert in your corner.

Just as important as the above is that a business broker can handle negotiations and communication discreetly to help maintain your confidentiality. If you’re planning to leave a job to start your own business but haven’t told your current employer, your broker can keep that information from leaking.

Benefits Of A Self-Directed Purchase

There are a few situations where buying a business on your own might make sense. Primary of these is if you’re buying from a trusted friend or relative. By skipping a broker here, you can save on the fees. The caveat here, however, is that businesses bought and sold with handshakes and promises may not stand up in court if there is a personal or professional falling out.

Which Is Best?

Although utilizing the services of a business broker means that you’ll spend more, you may save in the long run by having access to experience from the beginning. Buying and selling a business isn’t like picking up a carton of eggs at the grocery store. It’s a major financial decision that will affect you and your family for many years to come. Getting started on the right track means all the negotiations and paperwork are handled in your best interest and in a way that ensures a binding legal contract.

Are you ready to invest in your future? Contact Russell Carriere at First Choice Business Brokers today and let our team of professionals help you add entrepreneurship to your list of accomplishments.

Should You DIY Your Business Sale?

Wed, 03 Jan 2024 17:16:05 GMT

Selling a business is a big deal, but many people wonder if it’s something they should handle on their own or if they should call a broker.

The truth is that there’s no single answer for everyone, and there are a few instances where a DIY transaction might make sense. In most cases, however, your best bet is to contact a professional.

Benefits Of A DIY Sale

If you’re planning to sell your business to someone you know, you may be able to handle the majority of the transaction on your own. In doing so, you’ll save money on broker commissions. You can also have more control over the entire process. You get to create your own terms and put yourself in a position to be more involved throughout the transition process.

Selling With A Professional

Business brokers are experts in the sales and acquisition process. Your professional knows the market, and they are experienced in research and negotiations. Importantly, your business broker can also help you put the right value on your business so that you aren’t short-changing yourself.

Other benefits of selling with a business broker include:

Access to their network. Your business broker will have a network of potential buyers, including other business owners, strategic investors, and those looking to break into your industry.
Confidentiality. A business broker can also help you sell your business confidentially. This is crucial if you want to start the process without alerting your employees, competition, or customers. Not letting the potential sale leak before you want it known can help to ensure smooth business operations and avoid customer and employee panic.

Due diligence. Business brokers are also highly experienced in helping you manage the complexities of the due diligence process. This might involve anything from letting your potential buyers know all of the numbers to answering questions truthfully and thoroughly.
Closing. Your broker will ensure that paperwork is in place so that the business sale is finalized according to the right terms. They’ll also ensure that transfer of ownership takes place without a hitch.
Marketing. Your broker can help identify the right buyer persona and market to this effectively. They’ll help you create targeted materials, including your business profile, so that the business can be listed in the proper marketplaces.
Buyer screening. A business broker can help weed out unqualified buyers so that you don’t waste time or miss a viable opportunity.

With more than 70 office locations across North America, First Choice Business Brokers has the reach, experience, and local expertise to help you value, list, market, and sell your business. Contact us today to experience all the benefits that a professional business brokerage has to offer.

When’s The Right Time To Sell?

Tue, 19 Dec 2023 19:28:15 GMT

The decision to sell your business is an emotional one. But it should not be made without settling a few practical matters first.

Today, we’ll take a quick look at just a few things you might consider when you are ready to make an exit.

Financial Health

The financial health of your business is one of the top influencing factors on time to sell. While it’s possible to sell a struggling business, you’ll be most likely to attract the most buyers and get top dollar when your business is growing and profitable.

Market Conditions

Next, consider the market conditions. Look at the economy as a whole, but also dive down into your industry. When market signs are favorable, you’ll attract more buyers. Keep in mind that just because your market is down now does not mean that you are not poised for growth, but you’ll need to be able to show how you’ll weather a lull in activities.

Personal Goals

Your personal goals are one of the most important things to keep in mind as you choose to sell your business. If you’re ready to retire, start something new, or need to tend to a personal matter, such as a health condition, that makes it favorable to sell, these are all valid reasons to offer your business as someone else’s new opportunity.

Exit Strategy

This is simply the process by which you’ll release the business over to someone else’s care and management. Think about how you want to sell your business and the type of buyer you think would be most successful in your niche. Your broker can help you put a well-thought-out exit strategy in place to streamline the selling process.

Signs It Might Be Time

A few strong indicators that selling might make sense in the near future include:

Your business is at peak profitability – there’s growth potential for the right buyer.

You have an outstanding management team – these individuals can help operate the business as new ownership settles in.

You receive unsolicited offers – if you’re getting unsolicited offers, you might see lots of competition when you sell.

Ultimately, there is no right or wrong answer as to when it’s time to sell your business. But if the thought is fluttering around your head, use your best business sense and take the advice of Kenny Rogers: Know when to hold ‘em. Know when to fold ‘em. Know when to walk away.

If you’re ready to sell your East Tennessee or Nashville business, contact First Choice Business Brokers today. We are the world’s authority in business sales, and we can help you make your move at just the right time.

Why Would A Seller Sell A Profitable Business?

duda@fcbb.com — Thu, 20 Jul 2023 05:13:12 GMT

Smart Seller Exit Planning Strategies

Discover the reasons that a seller would sell what appears to be a great profitable business.

Many successful entrepreneurs also do something else that most business owners don’t do, they plan an exit strategy.

So the question is why would the person who is operating a business that is running successfully and making money look for an exit strategy.

The typical reasons are for either planning an exit strategy or considering selling are (and not in any order of importance): 1. The owner has reached the goal that they wanted to achieve; 2. The owner has found another idea that they wanted to pursue; 3. Boredom or burn out; 4. Not financially rewarding; or 5. Not emotionally fulfilling. 6. Need of a new challenge.

So it is good to know that many entrepreneurs who are busy building their business are also considering their exit strategy.

As a business owner, do you know your exit strategy and will you be prepared?

Buyers look for businesses that can provide two major components, one is sustainable income and the second is growth potential. After twenty four years of bringing buyers and sellers together we found that if these two ingredients are in the business that a buyer is investigating, the chances that the buyer will make an offer are very high.

If you are considering selling your business in the future make certain that a buyer can verify your income. Most buyers will walk away from a transaction if the income cannot be verified. Your First Choice Business broker can advise you in more detail as to what a buyer will need from you when you are ready to sell.

What Is Your Business Worth?

duda@fcbb.com — Thu, 20 Jul 2023 04:44:49 GMT

Discover how a Business Broker will value your business.

Working with a professional Business Broker can help to realistically price your business for sale.

Many Sellers, before meeting with a Business broker have an idea in their mind as to how much they should ask for their business.

Their CPA or their friend or their realtor may have offered suggestions. So at the time when they do meet their Business Broker and the Broker offer a suggested selling price, sellers will sometimes respond with the dollar figure that their CPA, friend or realtor thought that they should sell for.

The predicament of the business Brokers is how to and will they tell the seller that the price will be too high for their business.

Most professional business brokers will explain the reality of an overpriced business including the fact that overpriced businesses help reasonably priced businesses of the same to type to actually sell.

A business owner needs to understand that a Business Broker is valuing the business logically and realistically based upon past sales and experience whereas a seller looks at the business emotionally.

The art of valuing a business is just that, it is an art and not a science. A business sells for what a willing buyer will pay and what a willing seller will accept.

Another option is to obtain an outside valuation for a cost of about $3,000.00. Sometimes these outside valuations are theoretical and not a Market Price Analysis and may not be worth the cost.

For more information on how a business is valued, contact your First Choice Business Broker professional whose only position is listing and selling businesses full time.

What Is Analysis Paralysis?

duda@fcbb.com — Thu, 20 Jul 2023 02:03:11 GMT

How you can miss out on a “great” offering by over analyzing.

Learn why you should take a chance and make a decision.

In business brokerage, we see many potential buyers who have decided that they want to follow their dream of owning their own business. These potential buyers will ask their agent to quickly contact them when a “hot deal” comes up as they are ready to buy.

Amazingly we see six or even nine months pass with dozens of business opportunity introductions made and “hot deal” notices sent to the buyer to find this anxious buyer is stricken with “analysis paralysis”. This buyer has lost out on the potential “hot deals” to other buyers who have taken advantage of these opportunities.

What is “analysis paralysis?” Simply put, the inability to make a decision. Buyers get so caught up in the review and analysis of so many businesses that the process itself becomes their business, always wondering if the next opportunity will be a better fit or stronger business etc. Some buyers put an extraordinarily large amount of pressure on themselves to buy the “right” business that they miss out on the right opportunity due to analysis paralysis. We’ve actually heard buyers say, “Can I do this business every day for the rest of my life”? It is of course a reasonable question however this question can also make every business seem overwhelming and puts a lot of undue stress on the buyer. Yes of course you want the business buy to be as a good fit as possible however also remember if it is not the right fit you have the opportunity to sell that business and move into other ventures.

Our advice from many years of experience is for buyers to keep an open mind to different opportunities, you might be surprised about what the right business fit for you actually ends up being. Also it is important for buyers to obviously do their due diligence however those same buyers must also realize that other business buyers are also looking at the opportunities that come up and those buyers may not be stricken with “analysis paralysis”. Be ready to jump in when the right business comes along!

To Sell Or Not To Sell, That Is The Question?

duda@fcbb.com — Thu, 20 Jul 2023 01:54:16 GMT

Don’t wait until it’s too late!

Business owners are faced with a dilemma of whether they should sell and if so when is a good time?

Should business owners sell when their business is booming, when the business is declining or when they are tired and burned out?

After 24 years of selling businesses we can definitely state that the best time to sell is when the business is on an upward trend. This is the time that buyers are willing to pay the highest price. Unfortunately many business owners wait until their business is declining when they decide enough is enough and want to put their business up for sale. Buyers will not usually pay top dollar if they see the business is declining over a period of time. Sellers want to sell on potential however buyers will only pay for what they can see for income and the income trend at the time the business is available.

Your First Choice Business Broker can offer you the experiences of our 24 years of selling businesses. When the time comes to consider selling we’ll be here for you. In the meantime, keep your business running strong so the “trend” of your business in the eyes of a buyer is stable or on an upward trend. During the sale process we’ll take care of the incoming buyers and you take care of your business so you can capture the highest price for your hard earned efforts.

Ready To Quit Your Job?

duda@fcbb.com — Thu, 20 Jul 2023 01:46:08 GMT

Is now the right time for you to buy a business?

Use your 401k tax deferred plan to buy a business, learn more.

When does it make good sense to quit your job and use your retirement plan fund to buy a business?

This is a question that many employees ask themselves on a regular basis.

Here are some of the signs that it is time!

You are bored with what you are doing as there is no challenge in your work.
Your income is not at the amount you think that it should be.
Your employer is family owned so you can’t go too high up the ladder.
You are tired of relocating and want to stabilize you and your family.
You dread Monday mornings.

These are just some of the reasons to consider “retiring” and taking your 401K (tax free and penalty free) and using the money to buy an existing business.

First Choice Business Brokers receives many calls from people possibly in your position, however what does not surprise us is that the business they are considering purchasing is not related to their current work position.

Many times a person wants a business doing something that they feel they will enjoy and give them the lifestyle they desire.

Are you ready for the challenge?

Preparing For PPP Loan Forgiveness

duda@fcbb.com — Thu, 20 Jul 2023 01:07:06 GMT

Now that you have your PPP loan it's time to look at preparing for your "loan forgiveness".

Some may think of their PPP loan as "free money" however there are guidelines that must be followed in order to receive full loan forgiveness.

On May 15, the SBA released the loan forgiveness application , which left banks and small business owners confused. A week later the SBA prepared additional comments for release in an attempt to provide additional guidance however there were still many unanswered questions for some borrowers. With over $511 billion out in PPP loans and 79% of those being loans under $100,000 there are bound to be a lot of questions for hard working American's trying to keep their small businesses open.

We really appreciated Kyle Westaway's summary of the latest guidance on PPP loan forgiveness and think you will as well. This article provides information on what the bank will review in a forgiveness application and the timeline for the lender's decision on your forgiveness.

One question that has come up time and time again, is what costs are eligible for forgiveness? Below are eligibility guidelines directly from the SBA forgiveness application .

Summary of Costs Eligible for Forgiveness: Borrowers are eligible for loan forgiveness for the following costs:

1. Eligible payroll costs. Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the eight-week (56-day) Covered Period (or Alternative Payroll Covered Period) (“payroll costs”). Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period (or Alternative Payroll Covered Period) are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period (or Alternative Payroll Covered Period). For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the covered period. Count payroll costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811).

2. Eligible nonpayroll costs. Nonpayroll costs eligible for forgiveness consist of: (a) covered mortgage obligations: payments of interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage interest payments”); (b) covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020 (“business rent or lease payments”); and (c) covered utility payments: business payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020 (“business utility payments”). An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. Eligible nonpayroll costs cannot exceed 25% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once. The amount of loan forgiveness the Borrower applies for may be subject to reductions as explained in PPP Schedule A.

Out Of The Bad Comes The Good

duda@fcbb.com — Thu, 20 Jul 2023 00:58:07 GMT

Big Chains Out, Small Business In!

National Association of Realtors recent study cites interesting facts regarding the re-purposing of vacant malls.

The big chains have moved from their brick and mortar stores leaving huge vacancies and headaches for mall owners and independent businesses in those malls who based their business on the foot traffic from the now gone anchor tenants. Names such as J Crew, Sears, Foot Locker, Nordstrom, Payless Shoes and many others have disappeared and with them, the loss of jobs. With these huge amounts of vacant space the malls have been selling to investment groups at unbelievably discounted prices even as low as $1 per square foot. As an example of a redeveloped mall is the Cloverleaf Mall in Richmond Virginia. In 2006 the mall was redeveloped for a multi-phased, mixed-use development anchored by a 123,600 square foot Kroger Marketplace which includes office space, restaurants, retail stores and a residential component called Chippenham Place. Some malls have even been converted to Amazon fulfillment centers and others to office buildings.

There are many other vacant malls that have repurposed their centers to bring in the small independent businesses. Yes, we are talking about the same businesses that struggled and lost business due to the now defunct chains.

NAR Reports that across the country local cities have joined in redeveloping these non-operational malls with tax incentives to bring in new tenants. Some malls have been redeveloped to include apartments and even walking/strolling paths and parks.

So, from all of today’s bad news, what is the good news? The good news is that the small business owner has returned to these now non anchored redeveloped malls and so have the jobs. Small businesses in the US provide over 60% of all employment per the Small Business Administration and create over 1.5 million jobs annually. BusinessInsider.com confirmed that at least 3,300 chain stores are closing in 2020. The bad news of the big chains closing provides a much-needed opportunity for the “mom and pop” business entrepreneurs in the US.

Since 1994, First Choice Business Brokers has been assisting buyers and sellers of small businesses. Now we see the resurgence for small business owners who may have previously lost business due to the advent of shopping malls and big chains. As we said, from the bad comes the good.

Due Diligence What Does It Mean To The Seller?

duda@fcbb.com — Thu, 20 Jul 2023 00:50:00 GMT

Seller’s preparation makes smooth due diligence

Steps for sellers to prepare for the eventual due diligence process.

The Buyer has made an offer on your business and in the Purchase Agreement it states that he needs ten days to complete his due diligence on your business, what should you as the seller do?

The buyer will want to see your financial statements and tax returns if they have not already been supplied.

Tip # 1 when you give the business listing to your Broker; try to give the last 3 years of your P&L’s, Balance Sheets and tax returns. This will not only save a lot of time and will show the Buyer that you are forthright with your documents.

The Buyer will want to validate the income and expenses that you have shown on your P&L’s so that they fully understand the income claimed on the business.

Tip # 2 it is a great idea to give a written explanation to your agent of any “add backs” so that the Buyer is not trying to guess how you arrived at your figures.

Unless the Buyer understands how you arrived at your income figures he or she will keep asking for more proof of income

Tip # 3 The more information (record keeping), that you supply to your Broker up front, the less information the Buyer will have to keep asking for. Try to provide as much documentation (Sales tax reports etc.), to your Broker. Remember depending upon the time of the year, the Buyer will want up to date financials.

Tip # 4 Try to keep your recording keeping up to date. Many deals have been lost due to the Seller not letting the Buyer know of any major changes to the Gross or Net income.

Due Diligence what does it mean to the Buyer?

Many Buyers ask for Due diligence on a business when making an offer but are not sure what this encompasses.

The Seller should be supplying the Buyer, with their income statements and possibly their tax returns.

Due diligence usually does not include any contingencies that need to be completed such as licensing, employee agreements or other such items.

Try to put a list together of the items that you want to review so that you are not constantly asking for additional items. The Seller will have been advised by the Broker that he will need to supply a buyer with certain items.

As a Buyer you do have an obligation to either review those documents supplied by the Seller or have your professional advisor review the documents. Unfortunately you cannot ask or rely on your Broker to complete your Due diligence for you.

Once you receive the documents requested, you will need to make a decision within the time period set up in the Purchase Agreement.

If you decide that you need more documentation to support the income that the Seller is claiming, try to do this as soon as possible since you have certain time constraints to obtain these documents. It is OK to ask the Seller to explain certain expenses or changes to the Sellers net income.

Finally, make certain that you fully understand the income and expenses of the business before going forward.

Once you release your Due Diligence, you are stating that you are satisfied that the figures given to you by the Seller appear to be correct and you are moving forward in the transaction.

Breaking News On Your Retirement Funds

duda@fcbb.com — Thu, 20 Jul 2023 00:36:29 GMT

SBA announces faster access to retirement funds for business purchases

Breaking News on purchasing a business with retirement funds.

If you planned on using your retirement funds for the down payment or total purchase price of a business but were put off by the extra amount of time it would take we've got GREAT NEWS!

Thursday, May 7th 2020 the SBA announced that preferred lending partners, known as PLPs, are now able to approve these transactions in-house.

What does this mean to you? No more extensive SBA wait time.

You can use your retirement funds free of taxes and penalties.
You can now utilize your retirement funds quickly and why not, it's your money!

Learn more about using your retirement funds tax free.

Add Backs: What Are They?

duda@fcbb.com — Thu, 15 Jun 2023 03:56:15 GMT

Understanding the seller’s true Net income

A deeper understanding of which seller expenses can be added back to the bottom line realistically.

The prospective buyer of an auto repair shop for sale in California noticed, while conducting Due Diligence noticed that an office assistant was listed on the payroll. But he'd visited the business as a customer and had never seen anyone working in the office.

When inquiring about this, he learned that a "salary" of $1,500 per month was being paid to the seller's sister-in-law, and that she was listed as an office assistant, but didn't actually work at the company.

That's an "add-back" and it should be included with net income the seller said.

The buyer was troubled by this discovery. Also confusing was the seller's assertion that auto expenses, such as gas and insurance charged off as business costs, should be added back to profits.

These are just two examples of the many questions and sources of confusions that can surface when trying to understand the actual costs involved with operation of a business. The confusion comes about because many, if not most sellers attempt to show as little income as possible to reduce the taxes that have to be paid. Then, when it's time to sell, the business owner has the opposite objective, wanting to show as much earnings as possible to justify the price being asked for the business.

The typical way of resolving this dilemma is for the seller to point out the costs charged to the business but not really necessary to operate.

Good examples of these expenses are the owner’s personal expenses paid through the business amongst other items.

These explanations, however, sometimes raise more questions than they answer.

When the buyer who was investigating the business looked into what the seller was saying, he learned that although there was no one physically present in the office during business hours, it was necessary to have someone handling office work. The sister in law came in on evenings or weekends to balance the company check book, verify that all parts ordered were charged against repair orders, to compare vendor statements with individual invoices, handle payroll and sales tax responsibilities and take care of related duties.

And while it was true that the seller was charging the business for his personal auto expenses, it also was the fact that the car was used for needed business activities such as picking up parts and taking customers to their home or office.

A well prepared adjusted profit and loss statement anticipates buyer questions and clearly defines what expenses on the operating statement are, and what are not necessary for efficient management of the business.

But not every seller knows how to provide that information in a way that's easy to understand. And not everyone is willing to engage in full and complete disclosure.

It's up to the careful buyer to question every item on the income and expense statement. And to ask questions such as:

- Is each itemized expense necessary in order to operate the business properly?

- Is the listed total for each item the actual expense, or is the real cost lower, or higher than what has been entered in the books?

The smart business buyer does not accept, without question, the figures listed in the P&L and financials of a company being considered, but does some investigating to learn what the figures actually represent.
Part of the Business Brokers job is to question the seller about each items to determine if the expense is a “true business expense” or is it an expense that is necessary to run the business.

A competent Business Broker will review the seller’s P & L’s and “recast” the numbers by adding back the “non-essential expenses” that were paid through the business in order to arrive at an Adjusted net income for the business.

Buyers will find that 98% of small business owners have some type of add back and should not walk away from the business if they are satisfied with the seller’s explanations of the “add backs”.

Is Your Business All About You?

duda@fcbb.com — Thu, 15 Jun 2023 03:35:20 GMT

Looking at your business through the eyes of the Buyer

Ideas to de-personalize your business and make it more desirable to Buyers.

Many sellers feel that their business should reflect their own personal touch and in some ways that may be good HOWEVER not when you are selling your business.

There are many sellers who over “customize” their business making it too much about them as business owners for a buyer to see themselves in the business. Buyers often have concern that the business is dependent on the seller and when you are trying to sell your business this will work against you.

We have even seen over the years many different scenarios that with small tweaks issues could have been avoided. For instance we had an upscale restaurant where the owners labelled each menu item with their own names, for example Mary’s Meat Loaf or Ricky’s Ribs. What happens when a buyer takes over that business? Do they keep the menu items as Mary’s Meat Loaf even though their name is Sue? If they do change the names of the menu items there is a cost for menus to be re-printed and more importantly will the customers think that the recipes are now different and they can’t order their favorite meal. It’s even a good idea to look around your business with fresh eyes. Is your business covered with personal items such as family photos or photos of your last fishing trip, or even mementos of achievements? Awards for a restaurant or business services are great but too many personal items can detract when selling.

Take a look at your business through the eyes of a buyer. You could have a very successful business that is family owned with too much personal customization. When it comes time to sell, this will scare off potential buyers because they believe that the owners are so tied in with their customers or clients that the business will lose revenue once the business changes hands.

The sellers of this particular restaurant had previously attempted to sell their business with no success. We realized when we took the listing that they were hiring us for our experience and often common sense advice. We immediately suggested that the sellers make changes to their menu to remove their names from each item. The result was that we sold the business within a very short time period. Their business was truly successful but buyers couldn’t see past all the personalization with this small change their business became much more saleable which of course resulted in happy sellers and buyers.

A potential buyer must believe that the business that is being offered is transferable without a major loss of business because of the relationship of the sellers after the transaction is completed.

As Business Brokers, we always advise business owners who are considering selling to de-personalize their business prior to the business being marketed. So how does the business owner remove personalization such as an abundance of family photos etc. without alerting everyone that they are considering selling? One method we have witnessed is that the business owner considers some “small” remodeling or painting where he or she needs to remove items.

The bottom line is that if you are considering selling your business, talk to your First Choice professional to review whether your business is not only saleable and desirable but also if your business is ready to sell from how the buyer will view it. Make sure that the buyer will not feel that your business is “All about you”.

Ready For Retirement But Not The Rocking Chair?

duda@fcbb.com — Wed, 14 Jun 2023 02:07:49 GMT

Ideas to keep your brain active after retirement

Why Life does not end with Job Retirement

As business brokers for over 24 years, we hear time and time again people wanting to retire from their corporate jobs and take on a new lease in life with business ownership. We’ve proudly been part of these life changing events and are here to help you find the perfect “next chapter business”.

After spending years working in a job, the day for retirement finally comes. Great!

Many doctors believe that a person who stops using their brain power is a great candidate for Alzheimer’s disease. The solution is very simple. The retiree should take up a hobby that requires brain power or consider owing a business. Many of the people who contact our offices are retirees who are still young and active and want to control their future.

Today, very luckily, we are living in a world where age 65 is still considered young. The life expectancy of a male in 1958 was considered to be 72. Today according to the Uniform Life Expectancy Table 2013 a 70 year old man has a life expectancy of an additional 27 years.

What does this mean? It means that it is never too late to become self-employed by owning your own business. This can give you the opportunity to look forward to enjoying your post job retirement in a new career where you dictate your success. First Choice Business Brokers has a large selection of many businesses for sale and one of these just might fit your needs.

Selling A Business During A Divorce

duda@fcbb.com — Fri, 09 Jun 2023 04:53:33 GMT

Information on the process of selling a business during a divorce from an expert.

Mr. Smith owns a few laundromats. He’s owned them for 15 years. He’s been married for 19 years. For a few years now Mr. Smith has thought about selling them. He’s contacted a couple of business brokers and decided First Choice would be his choice if he decided to sell.

His wife has filed for a divorce, which forces Mr. Smith’s hand. He now must decide to sell the laundromats or value them and purchase them from his spouse by pay for half of the value.

We asked Las Vegas divorce attorney Rock Rocheleau to help us and Mr. smith understand Mr. Smith’s options.

Nevada is a community property state. Which means during a divorce all the property and assets acquired during the marriage are valued and divided evenly. With a business, like a home, the value can be based on an appraisal or allow the home to be sold. By allowing the business to be sold by a business broker, Mr. Smith is stating the value should be what the market will pay. This makes for the easiest solution. But what if Mr. Smith wanted to keep the laundromats?

How Do You Determine the Value of a Business?

There are three main approaches used in determining the value of a business: These three approaches are used when the business is not actually being sold in the open market.

Market-Based Approach . Compares the business to other similar businesses that have sold. Using this data, a value is assigned. Similar to how a home is appraised or valued.
Asset-Based Approach . The tangible assets of the business are given a fair market value and added up. This is similar to an asset sell of a business except the goodwill of the business or customer base is not considered.
Income-Based Approach . Assesses the present value of the business based future earnings. This is the most common approach.

My first impression is it would be best for Mr. Smith to hire First Choice Business Brokers to sell the business. This way there is no guessing at what the proper value is. But Mr. Smith may want a business to continue running after the divorce. In that case, the common valuation approaches should be reviewed and the best one chosen.

Market Approach to Valuing a Business

The Market Approach uses similar methods that are used by real estate agents when they determine the value of a property. The sale price of other similar businesses that have been recently sold is compared. The evaluator then assigns a fair market value of the community property business based on the price range of similar businesses.

The problem is in finding businesses that have sold that are truly comparable. The selling price for these businesses may have been influenced by unknown factors, such as:

The motivation for the sale
Market trends
The business sold may have been discounted for some unrevealed reason, so the sale is not truly comparable.
Other comparisons may not be accurate, such as the size of the business, the number of employees, and annual profits.
Intangible assets, or the lack thereof, may have affected the sale
There may have been no such similar businesses sold, forcing the evaluator to look for a broader business niche. For example, a business that specifically sells custom mufflers for eco-friendly vehicles may have to be valuated with a broader vehicle parts market. As a result, these valuations could considerably inflate or devalue the businesses’ actual worth.

Because of all these factors, the Market Approach is far from accurate in dividing the community property business between the two spouses during a divorce.

Asset Approach to Valuing a Business

The asset approach method may work well for businesses that have value based on tangible assets like real estate, equipment, inventory, and accounts receivable. In the asset approach, an appraiser adds up all the assets and subtracts the liabilities.

Unfortunately, this is not as easy as it sounds. Most businesses have both tangible and intangible assets. An intangible asset refers to things like intellectual property, business contracts, and goodwill. The Asset Approach does not take these factors into account when assigning a value.

For professional practices whose value relies on these intangible assets, the asset approach is usually not the best valuation method.

Income Approach to Valuing a Business

The Income Approach uses different mathematical approaches based on cash flow. The evaluator reviews the history of the specific business and compares its profits to other similar businesses. Risks of failure are also considered. All these mathematical approaches convert expected future profits into a present-day value.

The downside is that the value is based on a prediction rather than the current standing value. It cannot guarantee the assigned value will match the businesses’ future value. This can leave one or both partners shorted in the long term.

For Mr. Smith he should hire an expert to value the business based on the income approach, while at the same time hiring a business broker to look at what the laundromats would sell for on the open market. This way Mr. Smith can choose which avenue produces the most money for him and his wife to split.

How Do I Cut Business Expenses During Covid?

duda@fcbb.com — Fri, 09 Jun 2023 04:53:32 GMT

Cutting costs by reviewing expenses can help you through these tough times.

We all know that every dollar counts especially during this crisis.

While some business owners are applying for PPP loans savvy business owners are also evaluating where every $ is spent.

Now is a great time to examine all your business expenses. One of those expenses is your credit card processing rates and fees.

Now more than ever, every business owner is taking credit cards as their main form of payment for touch-less, non-contact service. We found a credit card processing bank that is offering free reviews of credit card processing rates and fees. If they can't beat your current rates and fees, they will pay you $1,000*. Who couldn't use an extra $1,000 right now? U.S. Bank Payment Solutions says they are confident that they can beat most rates because they are a direct servicer, no middleman to pay. We also found they don't even require you to have a bank account with their bank.

Some other expenses to consider reviewing are insurance premiums, security services and payroll services. Many business service providers are offering some of their regularly priced services at no cost or deeply discounted, you just need to ask.

First Choice Business Brokers is helping business owners arrange for their credit card processing rate and fee reviews at no cost.

We want to help you save every $ you can!

*Meet or Beat terms and conditions may apply.

There is no obligation, you have nothing to lose by having a review of your current credit card processing service rates and fees.

Today’s HOT Small Business Sales Market!

duda@fcbb.com — Fri, 09 Jun 2023 04:53:32 GMT

Economy makes buying a reality

Record high sales reported by BizBuySell national website

The Market is Hot: Retiring Baby Boomers and Rising Revenues Fuel Record Small Business Sales

BizBuySell.com's Second Quarter 2018 Insight Report examines the transactions and demographics behind the record levels of small businesses changing hands

San Francisco, CA - BizBuySell.com , the Internet's largest business-for-sale marketplace, reported today a record number of small businesses changing hands in the first half of 2018. The growth can largely be attributed to a growing number of Baby Boomers exiting their business as well as improving business financials. The full results are included in BizBuySell's Q2 2018 Insight Report, which aggregates statistics from business-for-sale transactions reported by participating business brokers nationwide.

A total of 5,383 businesses were reported sold in the first two quarters of 2018, putting the year on pace to surpass 2017's record-high of 9,919 transactions. In Q2 alone, 2,705 businesses changed hands, an increase of 6.7 percent over the same time last year and the most of any quarter since BizBuySell began tracking data in 2007.

fcbb-east-tennessee-262

Creating a Budget for Your Small Business

Creating a Google Ads Campaign That Delivers Result

Contact First Choice Business Brokers of East Tennessee and Nashville today.

Crafting a Unique Value Proposition: Why It Matters and How to Get It Right

What Is a Value Proposition, Really?

Why It’s Crucial in the Acquisition Process

How to Craft a Strong Value Proposition

1. Clarity

2. Specificity

3. Differentiation

Questions to Help You Discover Yours

Final Thoughts

Content Marketing Strategies That Actually Work

1. Know Your Audience

2. Be Helpful, Not Just Loud

3. Mix Your Formats

4. Stay Consistent

5. Always Include a Next Step

Conflict Resolution in the Workplace

How to Buy a Small Business: A Step-by-Step Guide for First-Time Buyers

Step 1: Define Your Goals and Budget

What Types of Businesses Are Easiest to Buy as a First-Time Buyer?

Step 2: Work with a Business Broker

Step 3: Evaluate Listings Carefully

Step 4: Conduct Preliminary Due Diligence

Step 5: Make an Offer

Step 6: Deep Dive into Due Diligence

Step 7: Secure Financing

How to Improve Your Chances of Loan Approval

Step 8: Close the Deal

Step 9: Transition and Take Ownership

Common Mistakes to Avoid When Buying a Business

Why Knoxville Is a Smart Place to Buy a Business

Final Thoughts

Frequently Asked Questions

Recent articles for you

Why Business Valuation Matters for Knoxville Entrepreneurs

What Is Business Valuation?

1. Valuation Is the Foundation for Selling Your Business

2. Valuations Attract Financing and Investors

3. Valuations Support Succession, Exit, and Estate Planning

4. Valuations Help You Understand Your Business’s True Performance

5. Valuations Add Leverage in Strategic Negotiations

6. Valuations Establish a Baseline for Growth Planning

Why Local Insight Matters in Knoxville

The Business Valuation Process

FAQS About Business Valuation in Knoxville

Final Thoughts

Recent articles for you

Conducting market research

Choosing the right domain name

Challenges and opportunities in the post-COVID world

Buying an existing business

Building a strong company culture

Building a professional business website

Choosing the right time to sell your business

Business broker vs. DIY sale Pros and cons

Attracting strategic buyers for your business

A Strong Exit Strategy Equals A Smooth Transaction

An exit strategy is simply a plan you put in place as a business owner to ensure a smooth exit from your company.

Step 1: Define Your Goals

Step 2: Receive a Valuation

Step 3: Explore Exit Options

Step 4: Prepare Your Business

Step 5: Assemble Your Exit Team

Step 6: Choose The Timing

Step 7: Market Your Business

Step 8: Do Your Diligence

Budgeting Your Small Business

Creating a business budget sounds like a complex process. And it can be.

Getting Started

Revenue And Profit

Analyzing Your Expenses

Budgeting Methods

Creating The Budget

Buying A Business: Financial Challenges

Buying a business is a huge investment that can have a major impact on you and your family for years to come.

Financing

Cash Flow Management

Is now the right time for you to buy a business?