The Silver Tsunami – Selling Your Iowa Business
Over 50% of all U.S. business owners are over 55 years old. In Iowa, with our aging population, that percentage is likely even higher. We’ve been hearing for years about the significant increase in businesses coming to market due to retiring baby boomer owners. The Silver Tsunami— referring to those turning 65—began in 2011. While […]
Worried About AI? Buy an Iowa Business!
It seems like all we hear about these days is how AI is the next disruptive technology — driving incredible productivity and efficiency gains. While it will create new opportunities, it’s also common sense that many jobs will change or even disappear. A familiar theme among Iowa business buyers is the desire to control their […]
The 3-year plan
It’s hard to know when it’s the right time to sell your business. But if you don’t have successors within your company (family or key employees) already, we recommend a 3- year plan to sell your Iowa business. Why is that? We have found it takes 11 months on average to sell a business. The […]
How Are Small Businesses Valued for Sale?
Historical Cash Flow Analysis and Seller Discretionary Earnings (SDE) When assessing the value of a small business, analyzing historical cash flow is a fundamental approach. This method provides buyers with insight into the company’s annual revenue generation and often justifies a premium purchase price for businesses with a proven track record of success. However, many […]
Other Key Factors in Valuing a Small Business for Sale
Understanding the Elements That Drive Business Valuation As the final part on this series of valuing a small business for sale, it is important to recognize additional factors that significantly influence buyer demand and final valuation. 1. Business Longevity and Track Record Buyers tend to favor well-established businesses with a proven track record. A longer […]
Seller Discretionary Earnings and Business Sales Price
Understanding Seller Discretionary Earnings (SDE) in Business Valuation Seller Discretionary Earnings (SDE) play a critical role in determining the fair market value of a small business. As a fundamental financial metric, SDE provides valuable insights into a company’s financial health and attractiveness to potential buyers. Additionally, the predictability of cash flow significantly influences valuation. Business […]
Business Consulting: The Importance of a Business Broker
When preparing your business for sale, it’s essential to engage key business advisors including a certified public accountant (CPA), attorney, and commercial bankers. However, there is one more integral advisor that many business owners often overlook: the business broker. Strategic Market Intelligence Business brokers provide invaluable insight into local market trends, comprehensive business sales data, […]
Buyer Financing – SBA Loan Structure
Overview SBA financing is the most common form of funding for owner-operators pursuing small business acquisitions. This government-backed program offers several advantages to buyers, including a lower down payment, longer repayment terms, and the ability to purchase a business without the need for significant personal or business collateral. From my experience, the 80-10-10 loan structure […]
Business Valuation – Key Value Drivers
Overview: There are countless methods to value a business. However, when it comes to small business sales, most transactions involve owner-operators much like the seller — individuals looking to step into the business and continue its operation. In these cases, there are four key factors that consistently drive business value: 1. Historical Business Cash Flow […]
Business Owner Strategy – Business Sale when Owning Commercial Real Estate
Business owners face unique complexities when selling their operations while simultaneously owning the underlying commercial real estate. Strategic preparation in three key areas can significantly enhance sale outcomes and buyer interest. 1. Market Rent Assessment and Adjustment Many business owners fail to adjust rental expenses in accordance with market inflation and property appreciation over time. […]