March
2018
Ask the Expert!
 
Question: How do buyers value my business? 

Answer: That depends (how's that for a good lawyer answer?). Most buyers are going to look at a three year average of the business SDE (Seller Discretionary Earnings). Many factors go into figuring out SDE and buyers will always try to find the lowest number, while we at the CBI TEAM are trained to help you figure out a verifiable SDE by doing what's called a recast of income. We know what buyers (and their lenders and CPAs) will accept as real SDE and we can guide you through that process. Most businesses will sell for a multiple of SDE and we want all our sellers to maximize their sale. 

We want to hear from you, our readers! Send in your questions to
info@cbiteam.com
and we'll have your answers in our next newsletter.


Business Confidential is compiled from information picked up by Carl Grimes and other CBI Team members on the streets, in the offices and around Northwest and Central Arkansas, and Northeast Oklahoma. The names aren't being revealed to protect the innocent (and sometimes the guilty!).

 

Dateline-Northwest Arkansas:

Lots going on in the Northwest Arkansas office of the CBI TEAM. Seven DIPs (Deals in Progress) and about 5 new listings hitting the books. Looks like a great year to be a CBI TEAM Intermediary. If you are interested in joining the CBI TEAM then send your resume to confidential@cbiteam.com and we'll review and get back to you ASAP. Things are booming: 

  • New listing being prepped for presentation is going to be a big one and offers a chance for a platform and roll up of companies in about a 3 state area, Arkansas, Missouri and Oklahoma. John Green has the engagement and is working diligently to get it ready for presentation to buyers. 
  • Loans4Biz, the proprietary CBI TEAM small business loan program continues to help business buyers get the best loan possible. Six deals are being shopped to lenders now and the results are amazing. If you need a loan for your company, or to fund a new franchise start up, call Kelly Tivis, the L4B Guy, at 877-582-5200.

Want to reach hundreds of business owners and buyers?

Contact us to find out more!


BIG BUYERS!
 
What they look for:
Each week, the CBI TEAM receives three to five messages from Private Investment Groups, and other Merger and Acquisition firms. These messages generally provide a guideline for the industries and criteria they use to identify the businesses they seek to acquire. Industry interests range from casual dining, and service companies, to cutting edge technology and medical facilities, and everything in between. Though many of these companies have a specific focus on industry, nearly all have the same financial criteria, the business needs to make five or more million a year. If this sounds like your business, no matter the industry we want to hear from you, and so do our big buyers. For more information  877-582-5200 or email confidential@cbiteam.com 

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Need some encouragement?
Contact us at 877-582-5200 or e-mail confidential@cbiteam.com for a no-obligation, confidential consultation.


Sold! Four Subway Locations
The CBI Central Arkansas TEAM does it again. Earlier this month, the CBI TEAM sold a package of our Subway franchises in Central Arkansas. 

Frank and Lisa Gardner, former owners of the Subways, were advised by their financial manager to call Connor Grimes, owner and broker of CBI Central Arkansas. Frank and Lisa expressed a desire to concentrate on other businesses that they own and made the decision to confidentially put their franchises on the market. Within three months, Dwayne Engle, another Subway franchisee, met with Frank and Lisa and shortly thereafter, made a full price offer, which was accepted. 

Dwyane, with the help of the CBI TEAM, used an SBA Loan to fund the deal. 

Frank and Lisa had previously listed their business with a local real estate company. Dissatisfied with the lack of productivity from the real estate broker, they waited out their 12 month contract and then made the decision to list the company with a professional who deals exclusively with helping people sell and buy privately held companies. 

Connor Grimes and Shep Campbell co-listed the business and both worked with Dwayne. 


Cash is King

by Carl Grimes Chairman Confidential Business Intermediaries/The CBI TEAM Northwest Arkansas

Most business buyers are focused on one thing when taking a look at businesses for sale...cash flow. 

It's pretty simple why. 

Most of them are Main Street buyers who have either been fired or downsized from their jobs. In that case, the first priority is to make a living and that means cash flow. So, if you own a business and want to sell it to help fund your retirement, the first criteria for a successful sale is that the business must generate enough cash for a buyer to make a living and pay for the business from the cash flow in 5-10 years (not counting real estate). 

By the way, this needs to be documented cash, not under the table cash. 

Report all your sales and most buyers are willing to pay a reasonable multiple of provable historic cash flow to buy your business. It's a classic "win/win" for Sellers and Buyers and your CBI TEAM intermediary can help put the deal together.  

Reasons You Should Sell Your Business

By Roy Still, Owner-Confidential Business Intermediaries/The CBI TEAM Tulsa Area

All entrepreneurs have pondered the question, "Should I sell my business?" Consider the following when thinking about selling your business. 

Risk

When you were a new business owner, you were more confident in taking risk. You didn't have much equity in your business and your business didn't have as much value. You have worked diligently over the years growing your business while developing and protecting your good will. Now that the business has grown in value, your risk has grown with it. 

Many factors make up your business' value any one of which can change your businesses' current value. Do you have the luxury of time to "right the ship" and spend years recovering lost value? Business owners should always be sale-ready and looking to exit their investment especially when the value is at its highest. 

Liquidity 

The larger your business value, the more you potentially have to lose and the longer you hold on to the business, the higher your risk of losing that value. If you are ready to exit and have a chance at liquidity while mitigating your risk, then you should consider selling your business. 

Change

Although a chance at liquidity is a good reason for an owner to sell their business, there are many reasons owners sell. After dedicating years of time, money and energy into building value in a business, some owners may find they are ready for retirement. Others may be looking for the excitement of a new opportunity as a serial entrepreneur. Some may sell due to changes in their health, marriage or family. 

Now that you have considered reasons to sell and have decided to exit, what's next? You will need to analyze and normalize your business financials, come up with a valuation, market your business online through business sales sites, social media, online marketplaces etc. Once your marketing plan is executed, you will be contacted by potential buyers. These buyers will need to be vetted and pre-screened as to their willingness and ability to purchase your business, they will need to sign non-disclosure agreements to ensure confidentiality and will want to tour your business, get questions answered, etc. Once you have identified a buyer for your business, you will need to negotiate the price, terms, leases, training period, non-compete agreement, closing deadline, seller financing, and contingencies of the transaction. The buyer will then want to conduct due diligence of all your financial records, tax bills, contracts, receivables, leases, franchise agreements, inventory, equipment, payables, credit lines, etc. Finally you will have to coordinate closing with a contract attorney and negotiate document changes and revisions between your attorney as well as the buyer's attorney. ALL WHILE TRYING TO OPERATE YOUR BUSINESS! OR...you can engage the services of the Confidential Business Intermediaries office nearest you. We have the experience and knowledge to work on your behalf in order to bring about the smoothest transaction with the best possible outcome allowing you to conduct business with the least disruption. Contact the CBI TEAM today at confidential@cbiteam.com for more information. 


Online Marketing Activity

One of the many ways the CBI TEAM markets businesses is through buyer specific websites, places business buyers go to find businesses to buy. ​Below are figures that represent ​some online ​buyer activity on some (not all) of the websites used by Confidential Business Intermediaries/CBI TEAM to market businesses. This information displays the amount of views or "hits" that ​CBI business listing​s​ and websites ​got as well as the total number of ​emails​ to ​which ​our monthly newsletter​s are sent​.​ It costs hundreds of dollars per month to place the confidential "blind" ads on these websites. In addition to the websites, CBI prepares and implements a customized marketing plan for each business ​we list for sale.

​CBI also prepares a monthly report for each business owner we represent. The monthly report provides detailed information about each business listing.


Business ListingsLast MonthLast 12 Months
Total Number of Views11,102120,204
Avg. Views per Listing2312,245
Total Email Inquiries53651



cbiteam.comLast MonthLast 12 Months
Total Number of Visitors1,21312,649
Total Number of Views1,98730,073



Monthly NewslettersLast Month
Total Newsletters Sent12,423

Company Profile

The CBI TEAM is the largest business brokerage network in Arkansas and Oklahoma. Since 1994 we have helped people sell and buy businesses in one of the nation's fastest growing regions. Offices in Northwest Arkansas, Central Arkansas, Fort Smith, Arkansas, and Tulsa, Oklahoma, make the CBI TEAM is the only business brokerage firm with offices in each of the major Ozarks cities. 

The CBI TEAM manages the entire business sales process, from helping the seller arrive at a reasonable, market-driven price for the business, to helping the buyer to arrange financing so that the seller gets the most compensation at closing. 

The CBI TEAM is the one-stop intermediary for all business sellers and buyers.

Carl Grimes, Office Owner
Serving the Northwest Arkansas area
Contact us at (479) 770-8989 or carl.grimes@cbiteam.com

Connor Grimes, Office Owner
Serving the Central Arkansas area
Contact us at (501) 404-4980 or connor.grimes@cbiteam.com

Mark Kincannon, Office Owner
Serving the Fort Smith/River Valley Arkansas area
Contact us at (479) 784-9522 or mark.kincannon@cbiteam.com

Roy Still, Office Owner
Serving the Tulsa, Oklahoma area
Contact us at (918) 940-6437 or roy.still@cbiteam.com

Casey Grimes, Office Owner
Serving the Richmond, Virginia area
Contact us at (804) 299-0301 or casey.grimes@cbiteam.com