Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Axial entitled “Consumer M&A: Acquiring the Competition” discusses several types of acquisitions and the value that each can deliver. As seen in the 2008-2009 economic downturn, times of crisis can lead to opportunity in the M&A space.
Types of acquisitions explored include:
- Acquiring the Competition – This deal type involves acquiring potential challengers to your business.
- Established Brands – This deal type involves acquiring larger, more established brands in your industry.
- Horizontal Expansion – This deal type involves expanding into adjacent businesses.
Click here to read the full article.
A recent article from Bloomberg Tax entitled “INSIGHT: Impact of Covid-19 on Middle-Market Private Equity M&A” discusses the ramifications of the COVID-19 shutdown on middle-market private equity mergers and acquisitions.
The shutdown has presented challenges including:
- Many sellers have put their sale plans on hold or at least have slowed things down
- Buyers are struggling to complete due diligence as in-person activities have been limited
- Access to debt markets is tighter
- Risk allocation and valuation have become key issues
Despite these challenges, buyers are seeing favorable deal terms and valuation gaps are being bridged through a variety of deal features. And with challenges comes opportunity.
Click here to read the full article.
A recent blog post from Exit Strategies Group entitled “M&A Advisor Tip: COVID-19 Era Due Diligence Part 1” explores potential questions that may come up during due diligence regarding staffing in relation to COVID-19.
The workplace as we know it has changed and business operations have had to adapt to survive COVID-19 challenges. This will likely come up during the due diligence phase of selling a business. Questions may arise regarding layoffs, key employee retention, compliance, health and wellness considerations, safety plans, and remote working.
Click here to read the full article.
Read More
Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from BizBuySell entitled “Small Business Acquisitions Dive in April Before Rebounding to Close the Second Quarter” reveals the results of BizBuySell’s 2020 2nd Quarter Insight Report. The report aggregates statistics from business-for-sale transactions from business brokers across the U.S. The 2nd quarter experienced serious shifts due to the COVID-19 shutdown.
Key findings from the report include:
- Small business transactions dropped 39% in Q2, with the biggest drop in April and some rebounding at the end of the quarter
- During May and June, the number of buyers searching and inquiring about businesses on BizBuySell eclipsed pre-pandemic levels
- 66% of buyers are seeking a profitable, pandemic resilient businesses
- The median sale price of businesses sold in Q2 rose 6.1% compared to 2019
- 68% of owners experiencing a decline expect it to rebound within the next year
- 16% of business owners plan to exit their business earlier as a result of the pandemic, 20% plan to exit later, 61% are not changing their timeline
Click here to read the full article.
A recent blog post from Transworld Business Advisors entitled “How to Prepare Your Business for a Post-COVID-19 Sale” discusses important things to keep in mind in light of COVID-19 if you plan to sell your business during the second half of 2020.
Consider the following:
- Do what you can to keep revenue coming in such as selling online or offering delivery
- Keep detailed financials on a month-to-month or week-to-week basis
- Write down what you learned, what you changed, and how the business has survived
- Evaluate how your industry has changed so you can offer insights to buyers
- Improvements made to help your business survive will also likely help it sell
Click here to read the full article.
A recent article from BizBuySell entitled “Study: The Impact of the COVID-19 Pandemic on Small Businesses” discusses BizBuySell’s recent survey of over 3,000 small business owners and buyers regarding the impact of COVID-19. The 41 question survey covered topics such as government mandated shutdowns, rehiring challenges related to unemployment benefits, exit strategies, expansion plans and acquisition goals.
Key findings from the survey include:
- 51% of businesses have had to close or suspend some operations
- 52% of businesses who are starting to rehire furloughed or laid off workers have experienced challenges due to the $600 federal unemployment benefit
- 16% of business owners plan to exit earlier than planned and 20% plan to exit later
- 80% of business owners would consider buying a business that has remained open but has been negatively impacted by the pandemic
- Buyers are looking to utilize the CARES Act benefit of 6 months free principal and interest on new SBA loans closed by September 27th
Click here to read the full article.
Read More
The Main Street Lending Program
There is no doubt that the COVID-19 situation seems to change with each and every day. The disruption and chaos that the pandemic has injected into both daily life and business is obvious. Just as it is often difficult to keep track of the ebbs and flows of the pandemic, the same can be stated for keeping up to speed on the government’s response and what options exist to assist companies of all sizes.
In this article, we’ll turn our attention to an overlooked area of the government’s pandemic response and how businesses can use a whole new lending platform to navigate the choppy waters.
As the pandemic continues, you will want to be aware of the main street lending program, which is a whole new lending platform. It was designed for businesses that were financially sound prior to the pandemic. Authorized under the CARE Act, the main street lending program is quite attractive for an array of reasons. Let’s take a closer look at what makes this program almost too good to be true.
This lender delivered program is a commercial loan. Unlike the PPP, there is no forgivable component. However, the main street lending program does have one remarkable feature that will certainly grab the attention of all kinds of businesses. It can be used to refinance existing debt at a rate of around 3%. With that stated, it is also important to note that businesses cannot refinance existing debt with the current lender. Instead, a new lender must be found. Generally, loans are a minimum of a quarter million dollars and have a five-year term. In another piece of good news, there is a two-year payment deferment period.
The main street lending program can be used in a variety of ways. In short, the program is not simply for refinancing existing debt. Additionally, there is no penalty for prepayment. The way the program works is that lenders make the loans and then sell 95% of the loan value to the Fed. This of course means that the lender is only required to retain 5% of the loan on their balance sheet. The end result is that lenders can dramatically expand the amount of loans they can make.
Whether it is the PPP or a program like the main street lending program, there are solid options available to help you. Businesses looking to restructure debt or put an infusion of cash to good use may find that the main street lending program offers a very flexible loan with great interest rates.
Copyright: Business Brokerage Press, Inc.
The post The Main Street Lending Program appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent blog post from Exit Strategies Group entitled “Methods of Selling Distressed Business Assets” discusses options for businesses who become financially distressed as a result of the pandemic shutdown. There is currently an active market for distressed business assets, giving these owners some options to exit.
Four common ways to sell assets from a distressed business include:
- Asset sale in which lenders or creditors may be asked to forgive or discount outstanding debts
- Secured party short sale under Article 9 of the Uniform Commercial Code
- Asset sale in an Assignment for the Benefit of Creditors
- Section 363 asset sale in a Chapter 11 or Chapter 7 bankruptcy
Click here to read the full article.
A recent article from NuWireInvestor entitled “Buying a Business? Be Sure to Avoid These Mistakes” examines costly mistakes to avoid when buying a business. The current economic environment has created real opportunities for buyers, however it is still important to buy wisely in order to have a positive impact on your life.
Key mistakes for buyers to avoid include:
- Failing to ask important questions such as “Why is the business for sale?” and “What do I need to operate this business?”
- Failing to carefully inspect several years of tax records
- Not being honest with yourself and picking a business that doesn’t fit who you are
- Letting everyone go right away and replacing them with your own people
Click here to read the full article.
A recent article from Divestopedia entitled “Selling Your Business: What Sale Process Is Best?” discusses three ways to sell a business and the pros and cons of each. When it’s time to sell, it’s important to know your options and to carefully consider which option is right for your business and for your goals.
Three common ways to sell a middle market business include:
- Broad auction – This opens things up to the full spectrum of buyers, which can maximize value yet can also take longer and comes with a higher risk of a confidentiality breach.
- Controlled auction – This involves approaching a limited number of buyers who would be a good fit, which can help maintain confidentiality and drive a higher value yet it can take some time to complete.
- Negotiated sale – This involves a very limited number of buyers (often just one buyer), which can be quicker and confidential yet could lead to a lower sale price.
Click here to read the full article.
Read More
Why Does Your Business Need Google Reviews?
In today’s business climate, reviews are the differentiator. Years ago, people commonly asked for references when they were vetting a product or service. But these days when people are searching for a local business to work with, they are likely to conduct research on their own and read online reviews.
Google reviews can give businesses a big credibility boost without having to spend a dime. Let’s take a look at some of the key benefits.
Increased Credibility & Trust
According to statistics, approximately 91% of consumers read reviews to determine credibility of a local business. In fact, 84% of consumers say the positive reviews have helped them gain trust. Without the reviews, that level of trust would not have been established.
Needless to say, people trust Google. The fact that these reviews are on a 3rd party website increases transparency. These reviews have much higher value than testimonials posted on the actual business website.
Improved Business Conversions
Once a potential customer gains trust in your company through reading Google reviews, it is more likely the conversation will get converted to an actual business transaction.
Customer Feedback Loop
When your customers write reviews about your business and post them on Google, these reviews often clearly mention details about your product or service. Through this means, future customers become educated. These reviews can also serve as a feedback loop for you if things need improvement.
Increases Online Reputation & Visibility
The power of online marketing methods you might be using to promote your business will be amplified, as users will become more attracted to your business due to 5-star reviews. This factor increases online traffic to your website and an increase in leads and business.
Another fact to be conscious of is that your clients will review your products or services whether you want them to or not. If you fail to set up Google reviews, you’re missing out on the opportunity to gain a level of control and visibility.
How to Set Up Google Reviews
- Create a Google My Business account. – Visit https://business.google.com/ to sign in or create a Google account for a business. Complete the step by step process by filing required information like email, phone number, business details, etc.
- Ask clients to review your services. – Start sharing your Google My Business URL with clients and ask them to post a review about your services. When asking for reviews, you can mention to clients that their review will help everybody else make an informed decision when they are looking for help. It is important to ask about the review within a few days of closing your transaction. If more time goes by, the client may be less motivated to post a review for you.
- Remind clients. – Everybody is busy. Therefore, there is a chance that your client might forget to write a review. In this case, we recommend reminding them to do so. You can also politely inquire if they need any help posting the review that you discussed.
Through the above-mentioned process, you can begin generating reviews for your business. Of course, it goes without saying that you can only guarantee good reviews when you are providing excellent customer service along with a top-notch product or service.
Copyright: Business Brokerage Press, Inc.
The post Why Does Your Business Need Google Reviews? appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
