Archive for category: General

Watch the video below to find out how business brokers assist their clients in the sale process.

If you have kids, especially teenagers, you understand the meaning of this title. We can’t help it! As parents we have to try to help. And, in our experience as business advisors, many times Entrepreneurs can act like teenagers too.

Business advisors sometimes sound like parents.  Apex business advisors have a great deal of experience, and have participated in countless situations that either resulted in a closed deal or collapsed deal.

So you can imagine that we know what typically works and what does not, and can usually see the red flags of a collapsing deal.  We can’t always see the collapse coming, but we learn constantly through new and wonderful experiences!

We are giving advice regularly to help our clients and customers through the business sale and buying activities. The years have taught us about time killing deals, investors are ghosts, relatives are naysayers, change is hard, discretion is critical, etc. However, to people who have never bought or sold a business, our pleadings and warnings can fall on deaf ears.

We are not always right because every deal is different, but clients really need to take a moment and listen to their advisors. They need to collect all the available information and make an educated, non-emotional decision. A buyer or seller may not follow our advice, but if they listen to us and really understand the situation they will be able to make their own decision – which is the beauty of being an Entrepreneur!

Completing deals that result in a win-win for both buyer and seller is what we love to see at Apex. Finding good businesses to sell and having buyers continue the success is really important to us. Talk to an Apex Business Advisor for assistance if you are in the market to sell or buy.

Doug Hubler
President

With all of the excitement of buying a business, variable rate loans can sometimes add some anxiety. Loan terms vary from bank to bank. Generally, interest rates on a 10-year SBA loan will adjust quarterly as a function of the prime interest rate — typically prime + 1.75-2.25%. Let’s look at an example to understand what impact a rising interest rate might have on your income.

Today’s rates commonly allow for an initial interest rate of 5.5% on an SBA loan.  The table above describes the impact of successive increases to 7.5%.  Under this scenario, amortization costs on a loan of $525,000 could increase by only $6,408 on an annual basis, which would translate to a minimal reduction in income if all else is equal.

Typically a buyer will pursue a business in part because of anticipated growth — perhaps at the rate of 10% per year — then the threat of interest rate increases of this nature won’t be more than a blip on the distant horizon.  To learn more about buying or selling a business, please contact one of our Apex Business Advisors.

Paul Temme
Senior Advisor

The toughest part about buying a business is the follow through.  Will you get to the finish line? Will you write the check from your investment account? Will you put your house up as collateral? Do you think that the 10 to 20 year old business you are interested in will collapse as soon as you take it over?

The odds are very much in your favor if you are buying an existing business. It may take you some time to find the right business for your personality or the right sized business for your investment, but when found will you jump? Some soul searching with your partner and/or spouse will be critical before entering the realm of a business search.  Is this the right time? What are your other options?

I was recently involved in a brainstorming session with a bunch of entrepreneurs from many different industries. The topic: “What are the typical characteristics of an Entrepreneur?” Take a look at this list to determine if you fit a few. This is not the entire list we came up with, but these are my favorites.

If you have a few of these traits there is a good chance you are or will soon be an entrepreneur. If you have all these traits, you might just annoy your fellow entrepreneurs (out of jealousy). If you don’t see a fit with any of these characteristics, you might want to avoid business ownership. Either way, we would love to talk to you and give you some insight into business ownership. Contact any one of us.

Apex Business Advisors would like to congratulate the 5 new entrepreneurs who accomplished their dream of business ownership this month!

Although most people don’t like debt, it is critical in most cases to enable a buyer to purchase a business. There are plenty of benefits to using a bank’s money too:

• It allows a buyer to acquire a bigger and better business.
• The bank is taking on some of the risk, and
• The returns on invested capital should be outstanding.

Since a bank is needed to acquire a business, that banker is now going to be your “partner” in the venture. They are taking on a substantial amount of risk and want to make sure their new partner is going to be a good partner. The bank will want to know that their potential new partner has a thorough understanding of the business they want to buy, the industry they are about to enter, the trends, opportunities, challenges, etc.

So, in preparing for a loan, the buyer will need to write a short business plan and have a 2 to 3 year projection of the business after acquisition. This isn’t a difficult process, but will take some effort and thought. There will probably be an interview with the loan officer and maybe the bank credit underwriter. Remember interviewing for a job? This interview will be similar in that it’s not a time to be glib, rude, arrogant, or indifferent. Bankers have feelings too!

The buyer needs to show passion for the business, knowledge of the industry, and interest in growing the business.  The seller will be able to educate the buyer about the details of the business and industry trends, and where to go for additional data if necessary. There are plenty of professionals that can also assist in the process and your Apex Business Advisor can steer you in the right direction.