Frequently Asked Questions
Consulting
Chances are “you know your stuff” regarding the product you produce or the service you render.
However, all the other things that must occur in order for you to have a sustainable and profitable business can, and often should, be delegated to someone else – like a business consultant.
Finding the right consultant can make a world of difference in your business world!
Way too many! Many are IT specialists. Others are HR specialists. Yet others are marketing specialists. The key is to retain a business consultant who can knowledgeably help you with YOUR specific situation.
When you find one that understands “The Business of Business” – retain that firm.
Objectivity.
All too often, business owners “can’t see the forest for the trees”. Essentially, they are so busy “putting out the fires” that occur in the day-to-day operations of a business that they don’t have the time (and/or energy) to take a step back and see the business as a whole.
A consultant’s objectivity frequently reinforces the owner’s “thoughts about things.”
Be careful when retaining a marketing consultant. Why? There are many aspects of marketing such as proper pricing, ad creation and placement, packaging that is effectively eye appealing and protective, distribution channel selection, as well as sales and sales management.
Ask your prospective consultant what their special area of marketing is. Make sure that coincides with the type of help you need.
In most cases, “Yes”. Once again, perform due diligence for any consultant you are thinking of helping you with competitive research. A marketing background or degree can be quite helpful.
Additionally, it puts you in the driver’s seat if you know more about your competitors than they do about themselves.
Occasionally, you may come across a CPA who specializes in business consulting. And that’s a good thing.
However, there are many consultants who have a firm grip on small business financial matters and will take the time to explain what the statements are saying.
Once you “know your numbers” you will have a significant advantage over many of your competitors.
Wonderfully, yes. Before you hire this type of a consultant, double check his/her background and work experience. If they have been a salesperson and a sales executive, that person may be just the right fit for your business.
The two key elements to sales success are 1) product or service knowledge and 2) proper and effective sales techniques.
Absolutely! This question concerns marketing and strategic planning.
However, don’t worry. Everyone has had a mental logjam at some point. The key to retaining the right consultant is finding one who you feel comfortable with and has experience with other business owners who have experienced similar challenges.
The right consultant can be like a business breath of fresh air!
Perform a Google search. But, be very precise regarding the type of consulting help you are seeking. As mentioned in Question #2, there are many consultants who focus primarily on one area of knowledge. Speak with three to five different consultants, asking the same questions of each of them.
When those conversations have occurred, decide which two are your favorites, and why. Then, decide which consultant you are most comfortable with … and why.
There is bound to be one who can provide you with just the right guidance.
Business Brokerage
A business broker takes a highly confidential approach to selling your business as opposed to a commercial real estate broker who doesn’t.
An extremely important aspect of selling one’s business is maintaining the highest possible level of confidentiality. Failure to do so can result in lost customers, lost key employees, and tighter payment constraints of suppliers.
Consequently, those losses lower the value of the business.
Initially, only the people who you trust will maintain the strictest of confidentiality. Those individuals include your attorney, your accountant, and your selected business broker.
DO NOT tell your employees, your service and product suppliers, and your banker.
Two things: 1) Make sure your records are all up to date and accurate, and 2) Cleanup/freshen up your facilities – internally and externally. If an area needs a fresh coat of paint, paint it. If there’s a pile of junk behind your building, get rid of it. If applicable, mow the grass and trim the bushes.
The internal and external “curb appeal” of your facilities will suggest that you pay attention to all aspects of your business – which increases the chance of better terms and conditions of your buy/sell agreement.
No less than two years from the date you list your business with a business broker.
Like with so many things in life, “Over prepare, then go with the flow.” Doing so ill benefit you in the long run.
First, it depends on the complexity of the business. The fewer the requirements for third-party approvals, the faster the sale can occur. The length of time to complete the sale of a business can be six months to two years.
However long it takes to sell your business, be ready for a roller coaster ride!
The value of the buy/sell agreement is more important because of the possible tax ramifications that can negatively impact the seller’s financial situation.
Your accountant can be extremely helpful regarding the structure of the agreement. Following your accountant’s advice can only help.
CAUTION: Don’t be fooled by someone promising to “get the highest possible price” for your business. It’s the total net value of the buy/sell agreement that matters.
There are a handful of ways (5) to value a business. After completing all five ways, throw out the highest and lowest values. Your business will probably sell for an amount between the highest and lowest amounts of the remaining three.
Actually, make your initial asking price slightly higher than what you’re willing to settle for. That way, you can give a buyer a “victory” by “negotiating you down.”
Actually, a business broker can help all parties remain calm. Yeah, even you. It is natural for emotions to creep into the negotiations process, especially when the seller founded the business.
Thus, a business broker can be a much-needed emotional buffer – which increases the chance of successful sale of your business.
Yes, it is. A highly experienced and long-time business broker usually has well-established network that includes connections with potential buyers (directly or indirectly), attorneys, accountants, bankers, investors, and lessors (property and equipment).
Tapping into a business broker’s network can save you time, effort, and money.