If you are a small business owner and ever wish to sell your business you need to understand how the ability to finance a business plays in your valuation and your ability to get a deal done.
It may seem backward for a current business owner to need this information but here is the reality. The average 40 year old in the USA has about 63,000 in their savings and retirement accounts. Now we recognize that the average person does not buy business however say we double or even triple that amount to 163,000. At that level of down payment, you only then can stretch into a business worth about 1,000,000 to 1,500,000 assuming some very favorable terms including seller financing.
Just as small business owners need to understand who their customers are so too do they need to understand who their business buyers are and what is reasonable assuming they have to go to a third party (the SBA Lender) to get the liquid cash to buy the business. These third parties are the 3rd wheel in the deal and they have their say.
Do take the time to listen to this interview with Michael Hershaft of Celtic Bank. Michael has been a long time local SBA lender here in Florida and is one of Transworlds preferred partners for doing SBA Level Deals.
For a deeper analysis of your business, its bankability, and the nuances of buying or selling a business in Central Florida please contact me at Mike@tworld.com or call direct at 321-287-0349.
www.tworld.com/michaelshea are Central Florida’s Largest Business Brokerage with 260 offices worldwide, 600 plus active brokers and over 10,000 sold deals in 40 years of continuous practice.