Michael Shea

Central Florida's #1 Business Broker

capital

capital

10 Signs a Business for Sale Is Actually a Good Business

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What makes a business worth buying? Here are 10 signs of a fundamentally strong small business, including cash flow, customers, employees and systems.

1. Consistent Cash Flow

Consistency reduces risk.

2. Repeat Customers

Customers who return are valuable.

3. Strong Employees

Good employees make the transition easier.

4. Low Owner Dependence

The business shouldn’t collapse when the owner leaves.

5. Good Reputation

A strong reputation is an asset.

6. Diversified Customers

No single customer should control your destiny.

7. Good Suppliers

Stable suppliers protect margins and operations.

8. Reasonable Capital Requirements

You don’t want every year’s profits going into new equipment.

9. Documented Processes

Systems make businesses transferable.

10. Opportunities for Improvement

A good business with fixable weaknesses can be a great acquisition.

Working Capital Peg Example (With Real Numbers) – A Case Study

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One thing that kills large deals is working capital PEGs don’t get addressed early by the broker and the parties. Small business owners often run their business with little to no understanding that if they sell to a private equity group of a more sophisticated buyer they will look for the working capital to be given to them in the sale.  Here is an example of the way it works.

The “Working Capital” Peg: How Cash and Inventory Are Negotiated at Closing—and How Sellers Can Improve It to Their Advantage

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By Michael Shea, Transworld Business Advisors of Tampa Many business owners focus almost exclusively on sale price. But seasoned sellers know that working capital—how much cash, inventory, and short-term assets stay in the business at closing—can quietly swing deal economics by hundreds of thousands of dollars. In lower middle market transactions especially, the working capital […]

M&A Advisors vs. Main Street Brokers: Choosing the Right Representation for a $500K Business—or a $10M One

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Not all business sales are the same. A company valued at $500,000 requires a very different approach than one worth $10 million. Yet many owners don’t realize there are fundamentally different skill sets, buyer pools, and processes involved.

Buying a Business vs. Starting from Scratch: Pros and Cons

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If you want immediate cash flow and a ready-made foundation, buying a business may be ideal. If you crave creative control and have a groundbreaking idea, starting from scratch could be the better fit.