In This Issue
Why It Is Important To Pay Attention To Your Balance Sheet When Selling Your Business
FEATURED
CLIENTS
Automotive Service and Repair - Growing Profitability!
#1715
This automotive service business sets the local standard for customer satisfaction, employee retention, and overall profitability in the industry. With a great location proximate to a major thoroughfare, the company continually attracts new customers, as well as serving its loyal base of local customers. The
company has grown steadily year after year, and is projected to eclipse $1M in revenues for 2015. The real estate for this location is being sold in addition to the business. The estimated down payment and financing terms assumes the purchase of both the business and the real estate.
Business Purchase Price.........$845,000
Real Estate....$925,000
Down Payment.......$274,000
(Estimate/assuming an SBA guaranteed loan)
Gross Sales.......$925,496
SDE............$303,673
For more information,
contact Robert Amerine
Arizona Real Estate Development
#515
This development, ready for residential and commercial buildings, is located proximate to beautiful Lake Powell and is perfect for those who love fishing, water sports, hiking, and exploration. The development includes 331 residential lots with 9 different subdivisions/phases. There is a total of 25.51 acres of commercial land in 6 parcels, 11 acres of small commercial lot property, and 5.02 acres of improved RV/boat storage and mini-storage facilities. Roads are paved and private utilities are ready to hook up. The resort site is a hub to Canyon Country, and is the perfect basecamp for visitors seeking upscale services while exploring Northern Arizona. This may be the only privately-owned hotel parcel with views of Lake Powell!
Purchase Price..$15,900,000 Down Payment....TBS
Commercial Furniture Manufacturing & Upholstering Company With Restoration Capabilities
#2514
This well-known and respected company is located in the Rocky Mountain Region. All projects are custom; individualized to meet the clients' needs. The company specializes in auditoriums and theatres, churches, educational facilities, office environments, hospitals and medical centers, resorts and hotels, restaurants and lounges, and retail store components. We believe this company would make an ideal acquisition candidate for a hands-on managerial/operational entrepreneur or an acquirer with industry experience and/or knowledge of functional design looking for a profitable, established company with a database of repeat customers developed over 50+ years in business. REAL ESTATE, WITH A VALUE OF APPROXIMATELY $635,000, TO BE PURCHASED WITH THE BUSINESS. Down payment assumes purchaser qualifies for SBA financing.
Purchase Price....$1,770,000
Down Payment......$400,000
Gross Sales...$1,326,885
SDE........$593,216
For more information,
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Quick Links Current Schedule of Businesses For Sale
Confidential Purchaser Profile |
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THE FBB GROUP, LTD.�
719-635-9000
800-395-7653
Email: fbb@fbb.com
www.fbb.com
 
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I am currently involved with one of our associates in negotiating the sale of one our client's companies. It is a desirable, growing business that attracted five offers from a diverse group of acquirers. Three of them are strategic industry buyers, one is a strategic buyer from a complementary industry, and one high net worth individual. Like many lower middle market transactions, the transaction was structured as an asset acquisition, rather than a stock sale. To facilitate a presentation to our client, my team prepared a spread sheet, comparing the proposals on an "apples to apples" basis. On their face, most of the proposals seemed to be similar, until you got into the fine print and determined which assets and liabilities the various buyers were acquiring. The difference to our client amounted to several hundreds of thousands of dollars.
Set forth below are some of the more relevant reasons for paying attention to your balance sheet in anticipation of going to market:
Accuracy of Values - It is not uncommon for us to see inaccurate inventory or accounts receivable amounts. If you have not taken accurate annual inventories and adjusted the inventory for shrinkage and obsolescence over the years, it is likely that not only is your Balance Sheet incorrect, but your income is being misstated. If your accounts receivable contain uncollectable amounts, you may have similar issues. These types of inaccuracies will usually be discovered in due diligence and could blow up the transaction. Worse yet would be that the problems surface post-closing and litigation ensues.
Working Capital - The numbers on your Balance Sheet will likely be used to determine working capital requirements. Therefore, incorrect amounts can result in an inaccurate calculation of the amount of working capital to be included in the sale. As an aside, working capital calculations can be complex and subjective. It is advisable to work with your accountant and intermediary to determine the appropriate amount prior to going to market. The prospective acquirer will have his or her CPA and lender also involved.
Detrimental Line Items - Most buyers don't like to see employee loans and loans to or from shareholders. The former may be viewed as a sign of poor management and the latter may be viewed as an indication of inconsistent cash flow from the business.
Cleaner and less complex Balance Sheets are usually better and may take some time to properly address some of the items needing attention. We would welcome the opportunity to visit with you and your accountant to provide a perspective from the other side of the table.
Business acquisition activity remains strong and, if you are considering going to market within the next three years, I would suggest that you consider visiting with your advisors now to determine if it is appropriate for you to consider a transaction in the near term.
The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.
Sincerely,
Ronald V. Chernak
President Inspiring business relationships since 1982!
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JUST A REMINDER...
The 19th Annual Southern Colorado Economic Forum
is Friday, October 23rd, from 7:00 to 11:00 a.m., at The Broadmoor in Colorado Springs, Colorado.
See you at the Forum!
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EXPERIENCE CUBA IN COLORADO SPRINGS
Cuba is in the news a lot lately. Ron Brasch, one of the brokers at The FBB Group, has been collecting contemporary Cuban art for many years. He frequently travels to the forbidden island in search of the best artwork. You can experience this art for yourself at a Colorado Springs Fine Arts Center exhibit. "Now you can see why Cuban contemporary is considered so dynamic and popular with collectors around the world," says Ron. "It is fresh, unusual, and tells a story - which I love!"
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