What to do when selling a business

Selling a business: The In’s and Out’s of Business Seller Financing

As you work with you Florida business broker to plan the details of a sale, its good to have a overview understanding of how seller financing works because that is part of a majority of business sales.

If you are really interested in selling your business, then it is important to be mindful of the “competition” in the market for buyers. There are thousands of businesses for sale at any given time and many times a buyer looks at hundreds of businesses before finally choosing one. Though your business is unique, plan to have the terms of sale, and seller financing, be within the range of what a prospective buyer is seeing from other companies.

Amount of Down Payment

It’s not uncommon for a buyer to get a business for about 20% down, so if you considering seller financing, you should be as conservative as possible in asking for a down payment. It is typical to get one times your yearly earnings or seller’s discretionary earnings (“SDE” on the low end) to 50% of the purchase price down (on the high).

SDE is equal to the amount of “benefit” that you receive from the business each year. This number is more than the profit on your tax return or profit and loss statement. SDE is the total amount of money that you make or your benefit as the owner. A quality business brokerage firm can help you discover this number.

Interest Rate

A seller financed loan can have whatever interest rate the parties agree to, but remember that you are not a bank.  This is an investment to you.  Expect a much higher return on your money than you can get in most other investments, usually ranging from 2% above Wall Street Prime but no less than 6% and not more that 12%. (At the time of writing this book, prime is at 3.5%.) The bulk of the seller-financed businesses provide a return of 8% to 10%.

Some sellers, however, prefer to go with a more traditional bank approach and use a “variable interest” rate. For example, the interest rate could be Wall Street Prime + 2%, adjusted monthly, quarterly, or yearly based on the then current Wall Street Prime interest rate. Often there is also a floor and cap on the interest rate, such as not to go below 8% or over 12%.

Term of the Note

The term of the note is the length of time that a buyer has to pay the loan off, thebusiness brokers period that the loan is “amortized.” There are several ways to determine the length of the term. A skilled Florida business broker can walk through a process of analyzing the business current profit, the buyer’s living wage needs, rainy day fund, reasonable funds necessary to grow the business, and the amount reasonably available to service debt.

When selling a business, both the seller and the buyer want as much money as possible reinvested back into growing the company rather than taking the money out and weakening the company’s ability to pay. Therefore, the best way to have a “win/win” situation for the buyer and seller is to have a loan amortized for 10 years.  While the loan is amortized over 10 years, we typically set a balloon payment at month 61. Sometimes, according to the quality of the business and the condition of the financials, we will do a balloon payment at month 37.

Therefore (as you may already foresee), the bulk of the payments you receive for the first three to five years are in INTEREST. When the buyer makes the balloon payment, be it at month 61 or 37, it is not far off of the total amount being financed.

Payments

Depending on the type of business, it may be necessary to offer a varied payment schedule to account for a variety of business-specific variables. For example, if you are in a seasonal business like a heating, ventilating, and air conditioning (HVAC)company, it might be logical to have the payments due in the summer be higher than the payments due in the winter. Not only will this seem more realistic for you, but also it is important for buyers to be mindful of the ebbs and flows of cash for their business.

Try to arrange the seller note to be paid in the way and at the times that you know the business can be better positioned to pay it. You may actually tell the buyer that they make no payments for three months, but then you would spread out over the rest of the year or maybe schedule it such that during the height of the business season (when the coffers are full), they are actually making double payments.

Also, consider allowing the buyer to get into the business and “get their feet wet” before making payments. I usually recommend 60 to 90 days before the first payment is due. This will help the buyer “settle in” and deal with those various additional expenses that always occur after purchasing a new company, and build goodwill in your relationship.

Seller Earn Out

A seller earn out can be used AS the seller-financed portion or in addition to the seller note. An earn out is typically used in situations where the value of the company is really in the “potential” of the company rather than based on the “past” earnings of the company.

So, for instance, if you have a business that has just signed a multimillion-dollar contract right before closing, this might be a solution for you. In a situation where there is a seller earn out, the business has to make the money BEFORE the buyer is obligated to pay the amount. This type of loan is not amortized until the “target gross revenues” are met. So in the situation where you have already signed a contract for the “extra” earnings, this makes sense.

Seller earn outs are also used when we are trying to bridge the (sometimes considerable) gap between what a seller wants for their business and what the business is actually worth. Therefore, the business is sold on the “potential” of the future rather than the past.  There are times when a business has signed a large contract or there is some other situation that will cause the business to grow in the future without the involvement of the buyer. This means that IF the business does grow and accomplish what the seller claims that it will, then the seller gets an “earn-out” payment. Therefore, the sale price of the business is really based on the projections of the seller.

This is also used in situations when a business has had a downturn in profitability. In this scenario you, the seller, have the confidence that this is just a slight downturn due to external factors (or factors that you have taken care of). We put an earn out in place for the express purpose of getting the buyer to pay what the company was worth, all the while giving the buyer the confidence that the downturn was not long term and you are standing behind this claim.

Chiropractic Care and Heartburn and GERD

Gastroesophageal Reflux Disease (GERD / Acid Reflux Disease or heartburn), is becoming more and more prevalent throughout the world, especially among middle-aged and the older segment of the population. However, even pediatric populations are developing GERD signs and symptoms at an alarming rate. Ignoring GERD symptoms or failing to eliminate the cause, can lead to ulcers and esophageal cancer.

While diet, smoking, stress, caffeine intake, and certain drugs all contribute to GERD, recent studies suggest that lumbar kyphosis – or the abnormal curvature of the spine – combined with back muscle weakness, can have a “significant effect” on the presence of the disease. Furthermore, increased thoracic–mid back- curvature called hyper-kyphosis has also been found to cause and / or contribute to the signs and symptoms of GERD. There are at least two mechanisms whereby altered spinal and postural alignment can lead to GERD.

orlando-chiropractor-acid-reflux

First is a direct mechanical effect. Lumbar kyphosis and thoracic hyper-kyphosis will increase the pressure placed on the stomach and esophageal system; in some cases the pressure is so severe, it will cause a displacement of the stomach downward leading to a condition known as hiatal hernia. Furthermore, the altered spinal-posture alignment will cause inhibition of the stomach-gastric muscle reflex activity that is critically important for digestion and transportation of food from the stomach to the intestines. In the end, this complex reaction caused by altered spinal alignment is what leads to GERD in many cases.

Second is a direct and indirect neurological effect. Further compounding the mechanical causation of GERD is the fact that slight, moderate, and severe spinal abnormalities and misalignments in the spine will put unnecessary and often detrimental amounts of pressure on the delicate nerves coming out of the spine. Since the nervous system is responsible for EVERY function of the human body, including movement of our limbs and the function of our vital organs, it should be apparent that altered and inhibited nerve activity – as a result of poor posture– can also lead to disturbances of stomach function. Chiropractors call altered nerve function from altered spinal alignment “Nerve Interference”.

Nerve interference can diminish the amount of vital nerve energy reaching the organs, including the stomach. If left untreated, the stomach and digestive tract will go into a state of dysfunction, and eventually disease. Many GERD sufferers under the care of corrective care chiropractors have reported significant reduction in their symptoms. That’s because realigning the spine back to its healthy shape and strengthening the back muscles reduces the mechanical pressure on the internal organs and allows nerve energy to flow freely throughout the body; therefore restoring normal function to the stomach and other vital organs.

Chiropractic care from an Orlando Chiropractor is one of the most researched, scientific, and results-oriented corrective care techniques. It aims to realign the spine back to health, eliminate nerve interference, and return the body to a state of health and wellness.

If you or a loved one is suffering with GERD / Acid Reflux Disease contact a CBP Certified or trained Chiropractor in your area to get help. No matter how many bland diets you go on, lifestyle changes you make, or proton pump inhibitors you take, the source of the disease and dysfunction may not necessarily go away, unless your spinal misalignments are addressed and corrected.

 

Roof Cleaning Tips

1. Safety should be a top priority when working on a roof especially when conditions are wet and slippery. When climbing on a roof put on shoes that are slip-resistant. Also have a safety rope with you. Some chemicals used in roof pressure washing can also be harmful to the eyes and the skin and so goggles as well as gloves should be worn.

2. Some cleaning agents like bleach might destroy not only the algae but also flowers and other plants around the house. So when bleach runs off to the ground pour some water on these surfaces to dilute its effects.

3. To reduce evaporation of the cleaner, roofs are best cleaned on a cloudy day.

4. One way to prevent algae from regrowing is installing strips of galvanized sheet metal or copper on both sides of the roof just under the ridge.

5. While the easiest way to clean debris from a roof is by hand, a blower can be more efficient and offers less chances of the person doing the pressure washing getting dirtied.

6. When cleaning debris from a roof with a soft brush it is important to apply as little amount of pressure as possible. If excessive pressure is applied the roof granules can come off thereby shortening the roof’s lifespan.

7. To remove algae, moss and lichens and mold from the roof the best way is by high pressure washing. Treating the roof using a fungicidal wash after the high pressure washing will help in preventing the algae, lichen and moss from growing again.

 

Benefits of Roof Cleaning In Orlando.

1. Improving the appearance of your home

When a roof has dirt, debris or dark stains caused by algae, moss or lichens, the appearance of the roof becomes ugly and unsightly. This makes the house unattractive to potential buyers and also reduces its resale value should you want to put it on the market.

2. Increasing the lifespan of the roof

When a roof has algae on it the lifespan of the roof is greatly reduced because theOrlando Pressure Washing Service algae tends to shorten the durability of the roof. The dark stains also trap excessive heat which can further damage the shingles. The moisture and the heat trapped on a dirty roof can also cause decay of the roof shingles.

3. Reducing you power and energy bills

When roofs have dark stains on them, the roof tends to retain heat resulting in indoor conditions that are hotter than usual. This naturally results in increased power bills because of the attendant air conditioning demands.

4. Better health for the house occupants

A dirty roof creates a conducive environment for mold to thrive. Mold may in turn lead to allergic reactions and negative health implications on pets, the elderly and children. Please call if you are in need of assistance or would like our Orlando Pressure Washing Services for all of your pressure cleaning needs.

In roofing and roof cleaning some of the things you will require to get the job done include a ladder, safety rope, shoes that are slip resistant, a pump sprayer, rubber gloves, a garden hose equipped with a spray nozzle and a cleaner. To ensure a safe, effective and efficient process there are several tips you need to keep in mind.

As has become clear it is important to keep the roof of your house clean at all times so as not just to maintain its value but to increase the roof’s lifespan. Plus, a clean roof prevents your home insurance costs from shooting through the roof!

Getting Life Insurance

When to get Life Insurance

Term lifestyle insurance plan is recognized as a insurance policies products because it doesn’t build dollars beliefs – it is a particular advantage for life-insuranceyour precise stretch of time. Some term life merchandise offer added rewards, which includes terms for being out of work and home deterioration, and an multiplied loss of life benefit – which means that the vast majority of dying benefit pays back about proper diagnosis of an ailment if your daily life expectancy is established to get two or three years or significantly less.

But the most important cause to acquire name insurance cover is usually to present your loved ones with fiscal reassurance… your money to retain their method of existence in the event you no more remain to provide for them.

Can I Require Life Insurance coverage?

Your not the very first particular person to question whether you will need existence insurance plan, or check with regardless of whether you have sufficient insurance. Next are several popular questions regarding the necessity of adequate safeguard:

1. Existing life insurance policies are the simplest way to combat an economic difficulty attributable to the early death of any major salary earner. United states citizens to opt-in for economical investments or profits anticipate to use life insurance policies to help you pay bills as well as keep their way of life if your key income earner passes.

2. I need existing insurance cover with my supervisor. Is that enough? No, it probably isn’t plenty of Protection through your boss is commonly limited by twelve months salary and chances are terrific you uninsured. Can one year income, compensated inside of a single payment, keep up with the expenses and provides all your family time they should heal?

3. How much does it imply to be ready if the most important salary earner is disapated? In connection with this, geared up implies a family gets the dollars to address memorial bills, regular debts, for example., if your income earner dead. But if your spouse and children relies on your continuous income every month, a lifestyle insurance policy can help provide you with the financial resources wanted so as to return to their foot.

4. I have on think I have the funds for to acquire a living coverage. Would it be expensive? There are several sorts of life procedures, which can be economical subject to your family needs. The first task should be to question an insurance plan adviser for any no-liability quote.

5. I really do see the necessity for Orlando life insurance, but where will i start? Simple. Just inquire a life insurance representative for a no-hassle quote and to talk about the options. A qualified agent might also occasionally review the words, terms and possibilities of your daily life insurance policies.

JW Life insurance plan is usually an reasonably priced way to give your family members one of the biggest gift items attainable – the satisfaction realizing that if one thing happen to you, the money will be there… to safeguard your family members residence, all your family means of lifestyle, your family members foreseeable future.