Post about "services"

Pricing a Business For Sale – Key Factors All Play a Role!

Correctly Pricing A Business Is Important If You Really Want To Sell It!As a consultant I talk to many business owners, brokers, and agents on a daily basis about valuing businesses. It always amazes me on how some of these individuals come up with the values on small businesses being sold. No wonder only 30% of all businesses sell! In many instances no consideration is given to the total picture – like will the available cash flow of the business be able to pay the debt of a loan, will the deal as structured or priced even be attractive to financing sources, “cash” price vs. “note” price and how these factors figure into the equation!I have seen many “professional valuations” where the price just doesn’t make sense – and sellers wonder why their business for sale just sits there with no action!Market ApproachThere is a solution that is grounded in the fundamentals of economics, and time tested in the marketplace, where the influences of supply and demand ultimately determine where a business belongs on the price scale. One economist explains this market approach by comparing a business to a machine which has the purpose of making money: The more money it makes, the more it’s worth. And that explains why, for example, there is a strong demand for a very profitable distribution business with few hard assets; and why it is worth more in the marketplace of available businesses, than a large machine shop that would cost nearly $1 million to duplicate, but can’t make a living for its owner.Adjusted Net IncomeThe first category of information needed is called adjusted net income, and is the total amount of cash produced by the “money machine.” It’s a figure that includes the profits, the owner’s salary and all of the many cash-related benefits which are enjoyed by the principals of small businesses. Those benefits can include the use of a company car, the company-paid premiums for health, life and auto insurance, plus personal expenditures tucked into travel and entertainment, subscriptions and similar business “expense” categories. Interest expense should be added to adjusted net income, along with accounting entries-such as depreciation and amortization-that can divert money to the owner’s pocket so that it never appears on the bottom line of the P&L.While some of these items vary from business to business, any owner knows which categories of expenses in his or her financial records include sums of money that should be added to adjusted net income. Many business owners also know of cash income that never sees the business records in any way, shape or form. Some owners feel they should get credit for these sums in the calculation of value. But it’s a poor policy to collect unreported income and then attempt to have it included in adjusted net income for evaluation purposes. When selling, your buyer prospects want any statements you make about your business to be supported by evidence in the form of accounting records and other reliable sources. To admit that you are doing business “off the books” not only exposes you to problems with the IRS, it also sets a bad tone with prospects who-if they are going to be interested in your business– need to believe your practices and record keeping are above reproach.Adjusted net income is usually the first thing any buyer wants to know about when investigating a business; and not just the past few months’ worth of income. A seller should be prepared to demonstrate a history of earnings, and have the documentation to back it up.Multiplier MethodThe next piece of the equation comes from the expectations working in the marketplace to shape the multiplier-a figure which will be computed, along with the cash flow, to calculate a rough value. The validity of the multiple is that it reflects behavior in the market. There is no need to theorize about a proper multiplier. It’s calculated by determining what people actually pay for small businesses in California.The experience with low risk businesses is that their high market demand is reflected in a fairly strong multiple. A lot of buyers want, for example, a well-established franchise, or a grocery store with a long lease in a densely populated area and little direct competition. Its multiple might be in the range of two to three times annual adjusted net income.A one or two multiple, on the other hand, would be associated with an enterprise in which the buyer is assuming greater risk. An example is a retail store near a large shopping area, which leaves the buyer of the smaller business vulnerable to the competitive marketing activities of much larger companies. The lower multiple is a consequence of lower market demand. Fewer people want that kind of business.Since profitable distributorships and manufacturing companies are much sought after, it’s not unusual to see them command a price upwards of four times annual adjusted net profit. The company in this category providing adjusted net profit of $200,000 might realize a selling price in the range of $800,000, assuming a favorable deal structure (more about that shortly). Also warranting a high multiple are businesses loaded with assets-equipment, trade fixtures and inventory. But remember that a seller must be able to establish the company’s “history of earnings” with financial reports and tax returns, before the higher price will be offered.More commonly available businesses, such as restaurants, are priced with a lower multiple – in the one to two range – to reflect the abundance of this kind of business available for sale at any one time. In this case it’s purely a matter of supply and demand.And a company in any industry that is difficult to finance, will be hard to sell. I’m familiar with a retail business in Northern California that is not generating enough adjusted net income to support its $1.5 million asking price. Because a new owner would have a difficult time paying off a loan that was hefty enough to swing a purchase of this company, there are no lenders willing to provide the money. That severely affects marketability. In fact, the company is probably unsalable as presented.Importance of Deal Structure/TermsAnd the final factor thrown into this equation is particularly useful in determining the value of businesses offered for sale. It recognizes that the terms of a transaction–in other words, how a price is paid–are critical in calculating that price. When sellers demand all cash for their businesses, for example, the market tells us that they can expect to receive about 60% to 80% of the sum they would have gotten by taking a down payment and financing the balance.It’s easy to understand why deal structure is such a vital component in the valuation process. For a business to be affordable, the cash flow needs to be substantial enough to support the price at the multiple being used. A deal that requires a lot of cash up front, in relation to the expected amount of adjusted cash flow, will place a greater burden on the buyer. That principle, translated into the language of the marketplace, means the business will only be appealing at a low price. If, on the other hand, the level of adjusted net income supports the buyer’s ability to make payments to the seller in order to purchase the business-this opportunity will interest more potential buyers and the result is a higher achievable sales price.Other ways an attractive deal structure can be used to build market appeal include a delay of a few months–after close of escrow– before monthly payments on the seller’s financing are due to begin, a low interest rate, and interest only payments for awhile, until a new owner is able to build the business to more easily meet the loan obligation. Creative deal structures always help sell a business and will usually command a higher market price for the business (remember it has to make sense)!Pricing a business is as much or more of an art than a science. Sellers who take a look at the big picture – looking at both deal structure and price are usually the ones who are successful in selling their business!

Waste Removal Companies and How to Choose and Use Them

There are many waste removal companies in any large town or city. You can simply look one up and call them when you need to get rid of waste, but for good or great service it’s important to do some research first and to choose the best company for you.

Here are some home improvement tips to help you choose the right waste removal company:

Look at the company’s reputation. Look for companies with good reputations. This will help you feel confident that the company will take care of the waste removal process.

Ask about the price. Make sure the price is reasonable. You don’t want to overpay for the service.

Ask about the service. Make sure the company offers a good waste removal service. This will ensure that the process is done properly and that the waste is removed properly.

Ask about the schedule. Make sure the company has a schedule that fits your needs. You don’t want to have to wait until the last minute to have the waste removed.

Ask about the availability.

Make sure the company is responsible for the waste they collect and will only tip it at properly licensed waste disposal facilities.

There are a number of different types of local domestic and commercial waste removal companies that offer services these days. Some of the most common are described below:

Local Waste Disposal

Local waste disposal is the process of removing waste from an area. Waste disposal can be done by the local government, a private company, or a group of people. The three main methods of waste disposal are landfills, incinerators, and recycling.

Local waste disposal can be done in several ways. The local government might use landfills to dispose of solid waste. A private company might use incinerators to dispose of solid waste. A group of people might compost the solid waste and then use the compost to fertilize the land.

House Clearance Services

House clearance services are offered by companies that can help you declutter and tidy up your home in a snap. This can be a great way to make your living space feel more organized and stress-free.

Clean up your living space and declutter it, making it easier to live in and more organized and most people report that you will also feel happier.

Garden Clearance Services

Garden Clearance Services can help you clear a backlog of growth and discarded rubbish from any garden quickly. Most will always do their best to reuse, upcycle and down-cycle and recycle all the waste they collect.

In fact, most times now they will save money this way on the alternative of very high waste disposal costs for landfill and incineration.

If you have too much garden furniture, plants, or flowers, or if your garden is too small, you may need to hire a garden clearance service to help you declutter and organize your garden. This service can help you find items that you can donate to charity, sell online, or give to friends and family.

Pet Waste Removal

If you have a pet and find yourself struggling to cope with the amount of pet waste your pet produces, you may want to consider hiring a pet waste removal service. These companies are specially trained to take care of scooping up pet waste and disposing of it safely.

If you have a pet, you know that one of the things you have to take care of is getting rid of their waste.

Unfortunately, pet waste can be really messy and can stain furniture, floors, and other surfaces. That’s why it’s important to have a pet waste removal service that can take care of it for you.

They’ll come to your house and remove all the waste, leaving your house clean and tidy.

Man & Van Rubbish Clearance

Man and Van Rubbish Clearance is the perfect service for those who have a lot of rubbish to clear from a home or business location. A team of experts can help you get rid of all the rubbish in an area or property quickly and easily. They’ll take care of the entire process from start to finish, so you can focus on what’s important.

We cannot stress too highly that it is important to hire a company that has the necessary experience and is reliable.

Any waste management company should be licensed, bonded, and insured. It is also important to find out what type of waste they handle. If they are illegally handling waste, they may have to face financial penalties.

And you might also become implicated in the eyes of the police if your waste is found to have been illegally dumped.

Why Use a Local Waste Removal Company?

Using Waste Removal Companies can help businesses eliminate waste from their property and reduce their environmental footprint. Many professional waste management companies are dedicated to environmental protection. These companies collect, sort, and send waste to recycling facilities.

They use advanced equipment and technologies and strive to reduce the environmental impact of their services. Professional waste management companies can also help businesses reduce their costs by removing waste as cheaply as possible.

Fortunately, you may be in luck because waste removal companies are evolving to meet the increasing demand and getting much better at recycling according to the efficiency guide which is known as the waste hierarchy. The waste hierarchy has been devised to help people take the most sustainable option whenever waste is disposed of.

Clean Harbors is an example of a waste removal company that has expanded to more than 400 locations worldwide. It started with a trash truck and has grown into a multibillion-dollar corporation. They are also the largest organic compost facility operator in the United States.

Despite their huge size, this company has a long and turbulent history. Its owners fought for public health and the environment and have made this huge business out of a start-up using just one trash truck.

Waste-to-energy Facilities

Waste management businesses are more and more often announcing ventures to develop waste-to-energy facilities (WtE).

This technology can transform organic waste into transportation fuels. Including providing fuel for cars in the form of compressed biomethane (rCNG) in cylinders. It can also help power homes and businesses.

By turning trash into fuel, these companies can help save the planet and reduce our carbon footprint.

Trash Removal Rates and Services

If you choose a private waste removal company, you should ask about their rates and services. Some charge for monthly or yearly contracts. Some also charge per individual pickup. Make sure the prices you are quoted fit into your budget. Lastly, check if they offer any other services besides waste removal. It’s also important to find out whether the company offers any type of recycling.

The costs for garbage removal depend on the type of waste you have. Some items are recyclable while others require special equipment. Some of the more common items that are considered hazardous are batteries, fluorescent light bulbs, food waste, and yard waste. Depending on where you live, some types of waste may not be legally tipped on any particular landfill. Each landfill varies in the types of waste they can legally accept.

Your local government will enforce laws regarding hazardous waste, and there can be fines for illegal disposal.

The fees associated with waste removal may include dump fees, transfer station fees, pumping fees, and discharge fees. These fees are part of the cost of doing business for the company. These fees may be passed on to customers.

You should compare prices to ensure you get the most affordable service.