Monday, May 19, 2014

Top Three Methods for Determining the Value of a Florida Business for Sale



Florida Business Brokers use a number of different methods for determining the value of a Florida business for sale.  Although most Florida Business Brokers are not certified business appraisers, many can provide an “opinion of value” which will use the same basic principles and guidelines as a certified business appraiser. Statistics show that many businesses for sale in Florida never actually end up selling for the price they were listed at and this is most often due to the business being overpriced to begin with. Understanding business valuations and getting an opinion of value from of Florida Business Broker is always a great first step to selling a Florida Business. Often times there can be a confusion in the valuation methods because multiples get applied to the wrong numbers or the valuation method is not fully understood.

Industry Method
The industry method calculation varies according to a particular industry but most commonly uses a
straight percentage of the sales or gross revenue. This could range anyway from 15% to 100% depending on the industry and it is usually advisable to consult with a Florida Business Broker to determine where a particular industry might fall. With the exception of some professional practices or businesses with a large amount of re-occurring revenue most business will be well below 50%.

Income/Asset Method
The income/asset method takes into consideration both the income and assets of the business. Income is often stated as discretionary earnings, owner benefit or for larger corporations as EBITDA.  A multiple is usually then applied to this number based on the industry, the amount of the earnings, or the size of the business. The assets are typically valued at a fair market value taking into account any added costs to put them in place and into use. A Florida Business Broker will almost always need to apply some subjectivity when using this method for a pricing a Florida business for sale. 
Comparable Sales Approach
The comparable sales approach which is most commonly used with the sale of residential or commercial real estate is also a great way to value a Florida business. Since the selling prices of businesses are not publicly recorded this information can be a little more difficult to obtain.  Florida Business Brokers will usually have access to data for what particular business have recently sold for and in which industries they have been sold. This information becomes invaluable when pricing a Florida business for sale, because it takes into account what the market is doing and what businesses are actually selling for.



Although these are the top methods for determining the value of a Florida business for sale there are others that can be used as well. The income capitalization method is more commonly used in valuing income producing real estate but can also be used for valuing businesses. The excess earning methods takes into account a number of different factors and although it has been suggested by the IRS as the least desirable method and to only use it if there is no better method, it can still be another option. Using certified business appraisers is still the preferred method if acquisition financing is being obtained through an SBA lender. Getting a certified business appraisal can be a little costly so using a Florida Business Broker can often be a more economical way to determine the value of a Florida Business for sale. For more information visit Florida business valuations.

Friday, May 16, 2014

Sell a Pool Route in Florida


Often times, to sell a pool route in Florida, business owners choose to market their pool business for sale with an out-of-state online firm that claims to specialize in pool route sales. When searching on Google, Yahoo, Bing and many other sites alike, you find a variety of options to market your pool business for sale. Many brokerage sites advertise that they have pool related experience, offer protection in case of transaction disputes, offer confidentiality and mostly - save TIME & MONEY by using their services.


The challenges of confidentiality when selling Pool Routes
sell a pool route in Florida
Before choosing to use the services of an online brokerage, explore all of your options and consider using a licensed Florida Business Broker. Much like real estate agents, we bring buyers and sellers together to transact a purchase agreement. Unlike real estate agents and real estate companies, our marketing and expertise focuses on the Buyer who is searching for a business opportunity. Business Brokers are used by business owners mainly because we are professional practitioners that safeguard Sellers’ proprietary information and will take necessary precautions to ensure prospective Buyers have true intentions of purchasing. In many cases when a business is being presented by a Business Broker, Buyers are unaware that they cannot simply request information on a business without having to go through precautionary procedures. There can be a delicate balance between Broker and Buyer to ensure that the business information is protected and keeping the prospective Buyer interested in pursuing the opportunity. Online brokerage firms sometimes eliminate these precautionary measures in effort to minimize any irritations to a prospective Buyer. If you are thinking about selling a Pool Route or Pool Business in Florida, reach out to a professional and licensed Florida Business Broker who knows how to properly handle these challenges.

Don’t limit your chances of successfully selling a Pool Route:
Many online pool related brokerage firms are not allied with other Florida Business Brokers or members of Florida Business Broker associations like Business Brokers of Florida (BBF), Alliance of Florida Business Brokers (AFLBB) or International Business Brokers Association (IBBA). Out-of-state brokers do not possess the luxury of cooperating with other licensed Business Brokers in Florida. BBF statistics suggest that 50% of all businesses in Florida, regardless of industry, are sold by cooperating Brokers. So don’t limit your chances of selling a Pool Route or Pool Business by using a brokerage that is not networked with other professionals that exclusively sell Florida businesses.  

Contact a connected & licensed Florida Business Broker:
Truforte Business Group consists of experienced and successful full-service Business Brokers who have been assisting buyers and sellers for many years.  Our Direct Marketing Department is always on the search for qualified buyers and has been very successful doing so. Our firm is comprised of Florida real estate licensed brokers who specialize in giving our clients personal attention in assisting them in selling or buying business opportunities, including but not limited to pool businesses.  So ask yourself, is it worth your TIME or MONEY to use anything less than an experienced and licensed Florida Business Broker such as Truforte Business Group?

Starting the process and making the sale:
When it comes time for selling a Pool Business or Route in Florida, contacting a qualified Business Broker at

Truforte Business Group is always a great place to start. We can guide you through the process of Valuation • Visa coordination for foreign investors • Marketing • Buyer qualification • Deal structuring • Coordinating financing options (including SBA) • Contract preparation and sale documentation with the final closing coordinated with closing attorneys. To get started or to learn more check out pool service for sale in Florida.

Tuesday, May 6, 2014

How to Avoid the Most Common Financial Pitfalls That Come with Buying Businesses

Owning and running your own business comes with a number of benefits. As The Huffington Post writes, running your own company allows you to turn your passions, whether they're for making cupcakes or providing state-of-the-art electronics, into profit. The quote, "choose a job you love, and you will never have to work a day in your life," often attributed to Confucius, sums up the wonders of owning your own business perfectly.
avoiding pitfalls when buying a Florida business for sale

As any business broker can tell you, the space between buying a small business for sale and getting it to the point where you're profitable and enjoying being a new business owner can be fraught with challenges, especially if you aren't careful when it comes to buying businesses. While choosing your Florida business for sale, you should be aware that you may be opening yourself up to some extra costs.

Three Extra Fees You Might See when Buying Businesses
  1. Sales Tax
  2. Depending on where you're planning to buy your new business, you're likely to incur sales tax on a number of items. Most states require you to pay sales tax on capital assets, like office furniture, and consumables, like office supplies. The amount you pay, of course, will depend entirely on the state you're buying in. Contacting your Department of Revenue can help you get an idea of what you'll be required to pay taxes on.
  3. Outstanding Invoices
  4. As Inc. suggests, buying a financially toxic business may seem like a great idea, especially when you see the dirt cheap price-tag. However, buying businesses in this sort of financial turmoil can mean buying their debt as well. One of the most common forms of debt in these situations is outstanding invoices for inventory or services rendered. It goes without saying that putting down tens of thousands or hundreds of thousands of dollars into a new venture only to find you have to make up for the previous owners' debts is not a great feeling.
  5. Audits and Tax Bills
  6. For the Florida Department of Revenue, few things are as important when buying businesses as looking into their tax history. It may sound like a pain, but by contacting your state Department of Revenue, also known as the Department of Taxation and Revenue in some states, you can have an official inquiry launched into the business before you buy. Needless to say, this can help you avoid a huge chunk of debt before you even get started.

Can You Avoid These Costs of Buying a Business? Not all of these costs are avoidable. Although even something like Sales tax can often be minimized when the purchase is properly coordinated by an experienced business broker.  Outstanding debts can also best be dealt with by using an knowledgeable business broker in conjunction with the relevant state authorities. A Florida business broker can help you with the footwork to discover any outstanding debts and also assist with writing some additional safeguards into the purchase contract.  Purchasing a business can give you the professional and financial freedom to live your life as you choose. However, unless you pay close attention, you could wind up with more than you bargained for. Keep these things in mind to avoid any financial headache and don't forget to consult with your accountant, lawyers, broker and other professional advisers.