BSBR Educational Resources
Bankruptcy Indicator, Possible Prevention
A few years ago I worked with a client who owned an appliance store that was doing about $10M in annual revenue. The business focused on large household appliances, mainly high end kitchen appliances. They had an amazing showroom and took care of clients from sales and ordering through delivery and installation. This family-owned and operated business had been serving its community since 1970. The owner approached Blue Sky for help with a possible sale of the business. She was entering reti…
What is the Lower Middle Market?
Lower Middle Market...AKA LMM
Dictionary Definition
Lower middle market is the lower end of the middle market segment of the economy, as measured in terms of annual revenue of the firms. Firms with an annual revenue in the range of $5 million to $50 million are grouped under the lower middle market category.
Plain English
Companies in the LMM have grown beyond the Main Street Market. They are above $5M in revenue, have multiple employees, systems and processes, etc.
Why it Matters to…
The Business Owner's Journey: Part 3 Declining or Plateaued Growth
The Business Owner's Journey eBook
Part 3: Declining or Plateaued Growth
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There comes a time in every business when sales slow or even decline. What do you do when this happens? Does it mean the end of your business? There are so many questions floating around inside your head. This short eBook is designed to help you create answers to all of those questions and keep your business thriving.
The Business Owner's Journey: Part 1 Early Stage from Inception to Rapid Growth
The Business Owner's Journey eBook
Part 1: Early Stage from Inception to Rapid Growth
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This quick read gives business owners insight into the rewards and challenges of owning their own business. The eBook offers suggestions and best practices on how to create a strong and durable business. At the end of the eBook is an Early Stage Self Assessment, designed to get owners thinking and examining their operations.
The Business Owner's Journey: Part 2 Rapid Growth
The Business Owner's Journey eBook
Part 2: Rapid Growth
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Surviving the start up phase and making it to rapid growth is no small feat, and it warrants taking a moment to reflect on everything you have achieved by becoming one of the elite 10%. Don't take too long to celebrate, now it's time to roll up your sleeves and get back to work with new and exciting challenges. This eBook shares with you many issues you are now likely to face and how to re…
What is an Indication of Interest?
Indication of Interest...AKA IOI
Dictionary Definition
Presented by a buyer, prior to the LOI, indicating they are interested in pursuing the business further. Documents includes:
- range of anticipated valuation,
- rough outline of anticipated structure,
- expectation of timeline from LOI acceptance to close, and sources and uses of funds.
Plain English
Site visits are usually done after IOIs are submitted. This is generally kept to a small number of buyer groups. Most sellers do not…
What is a Business & Market Strategy Guide?
Business & Market Strategy Guide...AKA B&MSG
Dictionary Definition
IRS Revenue Ruling 59-60 determines the basis of fair market value. It states that fair market value is, "The amount at which the property would change hands between a willing buyer and willing seller when the former is not under any compulsion to buy, and the latter is not under any compulsion to sell, both parties having a reasonable knowledge of relevant facts."
Plain English
A calculation estimating how much money someo…
What is a Working Capital PEG?
Working Capital PEG
Dictionary Definition
A benchmark or baseline amount of net working capital that is agreed upon by the buyer and the seller and is usually determined toward the end of financial due diligence.
Plain English
The Working Capital PEG negotiated between the buyer and the seller. It is the WC amount that will be left in the business as of the date of closing.
What is negotiated? The basic formula of assets - liabilities = WC is hardly ever the calculation used when negotia…
What is Working Capital?
Working Capital
Dictionary Definition
This ratio reflects the ability to finance current operations and is a measure of the margin of protection for current creditors. This ratio also indicates how efficiently working capital is being used. A low ratio (close to zero) may indicate inefficient use of working capital. A high ratio (high positive or high negative) often signifies overtrading, creating a vulnerable position for creditors.
Plain English
The capital of a business which is used i…
Three Common Mistakes Business Owners Make When Selling Their Business: Part 2
Part 2: Business Preparation
So, you are ready to sell your business. Where do you start? Should you put a “for sale” sign in the window and contact the newspaper to attract buyers? I hope common sense is jumping in at this point and a few warning sirens going off.
In the Forbes article “The Business For Sale Marketplace - - Why 90% of Listings Never Sell” (Oct 24, 2016), only 10% of businesses trying to sell actually get to the closing. This information is based on IBBA (International Bus…