Florida Business Broker in Sarasota & Bradenton

Economy

SEARCHING FOR A BUSINESS TO BUY: TIPS FOR SUCCESS

When contemplating buying a business, it’s helpful to start looking at businesses for sale and find out what businesses are available and how they are priced. This will give you an idea of how much money you may need to buy a business. Consider your strengths and weaknesses, hobbies, and previous jobs that you’ve enjoyed while searching for businesses. Using this information can help you narrow down the type of businesses that might be a good fit for you but be careful to not narrow the list so much that you are unable to find a business within your budget or search criteria.  While looking for a business it’s best to keep your options open by sticking with a type of business rather than a specific business. This can help you find a business that you may have overlooked before but could be a great match now. Keep in mind that your search should be based off what you are interested in and what you can realistically afford to buy. It is important to know what your budget will be for the purchase and whether you’re paying all in cash or if you have other financing options available, such as SBA loans. If you are using a loan, ensure that you understand its requirements, along with the requirements for the business you wish to purchase. Business brokers can tell if you will be able to close on a business by asking questions about your finances and background information. Through experience they can tell if the deal will be easily completed or what bumps may be ahead. Ensure your search is productive by keeping these tips in mind, and you could be on your way to purchasing a business. 

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SMALL BUSINESS VALUATIONS IMPACTED BY INCREASING INTEREST RATES & INFLATION

The business for sale market grew modestly in 2022 with closing transactions up 4.7% over 2021, and 19% above 2020 sales. However, sales are still 7% below the 2019 pre-pandemic levels. With increasing interest rates and inflation, momentum of sales began to cool in the second half of 2022 with a reported total of 9,054 transactions, still an increase over 2021’s total of 8,647 transactions. While the number of deals closing in 2022 was up, the median sale price dropped 3% to $315,000 over 2021.  Sellers have been feeling the impact of inflation and rising interest rates on business valuations as the cost of capital became an issue in 2022. Increasing capital rates began causing the downward pressure on business valuation multiples. The median revenue of businesses sold in 2022 was $650,000 a 2% drop from 2021, with the average revenue multiple dropping from .67 to .65 on business valuations. The median cash flow dropped 1% from 2021 ending 2022 at $148,765, with the average cash flow multiple dropping from 2.55 to 2.53.  Source: BizBuySell

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BOOMING LABOR MARKET COULD HAVE FED KEEPING INTEREST RATES HIGH

The Fed raised its benchmark federal-funds rate by a quarter point to a range between 4.5-4.75% to try and slow the economic growth to a below-average pace to help weaken demand and attempt to restrain inflation. The economy appears to have more momentum than previously anticipated with January reporting a booming labor market with employers adding 517,000 jobs last month, and the unemployment rate falling to 3.4%, the lowest level since 1969. As more reports come in, Fed officials are looking to see if there is an increase in consumer demand leading to stronger economic growth that could have inflation continuing to rise in the start of 2023. If reports continue to show strong growth this could force the Fed to continue to raise interest rates to 5.25% in 2023 and hold it there until the end of the year. Officials must now decide if there is more that needs to be done to slow the economy by raising interest rates and keeping them higher longer, or if the next inflation problem could come from the economy continuing to add more than 200,000 jobs a month without an increase in the supply of workers, making the labor market tighter each month. Source: WSJ

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SELLING YOUR BUSINESS? TIPS FOR A SMOOTH, PROFITABLE SALE

The idea of selling your business can seem daunting but knowing how to avoid these common deal breakers can help ensure a smooth selling process for you. Every business has key employees that help keep the business running smoothly. Ensure that your key employees have signed a non- compete and non-solicitation of customers when hired if necessary. This helps to ensure that at any point during the sale of the business, these key employees won’t be able to undermine the business sale or impair daily operations if they were to leave. To secure a smooth transition of ownership and continuity of business operations, ensure any intellectual property owned by the company can be transferred to the new owner. If there is an active lease make sure to have a copy of the lease available, and check with the landlord that the lease is transferable. When preparing for a sale of your company begin pulling important corporate records such as ownership, shareholder, and operating agreements to ensure they are up to date and readily available. Gather all financial data for the company including information on any outstanding liens or loans that will need to be cleared before or after closing. Lastly, if your company deals with vendors, suppliers, and consultants it’s important to have all the contracts in writing and speak with them about continuing service with a new owner. Source: AllBusiness

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SIX QUESTIONS TO ASK YOURSELF BEFORE BUYING A BUSINESS

When looking to purchase a business there are many factors that go into your search, but if you keep in mind these 6 thoughts it can help you find a better match for you. When looking for a business finding one in a field you are familiar with can help you bring your knowledge to the business and guide it towards success. You should investigate if the customer base is made of a few large clienteles or a larger customer base. This can help you gauge the financial stability of the business and help you research the field to identify any possible issues with the current customer base that you could look to improve after taking ownership. As part of the buying process understanding your due diligence can help guard your new business from any legal or liability concerns that could cripple the business later.This also includes making sure that you understand the full purchase price of the company including ongoing cost associated with continuation of salaries, leases, contracts with suppliers, and any repairs that could be needed in the foreseeable future. When looking for a company it’s important to know not only if there is long-term growth but how you factor into the growth of a company. You should consider what you can bring to the company to fill in missed revenue opportunities, new marketing, and reaching new customers to ensure longevity of your purchase. Source: Forbes

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CPI: US INFLATION FALLS TO LOWEST IN MORE THAN A YEAR

For the sixth consecutive month the latest data has confirmed inflation has fallen to its lowest level in more than a year with a drop from 7.1% to 6.5% in headline inflation. While this a relief from the 9.1% headline inflation rate in June, it’s still not quite at the Fed’s target level rate of 2%. In an effort to return the inflation rate to the 2% target considered to be a healthy rate, the US central bank has responded by raising interest rates at the fastest pace in decades. Raising borrowing costs, the Federal Reserve expects to dampen the demand for expensive items such as homes and cars to help slow the economy and ease the pressures pushing up prices. Federal Reserve chairman Jerome Powell stated last month that the bank would start to move less aggressively to see how the moves are playing out in the economy, however, this slowdown from higher rates risk tipping the world’s largest economy into a recession. Seema Shah, chief global strategist at Principal Asset Management, said “Taking a step back, evidence is building that inflation is cooling and will continue to do so over the coming months. But perhaps the real question will come in late Q2 as inflation tries to move below the 4-4.5% handle. If it plateaus there, then the Fed will have very little space to cut rates this year and markets will face renewed challenges.” Source: BBC News

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INCREASE IN CYBERATTACKS AGAINST SMALL BUSINESSES

Holidays are a busy time of the year for most businesses, but with cyberattacks increasing 64% compared to last year culminating in more than $6.9 billion in potential losses, small to medium-sized businesses can help safeguard their business in a few easy steps. One thing the FBI does not encourage is paying any ransom requested by criminal actors as this will not guarantee recovery of any systems or data that was being held hostage. Ensure that passwords are protected, as well as using different passwords for both employee access and individual access to multiple systems can help lower the risk of the systems being hacked. Using reputable services and updating them as needed can help keep anti-virus, firewall, and email systems safer. Make sure you’re backing up important data to an offline source such as an external hard drive, USB device, or saved to the computer as an offline document. Not only should your data and passwords be protected but be diligent when checking emails. Never give payment information to a request for money or invoices that look suspicious, especially ones requiring urgency. By taking the time to check with the individual assumed to have sent the invoice by phone, in person, or an online call, you could save yourself from sending fraudulent payments to an unknown party. Source: CNBC

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IMPACTS OF INFLATION ON SMALL BUSINESS

There is an increasing concern among small business owners about how inflation will affect the cost of doing business, including the possibility of higher overhead costs, inventory reductions, a reduction in marketing budgets, or an increase in the cost of services or merchandise to offset inflationary costs. There are ways to prepare and adapt to rising inflation costs as a small business owner. It’s important to ensure prices aren’t rising to levels that will exclude your current customer/client base. As a small business owner look for ways to streamline services rather than attempting to expand services that may add more cost to the business. You will not only be saving money and creating more cash flow in your business, but you will also be ensuring its long-term success by investing back into it. Source: ViewRidgeFunding

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BRITISH POUND HITS NEW HIGHS

GBP/USD has again hit fresh highs at 1.3842 and GBP/EUR reached a 10-day high at 1.1339. The movement appears to be triggered by news of French President Emmanuel Macron’s meeting with PM May, today, January 18, 2018. Although we are unsure of what these talks entail, discussions will likely be centered around Brexit, trade and Calais. Calais could be particularly prominent given this morning’s news the UK will be investing an extra £44m into the border. In addition to current political discussions, the French president will be allowing the UK to exhibit the Bayeux Tapestry. It’s likely that behind the generosity, Macron intends to make a tough political point in reference to Brexit as the Bayaux Tapestry depicts an almost metaphorical lesson. The English Prince, Harrold was killed after betraying his ally William of Normandy, for William to then go on and rule England. Source: Thomas Huskinson, FX Trading Desk, whitespay.com

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BRITISH POUND STRONGER AGAINST US DOLLAR

UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under significant downward pressure recently, largely owing to the uncertainty of Britain’s future position in the European Union, ahead of June’s referendum. His pro-European position, backing UK Prime Minister Cameron’s ‘Stay’ canvassing has helped Sterling recover somewhat from a poor first quarter against the US Dollar. Markets, of course, do not like uncertainty and although this turn of events does not necessarily create certainty that the UK will remain part of the European Union, many analysts see Obama’s comments as a positive indicator that a UK exit will not happen. Indeed, President Obama is well-liked and respected in the UK, and David Cameron will be hoping that his influence with British voters will swing the vote to stay part of the EU. Coupled with some uninspiring results from the United States across housing and consumer goods, the Dollar is under pressure from Sterling to respond in a positive way. With less than 60 days to go until the referendum in Britain, there will undoubtedly be some further shifting in the GBP/USD exchange. UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under significant downward pressure recently, largely owing to the uncertainty of Britain’s future position in the European Union, ahead of June’s referendum. His pro-European position, backing UK Prime Minister Cameron’s ‘Stay’ canvassing has helped Sterling recover somewhat from a poor first quarter against the US Dollar. Markets, of course, do not like uncertainty and although this turn of events does not necessarily create certainty that the UK will remain part of the European Union, many analysts see Obama’s comments as a positive indicator that a UK exit will not happen. Indeed, President Obama is well-liked and respected in the UK, and David Cameron will be hoping that his influence with British voters will swing the vote to stay part of the EU. Coupled with some uninspiring results from the United States across housing and consumer goods, the Dollar is under pressure from Sterling to respond in a positive way. With less than 60 days to go until the referendum in Britain, there will undoubtedly be some further shifting in the GBP/USD exchange. UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under significant downward pressure recently, largely owing to the uncertainty of Britain’s future position in the European Union, ahead of June’s referendum. His pro-European position, backing UK Prime Minister Cameron’s ‘Stay’ canvassing has helped Sterling recover somewhat from a poor first quarter against the US Dollar. Markets, of course, do not like uncertainty and although this turn of events does not necessarily create certainty that the UK will remain part of the European Union, many analysts see Obama’s comments as a positive indicator that a UK exit will not happen. Indeed, President Obama is well-liked and respected in the UK, and David Cameron will be hoping that his influence with British voters will swing the vote to stay part of the EU. Coupled with some uninspiring results from the United States across housing and consumer goods, the Dollar is under pressure from Sterling to respond in a positive way. With less than 60 days to go until the referendum in Britain, there will undoubtedly be some further shifting in the GBP/USD exchange. UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under significant downward pressure recently, largely owing to the uncertainty of Britain’s future position in the European Union, ahead of June’s referendum. His pro-European position, backing UK Prime Minister Cameron’s ‘Stay’ canvassing has helped Sterling recover somewhat from a poor first quarter against the US Dollar. Markets, of course, do not like uncertainty and although this turn of events does not necessarily create certainty that the UK will remain part of the European Union, many analysts see Obama’s comments as a positive indicator that a UK exit will not happen. Indeed, President Obama is well-liked and respected in the UK, and David Cameron will be hoping that his influence with British voters will swing the vote to stay part of the EU. Coupled with some uninspiring results from the United States across housing and consumer goods, the Dollar is under pressure from Sterling to respond in a positive way. With less than 60 days to go until the referendum in Britain, there will undoubtedly be some further shifting in the GBP/USD exchange. UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under significant downward pressure recently, largely owing to the uncertainty of Britain’s future position in the European Union, ahead of June’s referendum. His pro-European position, backing UK Prime Minister Cameron’s ‘Stay’ canvassing has helped Sterling recover somewhat from a poor first quarter against the US Dollar. Markets, of course, do not like uncertainty and although this turn of events does not necessarily create certainty that the UK will remain part of the European Union, many analysts see Obama’s comments as a positive indicator that a UK exit will not happen. Indeed, President Obama is well-liked and respected in the UK, and David Cameron will be hoping that his influence with British voters will swing the vote to stay part of the EU. Coupled with some uninspiring results from the United States across housing and consumer goods, the Dollar is under pressure from Sterling to respond in a positive way. With less than 60 days to go until the referendum in Britain, there will undoubtedly be some further shifting in the GBP/USD exchange. UK Sterling increased this week following President Obama’s comments about whether the UK should remain in the European Union. The Pound has been under

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