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5 Accounting Tips to Increase the Value of your Business

5 Accounting Tips to Increase the Value of your Business

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1.  Stop minimizing taxes; instead maximize reported profitability

Many small businesses utilize the cash-basis of accounting rather than the accrual basis.  Doing so enables businesses to accelerate expenses into the current tax year and defer revenues to the following tax year.  This is a very aggressive method of minimizing taxes, and it follows that this method minimizes earnings and unfortunately minimizes business valuations.

2.  Eliminate excessive personal expenses and skimming cash

Similarly, if you run personal expenses through your business to minimize taxes, that practice is counterproductive to the value of your business.  Although some of those expenses might be able to be “sold” as add-backs to arrive at seller’s discretionary earnings (SDE), buyers often fight those adjustments and lenders will not consider them at all in determining the value of the business

3.   Stop expensing capital expenditures

Another tax minimization strategy used by some businesses is to record capital assets they acquire into expense accounts rather than into asset accounts.  By doing so, they expense 100% of the cash outlay in the year the asset is acquired versus having to depreciate the asset over several years

4.  Improve your inventory accounting system

Yet another area of tax minimization is the handling of inventory.  When the value of inventory is understated, the cost of goods sold is overstated and earnings are thus understated, which negatively affects the business valuation.  Inventory accounting in small businesses is notoriously poor, which represents a significant risk for buyers.  By making improvements in your inventory accounting, you can minimize buyers’ risks while also improving the quality of information which you can use to further improve your business operations.

5.   Track key business metrics

Tracking key business metrics on monthly comparative reports can help spot negative and positive trends and identify opportunities for improvement.  The nature of key business metrics will vary from company to company.  Some common metrics are: leads to close percentages, gross margin percentage, payroll percentage, overhead percentage, average sale, sales by product line, average monthly sales, seasonality percentages, average accounts receivable collection period, average inventory levels and turnover rates, working capital levels, salesperson percentages, bad debt ratio, customer percentages, etc.  To improve your business value, tracking metrics is insufficient by itself.  You must take action to make improvements and then monitor your progress using the metrics.

Prior to selling your business, there is considerable opportunity to increase its value by reviewing and improving your accounting systems and procedures.  In most instances, the further in advance you begin to address these issues, the greater the value improvement opportunity.

Call a business broker for a free consultation. We offer no-charge, no-obligation evaluations of small businesses. We can provide a broker opinion of value and help you identify obstacles to a successful sale as well as opportunities for improvement to increase the value of your business. That is a great way to start planning for a successful and profitable exit from your business.

Business For Sale: Muffler Repair Shop

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New Business For Sale!

Specialty Auto Repair… Performance Muffler Shop

Asking Price:$149,996

Cash Flow:N/A

Gross Revenue:$161,342

Established:1981

Print Share

Business Description

Profitable and 5-Star Yelp Reputation. 35+ Years in business

Mechanics: are you looking for a shop to get your business started? This Muffler Shop has been established for over 35 years!
Excellent 5 star reviews on Yelp and other review sites.
Independently owned and operated, seller has operated this shop solo since 2010…zero employees!
Has established corporate accounts.
Picks and chooses his work.
Although a one person operation, this is an excellent opportunity for a mechanic looking for his first shop. Easy to grow, add employees, open weekends, advertise….

Please complete an NDA for more information. Offered by Spectrum Business Advisors, Business Brokers.  Call 1-800-Biz-Broker.


Detailed Information

Real Estate:
Leased
Building SF:
2,800
Lease Expiration:
8/31/2019
Employees:
Zero
Facilities:
Fully functioning & equipped muffler shop. 3 Lifts Lots of parking
Competition:
Established over 35 years! Current owner for 22+ years!
Growth & Expansion:
Open on weekends. Add employees, seller limits business.
Financing:
Yes! TBD
Support & Training:
Yes!
Reason for Selling:
Retirement

New Listing: Dog Grooming Business for Sale

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Dog Grooming + Self Service Dog Wash

 Yucaipa, CA (San Bernardino County)

Asking Price:$110,000

Cash Flow:$56,936

Gross Revenue:$327,276

EBITDA:N/A

FF&E:$30,000

Inventory:$5,000*

Lease Rate/Sq. Ft.:N/A

Established:2010

*not included in asking price.

Business Description

Dog Lovers Dream Business! Established 2010

Ready for an owner/operator! Perfect for a dog groomer… Business has been serving their market for over 7 years. Amenities such as grooming, bathing, self-service bathing, and dog-spa treatments are available.

4 dedicated Groomers on Staff.

Over 3000 satisfied customers in the business database!

While current owner loves animals, she is not a groomer…. great opportunity for a groomer!


Detailed Information

Inventory:
Not included in asking price
Real Estate:
Leased
Building SF:
N/A
Lease Expiration:
N/A
Employees:
9
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
Self standing building on major road. Fully functioning Dog Grooming facility. 5 Groomers stations, with room to grow. Bathing area with self-service dog washing available. Small retail area.
Competition:
Yes. However this business is well established (7 years). xcellent reviews and web presence. Over 3000 customers on database
Growth & Expansion:
Space available to add groomers. Market to database. Social media ads.
Financing:
TBD
Support & Training:
Yes. 2-3 weeks as needed/negotiated. Owner is not a groomer, but has built a great business in the community with excellent online reviews.
Reason for Selling:
Other interests

 

Thinking about buying or selling your business?  We are Business Broker.  Contact us today!

Dog Daycare and Boarding Business for Sale

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Asking Price:$50,000

Cash Flow:$4,560

Gross Revenue:$170,448

Business Description

Dog Lovers Dream! This business offers Doggie Day Care & Boarding in a CAGE FREE environment. Established in 2014, this business is established but not operated by the owner, so it is not profitable. However, if you add-back the Manager’s $525 weekly salary there was a small earnings of $4560. This business really needs an owner operator to turn things around. However, that tipping point of profitability is within sight!

Benefit of Buying this Pet Business VS. Starting your own:
Great reputation is established (check out social media/Yelp)
Established website & SEO. Ranks on the first page of Google for “Dog Boarding <<City>> ”
Over 800 customers in the database- Great base to market to
Everything is already set-up and running!
All the build-out is done
Cheaper than building new & starting with Zero sales, Zero reputation, & Zero customer database.


Detailed Information

Real Estate:
Leased
Building SF:
6,480
Lease Expiration:
N/A
Employees:
4
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
Large 6480 sq/ft warehouse. Open space dog day care & boarding. Add groomin for incremental income.
Competition:
Competitive market, however if you want to be in this industry, buying this business will give you a huge head start.
Growth & Expansion:
Add Grooming & Retail…plenty of space. Needs an owner operator
Financing:
TBD
Support & Training:
2-4 weeks
Reason for Selling:
Owner lives on the East Coast

Contact us for more information.  We are Business Brokers.  We help entrepreneurs sell their businesses.

Business for Sale Transactions up 29%

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The current climate to sell your business is red hot!

BizBuySell.com, a major “business for sale” website– recorded 2,368 business sales in the first quarter of 2017….an increase of over 29% from the first quarter of 2016. That is an amazing and record setting statistic! The increase is sales is due in part to closing transactions around the New Year, a healthy economy, and continued access to financing.

Have you been thinking about selling your business? Now may be the perfect time to engage a business broker and see what your business is worth. Call a business professional today at 1-800-Biz-Broker. We specialized in the confidential sale of businesses. No long term commitments, just results.

Call 1-800-Biz-Broker or complete the form below.

Residential Cleaning Business for Sale (Riverside County)

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Just Listed for Sale!

Established Residential Cleaning Service (Non-franchise)

 

Business Description

Established in 2006

Price: $224,999     (plus cleaning supplies of about $2,000)

2016 Sales: $337,258

2016 Earnings: $128,530

 

Very Established Residential Cleaning Service!   Residential cleaning is a $10 BILLION Industry and expected to grow by 16% by 2018.

If you are looking for:

  • a simple yet strong business model offering a great ROI
  • primarily Monday-Friday work schedule
  • recurring cash revenue base

 

This business currently serves over 240 clients monthly and has hundreds more in its database.   There are 9 employees that handle the work… owners do not clean homes!  Managed by a husband & wife team out of an office in Riverside County.  Can be relocated or even managed from your home.

Monthly Income & Residential Clients are 100% verifiable

Sale includes 3 vans, cleaning equipment, and supplies … this is a turnkey business.

You will be trained by the sellers.

This business is represented by Spectrum Business Advisors.   Thinking about buying or selling your business?  You need to contact a Business Broker.  Please contact us at 1-800-Biz-Broker for more information.

7,842 Businesses Sold in 2016

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2016 is a Banner Year for Business Transactions as 7,842 Businesses Change Hands

The number of business sales reported by Business Brokers on industry website, BizBuySell, hit a record since this data has been recorded starting back in 2007.  Over 7800 business sales were reported by the participants. This amounted to an 8.6% increase of activity recorded in 2015.  Several factors were identified by the authors of the data fueling the record sales: more financing options, more qualified buyers, and an overall better business climate contributed to the sales rush.

Are you thinking about putting your Business on the market?  How much is your business worth?  Contact us today for a confidential consultation.  Call 1-800-Biz-Broker or complete the contact form below.

Click here to see how many businesses sold in Riverside County.

 

Best Selling Businesses in 2016

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As a Business Broker, I have found that a business will sell when the following three items are true:

  1. The business is profitable
  2. The business has opportunities for sustained growth
  3. The business has good records and verifiable books.

Without regard to the industry, if I represent a business that satisfies the above 3 conditions, experience has taught me that I will find a buyer.  However, I have also found that certain industries do sell better, sometimes faster, and more often than others.  Restaurants come to mind.

BizBuySell.com, one of the leading websites that lists businesses for sale, has just published their annual “BizBuySell Insight Reports”.  According to BizBuySell, these are the top 20 business types that sold in 2016 (by number of closed transactions).

Top Selling Types of Businesses

 

The full “Business Sales Insights” report can be found on BizBuySell.com

When you drill down the data, and look specifically at business sales in Riverside County, the news is good for potential business sellers as sales are up 4.8% from the same period last year.

In January  and February of 2016, 125 businesses were sold in Riverside County.  Compare that with 131 this past Jan and Feb, and you have a nearly 5% increase.

The table below summarizes the sales of businesses in Riverside County by month.  This information was taken from the BizBen Business Sales Report.  

Number of Businesses Sold In Riverside County

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Businesses Sold 2016 70 55 61 80 84 46 54 112 58 83 68 76 847
Businesses Sold 2017 66 65

 

Are you considering putting your business up for sale?  Would you like to schedule a confidential consultation with a Business Broker?  Call 1-800-Biz-Broker or complete the form below.

Business for Sale: Organic Nitrogen Fertilizer

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Business Description

$13 Billion US Market!

This market is worth BILLIONS! Perfect acquisition for a fertilizer company or a distributor in the home and garden market.
This company has already done the heavy lifting. EPA registration, trademarks, sourcing contracts, production/bagging partners, and even sales!

Currently available at Home Depots in Southern California. $156k in sales over past 2 years. Needs a strong sales/marketing component


Detailed Information

Employees:
0
Facilities:
Sourcing and production are outsourced (Home Based)
Competition:
The use of chemical fertilizers is causing health issues and hence, there is a huge demand for organic fertilizers in United States. Consumers are increasingly becoming health conscious and the demand for organic foods is increasing. The organic fertilizers and biofertilizers market is estimated to grow as a result of the increased demand for organic food products.
Support & Training:
Yes.
Reason for Selling:
Partnership disolving
Home-Based:
This business is Home-Based

Physical Therapy Practice for Sale

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New Business for Sale:  Thriving Physical Therapy Office in Orange County

Established over 7 years!

Physical Therapy Practice for sale. Excellent opportunity for a Physical Therapist to take over a thriving practice or as an acquisition by a larger group.
Owner is ready to scale back and semi-retire. Established over 7 years ago, this practice has been built offering quality care and superb professionalism. The office sees on average 75 patients weekly, with the ability to grow to 125-150 patients per week without sacrificing patient care.
Great relationships with referring physicians. Excellent web presence, plus 5 Star reviews on Yelp, and professionally designed website.
Almost all patients are covered by insurance, about half are Medicare.
Specialties include: rehabilitation after injury, post-operative care, osteoporosis programs, Parkinson’s disease treatment, lymphedema treatment, pelvic floor management/Incontinence management, & oncology rehabilitation.
This business is represented by Spectrum Business Advisors. Please contact a Business Broker at 1-800-Biz-Broker for more information.

Detailed Information

Real Estate:
Leased
Building SF:
1,298
Lease Expiration:
N/A
Employees:
3
Facilities:
Established Physical Therapy practice in Orange County. Based in a popular medical plaza with plenty of parking. Office is on the first floor for easy patient access. Office is laid out efficiently with a beautiful waiting room, 3 private patient rooms and a larger gym area. Also has a laundry area, a small private office, and a bathroom for staff and patients. The facility and all equipment is in great condition
Competition:
Located in the heart of the medical community of the area.
Growth & Expansion:
Medical field is growing strong. Aging demographic will continue to require services.
Financing:
TBD
Support & Training:
Yes. 2-4 weeks as needed. Great opportunity for a Physical Therapist. Seller may also stay on part-time basis.
Reason for Selling:
Retirement

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