The Truth About What a Buyer Really Wants When Purchasing a Business

Imagine you are going to take out a loan out from a bank and all your personal assets are going to be used as collateral and you will be putting a large sum of money down to buy a business.

Would you buy just any business or would you be particular about the business you bought?

Truth be known,buyers are particular and they are more particular today than ever before.

When reviewing a business, today’s buyers are looking for stable, solid, investment. They are quick to walk away if the information and numbers are not to their liking.

So what do buyer’s want?

This is not an easy answer. Buyer’s requirements change based on the market. Depending on the interest rates, availability of financing as well as the economic mood, the buyer may be more or less tolerant of risk.

Interestingly, often business owners think,”My business is a gold mine for the right buyer!”

Seller will often try to convince a buyer that with a little marketing you could make a fortune with this business.

The question of course that a buyer asks is: “Well, Mr. Business Owner, why haven’t you made that effort”?

Today’s buyers are not willing to pay the business’s potential. Business owners must take those steps themselves, which not only will increase their revenues and profits in the short-term, but will greatly improve the value of their business.

What buyers really want is reduced risk.

They want assurance that the business they buy will produce the cashflow they expect, not a projection.

So, here is a short list of what buyer’s look for:

  1. A well-run, stable business.
  2. Clean books and accurate tax returns.
  3. A well-marketed business.
  4. Loyal customers.
  5. High customer diversity.
  6. Contracts (if applicable).
  7. Reasonable seller financing.
  8. Structed business for growth.
  9. Unique businesses with sustainable models.

When a business owner considers selling their business, the 3-4 years before selling should be the best 3-4 years the company has ever had. Sadly, it is often the opposite. The owner waits until the market shifts or until they just can’t do it any more and the books like the business is dying. This is not the type of business that yields the highest selling price.

Before business owners considering selling their business, they should evaluate the opportunities for improvement and make those improvements so that a new buyer only sees a well-run business and is willing to offer a higher price.

For more information on how to sell your business, download the free report 7 Critical Points Every Business Owner Must Know Before Selling Their Business.

A Profitable Business Idea and Marketing Research

The task of coming up with a profitable business idea can be very daunting. Setting up your own business requires you to think rationally and thoroughly so as to plan and make key financial decisions. You should have a written business plan. There are many already existing business opportunities that you can choose from. Therefore, being an entrepreneur doesn’t necessarily imply that you Must come up with a new unique business idea.

There are many advantages of choosing an already existing business to start your business from. The main advantage is that the existing business opportunity has been already in the market therefore its products are already selling. You’ll not need to spend a lot of money in marketing the products because they have customers who already exist. Your task is to find the best strategic location where you’ll locate your business and also raising the amount of capital required to start and run the business.

You must ensure that you meet all the requirements including legal procedures before you start operating your own business to avoid breaking the law and being penalized. You should bear in mind that starting a business by using or improving an already existing business doesn’t imply that it will be profitable. It is either that it will be making profits each year or hardly making any profits.

It is upon you to make a decision whether to start from scratch by coming up with your new profitable business idea or look for an existing business idea to adopt. It takes a great idea for one to come up with a new business idea that is profitable. However, a business idea that is profitable in the present time cannot remain to be profitable throughout. It will reach a time that it will face stiff competition as a result of new technology, new superior substitute products or other factors that will make its profits to decline.

As an entrepreneur, you have to be aggressive and innovative. Innovation of entrepreneurs doesn’t necessarily imply invention of a product but it also implies coming up with new ways of reducing costs and improving the existing products. You should take risks by investing in profitable business opportunities you come across.

Do not focus on profits alone if you want your business to succeed but you should be customer oriented. When you’re customer oriented you’ll satisfy the tastes, preferences and expectations of the customers. You should not operate the same business throughout without improving the quality of your products and finding out from customers what they want your products to do for them.

What You Should Know About Making Profits

You should have a clear view when it comes to making profits before you start your business. Your business will fail if you miss to apply the objective of earning profits. Entrepreneurs are not supposed to focus on the objective of maximizing profits only. Focusing solely to maximize profits will lead an entrepreneur to charge a higher price for his products, exploit employees or produce products that are of low quality. An entrepreneur who solely wants to maximize profits will never make his business to be successful.

The enterprise that is coldly and solely motivated by the making of money seldom fares well in the long run~By Apply.

However, this is not to say that entrepreneurs should not make profits. Entrepreneurs should focus in satisfying customers and making adequate profits to cover all costs incurred i.e. making adequate profit to enable the survival of the business.

The problem of any business is not maximization of profit but the achievement of sufficient profit to cover the risks of economic activity and thus to avoid loss. But whether it is the motive of business to maximize profit is debatable. However, it is an absolute necessary for the business enterprise to earn at least the profit required to cover its own future risks and enable it to stay in business and maintain intact the wealth producing capacity of its resources~By Prof. Peter Ferdinand Drucker, the world-renowned consultant of management.

Marketing Research

Many upcoming entrepreneurs face the problem of product failure. You should keep on changing your marketing strategies and improving your products so as to satisfy your customers fully. You should not guesswork that the products you’re intending to sell will be purchased. You should find out facts in the market if your products will be purchased.

Nowadays, marketing research is vital. Why? It is because consumers know what they need and want thus you should find out from them by conducting a marketing survey. Marketing research will also help you to know if the business you want to start will be profitable. To avoid the risk of your business failing, you should find out;

1.) If the products you’re intending to sell are needed in the market.

2.) The place where most potential customers are in order to locate your business near them.

3.) The expectations of potential buyers. Find out from potential buyers what they want your products to do for them.

4.) The purchasing power of the customers so as to make your products affordable. This will help you to know the quantities you should pack your products. Customers with a higher purchasing power will have the option of buying the products that are packed in large quantities e.g. 1Kg, 5kgs, 10kgs, 20kgs etc. On the other hand, customers with low purchasing power will have the option of purchasing your products that are packed in small quantities e.g. 50gm, 100gm, 200gm, 500gm.

5.) If the business you intend to start has competition so as to find your own unique selling proposition to beat your competitors.

6.) The size of the market for your product so as to know how much products you’ll produce and the amount of capital to invest.

You should take a step in widening your horizons and in taking your time to search for business opportunities. Read widely business magazines, business management books and other business publications. You should make your business to be the best choice in the market by satisfying your customers, gain loyalty of your customers.

Starting a business does not mean that you have to open a big business. It is all about discovering a viable business opportunity and having a strong entrepreneurial spirit that defies logic. Click the link to understand how strong entrepreneurial spirit that defies logic differentiates people who are successful from those who are unsuccessful in business.

Five Things to Think About Before Starting a Photography Business

If you’re reading this article, odds are someone has told you that you take really great pictures and you should start up your own business. It’s exciting to think about turning your passion into your full time job, but before you jump head first into this endeavor here are a few things you should think about.

1. Picture yourself as a business owner

It’s thrilling to think about being a photographer, but have you thought about being a business owner. What most people don’t know is that only about 10%-20% of your time is actually spent taking photographs. That other 80% or more is spent actually working on your business. Whether it’s dealing with paperwork, doing the accounting, creating marketing pieces, dealing with disgruntled customers, or updating your website, these are not the tasks most aspiring photographers dream of doing, but they are a crucial part of staying in business.

If you haven’t thought about this yet, take a few minutes to do so. Would you be happy keeping track of your sales and taxes? Would you have fun working on marketing pieces for your business? How much would you enjoy dealing with customer queries – even unpleasant ones? All of these things are part of owning a business and part of a photographer’s everyday job.

2. Think about what kind of photography business you want to have

If you are contemplating starting a photography business, I’m sure you love taking pictures, but have you thought about what you really love taking pictures of? There are so many different specialties you can focus on in this world. There’s wedding photography, senior photography, newborn photography, family photography, sports photography, and a slew of other focuses as well.

It is often encouraged that you select a specialty or one area that you focus on. The benefit of doing this is that it makes it far easier for you to find your target market to advertise and promote yourself. But determining what your favorite thing to shoot is can be difficult. So take some time to think about what you really enjoy documenting.

3. Think about time and money

This is another side to the business that is easy to not even think about. Take some time to write down all the business expenses you think you’ll have starting out. This would include things like: camera equipment, website domain, website hosting, website design, logo design, filing with the state, sample products, software… As you can see this list can become quite extensive and the numbers can add up very quickly. But it’s much better to go into starting a business having an idea in mind of what it’s going to cost you.

Equally important is considering how much time you will spend working in and on your new business. Starting a business can be incredibly time consuming. If you already have a full time job and plan to start your photography business on the side. It’s good to set boundaries for how much time you will spend working. It’s far too easy to get caught up in this exciting new adventure and let time with your family and loved ones fall by the wayside. So be sure you are ready to invest more hours than you expect into this business.

4. Talk to other business owners about their lives

If you want to gain a real perspective on what owning a business is like talk to a small business owner in your area. It doesn’t necessarily have to be a photographer, though their insights would be most relevant, any business owner can give you a perspective on what it’s like. Take them out to lunch and pick their brains. Ask them what their average day is like as a business owner. What their favorite and least favorite things about owning a business are. What they would do differently if they could start all over again. All of their thoughts and opinions can help give you a better idea of whether or not this is the right choice for you.

5. Come up with a Business Plan

You’ve thought about it all, the time and money you’ll have to invest, the struggles you may encounter and the type of photography you’d like to shoot and you are ready to start moving forward with your new business. The last step of thinking about it and the first steps towards building your company are to create a business plan. It is the one step that is so often overlooked but the one that makes the biggest difference in developing and growing your business.

A business plan is basically a formal statement of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It often also contains background information about the organization or team attempting to reach those goals. For example, my business plan is “Green Tree Media Photography helps our preserve memories and captures the soul and essence of our families, seniors, newborns, and couples. We thrive on repeat business by developing relationships with our clients and providing exceptional care and unique and beautiful art pieces for their walls and home, while maintaining a strong and healthy relationship with our family and loved ones.”

As you can see – I’ve outlined what I like to photograph, the type of service I plan to provide, how I plan to do it and because my husband and family are important to me I’ve included them in my business plan as well. This serves as a constant reminder to me of where I’m heading, what I need to do and what’s most important. Your business plan, of course, evolves with your business, but it can be incredibly beneficial to head into the game with a business plan in mind.

So there you have it. Five Steps for Starting your photography business. Now you may have noticed that the first four steps were more about thinking and preparing than actually taking action, and there is a reason for that. It is so easy to jump into business too quickly and to let your excitement get ahead of you. At this point in time, many photography businesses are failing in the first 2 year of business. So to avoid adding yourself to that statistic, take the time to think through all the facets of owning a business so you can make the best and right choice for you and your family.

Understanding the Need of Having Adequate Business Insurance Cover

Insurance is a means to protect the businesses from unforeseen risks; it provides peace of mind to the business owners. However, choosing adequate insurance cover is crucial to leverage the benefits it offers. This article sheds light on the negative impact of under or over insuring a business and the importance of having adequate insurance cover.

Under-insurance or over-insurance – impact
Besides determining various risks that your business is likely to face, you also need to calculate the amount required to cover the risk to determine adequate cover, failing which you may face the following issues –

• Revenue loss: Under-insurance may cost you dearly. The low premium may initially attract you, but it may lead to revenue losses when the risk arises. If any risk arises and your business is not covered with adequate insurance, it may affect your business financially, as you have paid for an insurance cover that is less than its value and you have to bear with the loss of revenue.

• Business interruption: Being under-insured may lead to business interruption, because, if your business is not covered with adequate insurance, you have to endure losses in case of physical property damage or liability claims. Until you spend some money from your pocket to re-build the business, you may not be able to run your business. Business interruption, thus, halts the revenue you are generating.

• High premium rates: Over-insurance results in paying high premium costs, for a coverage that goes beyond the actual cash value of the risk that was insured by the policy holder. If your business is over-insured, and you are paying high premium, which is actually not required, you will be in a loss.

Adequate insurance and its importance: Incidents such as accidents, natural calamities like storms, etc. can result in interruption/closure of your business. Having adequate insurance coverage is, therefore, very critical to protect your business from such kind of risk. Following are two more benefits of having adequate insurance –

• Smooth business operation: If your business is insured with adequate insurance coverage, you can operate your business smoothly. You need not worrying about the risks that may occur in your premises.

• Resume operations after unexpected events: After an unexpected event at your business premises, you need to rebuild your business to resume operations. At this critical time, having business insurance is very helpful; it will cover the loss incurred. It helps rebuild your business and resume operations.

Determining the insurance cover for your business
Before you purchase insurance for your business, it is important to calculate the total value of assets and costs required to repair/replace them when an unforeseen event happens. For this, take help of tools such as property value calculator, replacement cost estimator, etc. which enable you to determine the coverage required for your business. This way, you can avoid the instances of both under and over insurance.

Take expert advice
After knowing the importance of having adequate insurance for your business, purchasing it on your own can prove risky, as you may miss on a few things. Therefore, it is better to take advice of insurance brokers as they will help you in choosing adequate insurance coverage after looking at all the aspects of the business.

Your business may be thriving well; however it might face difficulties which you cannot foresee. Purchasing insurance that covers all the potential risks to your business adequately is, therefore, a sensible business idea.

5 Ways Business Value Statements Impact Business

DEFINE THE FUNDAMENTAL VALUES BY WHICH YOU WILL RUN YOUR BUSINESS

Okay – so now that you are here, you know that:

  • Your Business Mission Statement provides a path to understand the business vision in line with its values; defining your business’ purpose and primary objectives
  • Your Business Vision Statement defines both the purpose and values of your business and can encourage you to achieve defined objectives, even if they are objectives that stretch you, knowing that the vision is SMART (Specific, Measurable, Achievable, Relevant and Time bound).
  • Your Vision Statement also defines your business’ reason, in terms of your business’ values.
  • These statements have a direct influence on your business’ bottom-line and success.

Business Values are guiding beliefs about how YOU want things done.

Value Statements: You demonstrate and represent your values in action in your personal and work behaviors, decision-making, and interpersonal interaction.

Here are a few value statements:

  • Marketing is a constant, learning process.
  • Maintaining outstanding customer relationships is key.
  • Operate with integrity and accountability.
  • Give back and support participation in the community activities that empower others.
  • Provide quality and thoughtful services
  • Showing improvement, innovative actions, credibility, and honesty.
  • Enjoy your business, achieve your vision!

Consolidate the common values by which your business will be operated.

Example of value statement: In conducting our business, we will realize our vision by performing our affairs so that our actions provide confirmation of the high value we place on:

INTEGRITY: by dealing honestly with our clients, staff, vendors and community.

RESPONSIBILITY: by considering the environment in which we do business, community views and the common good.

PROFITABILITY: by being aware that an appropriate level of profit is necessary to maintain our business and allow our values to continue to be observed.

VALUE: by providing quality products/services that deliver value for money.

Once your Business Value Statement has been defined, these values will impact every piece of your business.

How can the values you identify have an impact on your business?

1. Value Statements provide boundaries on how your business successes will be achieved. Business objectives and goals are grounded in the established values.

2. You and your staff demonstrate and model the values in action in personal work behaviors, decision-making, contribution, and interpersonal communication, to ensure a value-based, shared culture.

3. Your Business Values will help establish priorities in your daily work life.

4. Values will guide decisions that are made.

5. When hiring and promoting others – their outlook and actions will need to be congruent with these values.

The work and art of a successful business includes planning – And, that is where a business coach comes in to help you put this together. Because success is a piece of art.

Choosing the Tools for Social Media for Small Business

The initial part of this series explored the need for small businesses to use social media and what were some of the critical steps in the process. Questions were raised to assist the small business owner to focus their efforts in the best way possible to achieve the desired results based upon the overall objectives and goals of the marketing plan. It gave a few tips on how to specifically identify the target audience and where they could be found on social media.

It is possible to compare the selection of the tools for social media to how a farmer selects the tools. First he/she surveys the land to determine the best type of crop to plant. This is similar to the owner reviewing the business website. The website for the small business is very much like the land for the farmer. It must be easy to use, provide content, contains various ways for people to interact with business and other ways to link with the business. As the farmer begins to make a choice of crop or crops to plant, he/she identifies who will be buying the crops. For the owner, it is the identification of the target audience. The farmer then makes the selection of the crop or crops that will produce the greatest results for them and develops a plan or process that will be used to plant the crops. This includes the review of the tools the farmer has on hand and the tools he/she needs to purchase or lease to complete the job of planting. Thus the farmer reviews each of their tools to ensure they are in good condition and able to perform effectively the tasks that need to be accomplished.

As the farmer makes the decisions about crops, the owner has to make the choice of the products or services he/she are going to provide to customers. The owner must review the website and began asking the questions that will assist in making the correct decisions on improvement.

For instance,

  1. How effective has the website been in assisting creating more sales?
  2. What kind of content are we providing that helps prospective customers?
  3. What is on the site that keeps the customer captured in order for them to spend more time looking at other products?
  4. Do I have links to other social media sites?
  5. Do I have a place for them to sign up for something free I am giving them?
  6. What other things can I offer to them to keep them on the site longer or have them buy a product or service?

The implements for the farmer are limited by the type of product they are going to produce and the overall size of the area to be planted. For the owner, the implements for social media are much more varied and are dependent on the target audience and the overall time that a small business owner plans to expand on social media. Presently, the major tools being used include: Facebook, Twitter; LinkedIn; You Tube; and Google+.

While the ones listed above are the most popular and used most often, they are not the only tools that are available for a small business. Some other tools being used are Tumblr, Slideshare, Instagram, Foursquare, Yelp, Pinterest, Gentlemint and Merchant Circle. Each one of these tools provides different formats and reaches different audiences.

So much as the farmer decides on the best tools for planting the crops, small business owners must do the same thing. As we review the popular tools, it is important for you as the small business owner to keep in mind your target audience; also, the amount of time you want to expend in using social media.

Social media tools discussed below have requirements that you create a profile. The profile will differ somewhat between social media platforms. It is important that the owner complete each of the profiles. This becomes the key for people to learn to know about the owner and the services or products that the company provides. Some of the requested information include: name, picture, professional headline, current title, web sites, public profile, summary, specialties, experience, education, interests, groups and associations, skills, personal information, contact settings, and companies.

The tool called Facebook is one of the most popular of the tools and is constantly growing. Businesses of all sizes are using this tool. Businesses create fan pages and business pages to promote their business. They ask people to like their pages in order to create greater number of followers. When they post updates people who have asked to get notifications and feeds will get them. This is a way for them to promote their brands, events, and coupons. Before selecting this as the place where you want your business listed as an owner must understand that just posting a page is not sufficient. It requires time to place status updates and respond to updates in a timely manner. It is about the relationship you are creating. Prior to select this tool the owner should check for the demographics of the website to ensure it fits the target audience.

LinkedIn as a tool is one of the most powerful tools for connecting with professionals. It is a tool that allows a person to develop a professional profile, upload a resume and join groups, create groups and follow individuals and companies. It is a good source to find information about a person or company. It is an excellent way to connect to other professionals across the nation and world as well as generate request for introductions to others. It allows a user to maintain a contact list of people they know and trust in business and can use to help connect with others. As with other tools, it must be used professionally and needs to have ongoing maintenance. Interactions are also important in establishing your creditability with this tool.

Twitter is another of the more popular tools in social media. It requires more attention than others because it is more like carrying on several conversations. It is used worldwide and can be considered a micro blogging site. It is a good tool to keep people posted as to what is occurring in your industry and information that as a business should be shared with others. It is a means of connecting with leaders in your industry and finding out their thoughts and how they influence people. As with the other tools, it requires a time commitment to maintain and respond to twits or updates from people.

YouTube is a video sharing social media site that is owned by Google. This site has grown considerably and is now the number two search engine. Business and individuals use this as a means of connecting with people using a visual mode. Studies show that people will watch a short video rather than read a large amount of data. It is also used as an educational platform and provides various types of self-development information. It is a great platform for delivering video-based testimonials, how to guides and commercials promoting products and/or services. As with other tools, a business can subscribe to other users and receive information when new posts are made. Before selecting this medium recognize that new videos will need to be developed and uploaded to be an effective tool.

Google+ (Google Plus) is a relative new tool as far as social media is concerned. It is used by both businesses and individuals. It provides a few more tools to use within the site than some of the others. Some of them include: Circles, Hangouts, Messenger, Instant Upload of Photos, Hashtags, Explore posts, Find People, Events, Find Local Businesses, Create Business Pages and more. The features make it easy for an individual to use. Since it is part of the Google product line one must have a Google Email account to use Google+. As a whole when viewed with the other Google product provides a great arsenal of tools to assist small business become more successful.

The tools we have briefly discussed are some of the most powerful being used presently, but they are only as good as the owner who selects to use them. The owner must remember that as a farmer selects the tools, the owner must do the same that are best for the designed marketing plan. The use of the tools themselves for owner is most important. Once the farmer prepares the field with the right tools and plants the seed, it is now important to water the seeds and plants until it is time to harvest. The owner has prepared his website, selected the social media tools based upon the marketing design, prepared each of the sites with the requested profiles and published each of the sites.

Now as the farmer waters the owner must use the status updates, tweets, messages, videos, slides. Responding to comments is also the way that a owner works with small business to establish the know, like and trust factors. This must be done with consistency overtime. As discussed in the previous article, social media is the developing of relationships with people and that does not happen quickly. Thus it is of utmost importance that a regular schedule be developed and implemented on a weekly basis.

The next segment of the series will review and look at social media sites that are up and coming and sites that are very powerful but have not gained in the overall popularity. As with the others, each has its strengths and weaknesses. Each therefore has different demographics and different targets. The business owner needs to have an understanding in order to select the best tool. A discussion of some of the sites that are better for international use will also be discussed. The subsequent articles will deal with tools to use to make using social media a little easier and ways to measure the return on investment of social media. The final part of the series will discuss other web-based tools that can assist small business become more effective in delivering services and products to customers.

As a owner, take the time to review each of the demographics for the sites. If you do not have a social media site, then select one that fits your demographics. Ask questions, raise concerns, review your goals, and talk to those who are using the sites, and then move forward with your plan.