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Archive for Tips/Articles

Sep
03

Service to Seller Client

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Service Offered To Our Business Seller Client

ProClientLogo.modified-303x78ARE YOU PLANNING TO SELL YOUR BUSINESS?

If your answer is yes, then you are at the right place. We can help you sell your existing business in Toronto and Area, Ontario and beyond. ProClient Brokers connect matching buyers to business sellers. We offer a full range of seller services. Most of our steps, in addition to Agreement of Purchase and Sale and due diligence facilitation during selling process, are as under:

Our Activities During Listing & Selling

  • FREE Consultation for understanding selling process.
  • Free ‘Broker’s Opinion of Value (BOV)’ obtaining ‘Most Probable Selling Price (MPSP)’ of your Business.
  • An exclusive Web Page built for their company for sale highlighting salient features.
  • MLS Listing (Optional, as per situation and Agreement with the Seller Client)
  • ICI World Listing (Investment, Commercial, Industrial)
  • ICX.ca (http://ICX.ca) listing (if MLS listing)
  • GTABusinessBroker.ca – Included in the Business for Sale Summary List – Search Engine Optimized (SEO)
  • Listing in MyListingPlace.com (http://listings.proclient.ca)
  • Added listing in IBBA.org – International Business Brokers Association, worldwide for IBBA – members only
  • Print media exposure with limited information without affecting confidentiality.
  • Social Media (Twitter/Facebook/Google+/LinkedIn/Blogger/4Square/etc.).
  • Emails sent directly to our clientele in our buyer Data-Base
  • Active buyers on our list we talk to weekly or so.
  • Fiduciary Duties from ProClient as we are very Pro Clients.
  • Follow the RECO rules and IBBA policy guidelines for selling existing business.

DOCUMENTS REQUIRED FROM THE SELLER

  1. Listing Documents signed.
  2. 3 Years Financials – p&L A/C, copy of lease (if business is in leased premises).
  3. 6 + months listing duration.

COMMISSION STRUCTURE:

  • Total commission agreed upon at the time of Listing depending on the business value.
  • Sharing commission with the Buyer Broker or as agreed with the Seller Client.
  • We may renegotiate the the commission with client, if Buyer lead/ buyer comes from you.

To Seller Client: Let us know if there is anything we need to do in order to assist you.

Worth Reading Material:

 

 

Categories : Blog, Listings, Tips/Articles
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small business ArticlesReasons for Business Acquisitions

Acquiring another company is a great way to fast track the development of your company. There are companies that cannot succeed on their own and need to forge alliances in order to remain relevant in the marketplace. Companies that merge together must have a synergy and operate in different areas of specialty. Here are other reasons why companies acquire other companies.

1. Sharp Business Focus

It is possible to acquire a business in an unrelated industry simply because you see what lies ahead. It is not every time that people acquire businesses in the same industry. A strategic purchase can be made to increase performance or profitability elsewhere.

Companies should buy over other companies in other industries after adequate research and due diligence has been carried out. This helps to penetrate markets more effectively and establish market dominance for a long time to come.

2. Choke the Competition

Companies acquire other companies if they want to eliminate the competition and grab a bigger chunk of the market. A downturn of this strategy is that shareholders might see that you desperately want to purchase the business and ask for more money.  Stand your ground. You can even acquire shares from those willing to sell, thereby driving the price down rather than paying too much for an acquisition.

3. Growth

One of the main reasons why you should purchase a company is to grow your business. You can do this by buying a business that pulls its weight in certain areas like sales and marketing allowing resources to be diverted elsewhere. For instance, a big beer company can choose to buy a smaller beer company that has loyal customers but inadequate distribution channels.

4. Reduce the Risks

Mergers take place because business owners are looking for diversification. This helps to reduce the amount of risks because these resources are spread across various investments. If you want to reduce the odds of your business crashing, you should delve into another industry. It is not really smart to leave all your eggs in one basket.

It is true that working hard is a way to expand the frontiers of your business. Customers love great service delivery and a company that plays its position in the marketplace.

You should never pass up an opportunity to grow your business by purchasing a company that is available for the taking.  Be well prepared and brace up for the challenges that always come when entering a new line of business.

Remember Smart Owners Grow Through Acquisitions

That’s why Do Companies Acquire Other Companies.

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small business ArticlesMergers and Acquisitions as a Strategy for Growth

Acquiring a company or business can give you some leverage over your competition. Many small businesses think that acquisitions are only for blue chip companies. They are always intimidated by the acquisition work process and think money would never be available to purchase an alternate business.

There would never be a perfect time to purchase a business. You need to seize the initiative and try to purchase a business once the opportunity arises because it is the right thing to do if you want to see your business grow.

There are smart individuals charting new courses and conquering new territories everyday while others struggle to keep their businesses above water.  If you are really interested in being competitive, you need to acquire businesses.

Many companies are successful today and have made it into the Fortune 500 group of companies simply because they acquired companies in the past. Company acquisition is a strategy that every business owner must employ because of the rapidly changing face of the industry.

Sometimes it is better for a company to expand by purchasing another business rather than pumping resources into building a brand image, marketing or advertising. Investors and financial lenders are always impressed with sales projections, asset bases and real financials. These things are provided only if you acquire a healthy company.

If you have not been involved in an acquisition process before, do not rush. Take a few months to access the business and align yourselves with people who can advice you accordingly about the pros and cons of the business that pricks your interest.

When 2 companies come together, it is expected that they will make more money with less expenses. Revenue earnings can shoot up based on cross selling between the 2 entities as well as the combination of employees which helps to increase productivity.

A small business owner must be willing to take risks if he wants to see his business grow. There is no venture that is 100% foolproof. You need to understand the difference between taking a calculated risk and a reckless one. It is important that you cut down your risks to the barest minimum when you choose to acquire a company or business.

You need to make the risks easier to quantify if possible. You need to understand the expenses required to make it a reality. You need to be able to make profit projections with a certain amount of accuracy.

Businesses use Mergers and Acquisitions for Small Companies as a Strategy for Growth.

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small business ArticlesTips for Mergers and acquisitions

Mergers and acquisitions are not only for the big-timers. If you are an aspiring entrepreneur, you should not only be concerned with offering great services and keeping your customers happy. You should also be on the lookout for opportunities whereby you can acquire companies or businesses that can give you an advantage in the market. Are you an entrepreneur looking to acquire a privately owned company?

Here are 5 helpful tips that you should consider before acquiring a business.

  • Exclusivity Agreement

The first step every entrepreneur should take before an acquisition is to draft an exclusive agreement asking for a thorough investigation into the company. This agreement is often part of a letter of intent.
A prior agreement would also put you in good stead to avoid any bidding wars that might arise from other prospects. Most sellers would reserve the right for you to negotiate and investigate for 60 days. If you are not ready to buy or you are far from satisfied with the offer, you can allow the seller deal with other parties after the period has passed.

  • Assets are Important

You should spend money on tangible assets and not stocks. A stock transaction gives you access to liabilities under law, whereas in an asset transaction these liabilities are only agreed upon within the agreement. This is not to say that some liabilities are not advantageous to an acquisition. But you need to be aware of any loopholes and protect yourself against any issues that might arise.

  • Tailor to Transaction

The early draft of the acquisition agreement must be prepared to a particular transaction. It is not wise to use a general agreement in this case. This draft would be used for subsequent discussions regarding due diligence investigations, strategy, purchase prices and risk allocations.

The agreement should be well drafted with appropriate representations, warranties and indemnification obligations to protect the interests of the buyer. You should also get a consultant to help you out. The role that your consultant plays is a crucial one.

He must possess a comprehensive knowledge about your business and understand the risks that are involved. This helps you to make smart decisions based on your own terms. There is nothing better than getting someone who knows his way around these things.

  • Look Out for the Caps

One of the most contested issues when acquiring a privately owned company are seller damages. This is neither right nor wrong. It all depends on the type of transaction and the bargaining power of both parties. If there are many people bidding for a company, the ceiling cap might be 7% or less due to the competition involved. If you are the only bidder, you might be in strong position to bargain asking only to pay the purchase price and waive the cap.

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small business ArticlesM&A Failure Reasons

It is an open secret that not all mergers succeed. It is true that mergers help cut costs and boost productivity or profitability. It might be a simple and straightforward process for some companies. However, it might be downright complicated for others.

Statistics show that about two-thirds of all big mergers crash and burn. What this means is that they dip in the stock market and also lose confidence in the eyes of the consumer. Moreover, the reasons why some companies opt for mergers are flawed thereby devoid of adequate research and planning. There are many reasons that have caused the failure of mergers and acquisitions. Here are some of them.

  • Unfavourable Market Conditions

A market condition might favor an acquisition or merger. But as soon as you sign all the dotted lines, the market can swing in a different direction and put you under a cushion. This makes it almost impossible to get back to the drawing board, especially when you are still trying to find your feet. Unless there is a cohesive integration plan to help guide your process, you will struggle to adapt and get out of the rut.

  • Insufficient Workforce

A merger can take its toll on workers who cannot cope with the burden of new duties. These people spread themselves thinly and neglect critical aspects of the business which spells doom in the end. Before a merger is considered and eventually accepted, it is important to have the required people on board. Do not downsize because you want to save costs. Maintain a relevant staff strength so that your merger does not collapse from an insufficient workforce.

  • Corporate Culture Clash

The chances of a business merger succeeding can be further hampered if the corporate cultures of both companies are totally different. When you acquire a company, you do not only seize the opportunity because it is available. There are other things you need to consider as well.

You need to look at market and product compatibility. Furthermore, you also need to consider the work force and the working environment of the previous company. Disgruntled employees have sent many joint companies down under.

  • Haste in Cost Reduction

Companies focus too much attention on cutting costs after a merger. This adversely affects revenues and profits. Business mergers should focus more on building synergies and cohesion first rather than reducing costs immediately. This is another major reason why mergers fail and customers flee.

It is important to note that not all business acquisitions fail. Mergers are advantageous because they increase size and reach. They make you competitive in the marketplace and keep your competition on their toes. The utmost success of a merger mainly depends on how the 2 companies can be integrated seamlessly for daily operations.

<The Reasons Why Many Mergers and Acquisitions Fail>

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small business ArticlesReverse Mergers Explained

A public offering is a great way for a company to raise capital and improve their corporate profile. However, it can be a complicated and somewhat expensive process. There is a shortcut that can be taken. It is called a reverse merger; it is used as an alternative to an IPO.

A reverse merger is when a private company acquires a public company that is dormant. This public company might be dormant. But it must be listed on the stock exchange even though it has no assets to fall back on probably due to a bankruptcy.

Many companies take to this alternative. Reverse mergers are also known as reverse takeovers as it gives a private company control over a public one. The shareholders of the private company control the board of directors and maintain a strong ownership of the public company.

Benefits of Reverse Mergers

One of the benefits of a reverse merger is that it can be concluded quickly and cheaply. It does not involve the unnecessary protocol that is usually associated with public offerings. Reverse mergers are perfect for businesses or companies that are not desperate to make money in the short-term. It works better for companies that want to grow slowly but surely.

Secondly, reverse mergers provide a security that might not be available with IPO opportunities. An IPO depends on marketing conditions. Reverse mergers do not rely on this climate. They cannot be cancelled at the last-minute and are not subject to instability.

When a company plans to go public via an IPO process, it can take more than a year. The cost of this process can be a very expensive one. A reverse merger does not take up to 30 days to complete. Ironically, public companies enjoy higher valuations when compare to private companies. And what this means is that they have a faster growth rate as well.

Reverse mergers are good because they offer tax shelters to private companies. The public company may have taken plenty of hits and suffered losses. However, these losses can be carried over and converted to profits. By merging a public company with a private company, it is feasible to protect your merged company profits from subsequent taxation.

If you want to be successful with reverse mergers, you need to be highly perceptive. Keep tabs on happenings in financial circles and have a keen eye for spotting opportunities before they go public.

It is always smart to leverage on reverse merger opportunities that can give you back your money’s worth in little over a year.

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Pricing a Business for Sale

There are many tools available if you want to determine the price dynamics for selling your business. There is no particular price that you can use. The final price rests solely on the buyer and the seller. How bad does the buyer want to buy? How strongly does the seller want to sell?

These questions play a domineering role towards closing any sale.

  • Compare Before Proposing Asking Price

If you want to sell a business you can investigate and see how much a similar business is being sold. You can also contact a Business Broker and/or the national trade association/s where applicable. These organizations keep valuable information about businesses in key industries and are always willing to share it with anyone interested.

  • Hiring Business Broker

Moreover, you could hire a Business Broker who could do all the grunt work for you and also help you broker the deal eventually when buyers begin to show up or bid to take over your business. You can sell your business based on the asset that you have or monies that you generate including the cash flow, debt payments and revenue base.

  • Business Financials

Ensure that your business records are in order. Any serious buyer would want to look at your books. So it is imperative that your financial statement be in good working order. Income statements, cash flow statements, and balance sheets are what potential buyers usually ask to see.

  • List of Asset

You will also need to know the full estimate of your physical assets. Prepare them in a list and price them accordingly. Prospects that come around want to see a comprehensive asset list including the price of purchase and the current market value. This plays a large role in determining how much your business will go for.

  • Business Manageability

A business that is dependent on the owner or certain employees affects price. You need to make everyone relevant in the workplace. Appoint a deputy manager and key personnel in all the departments. This delimits risk and quells fears that the company would crash if a selected few leave.

CONCLUSION

In conclusion, try to focus on the core strengths of your business. A buyer will still go ahead with a sale even if he notices certain weaknesses in a business. Buyers do not necessarily tilt towards diversified businesses. They are more concerned with the assets and the strengths of a business. The pricing of a business will go up if you can improve your financial ratios and are ready to present before attempting to sell to buyers. In other words you need to prepare your business for sale before putting it for sale.

<The Pricing Dynamics of Selling a Business>

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small business ArticlesFix a Troubled Business

The aim of any business is to turn a profit. Profits show how well a business is performing under the present circumstances. Huge profits mean that the business is doing well; little profits show that the business is barely keeping its head above water. This is not a position that you would want to find your business.

When you lose relevance in the marketplace or suffer a lull in profits, investors and shareholders alike have every cause to panic. When a company is faltering, it is imperative to find a means of fixing this problem in order to prevent a total collapse.

The first thing that you do is to get new people in place particularly in top management where they can steer the business from troubled waters. Most businesses are made or marred by management. These are the people who make the decisions and these decisions make or break a company.

When you recruit people to fill new positions ensure that they are placed there based on their expertise and competence. You do your chances of fixing your business no good if you employ people based on sentiments and emotions. It is crucial that you look for experts and people who have a good idea about what makes your type of business tick.

Secondly, you would need to cut down all unnecessary costs. Take out time to run through all the expenses that your business generates and see what you can do without. This might mean closing up some departments and even laying off some workers. It might also mean selling off some seeming assets which in actual fact are only liabilities.

Thirdly, many businesses wobble and stumble because they do not know how to collect their money after services have been rendered. They have a long list of debtors who make empty promises and pay little money. You cannot stay in business for long if you continue to play Mr nice guy and work for free. Chase your money. You need to get paid. Hire debt collectors to ensure that your money is recovered.

When it comes to fixing the problems that are disturbing your business, you need to think like a doctor. A doctor does not give you weight loss tablets if you are complaining about an ulcer. In the same vein, make sure that you are looking for the right solution to fix a problem and not the wrong one.

Avoid complaining. Listen to your team of employees and inspire one another with a win-win attitude that everything is possible. We are not only in business to make money. We are also meant to add value to the lives of people and make them happier. So always improve on what is working and look for solutions for what is not.

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small business ArticlesTroubled Business Signs

It is always important to act fast when you sense that a business is in trouble. It could be a case of under-performance or a deepening financial crisis. It is crucial to act quickly and decisively once you see the signs that a business is going under in order not to be taken unawares.

Here are 5 signs that tell you a business is in trouble.

1. Unhappy Employees

Most employees have a 6th sense and know when a business is faltering. This can start with salaries being paid in installments or bonuses and allowances being cut altogether. Once employees sense that the future has suddenly become bleak it takes a toll on their productivity and performance. This marks the beginning of the end of a business.

2. Poor Sales

If your sales fall short of the expected target, then you lack the revenue to turn a profit or break even. So you do not have the money to operate running costs and pay salaries. In other words, you are running your business at a loss. And no one can survive that long without a consistent flow of cash and sales. When you struggle to meet your money requirements, you have loads of debtors to deal with everyday. There is no business that can survive in this manner.

3. Competition Closing Shop

It is not always a good thing when your competition starts to pack their bags and close shop. You might think you have one less company to worry about. But it might just be a warning sign that the market that you are in is not as profitable as you think. When the competition begins to cave in, it is important that you investigate the reasons they are bailing.

4. Big Guns are Leaving

Do not rest on you oars and think all is well even if no one has been sacked or told to go on a leave of absence. When top management begins to hand in their resignations to the human resources department, you need to get worried. They are at the top and probably see what you do not see. They are always quick to jump ship before things go full circle, crash and eventually burn.

5. Doing More for Less

You should know that your business is definitely in trouble when you are taking on extra duties and staying longer hours without being given a raise. This usually comes up when people are leaving and are not being replaced. You are given duties that do not match your job description and told to head out to other departments to help people out. When you are doing too much for less, those are the telling signs that a business is going under.

5 Signs That Tell You a Business is Definitely in Trouble >> HAVE SOME RECOMMENDATIONS ABOUT SELLING BUSINESSES? LEAVE THEM AS A COMMENT.

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small business ArticlesMaintain Your Business Success

As the saying goes it is very easy to get to the top. But it is very difficult to remain at the top. There are many businesses that succeed only to come crashing down only after a few years.

Here are 5 revealing ways that you can maintain your business success at the top.

1. Be a Risk Taker

You need to get out of your comfort zone if you want to move ahead. The business world is always changing and you need to adapt with these times too. Good returns always come with a decent amount of risk. However, you need to look out for calculated risks. It is important that you consider all the pros and cons to ensure that the risk is worth taking. If you are not willing to take risks then you do not want it bad enough.

2. Remain Competitive

For you to remain ahead, you need to provide a product or service that is different from the rest of the competition. You need to keep evolving and changing in order to maintain the edge. You need to be constantly on the go, looking for new ways to do new things. And once you find them keep them secret.

3. Get Good People

You might have the machinery to make a business work. But you need good people to make a business great. Many CEOs take credit for the success of their business. But the truth is no man is an island. He surely cannot do everything on his own. Every business needs people to get to the top and to remain at the top. Get good people and give them a stake in the company so that they do not break away to do their own thing and jeopardize things for you.

4. Offer More Value

How many times have you heard that a customer is king? The customer is indeed king. They keep the money coming in and literally keep you in business. You need to keep them happy and satisfied all the time. You need to treat them right because your competition is hanging around to steal them right under your noses if you disappoint. It is important to always offer value and treat your customers like treasure. Businesses do not remain at the top from dealing with one-off customers. They are at the top because they keep their customers.

5. Plan Plan Plan

If you fail to plan, you are planning to fail. Planning entails looking at a host of choices that you can use and the best road that you can take. It is alright to make a plan and change it because of the circumstances that might arise. But remember that you need to make these plans, set targets and consider the challenges that might hinder you from progressing forward. When these things are well laid out, you know what to do as of when due.

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SELLING A BUSINESS


Looking to sell your business? Selling your business confidentially & in top dollars needs preparation, patience, & right Business Brokerage Service. We market & process your sale while you concentrate on your business operation.....details

BUYING A BUSINESS


Considering buying a business? We can assist you find the right business & manage the entire buying process to ensure a successful transaction. For matching business opportunity suitable for you, let us know your preferences. ...details

VALUING A BUSINESS


Right pricing results in quick sale of a business. Overstating or underestimating business value can be costly for an owner. We help our Client avoid costly mistakes by valuing a business that can help you make/ save when buy or sell....details

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