The Value Gap
by Kelly Deis of SoundPoint Consulting
Have you ever heard of it? Well, if you are thinking of selling your business in the next few years, it is a term that you should get familiar with.
The value gap is the difference in price between what the seller thinks his/her business should sell for and what a buyer is willing to pay for it. Bluntly, it is unrealistic expectations on the part of the seller.
Sadly, it is one of the bigger reasons why deals go awry in the lower-to-mid market tier. And, it can be avoided.
Causes of the Gap
There are a variety of reasons why a seller may think that their business is worth more than what others are willing to pay for it.
Businesses in Washington should be aware of a possibly fraudulent letter claiming to be an official bill for annual business registration fees.
One letter received by an Edmonds-based business directed the business to send $121.86 to a post office box in Olympia. The letter stated, “your state annual report will not be filed until payment is received.”
The misleading letter did not include the Office of Secretary of State logo, as an official letter from the Office of Secretary of State would – see the example pictured above. Continue reading
by Kelly Deis of SoundPoint Consulting
Owners want to sell their businesses for for a variety of reasons – some want to retire and others are ready to move on to something else. Most owners ask – “is now a good time to sell?” Not surprisingly, the answer is, “it depends”.
Here are three factors to consider when timing the sale of your business. Of course, it is best when all three are optimally aligned, but that is not always possible.
The State of the Owner
The owner is critical to the success and ultimate value of a business. Typically, once the owner is beyond his or her prime, the business value will begin to falter.
It is best to sell when the owner is engaged, still excited about the business and perhaps wiling to stay on after the sale. Likewise, the more youthful and healthy the owner the less they will appear eager to sell.
You want to be the owner that wants to sell, not one that has to sell. Continue reading
One of the most challenging and rewarding parts of being a solopreneur is the need to be constantly learning. Of course, every day has its own lessons to teach—trial and error is the heartbeat of solopreneurship, after all. Sometimes, though, we need to turn to proven mentors and leaders who can offer wisdom from experiences that reach beyond our own.
When we run into these situations, books seem like the obvious first choice. Indeed, there’s a book out there for any problem you may encounter, whether procrastination, apathy, branding, or crippling self-doubt. Besides, shouldn’t we be reading like fiends anyway? It’s common knowledge that the most successful business leaders all share a ravenous appetite for good books.
But what solopreneur has time to read a book every week? Between brainstorming and producing and networking and marketing, it can be hard enough to make time to eat breakfast. Granted, reading is still a great habit to develop, but it may not be your primary mode of on-the-go education.
Thankfully, the world invented podcasts. Continue reading
by Mary Marshall, CEO Coach
Lately, I have noticed that the seeming inability to have reasoned debate within the political climate has spilled over into the workplace. There seems to be a “my way or the highway” mentality seeping into professional environments which is not productive. People are taking sides and staking claim to their view with no room for understanding or compromise. I’m reminded that whenever one side is “right,” it automatically makes the other side “wrong” and no one likes to be wrong.
I think the first step toward better understanding of one another’s points-of-view is to stop rushing to judgment. Just stepping back a beat and pretending there might be another approach or that – gasp – you might be wrong, are worthwhile steps. Being wrong is not the end of the world, it just means you have more to learn and isn’t that true of all of us? If we listened without judgment we might actually hear what the other side is saying.
If you are ready to practice, start with questions. “What” questions are usually the best and most effective for not conveying judgment. For example:
- What makes you say that?
- Tell me a little about how you came to that decision, belief, position, idea, etc.?
- What other ways have you looked at?
- Would you be open to a different point-of-view?
Read more on Mary Marshall’s website…
The process to change a business structure (for example, change from a sole proprietorship to a corporation) is the same as starting a new business.
Use the Business Licensing Wizard to get information and links that will help you do the following:
- Create your business structure with the Washington Secretary of State. (Skip this step if you are changing to a sole proprietor or general partnership.)
- Submit a new Business License Application to apply for a new Business License. You will be given a new Unified Business Identifier (UBI) number to be used on tax returns and other documents.
- Reapply for any applicable specialty, and/or city endorsements (for example, Nursery endorsements).
Note: You will probably need to re-apply for all of the licenses you currently have. For example, if you are a building contractor, you will need to reapply for your contractor’s license with the Department of Labor and Industries.
This information has been borrowed from the Washington State Business Licensing Service website. (link)
Many startup small business owners take pride in pulling themselves up by their bootstraps and not using financing to get their companies off the ground. But that approach can backfire, a new study in the Journal of Corporate Finance suggests.
The study, conducted by Florida Atlantic University faculty, assessed what happened to companies that took on debt during their first year of operation.
The authors discovered businesses that took on debt are more likely to succeed (as long as they use business debt as opposed to taking on personal debt).
What’s more, they’re also more likely to achieve higher revenues. Continue reading