After 2020 proved to be an extraordinarily challenging year, some business owners are eager to make a change. But who do you call to make it happen? Tami Norris from Business Brokers, LLC is the local expert in helping buy or sell existing businesses.
The REALTOR from McGrew Real Estate is focused on serving northeast Kansas entrepreneurs find the right fit as a buyer or seller. According to the Commerce Department consumer confidence is rising, retail sales rose 9.8% in March, a trend Norris understands: “So many of us have been cooped up back home that we are ready to go out to eat, have fun, spend money, and get out of the house.”
It’s an optimal time to transfer business ownership because it benefits both buyers and sellers. Sellers who were forced to adapt to shutdowns and the rise of e-commerce and digital trends are reluctant to risk going through it again. Meanwhile, tech-savvy professionals who experienced job uncertainty aim to take control of their careers. “When you go through what we did this last year, people start looking at how they can control their own future,” Norris explains. “You start to see more people learn towards entrepreneurship.”
Buyers who want to purchase an existing business are tempted by an established revenue stream, client base and reputation. It’s a lot easier to continue the operation of an existing business than it is to start from scratch. Oftentimes, the buyer has a specific type of business in mind, such as retail, manufacturing, or service industry. Other times, the buyer seeks to purchase competition to increase their current market share.
Norris is there to facilitate the process. She starts by learning what type of business and location the buyer seeks. She then recommends that the buyer sit down with a lender to work out potential financing options and put together a business plan so there is realistic understanding of anticipated cash flow, working capital needed, and anticipated debt obligations. Once a viable option is found, the business and financials are evaluated, then data is presented to the buyer.
A common misconception is that a business must be failing when it transfers ownership. Over 500,000 businesses change hands each year for various reasons unrelated to finances. For those who were considering retirement pre-pandemic, 2020 gave them a reason to speed up their timeline. Other factors, like burnout, health problems, financial insecurity, divorce, and a death in the family are reasons to leave a business behind.
To facilitate a sale, Norris begins by assessing the ins and outs of the business, such as its financial standing, potential list price, and marketability. She generates a marketing packet then actively promotes the business. If the seller wants to keep things confidential, agreements must be signed before information is passed on to any buyer. “It really is the business owner giving me a crash course on their business,” Norris says. “I work closely with the owner because obviously they know the business better than anybody.”
Ideally Norris would like to start working with a business owner years before they are ready to transition out of the business. Sellers need to understand how their financials, employee structure, market share, and other factors will affect their list price. It’s important to have time prior to listing for adjustments to help the marketability of the business. According to Norris, early planning is not always an option.
As the chapter unfolds for this new economic era, both buyers and sellers have worthy reasons to take control of their futures. For more information about Business Brokers, LLC, contact Tami Norris at tami@businessbrokersllc.net or visit businessbrokersllc.net.