Since April 2009 Google has been serving local listings in its search engine results pages. Although the layout has changed a bit and the number of business listings it provides has varied, what has remained consistent is a local Google map and listing of local businesses that are relevant to the keywords entered by the individual searching on Google.For local small businesses this has been a tremendous boost when it comes to competing with large national franchises since it gives precedent to the small business in local markets. And the price is right, too! Google provides a business listing to small businesses for absolutely no charge. However it is important that the small business know a few key points so that it leverages its business listing to the fullest.Choosing the right categories for your Google business listingOne of the most important factors to a successful business listing is choosing the right categories for which your business appears in the local search results. To date, Google allows businesses to choose five (5) categories. One of the categories must be a current Google category, and the other four (4) can be categories that you choose for your listing.The categories typically correspond to keyword phrases that an individual searching for your type of business would enter as a search term. For instance, if you are a plumber, typical keywords that someone searching for your business might use would be “plumber” or “plumbing.” To determine the existing Google category all you need to do is start typing the keyword in the Category section of the Google Business Listing (called Google Places) and Google will automatically suggest keyword terms that are relevant to your business. Just pick the one that suits your business best. That satisfies their requirement for using one of their existing categories. Now the other four (4) are up to you…and it’s important that you get this right as it can mean the difference between receiving multiple leads for your small business…or none at all.Choose Popular Keywords as CategoriesAs mentioned before, you want to use keywords and keyword phrases as your categories, but which ones do you choose? You’ll want to choose the ones that people search for the most, of course. Those most popular keywords will put your business in front of the most prospective customers and give your business the most visibility. And, guess what? Good ‘ol Google helps you with that, too. Just go to the Google AdWords Keyword Tool, enter a keyword in the “Word or phrase” box that describes your business, enter the letters displayed by the “captcha” security code and hit the “Search” button to get the list of keywords Google suggests. Pick the keywords with the most monthly searches that are also relevant to your business.But don’t stop there…Unfortunately for many (but fortunate for you), many businesses pick the four most popular keywords that are relevant to their business from the Google Keyword Tool, use those as their remaining categories and stop there…but that’s where they make a critical mistake because not all of those keywords result in a local search.Now this is a very important point so let’s be very clear. The key to identifying optimum categories is to make sure that the keywords that you pick are popular plus they must also produce a local search, too. Let’s look at an example -Let’s say you are a piano teacher, and you use the Google Keyword Tool to find the most popular keywords associated with your business. Google suggests the following keywords as popular keywords – “piano lessons”, “play piano,” “lessons piano,” and “how to play piano.” That sounds reasonable enough, but it isn’t until you check Google Search that you find some very important information. Only two of the keyword phrases produce a local search – “lessons piano” and “piano lessons.” The other two keyword phrases do not. Interesting!Keyword Lessons LearnedSo the lesson to be learned to get the most visibility for your local business is to choose popular keywords that are relevant to your business but also make sure that those keywords deliver local search results. If they don’t, you are wasting opportunities for your business listing to be shown and not fully utilizing the the visibility that Google wants to give you and your local business.
Having a business for sale can mean a lot of things – more than people might think. How does one business value compare to another, and how to arrive at that value? Because there are many types of businesses that exist for many different industries, it stands to reason there are numerous ways of approaching the process to find the value.There are the three main approaches to value, which are the income approach, the market approach, and the asset approach. There are variations of these approaches, and combinations of them, and things which must be looked at because each and every business will have variations of what gives the business worth, and some of these differences are substantial.First we must identify the type of sale: stock sale or asset sale. A stock sale is the sale of the company stock; the buyer is buying the company based upon the value of its stock, which represents everything in the business: earning power, equipment, goodwill, liabilities, etc. In an asset sale, the buyer is buying the company assets and capital which enable the company to make profits, but is not necessarily assuming any liabilities with the purchase. Most small businesses for sale are sold as an “asset sale”.Our question, when selling a business or buying a business, is this: what are the assets considered to arrive at an accurate value? Here we will look at some of the most common.1. FF and E: This abbreviation stands for furniture, fixtures, and equipment. These are the tangible assets used by the business to operate and make money. All businesses (with a few exceptions) will have some amount of FF&E. The value of these can vary greatly, but in most cases the value is included in the value as determined by the income.2. Leaseholds: the leasehold is the lease agreement between the owner of the property and the business that rents the property. The agreed upon leased space typically goes with the sale of the business. This can be a significant value, especially if there is an under market rate currently charged and the lessor is obligated to continue with the current terms.3. Contract rights: many businesses do business based on ongoing contracts, agreements with other entities to do certain things for certain periods of time. There can be immense value in these agreements, and when someone buys a business he or she is buying the rights to these agreements.4. Licenses: in certain business sales, licenses do not apply; in others, there can be no business without them. Building contracting is one of them. So is accounting. For a buyer to buy a business, his purchase includes either buying the license to the company or the license to the individual. Often times, the buyer will require the access or availability of the license as a contingent element of the sale.5. Goodwill: Goodwill is the earnings of a business above and beyond the fair market return of its net tangible assets. In other words, whatever the business makes in excess of its identifiable assets is considered “goodwill” income, where there exists a synergy of all of the assets together. This one can be tricky. Most business owners assume they have goodwill in their business, but goodwill is not always positive; there is such things as “negative” goodwill. If the business makes less than the sum total of its identifiable assets, there exists negative goodwill.6. Trade secrets: some businesses are all about secrets. The reason the business is in operation may be because of a trade secret, some aspect of a product or service that sets it apart and gives it a market. In a business purchase, these secrets have value and go with the sale.7. Trade names, telephone numbers, websites, and domain names: some businesses generate business simply because of its name and identifiable aspects. If those were to change, so would the profits. So in buying a business, the buyer will have need of those names and numbers to continue on in business. Of course, in some cases these things would not matter at all, and that is why each one must be approached individually.8. Works in progress: a construction company may have a multi-million dollar job going on at the time of the sale, which can take months to complete. In case such as this, the buyer would have need of continuing on in the particular job the company was engaged in; for money and for reputation. This is considered a work in progress and has value and therefore is considered an asset and made part of the sale.9. Business records: the history of a business detailed in documents and spreadsheets must necessarily become part of the business sale. The new owner can make use of records in identifying progress, tracking increased or decreased sales, adjusting expenditures and depreciation rates, etc. When someone purchases a business, they are buying the current operation and all the details that led to it.10. Real estate: the seller-owned property on which the business does its business is inherent to the operation and therefore the value. There are times when the new buyer needs to move the business to purchase it, but more often the real estate is viewed as a major aspect of the business value, especially if there is equipment attached to the property and buildings suited specifically to the business.When a business for sale is valued by a professional appraiser, a business broker, or a business owner, more than just the income is considered. Assets, economic values used by the business to produce revenue and profits, are weighed heavily to determine the worth of the business. And they must be considered to understand what a “business for sale” really means to a buyer.
Selling your business is an arduous and very demanding task; it is time consuming, stressful and often emotionally draining. Naturally the sale will dominate the owners thoughts and resources during this period and it is very easy for an owner to take their eye of the ball. The key to a successful sale is planning and preparation. Founders should build an exit strategy into their initial business plans, and this strategy should contain information on how the business will be advertised and marketed once the time has come for it to be sold.Owners who have not been through the process of selling a business before often underestimate how important it is to market, and package their business so that it appears attractive to potential buyers.As with all things pre-sale, the marketing must be thoroughly planned and executed perfectly. The aim of the marketing period is to drum up enough interest among qualified and motivated buyers to increase the chances of you business being sold for a premium. As many owners, business brokers and intermediaries will testify this is easier said than done.When attempting to market your business the first place you should start as an owner is your own market or industry. You will know your market better than any business broker or intermediary, and as a result you will know which individuals, companies or organizations will deem your business to be an attractive proposition. If you have decided to market and sell your business without the use of a professional you will have to find the balance between reaching the widest audience possible and keeping the fact you are selling away from those who do not need to know. Marketing your business is a delicate task, if you do not reach enough buyers you risk entering negotiations at a disadvantage, however if you market to aggressively you may end up alerting vendors, creditors, customers and key members of staff. The fact you are selling, may, in their eyes be an indication that something is wrong, and your business may turn south at the worst possible time. Therefore the marketing of your business must be carried out with the least possible disruption to the day to day running of the business. Once you have identified a list of suitable candidates you would be interested in speaking to you need to draw up a non-disclosure agreement, and following that the chief marketing tool which is the sales memorandum.There are hundreds of businesses for sale at any given time. To make your business stand out, you need to provide potential buyers with information that will help them to make an informed decision. A descriptive and well-organized sales memorandum will help in the sale process. The sales memorandum is a document which is used to present your company in the best possible light and motivate prospective buyers into making a solid enquiry. The sales memorandum can be prepared by a business broker, an accountant or by the owner of the company. This document will highlight all the positive things about the business and will help whet the appetite of potential buyers.The sales memorandum contains information on areas of possible growth and expansions, information on the unique value proposition of the business, its current assets, and key financial figures such as profit, cash flow, and total debt.This document should be tailored to the individual or group you are in negotiations with as different aspects of your business will appeal to different types of buyers. If you are talking to a company that offers a similar product, or serves a similar customer base as your own, your marketing efforts should be tailored to present your company as one which has a large and loyal customer base, in doing so you will increase the appeal of your company in the eyes of the buyer, and this will help you achieve a better deal during negotiations. If the buyer is part of a large conglomerate which is more interested in acquiring the skills of your workforce or the technology your business runs on, then these are the things which will need to be stressed within any marketing material you produce and put before them.During the sale process sellers must make sure that the business’ physical state is in good condition. The premises should be clean, the inventory current, and the equipment in good working order. It is very easy to overlook this during the marketing process, so you should ensure that your office, factory or shop is well kept, as a neglected workspace is often a red flag to many buyers. It is important to sell or dispose of any unused or outdated stock, apply a lick of paint to the premises, and check that all machinery and equipment is up to date and working, as many buyers will factor the cost of replacing or fixing damaged machinery into their offers. Doing this will create the impression of a well organized business and this inspires confidence in prospective buyers.Many owner managers do little, if any marketing once they have decided to put their business up for sale and as a result they can end up leaving money on the table when they eventually sell their business. Marketing, when done effectively can increase the amount the owner finally receives as there is nothing which drives up the price of a business then a room full of motivated buyers bidding on the business.