Ultimately, every business owner will want to know the resale value of their business. Even if they intend to pass it on to the next generation, it is important to be able to defend your valuation. Several criteria are needed to come to a reasonable valuation.
If there is real estate involved, and it is assumed that a new owner would continue the use of the property for the same or similar business, a commercial appraisal may be needed. However, lenders have some leeway on whether a fee appraisal is necessary, especially if the real estate value is less than $500,000.
A second consideration is whether the business will be sold as a "going concern" or if a new owner will be starting something new or a re-start of what was once there. A "going concern" will be valued based on historical profitability and how bankable those figures turn out to be. Most business acquisitions will involve financing, so it is important to avoid being too aggressive in write-offs in the immediate year's tax returns, otherwise a prospective buyer will devalue the business to comply with lender requirements. Saving some in taxes could result in even greater losses as it relates to the lowering of net income and thereby lowering the value of your business.
When a prospective buyer learns about your business, they will want to see two things right away. First, they will look at your website as it gives a first impression of how current your business is. Second, they will want to see your financials to determine the viability of the business.
If you're thinking a sale of your business is in the near future, contact Waking Girl Company. They have the resources to update a website and to give guidance on an independent evaluation.
When planning a succession or sale, business owners should consider turning the reigns over to either the “heir apparent” or an interim CEO/President while still on-site.
This will give the owner a chance to determine whether they are comfortable with a transition of authority, especially on day to day matters. Giving someone else authority to make decisions on hiring, marketing and vision-casting before actually going on that long awaited world cruise can be a good method to check out the mentality and initiative of a would-be successor before giving more comprehensive authority.
Often owners just want a break from the minutia of running the business which allows them to spend more energy on long range planning. Obviously, the physical and mental health of the owner should be considered as well. Asking, “Is the time right to retire, sell or turn over the day to day operations?” is a major decision especially for someone that has poured their heart and soul into the founding of a business. The emotional attachment can often blur the right decision.
One should do some soul-searching about whether the goals they had at the beginning have been achieved or whether it is more likely to be achieved with someone else at the helm.
Want to see if your business is ready to sell, or if you just need a vacation? Call us today for a complimentary business consultation.
Written by Larry, Business to Business Consultant
Larry, B2B Consultant
I was so happy when a Tim Hortons coffee and donut shop opened on the US side of the Canadian border. Whenever I visited family in International Falls, Minnesota, I made a point to bring my passport so I could cross the border to Fort Frances, Ontario where I was able to enjoy a thriving store with unique donut options and excellent coffee. Keep in mind, to cross the border at that point requires a fee as you first have to cross a toll bridge to get to the actual border crossing. So those donuts had to be good!
Why did Tim Hortons fail to be profitable in the US?
My opinion is that they carried the name across the border without carrying the level of service that I found at the Canadian branch. At one location my wife and I were the only customers in the store and we were outnumbered by Tim Hortons employees. However, there was not one table cleaned and ready for new customers. At another store, they did not even carry my favorite Oreo cookie donut, which I think is a trademark of the franchise. I recently visited another franchise only to learn that many of their choices were not available. This is when it became obvious to me that the franchise could not continue.
Typically, I would rather eat at locally owned and operated businesses, rather than a franchise. Of course there are good reasons to eat at franchises as you know what to expect as far as menu choices and a certain level of service.
Locally owned non-franchise places depend on building a reputation of their own, spread by word of mouth or social media.
Local businesses must learn from the errors of places like Hortons to stay profitable.
stay in business.
If you enjoy trying out the locally owned places as I do, remember to post a Yelp review for that business. More people are using reviews as a deciding factor when choosing where to dine or buy products. Locally owned businesses can find creative ways to encourage customers to post their experience on social media or post a review on Yelp or Google. Engaging a team of professionals to assist in this effort is worth directing some advertising dollars to, in order to get the benefit of obtaining reviews and knowing how to boost them to get maximum results.
While some web design companies offer this service, not all of them do and not all that do are experienced in this realm. Make some inquiries before committing to making the investment. In the event the business has had some negative reviews, a good web company can work with the business to address those concerns and turn some negative comments into positive change.
Several of our restaurant clients have had terrible experiences with various food delivery services. Here's an inside look at the reason some of your favorite restaurants are not participating in UBEReats, GrubHub, Postmates, etc., as well as some solutions YOU can use as a consumer.
Dear Delivery Service,
There is a lot more involved in proper delivery of our menu items.
1) The fleet needs to be prepared to immediately exit the premises and drive directly to the diner's location. We have experienced drivers from various services getting comfortable at the bar, and delaying their deliveries.
2) Based on the Yelp reviews we have received from diners who received their meals from delivery services like Postmates, other events are happening between our restaurant and the food's destination. I'm not sure what events this could entail, but it is not conducive to our customers' expectations.
3) The other problem is tipping. Our hard-working staff has no incentive to service delivered meals, and in fact, is often penalized for it. The IRS withholds based on the total sales, not on the total tips. So, a delivered sale will be taxed as if the server is receiving a full tip, but in reality, the tips are often small--as consumers don't understand the extra work involved in packing a to-go meal, and it's being split with the driver.
How Postmates can help:
Our hope is that Postmates will take this feedback seriously and enact immediate changes.
If your system changes, please let us know! We would be happy to reconsider participating in your platform.
Recently, a not for profit organization had a change of Directors. This change was not foreseen as the Director was diagnosed with a terminal condition that quickly took her life. The organization failed to keep a record of passwords and other pertinent information that were necessary to edit their website, check email messages and access bank and credit card information.
The Director probably had all that information saved somewhere, but where? So not only was the organization suddenly scrambling to keep up on the day to day activities the Director had been doing, they also found themselves in the dark as it related to all the technology that had been part of the organization. That is one reason to make sure the organization's website has a maintenance plan with your web designer.
Some businesses try to save a few dollars by having a staff person manage their website. Every owner or board of directors should consider engaging their web company to maintain the site and keep access for edits and changes even if the employee is making some edits. That is like an insurance policy against having an employee quit or otherwise leave the business wondering how to manage the site without them. At the bare minimum, a hosting and maintenance plan should be included with your web company.
There is no doubt that how we do business has changed dramatically since the world wide web presented itself. We have seen the demise of brick and mortar businesses all across our country. The last Blockbuster Movie store just closed as a good example. Changes in how we buy goods and services have impacted the traditional process. How we find companies to do business with has changed as well. Phone books and Yellow Pages have been replaced with web domains. Almost every business has some level of web presence these days if they want to stay viable.
When the time comes to sell a business, owners should consider part of the value of their company is their web presence. It is just as much an asset as inventory and real estate. That being the case, business owners that are thinking of selling should invest some effort in making sure their website is current and valuable and can be demonstrated as a generator of revenue. Some web designers do much more than host a site. Search Engine Optimization (SEO) efforts are a good example of additional services that drive traffic and attract sales. Social media posts and ads directed to a target market can be shown to prospective buyers that your business is viable and current with today's marketing strategies. A discussion with the web hosting company should be part of the selling process to determine what is owned and if there are any contractual arrangements that would prevent a new owner from assuming the website terms and conditions.
Your website can be modified to include a "hidden" page that can be shown to prospective buyers that give information not visible to the public that could include sales helps such as a history of revenues, profitability, cost of goods, recent evaluations of inventory, real estate holdings, etc. Tapping into the full potential of a website includes working with your web team to promote the value not only of your products and services, but your business as well.
If Facebook ads and Print ads were in a competition, Facebook ads would win almost every time.
**The following is a conversation I had with a tourism based community about bringing more traffic to their town.**
We can target people on Facebook who are fans of "Explore Minnesota Tourism."
Just in the last week we have reached 3271 people in the United States who have expressed interest in "Explore Minnesota Tourism."
From August 27-September 6 we reached over 5000 people.
We have received engagement (a Like, Comment, Share, or Click-through to the website) from over 900 of those people.
The hard Facebook ad cost of reaching this captive audience was just: $49.86.
We have the potential to reach 180,000 people on Facebook who are interested in visiting Minnesota.
The circulation of the Explore MN magazine is only 32,750 households.
Our daily reach is estimated at 300-1700 people, based on effectiveness of the ad and the ad budget.
As you can see in the graph, interest is now waning in this ad that has attracted over 5000 people:
It takes more than just the Facebook ad budget to make an ad successful.
Each ad requires: copy, a graphic and photo, and a Call to Action.
Each ad also needs to be carefully watched each day.
Fans need to be engaged with. Questions need to be answered, etc.
Fans also need to be invited to become permanent fans of the page.
This takes time and resources.
Not every ad is successful.
But it only takes a few dollars or a few hours to see if an ad is working or not.
The most exciting thing about Facebook ads, is that putting money into it is like putting money into an investment portfolio. Every time we run an ad campaign, we see a gradual increase in Page Likes or Fans. Once we have a Fan, we can more easily reach him/her with organic posts and paid posts.
We started the summer off with 10,500 Fans, and increased that number by 100 each month--June, July and August--we're winning people over for years to come!
The Facebook Page's Fan base is roughly 1/3 of the Explore MN Magazine Ad circulation.
If we could use the magazine budget of $925 for their smallest ad (1/6 page), we could potentially reach as many as 9000 people A DAY.
With their largest ad budget of $3300, we could potentially reach 32,000 people A DAY.
[These are estimates from Facebook]
Going into Fall and Winter, this is the time to build our Fan Base, so we can remind them monthly to start planning their Summer Vacation in Rainy Lake!!
Let me know if you want to reroute your Print Ad Budget to more Facebook Ad Campaigns!
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When Waking Girl first started, we said YES to every customer who came through our door. Whether the project or client fit us or not, we made it work. Now, with a full clientele, we are limited on how much time we can dedicate to a client who struggles to be successful with us.
You may have just taken a pop quiz to see if you qualify to work with us. If you're curious about the answers we were hoping for, read on! You do not need to see your business and website the way we do. No pressure! :)
Q. A business must have a website to sell products or services:
We believe a business does not need a website to sell products or services. While a website can greatly increase sales and credibility, early deals and relationships can occur offline. Our most successful clients made their early transactions before ever having a website. We have found that many new business owners rely solely on their websites to generate sales. It is important to use multiple avenues to sell products and services, especially at the beginning stages of a business.
Q. The most important purpose of a website is to:
CORRECT: Generate leads and sales
We see business owners fail in their websites because they are more focused on making the website perfectly match their favorite color, than making it bring in $ales. This is a mistake! When clients follow our design direction, they generally see an immediate increase in sales and leads. Why? We have developed a method that make it easy for your customers to reach you!
Impress customers: studies continue to show that impressive websites don't always bring in new customers and sales. We want you to be proud of your website, but we also want your company to be approachable.
Display logo and brand: yes, we want to display your logo and brand. This goal is secondary to generating leads and sales.
Reduce my taxes: yes! Your website is a business expense! We love helping you reduce your tax burden!
Q. A business owner should take advice about web design from:
CORRECT: The web designer they hired
Intuition: can be super helpful. Let us know what your gut is telling you.
Business partner and/or staff: can be super helpful, but can also be distracting. Ask abstract questions of business partners, staff, family early in the process, like, "How do you want to feel when you visit our website? How do you want our new customers to feel when they visit the website?" Avoid specifics about design elements, colors, etc.
Articles: can be super helpful, but can also come across like you're micro-managing your web design team.
Q. A website is like a car and needs regular refueling and maintenance.
We believe a website is like a car and needs regular refueling and maintenance. Absolutely, yes! The trends of the web are changing faster than the rules of the road--and a website needs to be able to keep up. We utilize platforms and strategies that allow for easy updates and full site overhauls as the technological demands of a website, company and The Internet change.
Q. A business will fail if any piece of it is not running perfectly at all times.
We believe that growing companies do have a few failing pieces at any given time. Only the companies that have become stagnant have perfection in all areas of the business. To grow requires some trial and error. We access the knowledge base of hundreds of business owners to mitigate the risk of failure for our clients and decrease the time it takes to correct an error. We love working with growing businesses.
Q. My website budget is:
$1000/year to $1000/month
Programs also available for $1000/week website marketing budgets!
We believe it's important to have a budget for your website. While it doesn't need to be a major expenditure, a small, monthly amount of at least $100 can really help a website keep up with the changes in technology.
We strive to work with companies that we can help, by taking "web presence" off the plate of the CEO. We are a full-service agency and can handle everything from website rebuilds to maintenance to SEO and Facebook presence.
Do you qualify? We would love to hear more about your website--what's working for you now, what's not working; what's frustrating, and what about Waking Girl prompted you to reach out?
Q. I'm getting a lot of phone calls from Yelp, telling me that I'm missing out on business. What should I do?
A. My number one rule in sales is: if the company requires a team of cold callers, their product deserves skepticism and hesitation. It might be the best product in the world, it might be so good that everyone who finds out about it just wants to hog the filthy little secret to themselves.
Or -- it's just not worth talking about.
Either way, when you get a call from Yelp or any other cold caller, take a step back and get some expert input from someone who has dealt with the caller before.
Expert Input about Yelp Ads:
1) Do you have a Yelp page? Have you claimed it? Let's start there. That's free and takes about 15 minutes of your time. Go to Yelp.com, find your business, and hit UNCLAIMED. Follow the steps to set up your business Yelp account (different from your personal Yelp account).
2) Have you ever gotten a Yelp review before? Hrmm. Depending on your industry, Yelp may not be an integral part of your business. If you haven't gotten a review before, it may not even be integral to your own success. But of course, it might be crucial for your business' next phase of development!
3) Before advertising on Yelp, it's a good idea to drum up some 5-star reviews. But how!? We recommend and sell a software that helps you better communicate with your existing customers so they know how to leave a review, and so they won't forget! If you can't track down any 5-star reviews, you may want to rethink advertising on Yelp. Why? People who shop on Yelp also leave reviews. If the Yelp-iverse isn't jiving with your services--be cautious! Might need to change how things are operating before bringing on the critical masses!
4) Once you have a handful of positive reviews, and you've gotten comfortable with Yelpers, now you can consider advertising with Yelp. Ask the Yelp representative a lot of questions about cost per lead and overall traffic, and what is the competition doing. If you sell $5 drinks, and the lead cost is $10--this is not a good idea. If you sell $200 services, and the lead cost is $14--this could make sense!!
- Start with the smallest plan available to test the waters. Ask for a discount, and ask them to start the ads before the billing cycle begins.
- Make sure your Yelp page is set up properly with nice photos.
- Download the Yelp app to your phone so you can respond to questions right away.
- Set up an enticing offer so you get noticed!
- Evaluate each month to make sure you're getting your money's worth!
Contact us if you need help talking to Yelp. We can generally get a more honest answer because we represent hundreds of customers. Yelp would rather tell an agency the truth, in the hopes of getting 50 new customers, than stretch the truth in the hopes of just getting your business! Let us know if we can help