No Coast Business Advisors

10/21/2024

Been so busy working on things with my partners that I totally lost track of how long it has been since I talked to all of you on facebook and that it was the 4th quarter already.

One of the things I see often near the end of each year is questions about business taxes and end of year planning and all of the fun stuff you wait until the last minute to do.

So me being me I figured what the heck I am going to lead some live zoom meetings for any of you that want to join and discuss different things that can be done, different tactics and ask questions.

First one will be this Friday at 9am CST. Come join us or don't.

Promise I am not selling or pushing anything either, just doing my small part to help facilitate some conversations.

Link
Jethro Hopkins is inviting you to a scheduled Zoom meeting.

Topic: Business Owners EOY Q&A
Time: Oct 25, 2024 09:00 AM Central Time (US and Canada)

Join Zoom Meeting
https://us02web.zoom.us/j/83681886370?pwd=uQcY2k3C3rXVbOlmhmD644bpgia3qS.1

Meeting ID: 836 8188 6370
Passcode: 956447

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Meeting ID: 836 8188 6370
Passcode: 956447

Find your local number: https://us02web.zoom.us/u/k3GwxS0jp

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06/05/2024

Grant money hit......for YOU!
What does that mean???

It means we are passing along or using the grant $$ we received to further help other business owners.

$20,000 in --> $2,000 x 10 out to Business Owners

Who gets it?

It's simple, those who take fast action!

Whether you are selling your business or are smart enough to want to know exactly where you are at so you can continue to make strategic decisions to scale and grow........you need a business valuation.

Normally the investment for an NCBA Certified Business Valuation runs about $5K.

And when we put $2K of the grant money on it -- that means you only have to cover the remaining $3K.

It's that easy.

So, when you decide to grab this $2,000 for yourself.....just be one of the first 10 business owners to reach out to me via DM or TEXT at 402-570-1166, and we will make it happen!

Jethro Hopkins and I believe strongly in supporting the business community and this is just one more way we help you drive things forward - we could have kept the entire grant internally, and instead we are leveraging it to create far more impact by sharing it with 10 other business owners!

Let's go!

PS. That may or may not be the REAL Jethro Hopkins in the picture. He's on the move so much, sometimes we have to use his stunt double for pics lol!

03/07/2024

FinCEN and Corporate Transparency Act update - please share!

THIS IS BIG - still more to come but glad to see that the government is getting checked because this whole ordeal is about overreach and a burden on businesses

REPOSTING from news:
The Corporate Transparency Act (CTA), which became effective January 1, 2024, was challenged in a federal district court by the National Small Business Association. The case is National Small Business United, d/b/a National Small Business Association, et al. v. Janet Yellen, et al., Case No. 5:22-cv-01448-LCB (N.D. Ala.). On 3/1/24, the court granted the motion for summary judgement brought by the plaintiffs and ruled that the CTA is unconstitutional.

FinCEN released a statement on its website on 3/4/24 regarding this ruling, below is the full update from the FinCen website:

“On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. FinCEN will comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.”

Given that the ruling in this case was specific to the Plaintiffs (the National Small Business Association (NSBA) and a specific named business owner who is a member of the organization) it is currently unknown how the ruling will apply to other Reporting Companies. At this time it may be prudent for clients (particularly those that were formed in 2024 and have only a 90-day window after formation in which to file) to continue to fulfill their reporting requirement as set forth by the CTA until further information becomes available. We anticipate that there will be appeals in this case and we are tracking this closely and will be in touch with more updates as they develop.

02/06/2023

ROI - always a hot topic for investors

So consider this, if you buy a business based on 4x their SDE or Sellers Discretionary Earnings - that means you will likely make your money back in 4 years if all things stay the same.

If you grow the business it may be faster.

If you invest even more to it, it may take longer but then higher overall returns.

And the best part is that it's at YOUR control and YOUR options.....not some Fortune 500 company or stock that tanks because someone tweets the wrong thing.

Owning or having equity in businesses is a great way to invest - even if you aren't the day to day manager of the business - in fact, that is usually even better from an investment standpoint and overall value!!!

So if you NEVER thought about buying a business as an investment to make more, control more, and be worth more.....now might be the right time to start thinking different!!

01/22/2023

One of the growing trends for 2023 is Seller Financing.

It may be that the Seller is financing 80% of the deal.....or maybe they only finance 25% - and the rest is paid by the Buyer or financed through a bank (including SBA programs).

Either way, this is something that we are seeing more and more of - and it's important to get it done right.

A few years back, approx 15% of ALL sales involved Seller Financing.

In 2018-2019 that percentage jumped up to 18-20% depending on where the business was located.

Now we are seeing even higher percentages - and many expect that number to pass 30% in 2023.

Banks are becoming even more challenging to work with, rates are going up, and programs are getting harder to qualify for.....and add to that all of the uncertainty of 2023.

There will be many businesses bought and sold this year. And in order to stand out or make your deal better - offer some Seller Financing, or negotiate it into the deal if you're the Buyer. This makes the entire process easier by removing or lowering a big roadblock.

Working with professionals including the right broker, accounting/tax professionals, and legal professionals will ensure that the Seller Financing is done properly AND possibly even find ways or opportunities to offset/save taxes for the Seller.

After all, we'd rather see more of those dollars in your pocket right?

If you have questions about Seller Financing options and tools, or just want to get a valuation done on your business for planning both short and long-term, just reach out!

We're here to help!!!

11/02/2022

For those of you thinking about mergers, here is an article from Our managing partner that Forbes published Yesterday!

Check it out and we hope it helps as the data shows between 70 and 90% of merger integrations fail depending on where you get your data.

Here are six questions companies should ask themselves in their post-merger integration planning.

10/25/2022

As in real estate location matters. Just in a much different way.

So in the last couple of videos in our series we talked about who your buyers is and what your business is worth. In this video we are going to talk about why location matters as a consideration in both how you value your business and in how you market to buyers.

Enjoy!

10/20/2022

The first of the 3rd quarter business reports went live yesterday which is the BizBuySell Quarterly insight report.

We will some up some of the relevant data from that report for all of you.

*After 5 quarters of growing sales numbers closed transactions were down 2% in the 3rd quarter.

*Asking prices in the mainstreet market dropped 13% and sales prices dropped 14% year over year as inflation erodes businesses profit and interest rates cut into the purchasing power of buyers.

*Sellers point to inflation and rising interest rates as their biggest challenges with labor market and supply chain issues taking third and fourth place.

*The core challenge for those looking to buy a business will be securing financing which becomes more expensive with each federal rate hike. In fact, 74% of buyers say higher rates are impacting their ability finance a purchase, almost half indicating a great impact.

*The one bright spot of the report is that restaurant sales are starting to finally recover from the pandemic with closed transactions bouncing up 14% year over year and up 5% in sale price. While still underperforming the rest of the market by a significant margin seeing a recovery in this sizable segment of it is heartening.

We hope all of this helped you out, for those on our mailing list expect the main Q3 report out in the next couple weeks!

10/18/2022

So we talked about the most common question, "What is my business worth?" Now lets talk about the next one, Who is my buyer most likely going to be?

Let us know if you have any questions!

10/10/2022

Whats My Business Worth?

Long time no see here on Facebook.

Been a lot going on with us and our posting pretty much stopped. Hope all of you have been having as productive of a year as we have!

Time to drop a new series of videos for all of you. So everyone asks us "What is my business worth and why?"

So here is the first video in the series to answer that question.

If you would like to get on our mailing list to receive the quarterly report we mention you can find the link to that in the comments. And no we will not spam you, just the quarterly report unless you ask for something else. ;)

Have a great week all!

05/17/2022

Lets talk about the myth of a niche business commanding significantly higher multiples over a normal business.

Many times when working with clients to value their companies we come across the mindset that they have a niche business that should be special and not follow the same valuation rules as every other company.

Lets start by defining a niche market;
A niche market is a focused set of people or businesses who are in the market to purchase a product or service you sell. Usually a subgroup of a larger market.

Pros- You are specialized, you have a very specific client list or service/product offering, occasionally higher margins due to the specific nature of your niche

Cons- Much smaller total market available, much smaller buyer pool, typically requires more specialized knowledge to operate in your niche, higher risk due to needs changing or larger competitor moving into your segment.

None of these when you are in the mainstreet market will affect the multiple or formula used in the valuation process in any significant way.

It is not until you are in the Lower to Mid M&A market that you will start to see some opportunity for substantial increases in the formula due to being large enough to be acquired by a competitor as a strategic acquisition. And that means at a minimum you have to have 3-5 years of history making at least 1 million a year in EBITDA.

Until you hit that point nearly all businesses are considered high risk investments and as such will typically be priced in the range of 2 to 5 times seller discretionary income or 3-7 times EBITDA.

Anything higher than that is typically a unicorn, it is so uncommon in the mainstreet market due to having to be a cash deal that most brokers will never see it.

Yes this includes the vast majority of businesses, niche or not, the only exceptions I have seen in the last 10 years have been in the tech and software industry, which is an entirely different conversation.