The graph shows the spread between the Federal Funds Effective Rate and 30-Year Fixed Rate Mortgage Average in the United States. The Federal Funds Rate is the central interest rate in the U.S. financial markets. The Federal Reserve decisions related to Federal Funds Rate plays a role in mortgage interest rates, but its actions only…
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Business owners need to understand and accept that: Clean business and accounting records are important to the sales process. Internal pre-sale “due diligence” is the right and smart thing to do. A third party “M&A data room” needs to be used. It takes substantial time and effort to sell a business – time range of…
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The economy is in flux, interest rates are increasing and lenders are tightening their loan covenants. Business executives need to aware of how leveraged their business’s balance sheet is and the loan covenants that relate to the debt. Business executives need to understand the best method for them to deleverage their business. Deleveraging is…
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The graph shows that mortgage rates for fixed-rate mortgages: the 15-year and 30-year. Every data point is the average rate offered at that point in time for new mortgages. It should be noted that the graph shows the most current rates, which few people with existing mortgages are actually paying. Homeowners that have existing mortgages…
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Time, Pressure and Money is a theory that is key to understanding three key factors that affect the process of selling a business and the sales price. The chart below shows the best postion for a business considering selling and the worst position for a business needing to sell. As the chart shows, selling…
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Fear Of Missing Out (FOMO) is a bad business strategy for any business no matter their size. Businesses went on hiring sprees in late 2021 and in early 2022 fearing that the business was going to miss out on the talent that was changing jobs. Now as the economy starts to drift lower and…
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There is no universal (one size fits all) method for determining the value of a business, as the Step Chart of Business Values demonstrates below. Most businesses fall with in the continuum of Fair Market Value, where a buyer is willing to make an offer and a seller is willing to accept an agreed upon…
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Business owners need to accept that: It might be better to liquidate the business than to try to sell it The revenue size of the business impacts the value of the business There will most likely be one buyer for a business rather than multiple bidders The offer is most often…
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An economic downturn appears to be about to take place. Business owners nearing retirement need to gauge whether they want to continue to run their business through the next economic downturn and economy recovery or sell their business now The key issue for business owners nearing retirement is whether they have the time and desire…
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Proprietary Product Lines and Brands Help a Company! Proprietary product lines and brands provide a business with complete ownership and control over their product lines and brands. A business with proprietary lines and brands controls the product’s price, quality, branding, and image in distribution. With proprietary product lines and brands the business controls distributor’s sales…
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