The Business Transfer Newsletter

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March 2021

Selling Texas Companies Since 1974

Our monthly newsletters provide educational information about buying or selling a business, current economic conditions, and highlight some of our newest business-for-sale opportunities.

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"The best library of articles about how to sell your business" -

says The New York Times

A Road Map is Key to Buying a Business

Buying a business takes time and planning. Just as it would be sensible to pre-map a road trip through unfamiliar territory, it would be practical for a first-time buyer to develop a plan to navigate the path to business ownership. Charting the route is key to buying a business and becoming your own boss.

If you try to look at every business on sale, you would be spinning your wheels and getting nowhere. You need to establish your own weeding-out process in order to streamline the course towards business ownership, rather than taking a circuitous route with too many detours.

Here are six (6) milestones to achieve before embarking on your trip to the business-for-sale marketplace.

Our Top 6 Posts on Buying a Business

Biuying a business is a nuanced endeavor. There are a lot of details that can be easily overlooked if you aren’t doing due diligence. From analyzing the competitive marketplace to examining the top buyer mistakes, we’ve compiled a list of our six most popular blog posts to provide the wealth of information you need as you consider purchasing a business:

How Much Cash Is Required to Buy a Business?

This is one of the most frequently asked questions we receive, and we go in-depth to provide all you need to know in this post. We examine the amount needed for a down payment—which can vary depending upon if the business is SBA financeable. We also explain the additional costs that are involved when closing the deal.

How To Plan Your Biggest Sale Ever

If you are considering an exit in the next few years, there is a laundry list of internal housekeeping items that you can do now to put yourself in the best position.

Getting your financials in order, putting the right team in place, preparing your tax strategy. These are simple things you can start to put in place now that are not expensive and low impact on day-to-day operation, but will significantly increase the value that your company commands when you ultimately go to market.

Market Pulse Survey - 4th Quarter 2020

Presented by IBBA, M&A Source & Partnership with Pepperdine University

Median Multiple Off Peak

Biden Tax Plans Could Accelerate M&A

During his campaign, President Biden proposed tax changes that could have a significant impact on business owners. Any business owner contemplating an exit in the next few years should consider how potential tax changes could reduce their net proceeds from a sale.

If Biden’s tax plans come to fruition, the capital gains tax rate could effectively double, from 20% to 39.6% for income exceeding $1 million.

Right now, that means business owners need to shift their focus from maximizing total transaction price to maximizing after-tax proceeds.

Can You Afford To Sell Your Business?

Selling or transitioning out of your business can be a complex process from both a financial and personal perspective.

Every business owner has a unique relationship with his or her company, which includes people in the community, family, employees, and others who have ties to the business. Additionally, each owner has a unique set of circumstances when it comes to their finances.

Here are four questions to ask yourself before you transition out of your business.

1. How much will I need to net from the sale of the business to meet my personal

financial goals?

2. What is my business worth?

3. How much am I likely to net from the sale of my business?

4. How much time do I need to sell my business and achieve my goals?

Market Pulse Survey - 4th Quarter 2020

Presented by IBBA, M&A Source, and in Partnership with Pepperdine University

2020 Active Buyers

In the lower middle market, 33% of buyers were existing companies, a drop from 40% in 2019. This year, first time buyers accounted for 22% of lower middle market activity and serial entrepreneurs accounted for 18%.

Private equity firms remain active, representing 22% of lower middle market buyers in 2020—a slight downtick from last year.

When Should You Tell Your Employees That You Are Selling the Business?

How can you nail that inevitable meeting with your employees when the time comes?

The issue of what you tell your employees when you’re trying to sell your business is a tricky one that requires careful thought. Maintaining confidentiality surrounding the sale typically takes precedence over other concerns, yet it may be impractical — or even impossible — to keep employees in the dark.