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I am pleased to present this lender's case study which was submitted to me by Donald Rudnik, whose full contact info is listed at the bottom of this post.  This is written from the lender's viewpoint and recounts the buyout of a bigger company by a smaller company, both underperforming. This will help the typical buyer get into the lender's head. The big takeway from this is how an apparently ...

I was intrigued by an article on and individual and his business and his book (Boss Life) today. They all deal with the same subject: small business failure.  Specifically his business which, after thirty years of struggling, apparently is always on the verge of shutting its doors. You can read the article of course but its importance to a business buyer is obvious. Could this happen to me? By way ...

Most business buyers are exposed to a good variety of business plans and executive summaries as they shop for deals through brokers. A good broker will put together a detailed "confidential memorandum" which requires the buyer sign an NDA,  as well as a one or two page executive summary or "teaser" which can be sent out to the masses.  The summary will have one or two paragraphs about the business ...

Many of my posts focus on businesses that are for sale - as opposed to not for sale, or never thought about selling. These for sale businesses are usually represented and listed by brokers. In some cases these are main street brokers, in some cases big deal shops and M&A intermediaries and even real estate brokers in states like Florida. Businesses that go this route have indeed decided to sell ...

In an effort to help you all find more deals I am going to provide my perspective on the world of brokers and their respective websites. Or perhaps the websites and their respective brokers. Both exist in big numbers. I usually start with big search engines such as Bizbuysell, where you can find loads of businesses for sale and the contact info for the brokers that represent them. There is ...

Talking about profits. The abbreviations above are all well known calculation methods for profits. Or cash flow depending on what you are looking for. I refer back to Pablo's theorem (Pablo being an academician from Spain who knows 100 ways to value a company - but probably never bought one) of the difference between the two: "net profit is an opinion, cash flow is a fact".  This is to say ...

Q: Why buy a small business? A: Because it's easier than buying a large one. No matter what they tell you, doing a small deal is easier than doing a large deal. But with a Mini LBO structure we can buy a much larger deal than we otherwise could with the same amount of cash outlay. The "Mini LBO" or small leveraged buyout, can be done at any level with ...