Business

Business Tips & Info

How Much to Pay for Business?

Looking at the past performance of a business can give you a great deal of information about its potential value. If the owner refuses to show you the past records, don't buy the business. There are many business for sale, and most owners are willing to cooperate with serious buyers.

When reviewing the financial history of a business, go back five years if possible. There are two main financial statements that you or your accountant should review. Those are:

BALANCE SHEET

INCOME STATEMENT

The BALANCE SHEET shows the value of the assets and liabilities of a business on a specific date. It shows what the business is worth on that date if the owner sold all the business's assets and paid all its bills.

The INCOME STATEMENT indicates the amount of profit (or loss) acquired over a period of time. Most businesses prepare an income statement every three months to see if the business is in good financial health. The income statement lists the income of the business along with its expenses. The difference between income and expenses equals the profit or loss of the business.

From the balance sheet and income statement, the owner or potential buyer of a business can find out the following:

Whether the expenses of the business are in line with its sales.

How much profit the business is earning.

Whether the business owes too much money.

Whether the customers are paying their bills on time.

Whether the inventory (merchandise available for sale) is selling as quickly as it should be.

IF INTERPRETING FINANCIAL STATEMENTS IS NOT YOUR AREA OF EXPERTISE, YOU SHOULD CONSULT A PROFESSIONAL ACCOUNTANT BEFORE MAKING ANY PURCHASE DECISIONS.


Related Info:

The Business Fundamentals

Starting Business from Scratch

Buying an Established Businesss

Buying a Franchise

Market Research

Your Product or Service

Your Customers

Your Competition

Getting a Financial Picture

Business Guide

The Power of Appreciation

Team work is the best tool for any business. Show some appreciation to your workers. Employee appreciation and personal thanks, whether in a small business or large corporation works magic. Every employee wants acknowledgment and personal appreciation, which is also the best way to keep them more productive, engaged, loyal and eager to contribute. Employee recognition is a powerful tool to create culture of engagement, so don't forget to offer personal thanks to your older team members. For people new in the business, experienced and older team members can provide support and guide every step of the way, if they are motivated.
Promote locally
to build long term loyalty
Add personal touch
to build trust and connection
Combine the best tools
use online and offline marketing

Did You Know?

It doesn't take a fortune to sell your products and services on the Internet. It just takes some knowledge of what your customers want and how to find a way to present your sales solution to them.

For business people either selling products or promoting their services on the Internet, the importance of attractive, fast, usable sites can't be overstressed. Much like a counter person or storefront, the appearance and function of a business' website conveys an image of the company to the customer.

Your website is your image on the Internet. That image can either be good or bad, and bad images don't sell. Adhering to a few common sense web design rules can help with the public's perception of your company and increase your sales. Find out more...