Summary: This article presents a case study of an acquisition of a small landscaping company. The landscaping company was sold for $700,000 and was acquired using a conventional structure. In this study, we cover the following: Note: All names have been changed to protect the participants’ privacy. 1. The business: SpringSprout Landscaping SpringSprout Landscaping was […]
articles
How to Finance a Trucking Company Acquisition
Summary: Acquiring an existing freight carrier can be challenging for new buyers looking to buy a small business. This article discusses how entrepreneurs can finance a trucking company acquisition. It provides you with the basic foundation of knowledge to understand your options and develop the best strategy. We cover: 1. Advantages of a trucking company […]
Finance the Acquisition of an Electrical Contracting Business
Summary: Buying an electrical contracting business can be an attractive option for a new entrepreneur. Construction trades have some advantages over other industries. This article covers the essential points buyers need to keep in mind to increase their chances of getting their acquisition funded. We cover: 1. Advantages of construction trade acquisitions Businesses in the […]
How to Finance a Plumbing Company Acquisition
Summary: Finding the right way to finance a business acquisition can be challenging for new buyers. This article helps you understand how to finance a plumbing company acquisition and provides you with insights into how lenders evaluate these transactions. These insights help you increase your chances of a successful acquisition. We cover: 1. Why are […]
How to Finance an HVAC Business Acquisition
Summary: Heating, ventilation, and air conditioning (HVAC) companies have always been attractive acquisition targets for entrepreneurs. Many HVAC companies are small, locally owned, scale well, resist recessions, and have clients with recurring maintenance contracts. These features make HVAC companies attractive to entrepreneurs. These features are also why many buyers target HVAC opportunities and other construction […]
MBO Case Study – Acquisition Target Carve-Out
Summary: This article presents the case study of a management buyout (MBO) of a small company with two vertically integrated business lines. This case study shows a transaction in which the seller carved out and sold one of the business lines to a company manager. The seller kept the other line of business as a […]
15 Red Flags to Watch for When Buying a Business
Most entrepreneurs believe that buying a business is less risky than starting a business from scratch. The risk is lower because buyers can examine the company before making the purchase decision. This article discusses 15 red flags that buyers should be aware of when acquiring an existing company. 1. Owner’s reason for selling Owners have […]
What is Seller Financing? How Does it Work?
Summary: Seller financing is a common financing component of many business acquisitions. It’s a type of loan that the seller of a business offers to the buyer. The loans are privately negotiated between the participants and usually have competitive terms and rates. In this article, we discuss: 1. What is seller financing? Few buyers can […]
What are Add Backs? (Business Acquisitions)
Summary: Add backs are specific business expenses that can be added back to the seller’s discretionary earnings (SDE). Consequently, add backs can increase the SDE. Add backs are important in small business acquisitions because they affect the SDE, which ultimately determines the company’s valuation. In this article, we cover: 1. What is an add back? […]
What are Seller’s Discretionary Earnings?
Summary: Seller’s discretionary earnings (SDE) is a metric used commonly by business buyers and sellers to determine the market price of a small business. This article describes how this metric is calculated, how it works, and its importance in small business acquisitions. We cover the following: 1. What are Seller’s Discretionary Earnings? Seller’s discretionary earnings […]