Valuation Of Emerging Technology Businesses

By: BuyTradeBiz.Com

Typically traditional business valuations are based on income, assets, cost approach and historical performance. Emerging technology companies present a significant valuation challenge, since they typically have limited revenues, few fixed assets, and a history of losses – and a short history at that.

There are several unique aspects to valuing a technology company. The factors typically present in a traditional valuation are either not present or provide very little insight in a technology company valuation.  Typical valuation methodology looks to assets and/or income for value and involves income, assets and cost approaches. Operating businesses are usually valued based on an expectation developed from their historical performance. On the contrary, technology companies many times have limited revenues, no history to speak of, and a track record of financial losses.

Often the technology company will represent the first of its kind of business. Therefore, it is difficult to find a peer group or competitors to benchmark performance. So, investors in technology companies usually look toward the future with an expectation of explosive growth.  Here are some other factors that impact the process of valuing a technology company vs. a traditional business opportunities:

Lack of Fixed Assets and Inventory – Technology companies do not invest significant dollars into land, buildings, or other fixed assets and derive most of their value from intellectual property. Since the products or services produced by the company are electronic bits & bytes, there is no inventory to speak of.

Projections are Key – The valuation of an emerging technology company is based on the projected future stream of income from its intellectual property. Projections include assumptions regarding demand for the product or service, revenue growth, competition, alternative technologies, the economy and many other factors. However, such assumptions, if based on market research, known facts and sound logic can be a basis for value.

Cost Of Capital – Another difficulty in the valuation of technology companies is determining the cost of capital. Many technology companies are dependent upon equity financing causing the cost of capital to approximate the cost of equity. Some technology companies issue hybrid securities, such as convertible bonds. Technology companies may have bank debt, making it hard to rate. In general, estimating the cost of capital from historical data is more difficult with technology companies that have short histories.

Management Strength – Investors often have their own methodologies for valuing technology companies. Some may evaluate certain factors and assign values to them. While a good idea may have value, without good management it may not be successful. Strong management may be worth more than any other characteristic. Industry contacts and relationships are important factors. Demand and an analysis of the marketplace must be evaluated. Finally, the feasibility of the product itself must be considered.

Intellectual Property – Most of the use of capital in a technology company goes to building up the company’s intellectual property.  So the appraiser has to pay close attention to the built up intellectual property in order to assign value to it.  Unless there is a proven track record of revenue, the appraiser has to research the market and evaluate the potential for the product before assigning value.

Given these challenges, it is clear that the valuation of technology businesses for sale should be performed by an appraiser familiar with current trends, data sources, market transactions and market participants.

BuyTradeBiz.Com is the Internet’s newest business for sale and franchises for sale listing website.  This is the site if you are looking to sell a business or buy a business or buy a franchise.

Business Opportunities are Everywhere

By: BuyTradeBiz.com

It is easy not to see opportunity when you are surrounded by it.  Many of us have grown up in an environment that is opportunity rich.  Our environments may be so rich, in fact, that it may be difficult to see the “forest for the trees.”  In our day-to-day lives, being able to spot the business opportunities that exist all around us can be difficult.  The hustle of every day existence can make it difficult for many of us to envision changing our lives in a major or dramatic way. Yet, it is quite possible for us to do so, and one way is through finding a business for sale.  In this article, we will look at how owning your own business can actually change your life.

Some people feel as though all the good business opportunities are already taken; however, this just isn’t the case.  The world is constantly changing and evolving, and, as a result, that means new opportunities are constantly being generated.  Having the ability to spot these new opportunities is a skill that will serve you greatly and luckily can be developed over time.

Finding a business for sale is, of course, one of the easiest ways to investigate what business opportunities are out there.  There is no shortage of good, solid businesses for sale on the market, and with a little digging you can find one of your own!

Buy a Business and Invest in Your Future

There are many reasons that you should consider owning your own business.  First of all, those who own their own businesses are less susceptible to the ebbs and flows of the labor market.  While a downturn in the labor market may indeed impact your business, it is not the same as actually being part of the labor market.

For example, if the economy slows down, you can adjust your strategies and tactics in a range of different ways.  Perhaps you change how you market to your customers, perhaps you get more aggressive in your market or you even change your core business model or strategy if necessary.  By contrast, if you are in the labor market and your job is eliminated, downsized or exported overseas, you are left seeking employment elsewhere.  Buy a business for sale and you are, to an extent, insulated against these problems.

True with business ownership comes other risks.  However, when you invest in a business for sale, you have a much greater degree of control over your fate.  Being able to control your fate is a wonderful thing.  Don’t forget that if need be, you can always be the one looking to sell a business.  If you keep your business profitable, there is no reason that it will not eventually be attractive to someone else.  The fact that you can potentially make a significant profit down the road when you sell your business provides yet another incentive towards being an entrepreneur.

Making the decision to buy a business is clearly one of the biggest decisions that one can make.  Considering this fact, it is important that you do not rush into any decisions.  Instead take your time, do your research, consult with experts.  Follow your gut instincts and double check your facts and preconceived notions and ideas.  There is a great deal of opportunity in owning your own business, and with the right approach you will find that it can really pay off.

BuyTradeBiz.Com is the Internet’s newest business for sale and franchises for sale listing website.  This is the site if you are looking to sell a business or buy a business or buy a franchise.

Internet Businesses for Sale

By: BuyTradeBiz.com

Simply stated, the Internet has changed how we do business.  The fact of the matter is that the Internet has in some way or another impacted every business on the face of the earth.  Few changes in commerce and business have had the impact of the rise of the Internet whose influence has been nothing short of profound.  There are plenty of Internet businesses for sale, but there are also some significant points that one absolutely must keep in mind.

Your Due Diligence

There are a variety of steps that you should take before signing on the dotted line.  For example, take some time to search the domain name on the web and check out its reputation.  If there are a variety of bad reviews about this business, they will continue to impact you once you have taken over.  Perhaps that is the reason that this Internet business for sale is being sold in the first place!

Also make sure that you secure the domain name along with the business.  Otherwise this could present a significant hurdle.  You should also take a look at other specifics like will you receive web hosting or do you need to secure it on your own.  If you are looking to sell an Internet business, you need to also consider these same factors and consider what you will give to the buyer.

New Rules and Old Rules

The Internet may have broken some of the old established rules regarding how we do business, but that doesn’t mean that the way you approach someone who is looking to sell a business online should be different.  The old rules regarding what you should be looking for in a business still apply.  You are, after all, looking at businesses for sale.  The fact that the business is Internet based shouldn’t mean that you throw away all traditional wisdom!

A business for sale can be a fantastic money making opportunity or it can also be a giant money pit and nothing short of a headache.  Internet businesses for sale are in no way different.  A business with a poor foundation and poor financials is the same in the end, regardless of whether it’s a brick and mortar store or a virtual store that sells any kind of goods.  In short, an Internet business for sale differs from traditional businesses for sale, but that doesn’t mean that the core aspects of whether or not a business is healthy should be overlooked.

Do People Need This Site?

When you are looking at Internet businesses for sale, it is prudent to stop and ask yourself a very simple question, “Do people need this site?”  This question should quickly be followed by, “Does this site make money and will I make money?”  Remember that vast sums of money were invested in Internet companies that had never turned a profit of any sort, and many of those companies never did.

You wouldn’t by a traditional store that sold products that no one wanted or needed, so why would you buy an Internet based business that essentially did the same thing?  Viewed from this perspective, you can quickly evaluate the wisdom of buying a given Internet based business.  Sure many people are looking to sell a business that is Internet based, but should you be the one looking to buy a business of this kind?

Getting a good deal on a business that is doomed to never make a profit isn’t a good deal after all!  While you might be tempted for a variety of reasons, if the investment doesn’t meet the traditional criteria for being sound financially, then you should just keep on searching.

BuyTradeBiz.Com is the Internet’s newest business for sale and franchises for sale listing website.  This is the site if you are looking to sell a business or buy a business or buy a franchise.

The potential for growth in the hotel section in the coming years could be quite impressive for a wide variety of reasons.  First of all, commerce is becoming an increasingly global affair.  While much is made of the fact that “everything” is becoming increasingly digital, the simple fact is that people are traveling more than ever and for a wide range of reasons.  Factors including increased air travel, new emerging middle classes around the world and increasing levels of global commerce all combine nicely to create a climate that is ripe for hotel expansion.  This means that increased profitability in the coming years and decades is looking more than likely.

Clearly, there are lots of businesses for sale.  The good news is that some businesses for sale stand as great potential opportunities.  While every single business opportunity is different, there is no denying the tremendous potential of hotels for sale.  The different factors contributing to global traffic mean when it comes time to buy a business, it might make sense to evaluate the different hotel options at your disposal.

Location is Always a Key Factor to Consider

Hotels in some ways are much like other aspects of real estate in that so much of their value and potential revolves around their location and the communities that they serve.  When you consider hotels for sale, remember that you are also investing in real estate.  Therefore, the location of a hotel is essential.

When you are thinking about a business for sale, it is important to think about why someone has opted to sell a business.  There may be personal reasons involved or there may be cash flow reasons.  However, it is your job to understand why a business for sale is on the market, and the means digging deeper.

As location is a vital element in the success of a hotel, you invariably need to understand the area.  Perhaps most importantly, you need to get an idea about what is happening in a given area in the coming months and years.  For example, perhaps the local economy is set for a severe blow due to a pending factory closure.  This type of event, of course, changes the entire equation when it comes time to buy a business or sell a business.

Physical Condition

While location may reign somewhat supreme when it comes to whether or not you should or should not buy a hotel, it is not the sole factor.  Of course, the physical condition of the hotel is a major factor in both the price you should pay (and, for that matter, if you should buy it at all!)  All of the problems that you might face in buying a home or an apartment building will be present in a hotel, but they will be multiplied by a factor of ten, twenty, fifty or more!

If you are considering hotels for sale, then you absolutely want to be certain that the physical condition of the property in question is good or can be brought up to speed at a price that you are willing to pay.  Failure to properly address this issue could leave you with a money pit of epic proportions.

BuyTradeBiz.Com is the Internet’s newest business for sale and franchises for sale listing website.  This is the site if you are looking to sell a business, buy a business or buy a franchise

Some people feel that they need to be experts on food and the food industry in order to jump into the food business.  Others feel that they know how to eat and that’s “good enough.”  Of course the truth is that the restaurant business is like every other business and sector.  In other words, it is a business.  This means that one needs to understand the “rules of the game” and how a particular restaurant operates.

If you decide to look at restaurants for sale, the same factors that are of concern when it comes time to buy a business or sell a business are still in play.  While the business opportunity itself might be unique or special, the basic rules of commerce still apply as they would with any business for sale.

Restaurants Have Enjoyed Great Growth

There are lots of businesses for sale in this particular industry ranging from coffee shops and cafes to fine dining establishments.  Since there are so many restaurants for sale, you can be sure that some of the business opportunities before you will involve restaurants.  The simple fact is that the restaurant industry has enjoyed fantastic growth in the last two decades.

Increasingly, people are spending larger and larger percentages of their respective food budgets dining out at restaurants.  This fact is no small factor when it comes time to buy a business. All business owners want to see growth as well as the potential for ample future growth.  The restaurant industry has this potential in droves!

Location and the Restaurant Business

Every business for sale is different and, of course, this includes restaurants for sale.  Location is absolutely critical in the restaurant business.  People will, after all, eat mediocre or even sub par food from a restaurant that is in a wonderful location.  However, people will certainly not travel miles and miles for mediocre food.

The Two Key Factors of the Restaurant Business

The two big factors that usually govern the success of a restaurant, location and food quality, are interwoven in determining the success of a given business.  It is thus necessary to not just focus on the location of a restaurant, but the quality of the food as well.

Are You Willing to Move Your Restaurant?

Here is a key point- you can improve the quality of the food a restaurant serves, and you can improve the service and the décor. However, you can only improve the location by moving!  When you are looking at restaurants for sale or any businesses for sale the location always needs to be carefully evaluated.  In the case of restaurants, a location, which has low population density, can be the kiss of death!

If someone is looking to sell a business, you must always ask why and look for the core reasons.  Usually if a business is low on headaches and high on profit, people will find little reason and little motivation to sell.  When you buy a business, it is important to know why that business is being sold.  If you can easily fix all or most of the potential problems, then you might just have a serious opportunity on your hands.

BuyTradeBiz.Com is the Internet’s newest business for sale and franchises for sale listing website.  This is the site if you are looking to sell a business, buy a business or buy a franchise

Websites for Sale, What Are the Key Factors

By: BuyTradeBiz.com

The Internet and Digital Era have forever changed the way that the world does business.  Yet, that does not mean that all the “old rules” have been tossed out the window never to return.  In fact, the same basic rules that have always applied to the world of business still apply today to the world of making money from a website.  While some websites are wildly popular and bring in a great deal of money, others bring in very little income.  In this article, we will reflect on some of the key factors involved buying a website.

Money, Money, Money-Yes It’s All About Money

First and foremost, when looking at web-based businesses for sale, it is important to consider whether or not the websites for sale actually either turn a profit or have a clear path towards profitability.  There are billions of websites in the world, but this certainly doesn’t mean that they make billions of dollars, at least not each of them.  When you set out to buy a business of any kind, it’s important that you understand the revenue model and the flow of revenue.

The Flow of Revenue, Old Rules Still Apply

If the parties who are looking to sell a business can’t clearly show you where and how their website makes money, you should be very nervous.  After all, there is nothing magical about a website.  The old dynamics of “making a buck” still apply.  Keep this fact firmly fixed in your mind when you are considering a web based business for sale.

Potential for Growth is Always Key

One of the great aspects of the Internet is its potential to grow.  The simple fact is that the growth of the Web has continued to outstrip even the most optimistic of impressions.  However, this does not automatically mean that the websites for sale that you are considering are a “slam dunk” when it comes to being profitable or highly profitable.

Long Term Profitability and Stability

Determining the profitability of any business for sale is a complex equation that is dependent and reliant on a variety of factors, which are both subtle and complex.  In other words, when someone is looking to sell a business, Internet based or otherwise, it is your responsibility as the interested party to not just understand where the revenue is coming from, but also whether or not long term growth and stability are part of the equation.

Looking Good on Paper

Lots of businesses for sale may look great on paper, but that doesn’t mean that you should buy a business based on its current level of success.  For example, a big competitor may have just entered the market, and that could spell disaster for all websites for sale in this particular category.  If this is the case, of course, it is no wonder that people are looking to sell a business. In this type of situation, you will likely also find that related websites for sale are plentiful too.

The bottom line is that all sorts of businesses may look good on paper, but that doesn’t mean they are worth buying.  The factors involving in buying an Internet business are numerous and complex, and this fact should not be forgotten.

BuyTradeBiz.Com is the Internet’s newest business for sale and franchises for sale listing website.  This is the site if you are looking to sell a business, buy a business or buy a franchise

Now that Congress has passed the Patient Protection and Affordable Care Act and is now waiting for President Obama to sign it into law, many small business owners are wondering, “How is this bill going to affect my bottom line?”

For starters, the bill does not require any business to purchase insurance for its employees, but does encourage small businesses to provide coverage.  For small businesses that do provide it’s employees with coverage, they will receive a tax credit worth 35% of a business’s hearth care costs through 2013, and half of those costs for the next two years, provided firms buy the insurance on the new insurance exchange that will begin operating in 2010.  Small Business Majority founder John Arensmeyer, predicts that the cost for insurance for small businesses would drop 20% to 30%.

CNN states, “Small businesses have shed an estimated 1.6 million jobs this year. That leaves the remaining staffers to pick up the workload left behind — and even bosses are pitching in. With their employee rosters cut to the bone, business owners are going back to the basics, re-learning to do tasks they may not have handled in years.”

When small businesses are started, business owners handle everything from emptying the trash to ordering the paper. As the business grows owners and mangers focus on the overall well being of the company but this does not mean they should only know how to operate their business on paper; in fact business owners and mangers need to know how to physically run their business, stepping in from time to time. “In a small business — if the business is a successful business — you probably always have the manager rolling up their sleeves.”

Due to the current economy slump many businesses, especially small businesses, have drastically cut down on Business Travel. A recent study by Oxford Economics, “found a link between travel and corporate profitability. Each dollar spent on travel by a U.S. company can generate an average $3.80 in profit and $12.50 in increased revenue.”

Next time you are debating visiting a current client or a potential client remember, “cuts in business travel that would generally be (considered) penny-wise and pound-foolish.”

For years, small businesses competing with big corporations have encountered many problems while trying to penetrate into the target market. The Small Business Web is helping small businesses better compete with Google‘s of the world. “The Small Business Web is a movement to bring together like-minded, customer-obsessed software companies to integrate our respective products and make life easier for small businesses. While there are many products available for small business owners on the Web, the approach we’re taking is to use each others APIs to provide a high-level of integration between these applications and create a more seamless experience for our customers.”

Business Week states, “The Small Business Web represents a fundamentally different way of doing business, where potential competitors open themselves to collaboration.” Maybe collaboration is the key to your success!