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Top Ten Must-dos When Selling a Business

Are you ready to sell your business? Thinking about starting new adventures? Certain changes you may make now can help you increase your business value. Below are top 10 tips on how to prepare your business for sale from expert, Bottom Line Management, Inc. founder, Loren Marc Schmerler, a Certified Professional Consultant and Accredited Professional Consultant.

Top Ten Must-dos When Selling a Business

  1. Know why you want to sell your business. Make sure it’s a good reason and not just to dump your problems into someone else’s lap.
  2. Give some thought as to what you will do with your time after your business sells. Finding yourself with nothing to do can be very demoralizing.
  3. Make certain that your taxes are current. This includes sales taxes, unemployment taxes, payroll taxes, state income taxes and federal income taxes.
  4. Document all your policies, procedures and controls. Not only will this help during the transition period when you train the buyer, but this will make your business more appealing to the corporate buyer who is accustomed to formal documentation.
  5. If possible, develop and train a strong “second in command” who can fill in for you when necessary. The buyer might be hands-on or hands-off, and having a strong assistant provides flexibility. Many business sales are lost when there is no depth of management.
  6. Review each employee’s strengths and weaknesses and show when they were last reviewed and when they next need to be reviewed by the new owner. Not reviewing an employee on time can cause anxiety and diminish loyalty.
  7. Make sure your financial statements and tax returns are “bullet proof.” You do not want the transaction to fall apart when the buyer or buyer’s CPA finds discrepancies.
  8. Prepare a business and marketing plan that will help a new owner understand where the opportunities for growth exist. This plan should include an Executive Summary that explains why the business was started, how it progressed to its current status and what a new owner should do to take it to the next level.
  9. Select an asking price that is based on reality – not fantasy. Be able to justify it based on a multiple of Owner’s Discretionary Cash Flow. Bad reasons include “it’s what I want”, “this is what I have in it”, “this is what I owe the banks” “I have put blood, sweat and tears over x years into the business.”
  10. Be willing to be flexible on price, terms or both. Deal structure can make or break a transaction. When each party to the transaction is willing to bend, there is a higher probability of success.
Author’s note. After helping sellers and buyers for more than 30 years, I have found that honesty, integrity, full disclosure, patience and a willingness to consider various alternatives makes the probability of success for all parties very high.
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Commercial and Residential Cleaning Service With Renewable Contracts

Business Description

This Commercial Cleaning Service can be easily expanded to market to residences, apartment complexes, office buildings, shopping centers, etc. The former owner grossed $400,000 until he was injured in an auto accident. It has a great reputation built up over the last 17 years.

This can be a hands-off business if the owner hires an operations manager to oversee quality control and scheduling.

FEW OPPORTUNITIES LIKE THIS COME ALONG ONCE IN A LIFETIME!

Detailed Information

  • Employees: 6 IND CON
  • Facilities: This business is starting a turnaround to return to it’s former glory when it grossed $400,000. The Owner has a full-time job and does not have adequate time to continue building it. It is home based with all cleaning personnel treated as independent contractors because they are free to clean as they please as long as they get the job done and satisfy the customers. (Home Based)
  • Competition: This business has the following positives going for it: 1. It is 18 years old which shows it has staying power. 2. There are 6 part-time independent contractors who can be easily increased as new business is obtained. 3. There are 12 – 14 A+ renewal contracts for either 2 year or 1 year periods. 4. Extra services can be easily up-sold so that carpet cleaning, window cleaning, supply sales, etc. can greatly increase revenue from the “captive” customer base. 5. Someone in real estate, mortgage sales, banking, insurance, lawn care, etc. can buy this business to work into their existing Customer bases.
  • Growth & Expansion: CUSTOMER SERVICE IS KING. THE CUSTOMER MUST ALWAYS BE MADE HAPPY. THE CUSTOMER IS ALWAYS RIGHT.
  • Support & Training: The owner will provide 10 days assistance to a new owner because the business model is very simple to understand and to replicate.
  • Reason for Selling: Owner has another business which requires her attention.
  • Home-Based: This business is Home-Based

Financial Information

  • Asking Price: $165,000
  • Cash Flow: N/A
  • Gross Revenue: N/A
  • Inventory: N/A
  • EBITDA: N/A
  • FF&E: N/A
  • Lease Rate/Sq. Ft.: N/A
  • Established: 1999
Contact Bottom Line Management, Inc. today for buying details by
phone: (770) 977-7334 or email: info@botline.com

Or simply complete the online form below and we will contact you shortly:

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Bollard Company

Business Description

WHAT IS A “BOLLARD?” Should be used most often in regards to being a barrier for deterring or stopping (or controlling) VEHICLES from traveling past or on streets, roads, or properties.

Most bollards are 36″ or 48″ tall (sometimes square – but these are not promoted by this owner), with the diameter and strength related to the NEED.

IN STOCK BOLLARDS – INVENTORY – counting all types as of July 1, 2017:

about 90 PLUS commercial grade bollards.
RETRACTABLE Bollards = #1 in stock and sales (other than Steel Pipe Sales) = $188 cost plus shipping – Sell: $1,488 + shipping.

Cost: Removable: $88 (SELL: $888 + 12%);

Older style: Cost: $300 (SELL: $588) – About 8 in stock

“PARKING PLACE SAVER” (two types) Cost:$66 – sell $288 + $45 shipping. 25 in stock

Most commercial used bollards are 4.5″ x 36″ stainless or Yellow.

PIPE bollards can be “on customer’s site” within 10 days. They are usually 6 5/8″ x 7 feet with 4 feet being above ground. Their wall thickness is 1/8″ or 1/4″ most times.

Bollard Polyurethane Sleeves: about 14 days = go over to dress up. PIPE BOLLARDS(they are 1/8″ or 1/4″ in “wall” thickness.)

THE PROFIT MARGIN ON EACH SALE IS phenomenal.

Detailed Information

  • Inventory: Included in asking price
  • Real Estate: Leased
  • Building SF: N/ALease
  • Expiration: N/AEmployees:owner + 1 PT
  • Facilities: ASK FOR PHOTOGRAPHS OF CURRENT CONFIGURATION. (Home Based)
  • Competition: There is very little competition in the current geographic territory.
  • Growth & Expansion: If you hire inside and outside salespersons, you can grow the business rapidly. NEW CONSTRUCTION MARKET IS WIDE OPEN.
  • Financing: $250,000 @ 6.25% over 5 years
  • Support & Training: The owner does not mind “helping or assisting” as often and long as necessary – within reason.
  • Reason for Selling: RETIREMENT
  • Home-Based: This business is Home-Based

Financial Information

Asking Price: $500,000
Cash Flow: $61,470
Gross Revenue: $228,750
Inventory: $60,000
EBITDA: N/A
FF&E: N/A
Lease Rate/Sq. Ft.: N/A
Established: 2005

Contact Bottom Line Management, Inc. today for buying details by
phone: (770) 977-7334 or email: info@botline.com

Or simply complete the online form below and we will contact you shortly:

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Painting Company – For Sale- Make $250,000/yr with $100,000 Down

Business Description

THE OWNERS WANTED TO TELL THEIR STORY PERSONALLY

I started the business around 1982, when my wife had our 3rd child, and I needed to provide for them. I had been working for another painting company that my brothers-in-law worked for, but they weren’t providing me with enough work. So I launched out on my own and worked hard to grow and make my customers happy.

One of my most loyal customers is one that will never forget how about 20 years ago, we repainted a warehouse at our expense, because the color wasn’t quite right, even though it cost me both time and money. He has worked for several large companies over the years and has given us many jobs.

I used to do the painting myself, till I realized that I could accomplish much more by managing the jobs and subcontracting out the work. I have had a strong work ethic and do what is necessary to make sure we have satisfied customers. As a result, we have had some customers for over 20 years. My wife has helped me with the books and been a great asset to the business as well. She has learned to be diligent in following up and making sure the company runs successfully.

In 2014 we purchased the Plainswift Software to be able to bid new construction jobs using online plans. This has been an invaluable tool, both in bidding jobs and keeping track of the estimated job costs. This also would a new owner be able to bid jobs competitively and also keep track of them..

In the last few years we have written down some of our goals, and held team meetings, which has also been helpful in continuing to grow the business. This keeps the communication open so the team knows what direction we are heading and we can all work together to make it happen more smoothly.

For the next owner to grow the business they could hire another salesperson and field foreman. There is tremendous opportunity to take this company to the next level.

OUR EMPLOYEES

Employee #1 has helped develop the business and acquire new customers. Employee #1 has been a valuable addition in sales and business development as he has helped us land one of our largest ongoing customers. He has faithfully communicated with our customers to make sure they are happy with our work, and continues to bring us new business, as well as maintain our current ones.

Employee #2 is very knowledgeable in all aspects of painting, prep work, products, scheduling and successfully completes the jobs. He works hard and can efficiently run a job from start to finish including maintaining his crew, which he does a great job supervising. He is training others to also run a crew, leaving him free to bid new jobs, or oversee others. With his wealth of knowledge of the painting industry Employee #2 has been a valuable asset to our company.

FEW OPPORTUNITIES LIKE THIS COME ALONG ONCE IN A LIFETIME!

Detailed Information

  • Real Estate: Leased
  • Employees: 2 + 2 Owners
  • Facilities: Metal building for tools, 4 pressure washers, 2 surface cleaners, etc. Property for Ford F-450 truck, Chevy Van, trailers, 60′ Boom Lift and 20′ Scissor Lift.
  • Competition: Very loyal Clients due to excellent work. Lots of repeat and referral business.
  • Growth & Expansion: Sky is the limit.
  • Support & Training: Owners will assist new Owner(s) for 4 weeks included in price.
  • Reason for Selling: Retirement after 34 years.
  • Financing: NOT NECESSARY – BANK WILL FINANCE 85% WITH 15% DOWN

Financial Information

  • Asking Price: $750,000
  • Cash Flow: $439,048
  • Gross Revenue: $1,113,050
  • Inventory: N/A
  • EBITDA: $68,261
  • FF&E: $50,000
  • Lease Rate/Sq. Ft.: N/A
  • Established: 1982
Contact Bottom Line Management, Inc. today for buying details by
phone: (770) 977-7334 or email: info@botline.com

Or simply complete the online form below and we will contact you shortly:

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Take This Workshop to Improve your Business or Become Your Own Boss

Can you answer YES to any of the questions below:

  1. Are you tired of working for someone else and want to start your own business?
  2. Are you already in business, but you want to take it to the next level?
  3. Do you want to grow your business to the point where you can sell it for top dollar?
  4. Do you want to know how to create “customer loyalty programs” where referral and repeat business lets your business thrive?
  5. Do you want to know everything you must do to get your business ready for sale?

If so, THEN join us for LIVE, small business workshop, led by Bottom Line Management, Inc. founder, Loren Marc Schmerler and hosted by SCORE North Metro Atlanta, a recognized leader dedicated to helping small businesses.

Learn about the latest business strategies, and get answers to your questions from industry expert, Loren Marc Schmerler, CPC, APC.

Loren Marc Schmerler looks forward to partnering with SCORE North Metro Atlanta to create growing entrepreneurial businesses and positively impact the community. Learn about the latest business strategies, and get answers to your questions from industry expert, Loren Marc Schmerler, CPC, APC.

WORKSHOP DETAILS

Led By: Industry expert, Loren Marc Schmerler, CPC, APC.

Date: Friday, June 23, 2017

Time: 9:00 AM to 12:00 PM

Location: Greater North Fulton Chamber of Commerce, 11605 Haynes Bridge Road, Suite 100, Building 400, Alpharetta, GA 30009

 

Register today.

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Take a Small Business Workshop

Can you answer YES to any of the questions below:

  1. Are you tired of working for someone else and want to start your own business?
  2. Are you already in business, but you want to take it to the next level?
  3. Do you want to grow your business to the point where you can sell it for top dollar?
  4. Do you want to know how to create “customer loyalty programs” where referral and repeat business lets your business thrive?
  5. Do you want to know everything you must do to get your business ready for sale?

If so, THEN join us for LIVE, small business workshop, “Maximizing your Bottom Line and Building Sweat Equity” led by Bottom Line Management, Inc. founder, Loren Marc Schmerler and hosted by SCORE North Metro Atlanta, a recognized leader dedicated to helping small businesses.

Learn about the latest business strategies, and get answers to your questions from industry expert, Loren Marc Schmerler, CPC, APC.

 

Register today.

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Art Event Studio with Upward Trending Sales in Metro Atlanta, GA

Business Description

THIS BUSINESS IS A LOCAL ART STUDIO AND ART SCHOOL WITH GROWING REVENUE FROM YOUTH EDUCATION, CORPORATE TEAM BUILDING, PRIVATE PARTY AND PAINTING ENTERTAINMENT SEGMENTS. This established Metro Atlanta, GA, Art Studio and Art Event Venue is experiencing upward trending sales and profit increases. The company is reaping the benefits of consumer desire for painting and art activities to supplement learning, enhance company morale and team building, and as social activity. The business was established in 2014 and has quickly built a highly recognizable brand name within the local academic, art, and business community. This successful combination offers a prime opportunity for a new owner to introduce outside marketing efforts to expand on and further build the brand. The company is poised for continued growth as the owners have been diligent in positioning it for continued growth and expansion. Ideal opportunity for owner operator.

Detailed Information

  • Inventory: Included in asking price
  • Real Estate: Leased
  • Building SF: N/A
  • Lease Expiration: Lease will go to month to month on 7/1/17
  • Employees: Just owner
  • Furniture, Fixtures, & Equipment (FF&E): Included in asking price
  • Facilities: Absolutely beautifully decorated with customer paintings. Incredible location with unlimited parking. Lease is now month to month. You will need to meet with Landlord before buying the business.
  • Competition: Starting in May 2017, this business will offer monthly focus groups that serve complimentary food and wine. The purpose of these focus groups is to give existing regular customers the opportunity to help the owner(YOU) build your business. THIS CONCEPT HAS NEVER BEEN TRIED IN THIS INDUSTRY.
  • Growth & Expansion: Owner has prepared an action plan for new Owner to grow the business.
  • Financing: $45k down then 6 months no payments then $50,000 @ 6% over 24 months($2,216.03/month)
  • Support & Training: Owner will include 2 weeks in purchase price. If you want more assistance, you can negotiate directly with owner.
  • Reason for Selling: Other business interests.

Financial Information

  • Asking Price: $95,000
  • Gross Revenue: 2016 Gross Revenue was $98,700
  • EBITDA: N/A
  • Cash Flow: N/A
  • FF&E: $4,753
  • Inventory: N/A
  • Lease Rate: $19.80/SQ.FT
  • Established: 2014
  • Contact Us

Contact Bottom Line Management, Inc. today for buying details via:

phone: (770) 977-7334 or
email: info@botline.com
Or simply complete the online form below and we will contact you shortly:

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Get consumers to buy through understanding their reasons for buying

Bryce Sanders
Contributing Writer
Jan 30, 2017
BizBuySell
The consumer drives the economy. Consumer spending is estimated at 70 percent of GDP.

For the health of the economy, the consumer needs to stay in a buying mood. It’s often said the definition of a bargain is when both parties feel they are getting a good deal. So how do you get them buying in your store on your website? How do people decide where to buy goods and services?

Advertised discounts — This is the traditional American model. You go to the mall. Jeans are on sale. The price is great! You buy a pair. It doesn’t matter if you have a dozen pair already at home. It was a deal. A memorable line from the CBS TV series The Nanny was: “It ain’t half off, it ain’t on sale.”

  • Comparison shopping — Finding the best price on the internet has been around for years. People perceive they can get a better deal online because of lower overhead. They will often walk into a retailer and ask them to match the price.
  • Negotiated pricing — This is the Asian model. Bargaining is expected. This process takes time. It’s a form of social interchange. Posted prices weren’t always the standard in the United States. John Wanamaker invented introduced the price tag in 1861.
  • Promotional offers — These are additional discounts not available to everyone. Car dealers might offer an additional discount for past and current members of the armed forces. Previous owners of the same brand may be offered a discount.
  • Private sales — Exclusivity sells. You are given access to merchandise or favorable pricing before the general public. When selection and sizing are a concern, this gets people motivated.
  • Free stuff — The most obvious is free shipping. You’ve heard the Wayfair ads (furniture) with the jingle “And it ships free.” Buy a camera and you get the case thrown in. Thank-you gifts fit into this category. Your public television station might offer promotional incentives based on the tier of membership you choose.
  • Convenience — Gasoline prices vary across the country and on the same highway. Many people will pay a few cents more for the convenience of pulling in immediately vs. crossing the road at the next traffic light and doubling back.
  • Family and relatives — Its assumed friends and family get a better deal. Cellphone companies use this strategy. Years ago, the Lebenthal Municipal Bond firm advertised, “At Lebenthal, we treat you like family.”
  • Scarcity — Each Christmas comes with its “Must have” toys. Hatchimals were big in 2016. The deadline is Christmas Day. If a store has it, you will drive a distance or stand in line for hours. Price is secondary.
  • Prestige — Why do people pay thousands for handbags? It’s been said 85 percent of Japanese women own a Louis Vuitton item. These items never go on sale. Distribution is tightly controlled. Prices are high. If you own one, everyone has a good idea exactly how much you paid.
  • Auctions — Items in short supply turn up on the secondary market. Whether it’s a global firm like Sotheby’s, a rising regional firm like Rago Auctions or eBay, that Hermes handbag will likely be available. The market price is driven by demand at that moment.
  • Desperation — When it’s 11 p.m. on a Saturday night and you need a quart of milk, you really don’t care what the all-night convenience store intends to charge.
  • Countdowns — These are often associated with “Going out of business” sales, but outlet stores sometimes use the same logic. Prices are 10 percent off this week, but 20 percent off next week. You would like the better pricing, but are taking a risk the same piece of furniture will still be on the floor when the price drops.
  • Loyalty — Many people want to recycle money in their own community. They will make a conscious decision to patronize their local hardware store instead of a big-box retailer. Sometimes they might pay slightly more, but a relationship comes with the purchase.
  • Donations to charity — Some businesses promote their charitable giving. Others pledge a certain amount of profits to a charity. They might just mention for every purchase made, they will make a gift to XYZ charity. People buy to indirectly support the cause.

People make buying decisions for many reasons. Which can be adopted by your business?

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Own Licensed Medicaid Agency Providing Home Health Care

Business Description

Founded in 1989, the Company is a licensed Medicaid agency providing home health care services to elderly and disabled clients in Georgia counties. In home personal service rates are set by the State of Georgia. The Company provides services to approximately 180 clients at any given time, with a few private pay clients.

The Company relies on word-of-mouth and referrals to generate business. Since inception, the Company has established an extensive network of contacts in the industry.

The Company is an S-Corporation operating from a leased office on a family farm with a recast fair market value rent of $20,000 per year. Their staff totals 47 full-time and 50 part-time employees, including three active principals. In home care providers are Certified Nurse Assistants (CNAs.)

  • Increasing gross profit trend: The Company’s cost of sales decreased from 70.0% of revenue in 2012 to 60% in 2014, resulting in increasing gross margins.
  • Strong customer relationships: The Company has strong ties to clients due to its reputation for timely and excellent customer service.
  • Overall growth expected in industry: Revenue (in current dollars) for US home health care services are forecast to grow at an annual compounded rate of 7% between 2015 and 2019. (Source: First Research, Industry Quarterly Update, February 2015)
  • Superior name and reputation: The Company has a long-standing reputation for its focus on quality products, offering reliable expertise, and providing superior customer support.

Detailed Information

  • Inventory: Included in asking price
  • Employees:47FT/50PT
  • Facilities: Leased office on family farm with recast rent of $20,000/yr.
  • Competition: See listing summary.
  • Growth & Expansion: See listing summary.S
  • Support & Training: Owners are available for a negotiated period of time beyond first month included in selling price.
  • Reason for Selling: Retirement and other business interests.

Financial Information

  • Asking Price: $1,700,000
  • Cash Flow: $508,000
  • Gross Revenue: $2,600,000
  • EBITDA: $361,000
  • FF&E: N/A
  • Inventory: N/A
  • Established: 1989

Contact Us

Contact Bottom Line Management, Inc. today for buying details via:

phone: (770) 977-7334 or
email: info@botline.com
Or simply complete the online form below and we will contact you shortly:

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Questions Business Owners Ask Me and the Answers I Give Them

bbpLoren Marc Schmerler, President and Founder of Bottom Line Management, Inc. contributed “Questions Business Owners Ask Me and the Answers I Give Them” article for Business Broker Press, an organization dedicated to support the business brokerage industry.

 

  1. How much is my business worth?
    The correct answer is the price a Buyer offers you that you are willing to accept. It makes no difference whether you are making money or losing money. It makes no difference whether sales are increasing, declining or flat. It makes no difference how much blood, sweat and tears you have put into your business. It makes no difference how much money you have invested in the business. It makes no difference how much money you owe to the bank or to yourself. It makes no difference what a business valuation or appraisal says. It makes no difference what your hard assets are. It makes no difference what your customer list or client list contains. It makes no difference what your patents or service marks cost you. It makes no difference whether you are a Franchiser, Franchisee, Licensor, Licensee, Distributor or Independent Contractor. The bottom line is that what you finally accept is what your business is worth.
  2. How long will it take to sell my business?
    The correct answer is no one knows for sure. But I tell my clients that the average time is seven months from listing to closing. For companies that sell for $1 million or more, the average is nine to twelve months. But I also explain that the quickest I ever sold a business was one week, and the longest it ever took me to sell a business was six years. Additionally, I explain that price and terms sell a business. The lower the price the more affordable the business will be. The lower the down payment, the more people will be able to consider it. The greater the amount of owner financing, the easier the business will be to sell.
  3. Is there anything I can do to make my business more desirable?
    The answer is yes. The most important thing you can do is to put your ego aside and not make the business dependent upon you. Ideally, the goodwill of the business should be at the lowest level that interfaces with customers or clients. This means that you want to hire and keep employees that make your customers happy with high quality work and excellent customer service.
  4. Is there anything I should not due during the listing period?
    The answer is that you should not slack off in any way. You need to stay focused and operate your business as if it will never sell. You need to work as hard or harder no matter how burned out you feel. Do not make any major changes during the listing period. Try to retain all good and excellent employees and remove those that are not contributing as they should. Try to keep your inventory fresh and eliminate any obsolete items. Keep your equipment and machinery well maintained and properly functioning.
  5. What is due diligence?
    It is the process where the Buyer examines all your books and records , gets approved by the Landlord, gets approved (if applicable) by the Franchiser, Licenser, Distributor, bank, etc. Your books and records need to be current and “bullet proof.” Your tax returns for payroll taxes, sales tax, state income tax, federal income tax, county income tax, city income tax and any other municipality taxes are 100% current. Your various licenses need to be current whether or not the buyer will have to apply for their own. You want to fully disclose everything and not leave any skeletons in the closet.
  6. What else do you suggest I do to impress a Buyer?
    Have a job description for each employee. Put together a Policies and Procedures Manual. This will make the corporate buyer feel more comfortable about taking over the reins. Make sure all your employee reviews are current. The last thing a new owner wants to do is to sit down in a vacuum with an employee who is expecting a raise. Make sure you clean everything that is dirty. Make sure you fix anything that is broken. You do not want the Buyer to wonder what else might be a potential problem. Prepare a business plan and/or marketing plan to show the Buyer how he or she can grow the business. Put together a transition plan that shows the Buyer how you will assist them daily for a period of 28 days. The Buyer may not want you for the full transition period, but at least you are showing that you have thought it through and are willing to make yourself available.
  7. What happens if I agree to do some owner financing and the Buyer misses a payment?
    The way the closing attorney prepares the paperwork, if a Buyer misses a rent payment or a note payment, it is considered an event of default under the note. This will allow you to take back the business in a worst-case scenario or enter into serious discussions to protect your financial interests. While the best outcome is a Seller getting paid all their money and a Buyer being successful, you must plan for the worst and hope for the best. But I also tell my clients that they should never sell their business to a person they feel will not treat their employees, customers, clients or vendors properly. If you ever get a knot in your stomach during the negotiation that is the time to throw in the towel and let me gently explain to the Buyer that you do not feel it is a good fit.

I hope this list of questions and answers has been helpful. I offer a free no obligation consultation 7 days/7 nights should you wish to discuss the sale of your business or the purchase of another business. Loren Marc Schmerler, CPC, APC, President, Bottom Line Management, Inc., 404-550-1417 www.BOTLINE.com.