By Annie Pilon, Small Business Trends

Are you considering selling your small business?  Perhaps you think it’s a good time to sell, considering that more businesses have been bought and sold this year than at this time last year, according to a BizBuySell survey.

However, valuations of those businesses could be lower in 2013, thanks to some tax changes. So if you want to get the best sales price possible, there are likely some steps you should already be taking. And allow yourself enough time to sell a small business.

Most owners don’t realize that selling a business can be so time consuming, according to Bob Pullar of Owners University, who recently suggested that owners spend three to five years preparing to sell in order to get the best price possible. Pullar said that preparing your business for sale over time will allow you to demonstrate how well your company trends over time, both financially and operationally.

And those who don’t take the time to properly prepare are leaving money on the table. According to Pullar, an owner that takes the time to complete all the necessary valuation enhancing projects can see an increase of up to 400% in valuation, depending on their industry.

So what steps do owners need to take to make sure they get the best sale price? Pullar recommends having three to five years of audited or reviewed financial statements, along with an annual business plan and three-year projection.

In addition, owners should have a detailed succession plan, which includes key managers to run the business after the sale, other employees who are key to the business’s success, and up-to-date contracts with third party suppliers.

According to a PriceWaterhouseCoopers survey (DOC), 79% of business owners identified maximizing the financial return as their top objective for succession. But not all of those owners said they had a succession plan in place. In fact, the most common step taken to prepare for succession was improving profitability by cutting costs and restructuring debts and compensation.

Though profitability improvements can certainly have an impact on valuations, Pullar said that most companies don’t require any massive changes in this area when preparing to sell. And even those that do need to make significant changes should begin preparations early and not discount the other steps involved in improving valuations.

“The most important thing for an owner to realize is that they can’t afford to wait until they know 100% that they want to sell their businesses,” said Pullar.

There is no magic formula for making sure your business is ready to sell. Targeting buyers and evaluating your business’s value can vary by industry. But having a plan and allowing enough time to implement it is essential for any industry.

Image: Sold via Shutterstock

Did you know that recent studies have shown that 50 percent of small businesses will fail within the first year? How about the fact that a staggering 95 percent will close their doors before they hit their fifth year of operation? That one seems a bit hard to believe but in today’s economy, it could be true. Here are some additional stats that may surprise you:

• 40% of small businesses are profitable.
• 30% break even.
• 30% are continually losing money.
• 9% have a chance of surviving 10 years.

Now before you get discouraged, keep in mind that many factors go into the success or failure of any small business. A good business plan and strategic marketing and customer service can go a long way toward obtaining success. This infographic by Top Business Degrees seeks to explain why some businesses fail and others flourish.

Originally published on Small Business Trends

About 8 years ago I found myself working at a large global banking corporation doing back office type stuff. I rarely mention it to this day due to the spectacularly negatable impact it has had on the rest of my career.

Except maybe for one lesson.

For myself and about 50 other people at the office, day to day we had to interact with the CMS from hell. It was some proprietary java-based CMS that had a Windows executable you used to interact with. It powered the global website and all its little regional children, plus a bunch of intranet reports and content. It was at its core an engine that spat out a static html site, generated at admin-controlled intervals. Similar in spirit to Jekyll (which I love).

If only this thing worked.

When the Windows app wasn’t crashing, the FTP upload (yes, it used FTP as the upload protocol) was failing which would also inexplicably bring down the global site. There was no versioning or roll-back, so if you messed up the upload you ended up with a Frankensteinian half-new half-old site. There were highly specific and seemingly arbitrary naming conventions for file uploads, and if you didn’t follow them the system would blow up instead of failing gracefully.

Of course this was all running from a datacenter on 10 different racks (about 9 more than they needed) in a remote location meaning that occasionally we’d have some hardware issue and would have to twiddle our thumbs while an anonymous technician fixed the problem from the opposite side of the world.

A few years later, I learned that the CMS was supplied and managed by a vendor who was charging a little over $2 million per year.

Fast forward to today.

Every day, hundreds of millions of people go to work and hate the piece of shit software they have to use to perform their jobs.

Every day, thousands of startups are trying to make it easier for people to share 6-second video clips or bookmark photos of cats.

There is a world of enterprise software companies that modern startups are completely oblivious to. These enterprise software companies are making millions of dollars building the kind of technology solutions that the average startup would laugh at. It’s time this changed.

In smaller, fragmented markets like South East Asia there is too much startup focus on B2C. Everyone wants to be the next whiz-bang app that gets acquired by Google for $50 million. There needs to be more balance.

As a startup, your primary goal is to survive. How long until you break even? B2C makes money at scale and through experimenting with different business models – it’s not for the faint-hearted or the low-of-funds. Your payday will come much sooner and more predictably if you focus on fixing one of the infinite problems that businesses have.

Big, medium, small companies – take your pick.

They are all riddled with problems to solve.

A Matter of Time

How to Generate Good Ideas from Column Five on Vimeo.

Recent college graduates are deeper in debt than people thought.

It’s been widely circulated that the average student graduates with $23,300 to $25,000 in debt.

Yet, according to the findings of a brand new survey by Accounting Principles, recent grads are carrying closer to $40,000 in debt when other forms of consumer debt are factored in. That figures includes an average of $27,000 in student loan debt, and on average, most of them are making less than $45,000 a year with their starting salaries, meaning they don’t have much to pay down those loans.

The good news is they are not ignorant of their debt. Approximately three quarters of graduates with student loans know their payment dates, 73 percent know the amount they owe, and 71 percent are aware of their current interest rate. However, less than a quarter of them can afford all their basic necessities, let alone bonus items like vacations, dining out, and shopping escapades.

For more info interesting details from the survey, check out the list below:

• Men Are More In Debt

  On average, male recent graduates owe 28 percent more in student loans than female recent graduates ($30,508 vs. $23,892 respectively). Male recent graduates also have more than twice as much nonstudent debt (i.e. credit card debt) than female recent graduates ($17,858 vs. $8,574 respectively).

• Recent Grads Thought They’d Make More

  Their misconceptions might have been because they thought they’d have a higher starting salary. More than two in five (43 percent) recent graduates expected to receive a higher starting salary.

• Recent Grads Are Really Broke

  Only one in five (17 percent) can actually afford all the necessities included in the survey (i.e. groceries, rent, cell phone, car and student loan repayment)

• But They’re Not Jealous

  Regardless of what they can (or can’t) afford, recent graduates may be content with their salaries compared to their friends. The survey found that only a quarter (25 percent) are envious of their friends’ starting salaries.

• They’re Also Putting Money Away, But Not For Retirement

  Four in five (80 percent) recent graduates regularly contribute to a savings account; yet, only 38 percent contribute to a retirement account. Even fewer recent grads contribute to an unexpected emergency fund (31 percent), personal investments (22 percent) or a life insurance policy (19 percent). One in ten (10 percent) does not regularly contribute to any type of savings account or fund.

• If They Could Do College All Over Again, Many Of Them Would

  Nearly a third of recent graduates would have: Actively pursued more scholarships/financial aid options (35%) Pursued a different major that would have led to a job with a higher starting salary (31%) Gotten a job while in college and started saving earlier (31%)

The survey was conducted over the phone with 507 recent college graduates of four-year degree programs aged 22-26, fielded by Braun Research.