Dallas’ Leading Mergers & Acquisitions Firm
for Companies with $500,000 to $50 Million in Revenue

(214) 396-8100

HBG Advisors is Now Sigma Mergers & Acqusitions

HBG Advisors is excited to announce their new company name - Sigma Mergers & Acquisitions. 

"Our new company name more accurately reflects what we have been doing all along - bringing together all the individual parts that are needed to broker business transactions that are not only financially successful, but also rewarding in the context of life and personal priorities," says Scot Cockroft, President and Owner of Sigma. 

Sigma means “the sum of all parts,” an apt description of what this 30+ year-old company has already been doing. Sigma marshals a collection of resources and networks of prospective business buyers, investors, and experts in all specialties needed to broker business deals such as CPAs, attorneys, appraisers, financial planners, realtors, due diligence experts, and business bankers. Sigma employs these resources to construct business sale deals that deal with the uniqueness of every business, and every buyer and seller's needs.

"Our firm is passionate about helping business owners who want to transition to their next step of development, either by selling the business to a qualified buyer, bringing in investors to expand operations, or selling the company to its employees. We also match individuals who want to purchase a business either on their own, or through a private equity group of buyers."

Sigma looks forward to many more years of dedication to bringing qualified business buyers together with quality businesses, and helping them bring everything together to finalize deals. 

 

5 Things To Do Before You Sell Your Business

Deciding to sell your business is probably not something you simply decided to do on a whim, but it’s also probably not something you’ve done a lot of planning for either.

There’s a distinct difference between taking your time deciding to sell your business, and taking the time to actually prepare your business for that sale.

There are some basic and fundamental aspects of your business that buyers are ultimately going to focus on, and those specific attributes can either make your business attractive, or expose problems that buyers just can’t overcome.

So here are five things you can do to get your business ready to sell:

1. Clean Up Your Financials

Nothing impacts buyer confidence and business value more than the state of your financial records. So the most important thing you can do to prepare your business for sale is to “clean up” those books.

There are literally dozens of specific areas of your financials that should be examined during this process, but one particular aspect is by far the most critical – owner’s personal benefits.

Don’t worry – every business owner takes advantage of this perk to some extent. It might be as simple and reasonable as paying yourself a W-2 wage, or it might be something more questionable like paying for your kid’s new car and booking it as a company vehicle expense.

Whatever the level and type of personal benefit you are getting from your business, you need to make sure those expenses are identifiable and provable to a buyer. Your business’ value is going to be driven primarily by its profitability, and for the purposes of selling a business these personal benefits are considered part of that overall profitability.

The bottom line is that the more personal owner benefits that can be identified in your financials, the higher your adjusted profitability will be and the more you can ell your company for.

2. Google Yourself

What do you think is the first thing buyers do when they are given the names of businesses for sale? Without question they Google them. So before buyers start digging into your online reputation, you should do some investigating on your own.

There are any number of sites out there where people can post a review about their experiences with any business. If you find something less-than-stellar about your company, see what you can do to remedy the review. Many sites give owners the ability to refute the claim, or at least post a response telling your side of the story.

If you can’t get your online profile cleaned up, then at least you’ll know what’s out there and can be prepared to address specific posts with buyers, if necessary. At the same time, you could also start a review campaign to try and incentivize customers who had good experiences with you to post those positive reviews.

3. Tighten Up Your Collections

Buyers care about cash flow, and nothing improves cash flow more quickly than managing your accounts receivable. You may be perfectly comfortable with the collection cycle you’re on, but if you tend to have A/R outstanding for long periods of time simply because you don’t aggressively pursue timely payment, you should consider straightening that out before you try to sell your business.

You’re A/R aging report is a critical piece of information buyers will want to review. If it demonstrates consistent and timely collection, it’s a huge positive for your business. However, if you have large amounts of revenue 60+ days outstanding, that raises a lot of questions and can cause buyers to lose confidence in the business’ ability to consistently cash flow.

4. Define Your Processes

 

As you prepare your business for sale, take the time to document the processes your business follows. How do you acquire customers? How do you train employees? How do you schedule jobs? How do you track inventory? There are literally dozens of unique processes you use to run your business, and you may not even realize it. Just keep in mind that everything it takes to run your business has to be learned by the buyer.

By defining these processes, you create a transferrable roadmap for the new owner to follow. Without this roadmap, buyers will possibly lack the confidence that your business can run without you. Documenting your processes eliminates much of that concern – if it can be defined that means it can be taught.

5. Get a Business Valuation

Every business, regardless of how simple or complicated the operation may be, has a “secret sauce” that makes it run effectively. When you sell your business, it’s that set of processes that a buyer is really buying. Sure, they’re buying assets and customers and your name, but without your processes those things have much less value.

Most business owners have an inflated opinion about their business’ value. While this is not necessarily a negative thing, it can create frustration and challenges if you are ready to move forward with a sale of your business, only to find out selling is not feasible given its true value.

So don’t wait until you’re ready to sell your business to find out what it’s worth – have a business valuation done on your company now. This information will only help you as you prepare your business for sale. In fact, getting your business value refreshed annually is not a terrible idea – if nothing else, you’ll at least know if the things you are doing in your business are working to make it more valuable.

In most cases, there are easily identifiable changes you can make to your business that will increase its value in a relatively short period of time. By getting the business valuation done early, you have the opportunity to implement changes that will make the business more valuable by the time you are ready to actually sell it.

Next Steps

If you’ve given any thought to selling you business now or in the future, these are five important steps you can take that will make that process much easier and more lucrative for you. Sigma Mergers & Acquisitions invites you to contact us to discuss any of these suggestions or if you have any additional questions.

We also would like to offer you a No-Cost, No-Obligation Business Valuation if you are interested in finding out what your business is worth.

How to Sell Your Med Spa for Top Dollar

Med spas are more popular and profitable than ever, and buyers have taken notice.

The medical aesthetic market in the United States is growing at a rapid pace. According to the American Society of Plastic Surgeons, people in the U.S. spent more than $16 billion on cosmetic producers in 2016, which was an all-time high. A Transparency Market Report projects that figure will eclipse $30 billion by 2024. Although 9 of 10 procedures are still performed on females, ages 25-64, numerous trends are pointing to growth in this industry coming from other large population segments, which is adding to the excitement in the industry.

Cosmetic procedures among men are becoming more and more commonplace. The American Society of Plastic Surgeons reports a 20% increase in male aesthetic patients since 2010, driven heavily by minimally invasive treatments such as Botox and other fillers. In addition to more men investing in their appearances than ever before, the Bureau of Labor Statistics reported that 18.8% of Americans ages 65 and over were employed in 2016, compared to only 12.8% in 2000. With an aging workforce trying to compete in the same arena as younger professionals, cosmetic procedures for seniors have increased as well.

Given the current market conditions in the med spa industry, coupled with all the signs pointing to these conditions continuing to improve in the short and long term, now is a great time to sell a med spa. The first step in this process is to find out how much your business is worth. We have provided some basic formulas you can use to estimate the value of a med spa and get a rough idea of where you stand. Keep in mind, however, there is much more to putting an accurate value on your business than these simple guidelines. A professional business broker can analyze your entire business operation and give you a true market valuation.

  • 2-3x SDE
  • 75-100% Total Revenue

Now that you have an idea of what your business is worth, you might be wondering what you can do to increase that value. Obviously, growing revenue and profitability will add value, but there are also other important attributes specific to med spas that not only improve your value, but also you marketability. Our intermediaries have valued and sold dozens of med spas – we put together these five tips that can increase the value and attractiveness of your business.

Online Reputation

In today’s cyber world where people are so empowered by the ability to make anonymous comments and reviews on anything and everything, personal services businesses like med spas can be at their customers’ mercy. Before deciding to sell your med spa, make sure your online reputation is as impressive as possible! Keep a constant eye on your online reviews. If there is ever anything negative posted, make sure and take the appropriate steps to remedy that post as quickly as possible. Additionally, encourage your customers to go online and write reviews. Inevitably the vast majority of online comments are negative, but they only represent a small percentage of a business’ actual customers. So the more people you can get to write reviews the better. 

Owner’s Involvement

Most med spas are owner-operated to some extent, but nothing can hurt the value and marketability of a med spa faster than an owner that is too involved in the day-to-day operation. Keep in mind that most med spa buyers do not have any formal training in the treatments and services offered. So if the owner also serves as a technician providing treatments to patients, that can limit your buyer pool and lower your value. As an owner of a med spa, ideally you are not directly involved in the treatment of customers. One way to make your business more attractive to buyers is to limit your involvement to administrative and back-office duties.

Customer Loyalty

Probably the most enticing aspect of owning a med spa is the recurrence of revenue. The fact that these aesthetic treatments are entirely temporary means that customers will need to have procedures done again and again. In order to capitalize on that need and make your business more valuable, your med spa should have some sort of customer loyalty or incentive program in place that encourages patients to return to your med spa. These programs can be as simple as regular email campaigns or as complex as POS systems administered by third parties.

Employee Retention

A high employee turnover rate is a major concern for potential buyers of a med spa. Not only do buyers see hiring and training new staff as a risk and hassle, but in personal services businesses like med spas there is the issue of customers’ relationships with the service providers. If you have an employee turnover issue, give some thought to tweaking your compensation plan or working conditions to encourage retention. There are literally dozens of effective employee retention programs we have seen med spas utilize to overcome retention issues – sometimes it’s as simple as altering the commission structure or even changing work schedules.

Cash Revenue

At its core, a med spa is a retail business. As is the case with the overwhelming majority of retail businesses, many customers pay in cash. While some med spa owners treat cash the same way they treat credit cards or personal checks, others may have a tendency to handle cash differently. To be blunt, sometimes cash goes unreported. We’re certainly not here to judge how you manage your revenue, but we are here to tell you how that impacts your business’ value and marketability. If cash revenue goes unreported, it lowers the value of your business. Simply put, if we can’t find the revenue you say you have, we can’t value your business properly. If reporting cash revenue is something you’ve avoided in the past but you want to maximize your business value today, then it’s time to start recording and reporting that cash.

Hopefully these five tips can help you find ways to increase the value and marketability of your med spa. Today’s market conditions for these types of businesses, along with more and more financing available for acquisitions, make this a tremendous time to consider selling your business. Whether that’s in the cards for you today, or you still need some time to get your med spa ready to sell, a professional business valuation is a great resource to have. That’s why we always offer business owners a no cost, no obligation business valuation before doing anything else. Feel free to contact us today and we can get that process started for you.

location

Sigma Mergers & Acquisitions LLC: 18170 Dallas Parkway, Suite 203, Dallas, Texas 75287
Dallas Business Broker, Mergers & Acquisitions Dallas / Fort Worth / Texas

214-396-8100 Office
972-838-5202 Fax