Essential Benchmarks to Consider When Buying a Business For Sale

Buying a business for sale is a multistep process and each step is important. Many times you may not proceed to the next position until you complete the preceding step and you should never be tempted to shortcut the process at all. Adequate preparation and time spent revealing everything there is to know about the business will be well spent here and will help to ensure that no horror stories are uncovered once you take the helm.A lot of information can be revealed before you even talk to a prospective seller. One of the most important questions you must ask yourself before you go forward is what kind of enthusiasm you possess for the type of business you have your eye on. Do you really want to be involved in that industry and does it represent an area that you truly want to be engrossed in? Unless you intend to be a completely “hands-off” owner and are therefore taking considerable additional steps to ensure your safety, it is far better for you to be involved in an industry that you have a good feeling for, if not a considerable level of enthusiasm.All documentation must be inspected when you are conducting a due diligence process.* Financials: look at balance sheets, reconciliations, profit and loss statements, tax filings and payroll records. Remember that “cash sales” cannot be included within calculations unless they are actually referred to within tax documents. Otherwise you must ignore them.* Employee records: including longevity, pay scales, behavior, and attendance.* Licenses: these must all be in place, including county, city, state and federal. Where certification licenses are required, inspect these closely. Also, you should be prepared to look at results with a keen eye to see whether any problems have arisen in the past.* Equipment records: including age, depreciation, maintenance, replacement cost, any required inspections.* Inventory records: including turnover, condition, re-saleability.* Supplier contracts: including portability, alternatives and goodwill.* Property records: including rental agreements and portability – the latter element is of considerable importance.If you find that all records, licenses, contracts and agreements are in order and are workable for you going forward, you may be wondering how to arrive at a good value when you buy business assets. There are many different ways of looking at this. Some of the methods used to calculate include:* Asset-based multipliers, where a total value of the assets are used to determine a value.* Rule of thumb, where industry benchmarks are used to establish the value (not recommended).* Revenue-based multipliers, where a percentage or a multiple of the monthly or annual revenue is used. Again not recommended.* Cash flow multiplier, where a business owner’s profit level is added to his or her salary and any other perks and certain expenses are deducted. This is most often the most appropriate way of valuing the business for sale.While there are many documents and figures that can be proven to backup an owner’s claim, or not as the case may be, you need to take into account significant facts. What is the age and reputation of the business, the level of competition expected, its physical location in many cases, the legal structure of the business, the quality of the premises and/or the difficulty in obtaining a new lease. When it comes to a business for sale, all will help you to determine whether you should buy a business like this, or not.

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Future Visions of the Auto Industry and Automotive Advertising Based on What Was and What Is

Auto industry social networks all have different rules and protocols to create their unique identities in the auto industry and the inter-dependent automotive advertising industry. While there are differences in format, content and contributors they share the common goal to educate their community members by sharing best practices and insights with the concept that a rising tide floats all boats. To provide clarity and share my vision of the future of the retail auto industry and automotive advertising it must be framed it in the context of our changing geo-political and economic environment. Once the foundation of today is built on the broad picture of our world economy and politic, then the role of the Internet and related technologies can be applied to the one constant that we can all depend on — human nature — to help define tomorrow as I see it.Any competitive business model must be built to accommodate tomorrow as well as today. Today is obvious. Sales volume, profit margins and inventory are down across all brands. Consumer confidence is falling as unemployment is rising even in the face of the expected temporary increase when the million plus census workers and various government employees — such as the sixteen thousand IRS agents to police our new health care system — are artificially added to the equation. Wholesale and retail credit lines are restricted by both natural business cycles and government intervention. Our economy is directly linked to the world economy along both monetary and political lines and the United States as well as our European trading partners are faced with excessive debt and unstable monetary systems. Our monetization of our debt — basically the fact that we loaned ourselves the money we needed to fund our growing debt by printing more money, since no one else would lend it to us — has insured the inevitable inflation of our dollar or some similar correction to our monetary system. This anticipated correction is already supported when observing the situation maturing in Greece, Portugal, Spain and other European Countries tied to the Euro and the International Monetary Fund, (IMF). No one has a crystal ball, so the only way to plan for tomorrow is to recap today’s critical issues that didn’t exist yesterday. It is these changes in — what was — vs. — what is — that will likely define — what will be and the actions that auto dealers and automotive advertising agencies must take to remain profitable and competitive in unchartered waters.The current administration was voted in on a platform of hope and change with the expectation that the promised transformation of America would take place within the confines of our constitution and in consideration of our established belief in a free marketplace. The redistribution of wealth was understood by most to reflect the giving nature of the American people as a moral and sharing society. Unfortunately, the transformation began in ways that could not have been imagined by the majority that voted for it with an agenda that is only now coming to light. The inherited financial burdens on our banking system that justified the need for change were matured across Republican and Democratic party lines — as evidenced by the contributions of Fannie May and Freddie Mac to our mortgage crisis and the preferred treatment enjoyed by the unions, Goldman Sachs, AIG and other entities on Wall Street supported by the progressive political movement that is represented within both parties.By way of disclaimer, I recognize that approximately 30% of our population believes in the collective — We the people — and the associated movement for the — workers of the world to unite — vs. the framers of the constitution that defined it as the individual — We The People — and the rights of the individual as a contributing member of the whole. That said, as the President has clearly stated, elections have consequences and I will attempt to limit my comments and future visions to only those actions that have or will have a direct impact on the auto industry and the automotive advertising agencies that are engaged to serve it.The empowerment of the unions in the formation of Government Motors is already impacting the marketplace even while it is being challenged in the courts. The mandated consolidation of the retail distribution channels for General Motors and Chrysler preserved the interest of the unions over the guaranteed bond holders and independent dealers contrary to established rules of law. This precedence diluted expectations of both investors and corporations to rely on binding contracts and individual rights in favor of the collective we that our evolving society is expected to serve. Recent adjustments to the language in a variety of Federal powers have impacted previously accepted State and individual rights which must also be considered when projecting the future of the auto industry and automotive advertising — if not our country as a whole.For example, the change in the definition of eminent domain from taking personal property — for public use — to the new definition — for public good — has already resulted in private and commercial property being taken at distressed market values and given to other individuals that promised a higher tax base to the governing authority based on their position that the additional tax revenue was for the public good. Similarly, the ownership of water rights in the United States has been changed from the previous Federal ownership of all — navigable waterways — to include — all waterways — such as ponds, surface streams and basically any water that the government determines can be used for the public good. The potential impact on the farming industry and our food supplies evidence a shift in government control of society that must be considered when projecting the future of any industry — including our beloved auto industry.Given the government takeover of the banking industry, General Motors, Chrysler, Health Care and Student Loans that are now part of our history, the point becomes self evident. These single word changes and government takeover of entire industries for the public good dilute individual and corporate rights in favor of the rights of the collective. This is a basic step in the process of redistributing the wealth in accordance with Socialistic and Marxist principles. I am not judging the validity of any of these differing political philosophies since it would risk my ability to remain unbiased in my evaluation of present and pending opportunities in the auto industry. My intent is not to defend our previous constitutional republic over the shift to a Socialistic or Marxist democratic society, but rather to apply them when preparing a business model moving forward for my auto dealer / vendor clients and affiliated automotive advertising agencies.For example, the recess appointment of Craig Becker as member of the five seat body of the National Labor Relations Board, (NLRB), suggests the intent of the administration to resume its push for the Card Check Regulation that is designed to facilitate unionizing all businesses in the United States. Recess appointments are an accepted practice used by previous administrations to bypass the Congress and the Senate to fill cabinet positions with individuals that are often blocked by partisan agendas. However, Mr. Becker was challenged in a bi-partisan manner based on his role as a senior attorney for the Unions including the CIO and the Service Employees International Union, (S.E.I.U), just before his appointment. The NLRB decides cases involving workers’ rights which directly impacts larger issues between Democrats and their labor allies vs. stated Republican party interests and those of the corporate world When coupled with the intent of Card Check regulation to eliminate the right of workers to a private vote to determine if a business can be unionized, the likelihood that retail auto dealerships will be forced to become union shops becomes a real possibility. The regulation also allows the government to intervene in the event that an employer challenges a union take over with a Federal administrator enforcing the union proposals as to wage and other terms and conditions of employment pending a final determination. Based on reduced sales volume, profit margins and increased costs of doing business the inevitability of these privately held dealerships collapsing under the financial weight of union demands is painfully obvious to any auto dealer that understands his cost of sales line items and their impact on his shrinking bottom line.Similarly, the administration’s success in manipulating the processes in the Congress to pass its version of Health Care reform will increase expenses to auto dealers regarding insurance costs for their employees either in the form of forced coverage or penalties which must now be factored into projected operational expenses. These expenses may pale in comparison to other increases in the cost of doing business if the administrations’ next stated goal to enforce Cap and Trade regulations are passed. This legislation promises to raise the cost of electricity and other costs of goods in America on many energy related fronts.For those not familiar with Cap and Trade regulations, think of it as a tax on carbon emissions that would be collected by yet another government controlled body to pay restitution to third world countries who have been breathing our pollution and suffering from its impact on global warming. Of course the same scientists that collected the evidence that global warming exists which supported this legislation have since reversed their position while confessing that they manipulated the data. However, that revelation has not slowed the administrations’ desire to move forward. In fact, they have empowered the Environment Protection Agency, (E.P.A.), to intercede and impose carbon taxes by claiming that carbon is a poisonous gas which they are authorized to restrict. Either way, the taxes will be imposed on American industry while other industrialized countries have already reversed their positions on imposing these same fees. This inequity in manufacturing costs will further reduce the ability for American manufacturers to compete in the world economy and will likely force the exit of many carbon producing industries to countries that do not impose these additional costs while taking their jobs with them.Itemizing — what is — vs. — what was — has little value other than to cause panic when people realize that there is little that they can do to reverse the changes that they voted in. However, if properly framed in a problem solution format it can provide an opportunity for those that accept — what is, forget — what was, and work towards — what can be. Now comes the good news!The solution to surviving the promised redistribution of wealth from the perspective of auto dealers and automotive advertising agencies lies in their use of technology to reduce and even eliminate certain fixed and semi-variable expenses. Brick and mortar facilities are often financed with mortgage terms and/or rent factors that were based on now dated real estate values and anticipated sales volume and profit margins to carry the debt service. The commercial real estate bubble of over one trillion dollars coming due over the next eighteen months with no current resource of funds to replace maturing commercial mortgages promise to exasperate already reduced equity positions for auto dealers. The related unsustainable debt service demands a change in the ways that vehicles are sold in the United States; can you say Internet!Similarly, current staffing needs are often related to processes that are labor intensive. The associated human resource expense and exposure is based on a business model that is antiquated in the face of potential union intervention and government controls; can you say Technology!Tax consequences resulting from LIFO credits that impacted auto dealerships who could not maintain inventory levels projected in their annual computations due to issues beyond their control are eliminating annual profits. As a direct result of all of these cumulative issues, even captive lenders are balking on maintaining floor plan credit lines or real estate mortgages. Minimum working capital requirements for auto dealers faced with reduced sales, profits and equity to present as collateral for much needed financing has severely limited dealer options to acquire funds to maintain operations.As already hinted, the solution lies in shifting the focus form brick and mortar facilities to new online virtual showrooms and other Internet based applications that provide more efficient selling processes. Of course real world facilities for sales and service are still part of the projected solution as are the people that will be required to staff them. All processes start and end with people and human nature has and will survive on the Internet. However, the allocation of these resources and the associated expenses must be reduced in the face of the changes already in place as well as those being contemplated to accommodate our new role in a world economy.Today’s car sales person must be educated to use new technologies and Internet based selling systems much like previous generations needed to be trained with the skills of a mechanized society versus an agricultural one. Computers are already an integral part of our culture so the transition shouldn’t be as hard as some may perceive. Similarly, large central distribution channels that used to provide efficiencies for manufacturing and retail outlets have been replaced by more cost effective online linked resources across the World Wide Web that reduce fixed and semi-variable expenses in a shared manner that didn’t exist before the Internet Super Highway.Consumers have already been empowered by the Internet to bypass the auto dealer in both the real and the virtual world as the source for the information that they need to purchase a vehicle. Seeking the path of least resistance to satisfy a need is an established element in human nature. An auto dealers ability to accommodate their customers preference to be in charge of their vehicle purchase will be the key to their survival now and in the future. Online customer interaction platforms already allow a dealer to accommodate a two way video communication with real time interaction with the online shopper/buyer sourced from data on the auto dealer’s DMS and linked to their CRM. The transparency of this negotiation process allows the dealer to crash through the glass wall of the Internet with the ability to push and pull the same material that they can at their dealership. The result is the opportunity to accommodate an online transaction with the inevitable ability to reduce staff and facility needs in the real world along with the associated expenses and increased profits.Social networking is another technology based solution that capitalizes on human nature which promises to change the face of the auto industry and the resources available to automotive advertising agencies to help their auto dealers sell more for less in the future. Consumer centric inventory based marketing platforms fueled by social networking communities that provide word of mouth advertising to virally extend the auto dealer’s branding and marketing messages represent the next generation of applied social media. C2C marketing messaging to social networking communities from the inside out vs. the now dated attempts to market to online communities with B2C messages from the outside in builds on established protocols in social media. Next generation platforms promise to monetize social media for automotive advertising agencies with integrated Ask-A-Friend / Tell-A-Friend features that allow online shoppers to solicit opinions from friends and family. Customer driven posts on their Face Book page drags the dealership and their vehicle into the conversation with the obvious advantage of the increased exposure and the associated viral coefficient to extend their message and online footprint for potential customers linked to the initial online shopper. Google agrees as evidenced by their weighted consideration of real time social media which quantifies the R.O.I. for the dealer with improved S.E.O. for the sourcing dealer’s expanding virtual showroom.Other technology based solutions that improve online marketing processes converts the pictures on an auto dealer’s web site to professional quality videos with human voice placed on the auto dealer’s site, all third party marketing sites and even the search engines through a dedicated API with You Tube — further evidence the ability of auto dealers to expand beyond the limitations of their brick and mortar facilities and in-house support staff. Extended social networking platforms which allow an auto dealer to empower their sales staff to develop their own websites to market to their spheres of influence with management controls to moderate content and monitor use to prevent employee abuse exist today with the promise to be more widely used tomorrow to build the vision of what will be in the face of a challenging economy.To extend my vision for the auto industry beyond the technologies that exist today requires a similar understanding that expenses and staff need to be consolidated beyond current expectations. Limited resources for consumers to purchase, finance and/or lease their vehicles won’t eliminate their need for transportation. Future financial instruments that are a hybrid of a lease and a rental agreement could allow consumers access to a pool of vehicles in a convenient central location where their Drivers License could act as a key and a charge card to apply charges against pre-paid transportation credits deducted by their employers and controlled by the government to track personal activities and location along with socially accepted consumption of our limited resources. I recognize that the big brother flavor of that vision may seem foreign in the context of what was and is, but we are talking about what will be based on the new collective society that our country has moved towards.As for the role of the OEM and the auto dealer in the future, it would be reasonable to accept that the government’s existing control of the auto and banking industry will extend into the energy industry which will set the stage for the government determining which vehicles could be manufactured and/or imported and placed into the transportation pools with the locations determined by public transportation hubs that link to local distribution centers. The government currently owns 51 % of all real estate in the country through their mortgage interests in Fannie May and Freddie Mack and the pending commercial real estate bubble promises to shift a great deal more to public control. In addition. the government has recently changed the funding available to both organizations to be considered unlimited with the full faith and backing of the United States Treasury. That action coupled with the previously stated changes in eminent domain and the fact that millions of acres of resource rich land was recently acquired by the government to build additional — national monuments — suggests that land will be made available as needed to accomplish this community transportation system for the public good. Of course government employees will be needed to manage and staff these transportation hubs which would likely represent the auto dealer of the future.Simply put, my future visions of the auto industry and automotive advertising is built on the past and the present with a recognition of what will be if we continue on the path that we have already chosen. I assume the constant of human nature and the role of technology in our evolution to date with the expectation that neither will change. Of course, there are consequences to elections so I suppose that I should update my projections after November, 2010 and the presidential election in 2012. In any case, the movement from the real to the virtual world has already started and will surely continue so that part of the vision should remain clear.

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How Social Media Allies and Upsides Your SEO Efforts?

SMM and Search Engine Optimization are usually given a separate space in the digital marketing arena.

And, quite reasonably, they are the two most decisive factors in the online marketing sphere.

But what we fail to understand is why many businesses do not acknowledge social media marketing as one of SEO’s most influential allies.

Do we intend to say that social media directly encourages your Search engine rankings?

The simple answer could be NO!

You must recognize that social metrics like Facebook likes and Twitter followers indicate social profile authority but have no hand in directly circumscribing the search engine rankings.

Surely, our straightforward answer is confusing. However, we completely believe that SEO and smo are powerful collaborators whose association must be leveraged for digital marketing success.

Let’s dig deeper and express how SMM can merit and warrant your SEO strategy.

The Relationship Between Social Metrics & SEO

Let’s assume that there might have been experiments conducted in the past that determine the use of social-media metrics such as social mentions and engagement level for search engine rankings.

But due to the unpredictable and unstable nature of smo and the weak signals generated, professionals might have dropped the attempts.

This was well elaborated by Matt Cutts back in 2014 in a Webmasters video. He was the Head of Google’s Webspam Team back then, and he revealed that social media provided incomplete signals.

Also, search engine algorithms can’t ascertain the reliability and authority of the smo posts and the profile.

Nevertheless, is there an Indirect way that social media influences search engine rankings?

And, this was embellished in the Cutt’s video itself.

He said that Google treats all social media websites like any other website on the Internet, which means that the same rules apply to Facebook, Twitter and so on as it applies to other websites.

Benefits of Social Media for Business

A Linkable Opportunity

As most social media consists of links to other websites, site owners and content creators can use it to promote their content.

You can employ a particular mixture of organic and paid promotions strategy to maximize your audience base.

Here’s how this happens-

As you use social media, there might have been countless times that some articles impacted you.

The impression an article made is evident in the things you share and communicate on social media. You might often use the information from the article in your other works, giving the source article a reference.

Understand that people cannot relate to something unless they know about it. Social media gives the perfect opportunity to content creators to prompt the audience and share link-worthy content.

You might well concede that SMM has given attention to many websites and individuals who were not known before. Creating Brand Mentions

Now, suppose someone or something (brand, product, service, individual, business, etc.) that has not yet been identified by Google suddenly notices many remarks online. In that case, it will influence Google to categorize them as an “entity”.

These are some unique circumstances that can boost your search engine rankings. This is bound to the context you are being mentioned or how people are talking about you online.

Understand that you are not adjudicated for how high you rank for a thing but what you entail as an entity.

So your website might not be getting a mention for a specific thing right now, but seeing the number of people who put trust in you, they can well start recognizing your business for that particular piece.

This is called the power of positive mentions.

Nevertheless, you need to make sure that positive mentions are not just on social media but on all public forums.

You can spring your brand marketing with your true audience base and inspire positive reinforcement and communication on social media.

Social Media For Searches

You cannot miss the fact that people use social media to search for a particular product or brand, and your audience base is just not limited to Google or Bing.

As you operate Twitter, you will realize that the social media channel with its trends, hashtags, insights and other tools give you a perfect opportunity to collude with the potential customers, making your content visible to the users.

You will find similar responses to Pinterest and Instagram.

Also, if anyone wants to know more about your company, he/she will likely ascertain your presence on Facebook, Instagram, Twitter channels- do a quick search and decide upon if he/she wants to deal with your business or not.

In 2016 Mark Zuckerberg had mentioned that “Now people are doing more than 2 billion searches a day between looking up people, businesses, and other things they care about.”- source Techcrunch.

Facebook had earlier retreated on a semantic graph search engine and launched a true keyword search, which landed in more search queries for media channel.

Twitter, since its onset, has been the leading destination for the population to flock for searches, especially in the event of big global news. Full post search appeared to have worked for Facebook and have expedited query volume.

Changing The Idea Of SEO

We have reached the phase where SEO is not just centered till Google optimization. We need to realize that search engine optimization is extending and converging on smo.

Also, if Google has been unclear about its stand, Bing, on the other hand, has been quite positive in including social metrics in its search engine algorithms.

You may well agree that the audience that reaches the company website, lurking through digital media channels, has already interacted with the company in a very pragmatic sense.

Also, digital media gives users the capability to engage more powerfully and compellingly. Hence, it will be only effective to broaden your social, media capacities and elicit brand awareness and growth.

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