May 5th, 2011 by admin

When you sell a business you have a variety of assets you can sell to a potential buyer.  One thing we will look at is intellectual property.  Intellectual property may be written down on documents you have thus you will have something tangible to show the buyer; however, intellectual property will work differently then selling certain assets like inventory in a business.

Intellectual property is not something you have to sell when you hand over a business unless it will directly affect how the company runs.  Let’s take a look at an example to be more specific about this concept.  Intellectual property is something you designed, created, and thought up.  It can be a logo, symbol, or a written work like a book.  In a business when you have intellectual property it generally means you have an idea or concept that is imperative to the running of the business.  You have created a new soap product.  This product is unlike any other on the market because it has a specific ingredient no one else has.  You even patented this idea.  This means you not only have intellectual property, but you also have patent rights that means no one else can produce your product.

You are now looking to get out of your business and the potential buyer will need to secure rights to use your patents.  You could sell the patents to the buyer and draw up an intellectual property agreement that states the new owner can use your information to produce the product, but they cannot sell it, trade it, or own it.  They will also have a specific amount of time they can use the property and patents.  The other option is to sell the patents and therefore the intellectual property completely selling out of the business.  If you keep the rights you can generate income from the use of the patent and intellectual property rights over time.

You will need to check with United Kingdom laws on how best to approach intellectual property sales to determine what your best course of action will be.  With any business sale you will need advisors like a solicitor to help you draw up the paperwork and ensure that everything is legal.  With an intellectual property sale you may also have property, inventory, and other aspects of the business that will go into the process.

There is one more thing to consider when you have intellectual property in a business.  If the concept came from an employee you may have to consider their rights.  Normally there is a document your employee signs stating that intellectual property created for a company is owned by the company and the employee gives up all rights.  However, when you sell a business you may consider offering the employee the intellectual rights or at least an option to purchase the company their intellectual property helped build.  These decisions and many others will affect how you handle your business sale and how you approach the issue of intellectual property.

May 5th, 2011 by admin

Business to Business is a concept that was created based on the Ecommerce market.  Ecommerce stands for electronic commerce, which means the business is via the internet.  With the internet has come the need for providing products to sell online in a timely manner.  Here is how it works.  A consumer comes to your site, sees a product, purchases the product, and expects the item to be shipped within a couple of days and arrive at their home or business in less than 14 business days.  You as the company will need access to the products you sell.  In Ecommerce and drop shipping your business never actually sees the products.

Let’s take a look at how drop shipping works to see if you would be interested in this type of business to business transaction. With drop shipping you make an agreement with a wholesale or distributing company.  This company stores the products in their warehouse and will ship the products for you.

Each day the drop shipping company goes online to check your sales.  They find the item the consumer purchased, package it, and then drop it in the mail.  Typically the product is shipped within two days of the order and received within 14 days.  At the end of the month you pay the drop shipper for the items they have sent out.

This means that you obtained the money from the sale plus shipping and then paid the appropriate amount to the drop shipper based on your deal.  You generate some income from the Ecommerce site, but much of the income is turned back to the drop shipper because you have to pay for the product and the shipping of the item.  Still, if you choose the right drop shipper you can be making a large revenue source from thousands of online sales.

Some drop shippers may require that you purchase the items you have for sale before they are actually purchased.  This can make things a little messy if you do not sell one item as much as another.  In other words if you purchase too much of something you may not see the revenue for some time.  This is why it is imperative that you find a drop shipper willing to send the items and then receive payment after the consumer has actually paid you.

There are plenty of drop shippers on the web that work like this.  They are best of all set up to handle the consumers that you get.  Many drop shippers work for numerous online companies making it easier for them to stay in business and serve your needs.  It also works in your favour because you do not have to find a storage space or your own shipping deal with a company.

Small businesses that ship out of their homes tend to pay a lot higher prices for shipping than those who use a drop shipper.  Typically this is because they use the post office for their shipping needs rather than UPS or other company.

May 4th, 2011 by admin

Business to business usually means you create a relationship with another business for some aspect relating to what you do.  In other words you hire a company to make products that you sell in your store.  This store can be online or a brick and mortar location.  The subject of Ecommerce and manufacturing your own products can still be a business to business relationship, though it will work slightly different.

Your online business may be to sell herb starter kits. You have the fertilizer, instructions, herb packets, and plant food all wrapped up in the kit.  This is a kit you are making yourself.  So you create the little basket and wrap it up before boxing it to ship.  Where the business to business deal comes in is purchasing the items you make the kit out of.  For example if you are using baskets you will need a basket supplier, the herb packet supplier, and so on.  Each item probably comes from a different manufacturer for the kit you sell.

In this situation you must get permission from the manufacturer to sell their products as your kit.  Basically you need to state in the agreement that their company name is displayed on the products, but the concept of the kit is yours.  You may even consider striking a deal in which the company manufacturing your product will put your business name on it.  This can be expensive though.

The other business to business relationship you have is with the shipper.  You will need a shipping company that will send your products out in a timely manner.  Using the post office is one idea, but generally if you are manufacturing the kits in your home or warehouse it is easier for UPS or another shipping company to swing by once or twice a day to pick up the items you have to ship.  You can also work out an affordable deal with the shipping company that is a lot better than the post office is willing to do on a per package basis.

This is just one option you have for an Ecommerce business.  The downside is that as your business grows it can be difficult to continue to manufacture the kit because you will need more space and more employees.  Once a business becomes too big for a garage or storage unit you have to look for a different way to provide the product.

Many Ecommerce sites therefore choose a product that they can sell that is already manufactured.  In other words an online business owner approaches a company that has an herb starter kit already made up.  Since the business is small they purchase say a hundred products to store at a facility.  Each time an order is placed the owner ships the product.  As the business grows the online business then creates a new business to business deal with a drop shipper who has the products, the storage space and the employees to handle the orders.  In this case you sit back and take advantage of the revenue.

May 4th, 2011 by admin

Have you recently thought about getting a new business?  Perhaps you are already in business, but want to branch out into a different area or new industry?  There are plenty of ways you can get into a new business.  We will look at how you might branch out into a new location or industry, as well as some of the finance options you might need to think about.

With any new business you will need a business plan and some research.  So the first thing you will do in getting a new business is sit down and assess what you hope to gain.  Ask yourself the following questions:

1. Why do you want to expand?
2. What do you hope to gain?
3. What type of business do you want?
4. If you are buying a new location, in the same industry, where should that location be?
5. Can you afford the time it will take to set up the new location, especially if it is a bit of a drive?
6. Do you need new suppliers?
7. Where will you find the employees?  If you are buying an existing business chances are there are employees there, and are they willing to work for you?
8. Will you use the existing business model or adapt it?
9. Lastly can you truly afford to obtain a new business?

All of these questions are imperative to getting your business plan on a roll.  They will help you determine if your goals are attainable, and more than that they can open up more questions that you need to ask the business owner.

The next step once you find the right opportunity is to sit down and really assess how you will buy the new business.  Can you afford to purchase it outright, do you need a loan, and is the owner willing to take payments based on the revenue you make from the business?

The typical answer to the finance question is finding a loan.  There are plenty of banks willing to lend money to a business.  Even in tough economic times, if you can show reasonable cause for expanding into a new industry and the business history and scores you should be able to get a loan.  If you have an existing loan with a bank you may approach them to extend the amount of the loan.

In rare cases you might have to seek a different bank or lending company.  For example, if you branch out into a different industry than what you are in now your current bank could refuse based on risk or not knowing that industry.  Always look for a bank or lender that has dealt in the industry you are in.  This way they understand the risks, which you can help explain from your point of view.

One more option into branching out into a new business is buying an online company to start selling products via the web, instead of a brick and mortar location.  This could be more affordable and cost effective.

May 4th, 2011 by admin

Owning a business can be a lot of fun, but there are times where you might get a headache just thinking about your responsibilities.  One way to ensure that your company runs smoothly is to have a good relationship between the retailer and wholesaler if you are selling products.  There are many businesses out there and some deal in services or trade.  For the purposes of our article here we are looking just at the product selling businesses.  To make things simple we will glance at the business relationship from the point of view of the retailer.

A retailer is in business to make money as is any business.  The method for making money is to sell products.  These products can be clothes, jewellery, trinkets, etc.  As the owner of the business you will decide what you want to sell and seek out the distributor or wholesaler that can provide this for you.  There are things to consider when choosing a wholesaler:

• Product Quality
• Product Durability
• Means to Supply the Goods
• Monetary Agreement
• Ease of Working Together

A wholesale representative is often a sales person.  This means they try to get you to purchase their product.  You have to distinguish between what they tell you and the value the product actually has to offer.  You want to be able to work with a representative that you can get along with and also one that understands business. The person you work with has to be willing to ship or bring you the items you wish to have in your store.

The products you purchase need to reflect the cost.  You will mark up the items in your store to make a profit; therefore, the lower cost the product is to you the easier it is to make a product.  Still, any product you have needs to be quality and have durability to please the consumer.  Any price you pay the wholesaler does need to reflect the value of the product.

A wholesaler needs to be able to fulfil your order needs.  For example, if you are a medium sized shop and you know a certain product sells very well you may order over a thousand of that item.  In turn you want to make sure the wholesaler can provide it when you need it.  This takes planning so that you order the product before you run out, while still providing time for the wholesaler to get the product.  Often the wholesaler is purchasing from a manufacturer before they can get it to you.

Lastly you will need a business contract that will stipulate how much you are going to pay per product and how long you intend on doing business with the wholesaler.  Sometimes you may find another company offering similar products so you might want to switch wholesalers.  The basic idea is to have a legal agreement both parties are held to with the option of terminating the agreement when one or both parties agree.

May 4th, 2011 by admin

In a business to business transaction we are not always talking about a sale of one business to another in the general sense.  Instead a business to business transaction can refer to a relationship between a manufacturer and a wholesaler or the distributor to the retailer.  Below we are going to look at the manufacturer and wholesaler relationship as it pertains to advancing your business.

Wholesaler and distributor can be used interchangeably.  Basically the two terms mean this is the company who obtains products to sell to retail locations.  The wholesaler is the one dealing with the retail end of things.  It is their job to ensure that the product the manufacturer creates is being sold.  The wholesaler can find clients to sell the products to or be approached by a business looking to make a deal for selling the products the distributor has.  In a later article we will look at the wholesaler and retailer relationship.

A wholesaler can decide what products they are going to represent.  Typically the business owner will set up a company that is able to ship or bring items to their clients.  The wholesaler generally looks for a couple of things from the manufacturer.

• The products must be quality
• The products must have a market to sell to
• The manufacturer needs a distributor
• The manufacturer must be able to fill the orders
• The manufacturer must be willing to deal.

The first thing a wholesaler looks for is pretty obvious.  The product needs to have quality that reflects the retail price.  A low quality product will be difficult to sell and therefore the wholesaler will not want to deal with it.  On the same line the manufacturer has to be willing to make a good deal for the wholesaler.  The wholesaler that is independent from the manufacturer typically has to buy the products they sell.  So they need to get it at a great cost in order to make a profit when they sell to the retail locations.  Too high a cost will make it impossible for the wholesaler to make their business profitable.

Some manufacturers may already have a few wholesalers.  In this case they may not be willing to work with another company.  On the other hand if you can provide a market as the wholesaler in an area no one else is reaching you have the opportunity to make a deal.

The last item to discuss is the orders.  The manufacturer needs to be able to fill any orders that the wholesaler has.  If a hundred thousand products of one item are orders the manufacturer has to have the facility to create them in a timely manner.  The relationship between wholesaler and manufacturer is a symbiotic one.  For one to succeed the other needs to be there succeeding as well.  Both companies help each other out and make the business work.  One or both businesses can terminate the agreement they have if it is not working.

May 4th, 2011 by admin

Business to business can be defined as two ways when you are talking about selling one company to another.  A business to business deal can be selling your business to the competition or another business entity.  This is often a direct sale in which you no longer have control when the deal has been finalised.  The second business to business deal is talking about franchises.  Often this is what we think about when we hear about business to business deals.

In a franchise you are selling a business model, training, knowledge, and your experience to hire employees.  You will sell the business for an upfront payment, and typically also take royalties during the course of the franchise license agreement.  The royalties are a percentage of the revenue the business generates.  In this type of sale you retain control of the business as a whole.

The person buying the franchise will be able to obtain some good things from you.  First off anyone buying a franchise gets experience of the owner and the proven business model.  A lot of the time there are lower risks involved than opening up a new business from scratch.

Now that you understand the business to business concept we can look at how to search for the business to business related franchises.  Obviously you know some of the franchises that exist in the United Kingdom.  There are also opportunities from other countries that are looking to expand that you might buy into.  McDonalds is a great example of a global franchise.  While it is also a chain some people own franchises rather than chains.  McDonald’s has been able to expand globally with chains and franchises that are now owned around the world.

So you can look for franchises that you know.  You can also look for a franchise that you might not know about using the internet.  The internet has many sites offering databases of businesses for sale.  In these databases you can search under the category of franchises for sale to see what is out there.  They can be further limited by searching for a specific industry under the franchise category.  In this way you are able to find many opportunities.  There are other sites that are more restricted to businesses for sale.  On these sites you will find business transfer agents selling more than just franchise options.

You can go to newspapers, local businesses, and brick and mortar business transfer agent locations to search for franchises.  However, your best location to find a franchise will be online.  There are just so many avenues you can pursue in the online world it makes it easier to find the franchise you want.

Within the franchise industries your options are extremely varied from restaurants to plumbing businesses.  Any trade, service, or product could be a franchise.  If there is a company you like but they do not have a location in your area you might approach them for a business to business sale where you run a franchise.