Don’t Be Disengaged: Why This Buyer Spells Disaster

Buying a business is a big deal. You are embarking on a whole new life, have a ton to learn and an exciting new road ahead – a road that takes a lot of planning, preparation and hard work.

 

What can sometimes confound business brokers, business sellers and even some buyers is a relatively rare but alarmingly destructive force – the disengaged buyer.

 

 

What’s a disengaged buyer?

 

Someone who waltzes into the business buying process with nonchalance – they don’t take anything seriously.

 

They miss conference calls. They’re chronically late for appointments. They let license applications sit on their desk unfinished. They don’t show up for training with the seller, or they show up and act like they could care less. Sounds frustrating, doesn’t it?

 

Frustration isn’t the only issue. This level of apathy can be destructive as well.

 

It alienates the seller. It angers the commercial landlord. It hampers the ability to run the business because licensing requirements have not been met.

 

Sure, some of the business buying process is tedious. Some of your training will seem unnecessary. Red tape and paperwork are boring. We get it. Guess what? Nonchalance on your part can (and probably will) cause irreparable harm to your business ownership goals.

 

Why?

 

All those conference calls and meetings are crucial to your success. You can’t know if a business is going to be right for you if you haven’t asked the right questions.

 

Licensing requirements are an absolute necessity – and they can take time. Time that is out of your control because the wheels of bureaucracy turn slowly. You need to get going on applications as soon as is feasible and you need to stay on top of all the bureaucratic red tape before it has a chance to strangle your new business venture.

 

Your training period is critical to your success. You need to take every single moment of training seriously and try to gain every bit of knowledge you can from your seller. They’ve already worked through the pitfalls that you will face, and their knowledge will help you avoid them.

 

The relationships you have with your seller and your commercial landlord can make or break your transition to business ownership. If you alienate the seller, they are much less likely to take training you seriously – and you’d better believe they’ll stop taking your calls as soon as the training period is over. An angry landlord can refuse to transfer the lease, raise the rent, etc. Preserving those relationships by being respectful of everyone’s time and effort will go a long way on ensuring your success.

 

Do yourself and your future business a favor – BE ENGAGED.

 

Are you thinking about buying a business and want to know more about how to maintain important relationships throughout the purchase process? Would you like to know more about licensing requirements? Do you have questions about how the training period works? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Business Buyer: Is Seller Financing For You?

If you are in the market to buy a business, but don’t have a huge amount of cash available to make an all-cash offer, then the option of seller financing may be for you.

 

What is seller financing?

 

This financing option occurs when a buyer brings a sizable down payment and the seller offers to finance the remaining balance of the purchase price.

 

 

Many traditional lending institutions are gun-shy about offering any kind of lending options for small business – small business ventures can be risky and banks typically want something with more concrete collateral. Seller financing fills this gap between the all-cash offer and the difficult-to-get traditional financing options. A note here – the terms of a seller financing deal may have a smaller time period and higher interest rates than traditional lending would.

 

If you are a buyer who is going to need help with raising capital, there are a few things about the seller’s side of seller financing that you will need to understand and consider.

 

Most of the time you will need to bring a big down payment. Most (but not all) seller financing is for less than two-thirds of the purchase price, so at the very least a third of the price will need to be given as a down payment at closing. The seller is going to want a fair sized chunk of cash up front because once they sell the business, they are essentially out of a job and will be moving on to perhaps another business venture or retirement.

 

You will need to prove that you have the ability to keep the business running and profitable long enough to pay back your loan. You will probably have a hard time getting seller financing in an industry where you have little to no experience because a seller doesn’t want your learning curve to affect whether they get paid for their business.

 

You may have to put up a fair amount of collateral. The business itself we be collateral, in that that seller can take the business back in default. Also, a buyer can offer up personal assets like real estate if they choose to.

 

If you are someone with terrible credit, you may have a hard time getting seller financing. Any seller in their right mind will want to make sure that you have the ability to pay them back for all of their years of hard work, and a buyer with a good credit score will look far more promising than one without.

 

The price overall may be a bit higher and the interest rate might be a bit higher too, but what a buyer needs to remember is a seller has no buffer like a traditional lending institution would, this business is all they’ve got. If you have decent credit, a sizable down payment, know what you’re doing in the industry – but just can’t get traditional financing – then seller financing could be a very realistic option. The better you look as a lendee the more business choices will be available.

 

If this is something you might consider, you need to have the seller financing discussion with your broker early on in the game. The need for this type of financing will drive what businesses you should look at and which ones will be financially out of your league – there are sellers out there who demand an all-cash offer.

 

Are you a buyer who would be interested in seller financing? Do you have more questions about what information you would have to provide to a seller in order to secure financing? Ask us! Leave a comment or question here, and we will be happy to answer all of your seller financing questions.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Want Happiness In 2021? The Entrepreneurial New Year’s Resolution

2020 was a rough year, for everyone. This New Year’s holiday holds special meaning for many of us. It’s a chance to start again.

 

That’s right, it’s New Year’s resolution time.

 

 

We all do it. We come up with fabulous and complicated New Year’s resolutions and then fail miserably within the first three weeks of the new year. We all want to be thinner, in better shape, more organized.

 

If you consider them as a whole, what are all of our collective New Year’s resolutions really about? They’re about happiness. If you are thinner, then perhaps you’ll be happier. If you’re in better shape or if you’re more organized, then perhaps you’ll be happier.

 

The reason these resolutions fail is they only scratch the surface of the underlying goal you are trying to achieve. Losing 20 pounds might initially make you happy, but you still have to get up and go to the job you hate every day.

 

Happiness is less about superficial changes and is more about living with a sense of purpose. It comes when you feel fulfilled in your daily life.  How do you reach fulfillment?

 

Take control of your career and follow your passion by becoming your own boss.

 

It may seem like a daunting proposition to become your own boss, but taking the entrepreneurial plunge doesn’t mean you have to come up with a genius idea and build a business from the ground up. You can enter the world of small business ownership by simply buying a business that already exists.

 

The benefits of taking this route to business ownership are easy to see. Buying an existing business means you don’t have to contend with coming up with a concept, finding and then equipping a location, finding and training a new staff, establishing a customer base, obtaining initial licenses and permits – the list goes on and on. All of this “start-up” work has already been done, and you even have the previous owner to train you when you take over so you aren’t walking in cold.

 

If you are thinking that buying a business might be a great part of your 2021 plans, you probably have some questions:

 

How much money does it take to buy a business?

The answer is, it depends. Sure, there are multi-million dollar businesses on the market – but there are also many smaller businesses that would require a much smaller initial investment. Many business sellers also offer the option of seller financing, so you may be able to get a business that would suit your goals without having to pay all cash.

 

What kinds of businesses would be right for me?

Remember that the point of business ownership is to have control over your own destiny and to feel fulfilled in your daily life. You shouldn’t buy a business where you aren’t going to be happy – without drive and passion you will most likely run the business into the ground. You also shouldn’t buy a business you know nothing about. Giving yourself the massive hurdle of trying to learn a whole new industry on top of learning how to run your new business just means you are setting yourself up for failure.

 

Think about what your goals for business ownership are. Do you want a more flexible schedule? Do you have a particular passion that you want to turn into a career? Are you looking to make a long term commitment to a business or are you looking to grow and then sell your new business for a profit? These types of questions will help you decide what types of businesses would be right for you.

 

What’s the next step?

Contact a business broker. They can help you figure out what businesses would be right for you based on your goals for business ownership and the capital you have available.

 

Get yourself on the path to business ownership and happiness in 2021!

 

Do you have more questions about the process to buy a business? Would you like to know what businesses are currently available? Ask us! Please feel free to leave any questions or comments here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Dig Deep: Decisions For Business Buyers

If entrepreneurship is your goal, there are more decisions to make than just picking a business off a list of listings. Figuring out the RIGHT business to buy is crucial to success. Here’s how you do it:

 

 

Dig deep.

 

What do we mean by that?

 

You need to figure out what you want. When you buy a business, you are buying yourself a life-encompassing job – a job where the buck stops with you. What do you want your future life to look like? Figuring out what really means the most to you, as well as what tools you have to help yourself be successful can mean the difference between buying yourself a successful new business and buying yourself a nightmare.

 

What factors should you consider?

 

Your background.

Why is your background so important? Owning and operating your own business is tough. It can sometimes mean long hours, tough decisions and navigating lots of issues. Your background matters because the steep learning curve that happens whenever someone buys a new business will become impossibly steep if you add learning an entirely new industry to the mix. Don’t do that to yourself. Pick a business that compliments the practical experience you already have. If you’ve spent the last 15 years in the manufacturing industry, and have never worked a single day of your life in the restaurant industry – buying a huge bar on the beach isn’t going to end well. Talk to your business broker about your experience and strengths – they can help you find business choices that will compliment your background and set you up for success.

 

Where you want to live vs. what type of business is actually possible in that area.

It should go without saying that some types of businesses can only be successful in certain areas. For instance, service-type industries (think restaurants, landscaping, housekeeping) do really well in places like southwest Florida where people are coming to second homes for vacation – and probably don’t want to be doing a ton of housework or cooking while they’re here. The same type of service business probably isn’t going to be as successful in a very rural part of Montana, for example. Take a look at the area where you’d like to live. What works there? What doesn’t? Talk to your broker about what businesses do better – and worse – in the area you’d like to end up.

 

What is your ultimate goal for business ownership?

Are you looking for a goal of making a certain amount of money in the next 5 years? Are you looking for a challenge and are willing to push the envelope with a business that will require more work on your part for a potentially bigger return? Or would you prefer a nice, safe and steady shop without a ton of room for growth – where you won’t have to push as hard but returns won’t be as big either? Your ultimate goal for business ownership will obviously have a big impact on your search. Talk to your broker about your income goals as well as about how much of a challenge you are willing to take on. 

 

Can you realistically get the licenses required?

Red tape can be very strange. There are certain industries in certain states that require a business owner to have prerequisite requirements for an operating license that might be hard to get. Think requirements to have x amount of years doing a specific type of work before you can even apply for a license. Some licenses require background checks, fingerprinting and the like. Ask your business broker about the industries you are interested in. The licensing requirements for an industry might preclude you from owning the business you think you want, so figuring out licensing limitations will be important early on in your search.  

 

The message here is buying yourself a new life needs more than a cursory search through listings. You need to dig deep and decide what you want your life to look like, then have a discussion with your broker about what type of businesses will fit with those goals.

 

Are you considering buying a particular type of business and have questions about whether or not it will meet your goals? Do you have questions about licensing requirements? Would you like to know more about the business search process? Ask us! Leave questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Are You A No-Offer Business Buyer? How To Be Taken Seriously

If you’ve been looking for a business to buy for a while, you may have run into a problem that some buyers encounter – no one will take you seriously.

 

Maybe it’s your broker or the seller’s brokers that you have come across, maybe it’s the sellers themselves. Whoever it is, they don’t look at you as someone who is serious about buying a business. What they see is someone who is on an eternal search, and therefore someone who isn’t worth their time and energy.

 

How can you prove them wrong and show that you are a serious buyer? Make an offer.

 

 

“I don’t want to make an offer on every business I look at.”

 

Of course you don’t, and you shouldn’t. What we mean here is if you are seriously considering a business, the only way to know for sure if the business is going to fit your goals is to get to the due diligence process. In this process, you are allowed an in-depth look at all aspects of the business, from financial statements to contracts – then you can decide if it really is the right business for you.

 

“If I make an offer, I’m stuck with that business whether I like it or not, right?”

 

Absolutely not. If, during the due diligence phase you come across a reason why you don’t want the business – you will have the opportunity to back out of the deal before anyone reaches the closing table. The system is designed this way because businesses are inherently complex, so your ability to get a good look at what you’re purchasing is part of the process. Then and only then do you have to make a final decision about buying.

 

If you’ve been looking at businesses for an extended period of time without even entertaining the idea of making an offer, then don’t be surprised if brokers don’t take you seriously.

 

There are plenty of “tire-kicker” buyers out there who inquire about countless businesses – over enormous amounts of time – without ever making the move to buy one. On the other hand, serious entrepreneurs come on the scene with goals in mind, do a targeted search of available businesses, then make offers.

 

If you were working in the business market or trying to sell your own business, who would you take more seriously?

 

Are you a buyer who has trouble getting sellers to take you seriously? Do you have additional questions about why it is a good idea to put an offer on the table? Please leave us a comment or question here, and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

 

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

5111-E Ocean Blvd
Siesta Key, FL 34242




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