The Perfect Business? Why Business Buyers Need To Keep The Must-Have’s Short

If you’ve ever watched one of the myriad of home renovation shows, you understand the importance of staying realistic with your must-have’s in a home when you are looking to buy. You can’t expect perfection when you are looking for a deal.

 

A similar truth rings true if you are looking at buying a business. Many new prospective business buyers come to the market with an eternally long list of what their ideal business must have before they buy. They literally want the perfect business. Guess what? The perfect business doesn’t exist.

 

Bullseye target.

 

We’ve seen some interesting perfection-seeking, must-have lists – like only wanting a business where the owner is retiring, the business is at least 10 years old, the landlord is willing to lower the rent and it must be able to run with an absentee owner – all for less than $50,000. Realistic? Definitely not.

 

The problem with this approach is the longer your must-have list, the less likely you are to find a business. You may end up in buyer purgatory forever, always searching for the “perfect” business.

 

Your first step towards successfully finding a business is letting go of the must-have’s and instead focusing on the goals you would like to achieve as a business owner. What are you looking for – a chance to be your own boss, more financial freedom, the opportunity to follow a passion? Ask yourself these questions first, then look for a business that will fit with your goals.

 

Your next step after defining your goals is to decide what issues you will be willing to deal with and which will be deal breakers once you find a business. All businesses are inherently complex and all businesses have issues of one kind or another – so be ready to make decisions on what’s do-able and what’s a deal-breaker.

 

Some examples of do-able issues might be a restaurant with falling numbers but an ineffective and disgruntled waitstaff that could easily be replaced, thereby turning customer service reviews around. Or perhaps a retail business that has zero online presence and no marketing plan to speak of that you could make profitable with some marketing savvy and a good website.

 

A deal-breaker issue, on the other hand, might be finding out during due diligence that you would be inheriting an $80,000 debt that the seller tried to conceal.

 

While searching for a business, remember that the past records of a business are just that, they’re the past, and the future of the business and what you could do with it are up for grabs. Just like in the home renovation shows, it’s not the house at the beginning of the renovation that counts, it’s the finished product that matters.

 

A creative buyer with some decent marketing know-how can turn around a less-than-ideal business in short order if they have a decent plan in place. By applying your personal strengths and experiences you can make many businesses fit with the goal you would like to achieve.

 

Just remember that there is no such thing as the perfect business, so keep an open mind and keep your must-have list short.

 

Are you looking at buying a business, but you can’t seem to find one that fits with your goals? Do you think your must-have list might be too long? Do you have questions about what issues are do-able and what issues are deal-breakers? Ask us! Leave a comment or question here, and we would be happy to help.

 

 

 

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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They’re Watching – 3 Ways Business Sellers Can Make A Good Impression

If you are in the market to sell your business, you might feel that your business speaks for itself.

 

 

The financials, the location – they will tell buyers all they need to know if they are considering taking your place as the owner.

 

Guess what? Buyers are also taking a long hard look at you. Your actions will speak volumes about the way you run your business and what they can expect from you throughout the sale process. Here are three things you should try to do – to not only gain the trust of a potential buyer, but to put your business in the best possible light:

 

Be honest.

About everything. Sure, every business has a skeleton or two in the closet, but trying to hide or gloss-over these issues when in negotiations with a buyer will make you look like a liar in the end. During the due diligence process, buyers get a chance to dig into your business, so anything you try to keep from them will eventually come out. If you are honest about any issues right out of the gate, most buyers will be willing to deal with those issues. If you try to keep a buyer in the dark, the inevitable unveiling of any issues will probably kill your deal.

 

Don’t be a disorganized mess, even if you really are.

If organization isn’t really your thing, then you need to give yourself an organizational make-over before you get in front of buyers. Your business broker will be able to help you figure out what needs a good once-over, like your records. You want buyers to be able to read and understand your books, as your financial records are what a buyer uses to determine what they are willing to pay for your business. A big box of jumbled sales slips is not going to impress anyone.

 

Follow through.

If you tell your buyer you will meet them, show up and don’t cancel last minute. We see deals fall apart because sellers mentally check-out long before the closing table and start blowing off meetings and phone calls with potential buyers. If you are this cavalier with a buyer, then how cavalier have you been in your relationships with the community or vendors – relationships that a new owner is going to rely on? Show that you are a man (or woman) of your word, and you will be speaking volumes about the value of the reptation of your business.

 

Are you thinking about selling your business, but your records are a disorganized mess? Do you have more questions about what buyers are watching for? Please feel free to leave us a comment or question here, and we will be happy to help.

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

 

 

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Confidentiality Versus Catastrophe: Why Buyers Need To Be Discreet

If you are new to the business buying game, then one part of this process you may find frustrating is confidentiality.

 

 

You are about to spend a very large amount of money – so you will obviously want to know everything about the businesses you are considering, and you want to know it now.



The problem here? Business sales don’t quite work that way. There is a huge need for discretion and confidentiality.



Why does everything have to be such a big secret?



Confidentiality has to stay in place in order to protect the business. If employees, vendors, clients or the competition find out a business is for sale, it can mean big problems for the bottom line. Employees quit, vendors cancel contracts, clients go elsewhere and the competition can move in for the kill.



Why should a buyer care about confidentiality?



One of the reasons that buyers have an issue with confidentiality is it doesn’t initially seem like something they need for their own benefit – it only seems to be in place to protect a seller and the business itself. It’s not. Think of confidentiality this way, you don’t want the business you buy to be in complete turmoil the day you take over, so keeping a tight lid on the for-sale status will be key.



The best way to illustrate why confidentiality is such a massive deal is with an example of what can happen if confidentiality is breached.



A buyer is very interested in a listing for a small restaurant in a downtown location. The buyer gets in contact with the listing broker and signs the necessary non-disclosure agreement. The listing broker then reviews the “rules of the road” – the buyer may not speak to employees, share any financial information, or tell anyone that the business is for sale. The buyer agrees. Since he now knows the name and physical location of the business, he goes in for lunch and asks to speak with the manager. He asks the manager why she thinks the business is up for sale and then asks for a tour of the kitchen. The manager, a key employee, had no idea that the business was on the market. She immediately runs into the kitchen to ask the head chef if he knew anything about the business being up for sale, which, of course, he did not. In the panic this buyer has now caused, both the manager and the head chef quit to find more stable work.  Now the business has lost it’s two most important employees and has been left in a seriously vulnerable position.



As you can see, the confidentiality of a business sale is extremely important. This buyer seriously damaged the seller’s business, and he didn’t have to do very much to cause all of this upheaval.



As a buyer, you will be expected to maintain confidentiality all the way up to the closing table. This is critical to the survival of the business and to the sale. The non-disclosure agreements you sign are there for a reason and are absolutely enforceable. If you disclose the business sale to an inappropriate party, you can face serious legal repercussions.




These rules are in place to protect the businesses you are trying to buy. Do your future business favor and keep confidentiality in place!



Are you a business buyer who has questions about confidentiality in the business market? Ask us! Leave a comment or question here, and we will be happy to address any questions you have.

 

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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Don’t Think You Have What It Takes To Buy A Business? You Do!

 

When we chat with people and they find out what we do, the conversation usually goes something like this,

I would love to own my own business, but…(insert excuse here)

 

Sure, there are a myriad of reasons why going it alone and owning your own business may seem like a foolhardy venture, but the truth is entrepreneurship can be the key to happiness.

 

Why? When you own your own business, you are the boss of your day to day life. The amount of money you make, what you do for work – these things are now up to you. Talk to any entrepreneur and they will tell you that this kind of control over your own destiny is absolutely worth it.

 

Let’s look at some of the big excuses we hear about why buying a business is impossible and show you that all it really takes to be your own boss is a little planning and a lot of drive.

 

“I don’t have the money.”

Sure, there are a lot of businesses out there that only a multi-millionaire could afford, but the truth is the small business market is full of businesses that many people could absolutely afford to buy. Smaller ventures can be bought outright for cash from your savings, while some medium sized businesses can be purchased with a decent down payment and a bit of seller financing. Think of the money you would need to buy a business this way – you aren’t just spending the money – you are investing it in a business that will give you a return on that investment with some hard work on your part. You already go to a job and work hard for someone else, why not do that for yourself?

 

“It’s too risky.”

Yes, all business ventures come with their fair share of risk, but so does the job you have now. You could walk into work tomorrow and get fired. If you own your own business, any mistakes you make, any risks you take that don’t pan out will make you a better and smarter entrepreneur in the long run. Think ahead to your retirement. Are you going to look back at your working life, where you gave your blood, sweat and tears to someone else’s business, and wish you had taken the chance to work for yourself?

 

“I don’t know how to run a business.”

You’re right, none of us did at the beginning – but you learn fast. Think back about every boss you’ve ever had. How many times have you said to yourself “My boss is an idiot, if I were in charge I would…”. See, you do know some of what it takes to own your own business! The rest you can learn along the way. Talk to other business owners, read books, take a class – the know-how is out there if you are willing to find it. It is also a good idea to buy a business in an industry where you’ve already worked. That practical experience will serve you well.

 

The message here is if you’ve always wanted to own your own business, there is no such thing as an obstacle (or excuse) that you can’t overcome with some hard work and perseverance. Take the entrepreneurial leap, and you can soon be well on your way to business ownership.

 

Are you thinking about buying a business, but you’re not sure you have enough funds? Are you curious about what would be available? Ask us! Please feel free to leave us a comment or question here, and we would be happy to help you on your journey to entrepreneurship.

 

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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The No-Offer Business Buyer – Why Won’t Anyone Take Me 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
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907




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