Posted in Become a Business Owner, Buyers Articles

Buying a business comes with a unique set of challenges. You have to learn operating procedures, you have to become acquainted with clients and vendors, you have to navigate the licensing and permitting process, you have to develop relationships with your new employees – the list is long.

Sometimes the previous owner was burned out and unpleasant, and as such the employees and clients might be happy to see them go in favor of a fresh face and attitude.

What if the opposite is true? What if you are replacing a highly respected and beloved owner? How do you successfully fill those seemingly enormous shoes?

First, don’t try to emulate the previous owner. Attempting to change who you are will always come across as inauthentic. The best thing you can do is be yourself, even if you are a vastly different person than the seller. Sure, some of the seller’s success came from their personality and the way they interacted with everyone related to the business – but that doesn’t mean that you can’t also be successful. Be authentically yourself, upfront and honest with with those around you and you will show the staff and clientele that you are someone who can be trusted.

Second, hit the ground running. Use the training period with the old owner to learn absolutely everything you can about both how the business runs and why that methodology is successful. Look for ways to grow the business from day one, but implement new growth strategies and marketing ideas while maintaining the operating procedures that have served the business well so far. If you come in motivated and willing to listen and learn (instead of rushing changes and forcing new policies right out of the gate) your staff will feel like their contributions to the business are respected and you can earn their respect in return.

Third, be nice. A truly beloved and respected boss is never an angry jerk, so although you might be very different from the previous owner – as long as you are kind to your new staff that thread of the positive owner relationship will continue. 

While it might initially seem intimidating to take over from an owner that everyone is really going to miss – if you can be yourself, be willing to learn and be nice your new business and those in it can learn to embrace you too.

Are you considering a business with a well respected owner and have questions about what the training period will be like? Would you like to know more about how you can successfully navigate the transition to new owner? Ask us! Please feel free to leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Posted in Business Broker Why & How, Sellers Articles

If you are considering selling your business you don’t just need help, you need the right help.

You risk way more than you should by sticking a for-sale sign in the window. The powerful misconception that any business for sale is a business on the brink of failure can mean devastating consequences if your for-sale status is revealed. You entire staff can panic and quit. Clients can cancel contracts. Your competition can see a potential sale as a weakness to be exploited. It’s all bad.

How do you get the word out about selling your business without exposing yourself to the downfalls of everyone knowing it’s for sale? An experienced and qualified business broker.

A good broker acts as a shield and a buffer. They keep the for-sale status of your business a closely guarded secret while also marketing your business to potential buyers. They verify every person is who they say they are before they are allowed any access.

How? They actually talk to every potential buyer.

They get real legal names and true physical addresses – then they look people up. They ensure the proper nondisclosure agreements (NDAs) are signed and that everyone understand the rules. They make sure the people who are looking at your business can actually afford it so no one’s time is wasted. They act as a communication buffer between you and a buyer so the deal can stay on track. 

It should go without saying that keeping potentially damaging information out of the wrong hands is extremely important.

Guess what? Not all business brokers do the job the way they should.

There are brokers who essentially robo-send NDAs to anyone who shoots them an email, no questions asked. They never actually speak with buyers, never verify identities or ask about available funds to by a business. These brokers don’t care about your business. They are just using your business to generate calls and emails from any and all buyers – without caring if those buyers are someone who should know about your for-sale status or listing details. 

Avoid these brokers by asking questions – lots of questions – before you list your business. How will this broker ensure confidentiality? Do they require buyers to identify who they are before information is disclosed? Do they actually talk to every buyer before sending them the details of your business? They should. 

Are you considering selling your business and want to know what measures we use to protect the confidentiality of your business and transaction? Would you like to know more about the questions we ask potential buyers? Ask us! Please leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Posted in Buyers Articles

Answering personal questions can be tough. No one likes telling strangers where they live or how much money they have – but if you’re going to buy a business know that these uncomfortable questions are coming.

Why? They are critical to your success. 

When you first interact with a qualified and experienced business broker they will ask you questions like these, and if you really want to buy a business you need to be upfront and honest with your answers. The bright side? Giving up some information about yourself only helps your broker help you. 

Why do you need to know where I live?

Business sales happen under a veil of confidentiality. This secrecy is important for a number of reasons. There is a powerful misconception that a business for sale is a business on the brink of failure. Although the failure scenario is rarely the case, this misconception can cause catastrophic losses for a business (an entire staff can panic and quit en masse or important clients can cancel contracts). Businesses often have proprietary information or financially sensitive information that will need to be disclosed to a potential buyer during the transaction process, in addition to exposing the for-sale status of their business, so a business seller is putting a lot on the line. To be allowed access to such important information you as a buyer must sign a nondisclosure agreement (NDA). When you sign the NDA for a particular business listing you are asked for your legal name and physical home address. This information is used to verify who you are and to identify you as an individual. There might be ten Matt Smiths in a town, but only one Matt Smith lives at his unique home address. When you consider the gravity of the information that is being exchanged, what you give on the NDA is paltry in comparison with what a seller risks by giving you access to their business. 

Why do you need to know how much money I have?

We aren’t asking how much money you have in your bank account. We’re asking how much money you currently have to invest when you purchase a business. If you can’t afford a $500,000 business then it’s a colossal waste of your time (and everyone else’s) to look at $500,000 businesses. We also need to know if you are looking to pay all cash up front for a business or if you are looking for financing options. What we do with the information you provide is find businesses that you can successfully afford and/or financing options you would be able to qualify for. Your honest disclosure of the capital you are working with only helps find the right options for you. You are also going to have to prove to your future commercial landlord that you have enough funds to cover your lease expenses. If you’re going to buy a business you are going to have to get comfortable talking honestly about how much money you have available. 

The message here is although you might not want to give up information about yourself a business broker isn’t doing their job if they don’t ask these questions. Giving up potentially damaging information to the wrong person could hurt a business that would have been perfect for you. Showing you businesses you could never successfully afford is a waste of your time and energy. Be upfront, be honest and be willing to help your broker help you. 

Do you have more questions about what information is required for the NDA? Would you like to know what businesses fit with the funds you have available? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Posted in Buyers Articles

No one likes to talk about deeply personal things with strangers – like how much money you make or exactly where you live. Guess what? If you really want to buy a business you are going to have to get comfortable sharing information just like this with the other parties in your business transaction.

What do we mean?

Well, for starters you are going to have to give your real physical address and full name to a business broker before they are going to let you sign a non-disclosure agreement for a particular business listing. They need this information because it ensures that you are who you say you are and you can be individually identified. For instance, there might be 10 John Smiths living in your area, but only one John Smith lives at 123 Marigold Way.

Next, a business broker is likely going to ask for proof of financials to prove to the seller, whoever is financing your transaction (the seller if your deal includes seller financing, the SBA if your loan is through their program, etc.) and your future commercial landlord/property manager that you indeed have the money that you say you do and that you can successfully purchase the business.

That same group might also want to know your work history, education and practical experience. A commercial landlord isn’t likely to let a new tenant sign a long term lease if they have no actual experience in that particular industry. The rent won’t get paid if you don’t know what you’re doing so they want a tenant who is more likely to succeed than fail. A seller also wants to know that they are handing over their business and employees to someone who knows how to keep the business going and keep everyone employed.

See a trend? You are going to have to get comfortable sharing this type of information about yourself. There’s no way around it. When you share your information you gain access to far more from the other side. You get access to confidential, proprietary and potentially damaging information about a business, you get to go through any and all documentation the business has, you get access to tax returns, contracts, employee files – the list is long. What you are given versus what you give is most certainly slanted in a buyer’s favor.

The message here is business deals are complex and a lot of money changes hands. You are going to need to be upfront and forthcoming with information about yourself if you expect the other side to be upfront and forthcoming with the information you need too.

Are you thinking about buying a business and aren’t super comfortable giving up personal information to gain access to listed business information? Would you like to know more about what business brokers, sellers and landlords do with that information? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Posted in Become a Business Owner, Buyers Articles

Buying into a franchise can be a great option for those who are looking to start their own business from the ground up. Starting your entrepreneurial journey with a franchise does not necessarily mean an easier path, it just means you walk in with an established brand and structure already in place. In terms of the time and money you will ultimately spend, buying into and starting a franchise will be just as much work as starting a business on your own.

What are the major expenses involved in starting a franchise?

The first cost you will incur will likely be the franchise fee. Franchises charge this upfront fee as a way of recouping the costs of training, branding and the support they will provide. The average franchise fee is somewhere in the neighborhood of $30,000, but they can range from less than $10,000 to over $100,000. The franchise fee will depend on the size of the franchise you are buying into, and each individual franchise will have specific requirements to become part of the brand.

There may also be costs related to setting up a location. You may have rent payments and may have to pay for things like landscaping. You may need to have signs made, install new equipment and fixtures, buy new furnishings, and build-out a space.

Any new business will also need to bring in an initial inventory and purchase supplies. There may also be operational needs like advertising and payroll, so you will need to be certain that after all of your starting costs are covered, there is still enough capital left to cover your additional expenses until you are able to turn a profit.

How can you be sure that you have enough to get your franchise up and running and keep it running until a profit starts coming in? Ask questions, lots of questions, during the buying process. You will need to have at least a general idea of how much time per week you will need to work, and how much income you can expect to bring in if all goes well.

Does starting your own franchise location sound a little daunting?

If you are looking for the benefits of owning a franchise without the risk of creating an unproven location, then perhaps buying an existing franchise location is for you. Like with the purchase of other existing businesses you will be getting a turn-key, currently operating business with everything from build-out, staff and operating procedures already in place. The difference with a franchise location is you will need to pay a franchise fee to join the brand – but if you are looking for a business with instant name recognition and a well defined structure already in place this might be the path for you. Ask your business broker about the costs versus benefits of buying an existing franchise location or starting one from scratch.

Does buying a franchise seem like the right path for you, but you have additional questions? Would you like to know what franchise locations are currently for sale in your target area? Ask us! Leave a question or comment here and we will be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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