Want To Sell Your Business? 3 Must-Haves

In a perfect world, every business seller would list their business and get an all cash, full price offer the next day.

 

In reality, this is rarely the case. Like, it never happens that way.

 

On average, it typically takes nine to twelve months to get a business from listed to sold.

 

As a seller, there are three very basic (but also very simple) things you can do to improve your chances of selling right out of the gate.

 

 

Offer Seller Financing 

Banks and other more traditional lending institutions have always been gun-shy about small business loans – and the 2008 recession didn’t help. There are always a lot of buyers who are looking for new business opportunities, but they typically don’t come with a lot of cash on hand. By offering to finance part of your purchase price, you will be able to attract many more buyers than you would otherwise. Worst case scenario if the new owners fail? You get to to keep the sizable down payment the buyers put up and you get the business back

 

Hire A Business Broker

You might be great at what you do, but what you do isn’t helping people buy and sell businesses. This is what business brokers do for a living. They know the business transaction process inside and out, they have access to buyers you could never find and they are experts in confidential business marketing. Going it alone won’t save you money. It will more than likely mean you either won’t be able to sell at all or will end up having to take far less for the business than if you had hired the right help.

 

List For A Realistic Price 

Your business is only worth what someone is willing to pay for it. When deciding on a listing price many sellers try to set a price that will recoup all of the money they have invested over the years or use the value of new equipment when determining what their 10 year old stuff is worth. We get that you have invested a great deal of your time, money and energy in your business. You can absolutely get a good return on that investment, but you need to be realistic. Your business price should be based on your cash flow, what your equipment and inventory are actually worth and what the market will currently allow. Making a sensible and well-informed decision about listing price is key if you ever want to see a closing table

 

If you think you are ready to sell, go into the process with an open mind. Have realistic expectations, and use the experience of your business broker to help you set realistic goals for your transaction.

 

Do you have questions about how to price your business? Would you like to know what businesses like yours are currently selling for? Ask us! 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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Is Now The Time To Buy? Making The Jump To Business Ownership In 2020

 

This year has been a strange one. The news changes minute by minute, and the pandemic still overshadows daily life. You’ve had a chance to reflect for the first time in a long time – and now you know entrepreneurship is your path.

 

Is this a good time to make the jump to business ownership? Absolutely, yes.

 

It may have seemed like the world ground to a screeching halt, but business has been happening all along. Essential businesses like manufacturing and delivery services have been booming. Small businesses with the creativity to pivot to fit the times have done well.

 

Many small businesses have had to scale back, but they are ready and able to scale up as soon as the situation allows.

 

What does this mean for you as a future entrepreneur? Now is a great time to consider buying a business.

 

Why buy? Starting from scratch, from the ground up – is tough when times are great. Right now a start-up would probably be even more difficult to get off the ground. People aren’t looking for new. They’re looking for a return to what they know and miss. An existing business gives them that.

 

Buying an existing business also gives you as a buyer some stability as well. You know the business model works because the business is currently running and generating cash flow. You know it’s a business that is well-run with an eye on growth and creativity because it survived the rise and fall of the economy. These proven features of an existing business just don’t exist with a start-up.

 

I want to be an entrepreneur, but I have my own concept that I think would work. Why would I buy something else? 

 

Your concept might be great, but you can’t know for sure if it works. If you’ve considered entrepreneurship, you should consider purchasing a business instead. You get handed the keys to something you know can and does work, you get training from the seller so you know what to do and you get an existing brand that people will be excited to come back to. If you really have your heart set on your own idea, perhaps the smarter move in these unprecedented times is to buy an existing business in an industry where you could make your concept a reality. Take some time to figure out how to implement your idea within a business model that is tested and successful, then roll it out carefully to see if it really works.

 

This year might be a strange one, but it can also be a year of positive change. If you’ve always dreamed of business ownership, now is a great time to get started. Talk to an experienced and qualified business broker about your goals for business ownership and they can help you search for the perfect business for you.

 

Have you always wanted to own your own business but don’t know where to start? Has 2020 made you rethink your life choices? Would you like to know more about the process to buy a business? Please 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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The Right Advice At The Right Time: The Role Of Attorneys In Your Business Transaction

Let’s start this one off by saying we are absolutely not advocating an attorney-free business deal. A business transaction involves contracts that you will need to sign and a lot of money changing hands – so the assistance of an attorney is absolutely necessary.

 

 

Business transactions, however, are also inherently very complex and businesses themselves involve a decent amount of risk. If buying a business gave you a 100% chance of getting a fabulous return on your investment then that’s what everyone would do. Buying and running a business means a fair share of risk and plenty of hard work.

 

Before you bring your attorney into the mix (which you will definitely need to do), ask yourself this important question – what do they do for a living? They protect you from any and all risk.

 

It is impossible for your attorney to keep you from any and all risk and also give you a thumbs up on a business. It is because of this conflict between what a lawyer does for a living and what you are trying to do (buy or sell a business) that we are suggesting that you keep their advice to only the portions of your deal that they specialize in.

 

What do we mean by this?

 

Your attorney doesn’t need to be giving you advice about price. Determining what a business is worth in the current market isn’t what they do. They don’t know how to derive value from cash flow or how to price a business based on what comparable businesses have actually sold for.

 

Your attorney shouldn’t have a major role in negotiations. At the end of the day, a deal is happening between the buyer and the seller. These two parties will have a tough time coming to a consensus – even when using intermediaries like business brokers who act as buffers. Adding more voices and opinions to the mix by having attorneys intimately entwined in the negotiations might mean no deal will ever be reached. It becomes a “too many cooks in the kitchen” scenario.

 

I get why my attorney might cause problems, so what should I use them for?

 

Again, your attorney will be instrumental in putting together contracts and advising you of your risks in association with these contracts. You should absolutely listen to what they have to say in regards to these parts of a business transaction that are very much their specialty. You should listen to their advice, weigh what they have to say based on the fact that their job is to protect you from risk – and then use common sense to make up your own mind about what you should do.

 

A note here. You should also be using a business transaction attorney for this role. Your family law attorney (for example) isn’t going to understand your business contracts the way a business transaction attorney does. It would be like going to the pediatrician to get plastic surgery – it isn’t what they do. Finding and using a business transaction attorney with some experience in this very unique process will be pivotal to success.

 

Keeping a business transaction as simple as possible is the only way to successfully navigate a process that is inherently complex. Use each advisor for the role where their advice is the most appropriate and you will have a far better chance of transaction success.

 

Are you a buyer or seller who wants to have their attorney involved in everything? Do you have more questions about why this might be a problem? Ask us! Leave any comments or questions 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

www.InfinityBusinessBrokers.com

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All The Way To The Finish Line – Why You Need A Great Broker

 

Both parties have agreed on the purchase contract, you’re finished – right?

 

Not quite, and if you have a business broker who isn’t going to push your deal all the way to the finish line – then your deal could be in trouble. 

 

A contract does not mean the deal is done, it just means one step in the process has been completed. We have a very high closure rate once our deals get to contract – 70-80%, but most business brokers can’t get anywhere near that number.

 

Why?

 

Once the contract piece of the puzzle is done, many brokers walk away and let the deal fend for itself. They let things like licensing, SBA loan issues and follow-thru with details fall by the wayside – and when this happens a minor issue can become a major deal-breaker in no time.

 

A transaction isn’t closed until it’s closed.

 

Why would any broker let this happen? Once the contract is put together, most brokers think that their work is done, but the last few details are often the most important. Our process is different because we do an immense amount of pre-due diligence. We have all of the ducks in a row and have rooted out and dealt with many of the issues that come up at the end long before they become potential deal killers. Then, we don’t stop until the deal is done.

 

Let’s focus on just one of the often-overlooked last-minute details to give you an example of the importance of getting all those final ducks in a row:

 

If you as a buyer have no idea what the licensing requirements are for the business you are about to take over, how can you possibly have all of those requirements complete on the day you get handed the keys? Any business transaction means that at the very least all licensing must be transferred from the old owner to the new, and many of these licenses come with an inspection requirement that needs to be fulfilled before the business can serve customers. What does that mean if you don’t complete the necessary applications and inspections before the day you take over? You can’t open the doors until they are all complete, so having a broker who is on top of issues like licensing will be crucial for a successful transaction.

 

If you are a seller who offered seller financing, then it is in your best interest for the transition to the new owner to go smoothly. An incomplete licensing, permitting or inspection requirement will put the transition and the future of the business in jeopardy (meaning you won’t be able to get paid). Having a broker who is proactive on the licensing front (and all other fronts, for that matter) will mean a more successful transition to the new ownership and a far better chance for the new owner to find success right out of the gate.

 

Ask your broker how many of their deals make it to closing once the contract step has been reached. Their answer to this question will tell you all you need to know about their follow-through and whether or not you’ll be able to make it to the closing table.

 

Are you buying a business and want to know more about the process to transfer licenses? Are you selling your business and would like to know what aspects of your transaction will need to be followed all the way to the end? Please feel free to leave any questions or comments 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

www.InfinityBusinessBrokers.com

 

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Bad Advice: The Outrageous Listing Price

 

You’ve decided to sell your business, so you start asking the people around you what they think it’s worth. Your father-in-law, your CPA and your neighbor will probably give you vastly different numbers – and you’ve also got a rough calculation in your head of how much money it has cost you over the years to build the business into what it is today. Are any of these “valuations” correct? Probably not.

 

The hard truth of the business market is your business is only worth what someone is willing to pay for it.

 

Many, many sellers have a hard time with this concept – and unfortunately there are business brokers out there who will tell a potential client anything they want to hear in order to get the listingmeaning their bad advice will cause you to list your small business for an outrageous price that you will never, ever get.

 

The price you put on your business from day one is very important. A business that is priced correctly will tell buyers you are serious about selling (and that you aren’t totally insane). 

 

Your business should not be listed for a price that is based on how much money you’ve invested over the years, how much all of the equipment and furnishings cost you when they were new (8 years ago) or how much you think you’re going to need in order to retire with the quality of life you currently have.

 

Your listing price will contain a lot of moving parts, but primarily it should be based on cash flow, the current value of any assets and what comparable businesses have actually sold for.

 

There are some occasions where a standardized multiple is used, but every small business is a unique case, and should be priced accordingly.

 

What should you do? Have a serious conversation with your business broker about where you would like to set the listing price and then listen to what they have to say. If they think you’re way above where you need to be, you should seriously consider their advice before demanding they list for whatever you want. Any good broker is going to walk away from a client who demands an outrageous price. A broker who will bend to your demands (regardless of reality) should be avoided. 

 

 

Are you thinking about selling and are curious about what similar businesses have recently sold for? Would you like to know our thoughts on the current state of the market for your industry? Ask us! Please feel free to leave comments or questions 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

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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