Posted in Buyers Articles

Think of an entrepreneur.

Who do you picture? One of the big guns, like Bill Gates or Richard Branson? Or your grandfather who started his own small business when he first immigrated to the United States? No matter who you picture, there are some hard and fast qualities that any successful entrepreneur has – and if business ownership is your goal, you need to have them too.

What are the secrets to entrepreneurial success?

Understanding that failure isn’t failure, it’s a lesson.

Every famous and wildly successful entrepreneur has made mistakes – big ones. The difference between those who succeed and those who balk and run from a failure is the determination to see failure as a lesson you can learn from – and then move on.

Understanding that issues are a part of life.

There isn’t a business owner anywhere who goes to work everyday and has the perfect day. Issues, large and small, are a part of everyday business ownership life. A great entrepreneur sees the issues that arise not as issues, but as challenges that need to be overcome.

Understanding that “no” doesn’t mean stop, it means work harder.

Business owners hear the word “no” a lot. If an entrepreneur hears “no”, they don’t stop. An impossible challenge should ignite your passion and push you to find a way to turn that “no” into a “yes”.

Understanding that a calm attitude will get you much farther than freaking out.

If every time you hit a brick wall, you flip out – your negative attitude when faced with problems will absolutely undermine your ability to solve them. Keeping a realistic, calm head will help you fix problems that arise.

See a trend? Entrepreneurs need to have a generally positive attitude, continue striving even when the goal seems impossible and learn from their mistakes. If business ownership is in your future, remember that some of the most important secrets to success aren’t related to what you do – it’s how you do it that matters.

Have you thought about becoming a business owner but don’t know where to start? Would you like to know what kinds of businesses would meet your business ownership goals? Ask us! Please leave comments or questions 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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Posted in Buyers Articles, Sellers Articles

If you are the child of entrepreneurs, then you grew up inside a business. You did your homework in the back office, you helped out on your days off and you probably became an employee once you were old enough.

When your parents look toward the future, they probably assume that their retirement plan includes handing you the reins. Great, if that’s something you want.

What if it’s not?

It can be difficult to tell your folks that you don’t want the business they consider their legacy – but the reality of taking over a business you don’t have a passion for is you likely won’t be as successful as you could be. Entrepreneurs need an edge that only passion can give you. As the child of entrepreneurs you know this already. Guess what? Your parents know it too.

If you don’t want your parents’ business – you have to tell them how you feel. We know it’s a hard conversation to have, but it’s one you have to face.

The good news? You can still continue your parents’ entrepreneurial legacy. You can fulfil their dream for you to be an entrepreneur and still follow your own passions. How? You can sell their business and buy your own.

Selling your parents’ business can give them a return on their investment in cash – cash they can use for their retirement and also use to help you purchase a business where you can be successful.

For instance – if your parents own a flower shop, but you’ve always dreamed of owning a pizzeria they could cash out on their flower business and then help you with a decent down payment on an established pizzeria. You can then finance the rest of the purchase with your own cash, with seller financing or a loan. You can pay your parents back over time, or let them maintain a silent partner/investor position so they can still have income in their retirement years. 

The point here is you can still become the business owner your parents have always hoped you would be without giving up your own dreams and adopting theirs. Have the tough conversation, and then give them the sell/buy alternative for the continuation of their legacy.

Are you the child of entrepreneurs and have always dreaded taking over their business? Would you like to know more about the possible options for a sell/buy scenario? Please feel free to leave any questions or comments, 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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Posted in Business Broker Why & How, Sellers Articles

If you are ready to sell your business, then you might already know the importance of confidentiality during a business sale (if you don’t, read this now).

Keeping the for-sale status of your business as need-to-know-only information will be pivotal to a successful sale, and the best person to help you maintain confidentiality is an experienced and qualified business broker.

Notice that we said experienced and qualified. Like any industry there are brokers who know what they’re doing and those who could care less. You don’t want the latter on your team. You don’t want a broker who responds to every form or email inquiry about your business with an automatic nondisclosure agreement (NDA) – without any idea of who the person is that’s signing it. Allowing dozens and dozens of NDAs on your business opens you up to a myriad of problems.

A prospective buyer should be answering some very important questions before they’re just handed the NDA. If anyone who tries can get access to your business information, the likelihood of maintaining confidentiality (as well as the likelihood of finding the right buyer) will probably be small.

The initial vetting of prospective buyers is critically important, and if your broker knows what they’re doing they will be asking questions like these:

Do they have any practical experience with a business like yours?

You’ve worked hard to make your business what it is today, so you aren’t likely to hand the keys to someone who is destined to immediately drive your business into the ground. Potential buyers need to have some sort of practical experience, training or education in your industry so they don’t have to add learning an entirely new industry to the already steep learning curve of taking over an existing business. This is also very important if you lease your business location, as a commercial landlord is unlikely to transfer a lease to someone who would have no idea what they’re doing. It’s a safer bet for the landlord to have you stay on as the owner and keep paying the rent.

Do they have the financial means to actually buy your business?

The business market is full of buyers who think they can afford businesses they definitely can’t – incorrectly assuming they will be able to finance 80-90% of a sale. In most business deals where financing is involved – be it SBA loans, seller financing or a more traditional loan – a buyer will need to come to the table with a sizeable down payment. A good broker will have a very serious discussion with a prospective buyer about how much cash they actually have available to buy a business, how much financing they would actually be able to get and then only disclose to that buyer businesses they can afford.

Is this buyer who they say they are?

One of the ways confidentiality can be breached is by letting the wrong person sign the NDA for your business. Think a current or former employee who is looking to confirm a rumor or a competitor looking to move in on your niche. Your broker should ask you to come up with a list of people who can’t know the business is for sale, and then verify someone’s identity before handing them the NDA to sign. Good brokers ask a lot of questions, require some personally identifying information and then wait to verify that information before disclosing your business.

The point here is in order to reach a closing table successfully, you need to make sure you have the right help. Ask your broker what they do to vet potential buyers. Are they asking questions? Or do they disclose to anyone who asks?

Are you getting ready to sell your business and want to know more about why confidentiality is important? Would you like to know more about our process to vet buyers? 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
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Posted in Buyers Articles, Sellers Articles

Business deals don’t just have a lot of moving parts, they have a lot of people. People with a lot to lose and people with a lot to gain. People who do this kind of thing for a living and are therefore unbothered by potential issues and people who’ve never bought or sold a business who think every small issue is a disaster. People who have to write very big checks and the people who are counting on those checks.

In any situation where you combine a lot of people and relatively high monetary stakes – drama is inevitable. There has probably never been a business transaction where everything was smooth and no one got upset.

Here’s why we bring this up. People who are going to buy a business and people who already own one are a tough bunch. You could call it type-A personality. You have to be strong, resilient, willing to make decisions and willing to take risks to be a successful entrepreneur. This personality, however, can be a bit of an issue when a business is changing hands.

Why? No ONE person can “win” in a business transaction.

The contract used for the sale of a business will end up being a very carefully crafted and heavily negotiated document. Heavily negotiated because businesses are inherently complex, and as such there are a lot of things to discuss and then decide on. How much is the buyer going to pay? Will there be financing of some sort? How will the lease be transferred? How will the licenses be transferred? What are the time frame and responsibilities for both parties during the training period? How long will the seller let the buyer have for due diligence? This list goes on and on.

The reality that essentially everything needs to not only be discussed but agreed upon as well means that neither side is going to get everything they want, exactly as they want it. Everyone, EVERYONE in the deal is going to have to make a few compromises if they want to get a deal done.

What this means for you if you’re a buyer or a seller is you can’t die on your sword every time something isn’t going your way. You can’t be petty about small things because you’re frustrated about something that has happened in the weeks or months that it takes to put a deal together. It means you can’t be petulant and difficult just because you feel like it.

At this point you’re probably saying “I’d never do that” – right? You might.

When a business changes hands, so does a lot of money. It’s a business that is someone’s blood, sweat and tears – and is getting handed to a complete stranger. The entire process can be long and incredibly stressful. It will be very hard for both sides of the table to always remain objective and not feel personally challenged during many parts of the process. You have to go into this knowing that your buttons will be pushed, your stress might get the better of you and your feelings might get hurt.

When that inevitably happens, don’t do this. Don’t make everyone change the time and place for a meeting last minute just because you want to be difficult on purpose. Don’t drag your feet with documentation that the other side has requested just because you think their questions are annoying. Although mildly entertaining for you in the moment, petty nonsense like this only wastes your own time and puts your own deal in jeopardy.

Power plays to “win” will do nothing but aggravate everyone in the deal – a deal that’s hard enough already and doesn’t need the additional drama. Go into your deal knowing that this process will be challenging, but worth it if you can remain patient.

Have you been in a business transaction where emotions got the better of someone and have an experience to share? Would you like to know more about the challenging parts of a business transaction? Leave any questions or comments, 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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Posted in Sellers Articles

Selling your business can be tough and time consuming. In addition to your day-to-day responsibilities as a business owner you have to be available for conference calls and meetings with brokers and potential buyers, you have to host on-site tours, you have to train the new owner and most importantly you have to provide the information and documentation a buyer requests during due diligence.

This last part – the documentation – can become a massive issue if you as a seller aren’t ready with what a buyer will probably ask for long before they actually ask.

Here’s why. Once you’ve accepted an offer from a buyer the due diligence period can begin (where a buyer typically gets a couple of weeks to go through your business records and decide if they want to continue with the purchase) – but it only officially begins once you’ve supplied a buyer with the information they’ve requested. Your business is essentially off the market during this time, so prolonging the time before due diligence starts by being unprepared on your end can keep your business away from the eyes of other potential buyers should this deal fall through.

This part of a business transaction exemplifies the saying “an ounce of preparation is worth a pound of cure” because you don’t want to be scrambling to assemble lists of expenses, months of payroll, multiple years of tax returns, copies of business licenses and permits, leases for your business location, registration information for equipment and/or vehicles, dates of purchase for equipment or inventory, leases or purchase documentation for company vehicles, client contracts, vendor contracts, lists of assets, multiple months of inventory records, employee files – all while the pressure of a due diligence timeline hangs over your head. It can be a maddening and stress-fueled nightmare if you aren’t ready.

The best thing you can do for your sanity, your hopes of reaching a closing table and your relationship with potential buyers is be ready.

Talk to your business broker about what a buyer is going to want to see – then get all of that documentation ready. Create files that can be shared, collect copies of documentation and make sure your financial records are easy to read and decipher. If your books are a mess your broker might recommend having a CPA who specializes in business transactions put your financial records together in a way that will make sense to buyers.

The message here is it won’t be good for you or your hopes of successfully selling your business if you’re trying to do ten years of books in three days. Get ready first.

Is selling your business something you’re considering in the near future? Do your business records consist of hundreds of unorganized pieces of paper currently shoved in a big box under your desk? Would you like to know more about what potential buyers are going to want to see? Feel free to 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

No Comments »