Posted in Become a Business Owner, Buyers Articles

If it’s your first time navigating the business-for-sale marketplace you may have noticed something that sets it apart from almost every other situation where something is for sale. Everything is a carefully guarded secret.

Business listings are vague and don’t disclose the name or location of the business.

Listings are very basic and don’t give you much in the way of details about a specific business. 

When you call on a business, the broker will continue with the vague information unless you are willing to give up some information about yourself (like your name and permanent address) and sign a nondisclosure agreement (NDA).

What gives? How am I supposed to find a business if no one will tell me which businesses are actually for sale?

An existing business can’t be sold like most other things because an existing business exists in a world of powerful misconceptions. Those misconceptions are that a business for sale is a business on the brink of failure. When the average person sees a for-sale sign on a business door, they automatically assume that the business is in dire straits. Why would anyone sell a successful business, right? 

Well, there are a lot of reasons. Maybe the current owner is ready to retire or has their heart set on a new life adventure that will mean they can no longer run the business. Perhaps the current owner started or bought this business with a specific set of goals, and now that those goals have been achieved it’s time to move on to another project. Sometimes owners have something occur in their personal lives that will make it difficult to maintain the responsibilities of ownership and so they’d like to leave the business in good shape and go attend to what they need to. 

It’s actually relatively rare for a faltering, disaster of a business to be sold. In situations that dire most choose to lock the doors, cut their losses and walk away.

What does that mean for business buyers? Most businesses for sale are great business opportunities. 

To remain great opportunities, those businesses need to be protected. Those powerful misconceptions about a business for sale can cause massive problems for an existing business if they simply stick a for-sale sign on the door. The entire staff can panic and quit. Vendors can cancel contracts. Current and prospective customers can choose to do their business elsewhere.  

A business is protected throughout the sale process by keeping the for-sale status confidential. The only people who can know the business is for sale are the seller, the brokers involved, prospective buyers and their experts (think attorneys and CPAs) who have signed the appropriate nondisclosure agreement.

What does this means for you as a buyer? You will have to use vague business listings to do a cursory search. When a listing seems to fit with what you’re looking for you will have to give out a tiny bit of information about yourself (that helps to identify you as an individual) before you can be given potentially damaging information about a business on the market – namely it’s status as a business for sale. 

Here’s what you can’t do. You can’t change the industry standard NDA to suit your liking. You can’t disclose what businesses you’re looking at to your neighbor or the guy in line with you at the coffee shop. You have to play by the rules that everyone does so businesses can stay in good shape while they are being sold. 

Are you considering buying a business and want to know more about the confidentiality of the process? Do you have questions about what signing the NDA means for you? 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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Posted in Become a Business Owner, Buyers Articles

Owning and operating a small business can be a much easier undertaking if you share the workload and responsibility with a business partner – but that lightening of the load can quickly devolve into a nightmare if you pick the wrong person.

How can you know if you’re making the right choice?

Here’s 4 things to consider:

You’ve known the person long enough for the honeymoon period to have worn off.

If you’ve just met someone who you think would be absolutely perfect to own a business with – tap the brakes. A business partnership is just like any long term relationship – the first bit is all happiness and roses, then after a time real life marches in and true personalities (and flaws) surface. You wouldn’t marry someone after only a handful of meetings, so don’t jump into a business partnership with someone you barely know. If the two of you really think business partnership would be possible in the future, embark on a much smaller project together and let some time pass. If small projects are a success and you are still good to go after a year or so, then perhaps you’ve found the right business partner for you.

You both bring different things to the table.

Two disorganized creative people are not going to be able to run a successful retail store, but one disorganized creative person can bring life to a retail concept while their organized and number-crunching business partner keeps everything on track. Really think about what your strengths and weaknesses are, then find someone who complements those strengths and weaknesses.

You don’t disagree about massive life things.

Just like the marriage of a deeply religious person and an outspoken atheist probably won’t last – you and your business partner need to share some core values if you’re going to be able to coexist in the same space for years on end. This is another reason why you need to spend some decent time together before you sign on any dotted lines. You might find out you have irreconcilable differences of opinion that will hinder any chance of a good partnership.

You’re both willing to enter a strong operating agreement.

Much like a prenup in a marriage, an operating agreement from day one will eliminate any contentious arguments down the road about who is responsible for what, who owns what percentage, what the exit strategy will be, and what your rights are as a partner. If the person you are considering for business partnership either won’t sign an agreement or won’t agree to what you want – they probably won’t be a good partner.

A great business partner can be a blessing, making your life easier by helping with the workload and by complementing what you bring to the table. The alternate possibility, however, is choosing someone who makes your life a living hell. Do some homework and let some time pass. Be just as diligent about choosing a business partner as you would be about choosing a business.

Are you considering buying a business with a partner? Would you like to know more about putting together a strong operating agreement? 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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Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Have you always wanted to own your own business but aren’t sure how to take the plunge?

One path to entrepreneurship that many choose is to buy an existing business. This can be a good option for a number of reasons.

First and foremost, the business has already been set up for you, and the business model has been proven because the business is currently up and running. The location is equipped and a customer base has been established too.

What do you need to do to get started if this is the path for you?

The first step is deciding on a type of business to buy. More often than not, a budding entrepreneur will start the process by seeing what businesses are available. This is a mistake because it can cause you to fall in love with a business that wouldn’t meet the goals you have for business ownership.

When entering a new business venture, you should choose something where you have at least a bit of background or experience. The learning curve for a new business owner is a steep one, and that’s without having to learn an entirely new industry as well. Give yourself a great head start by deciding on an industry before you search, and be sure to pick an industry you know.

The second step is to begin your search. Now is a great time to employ the services of a business broker, as they will have access to more business listings than you will be able to find on your own, they will know about businesses that are not yet on the market, and they will be able to market you as a buyer to other business brokers and their sellers.

Talk to your broker about the goals you have as a business owner – like how many hours a week you want to work, what type of return you are looking for with your investment, where your experience will suit you best and how much capital you have to invest. Identifying your goals, experience and available capital are critical to finding you a business where you can be successful. If the broker you are working with hasn’t had this conversation with you, perhaps it is time to find someone else to work with.

Once you have your goals ironed out and know what industries would set you up for success, you can do a cursory search for businesses by visiting our Business Search page.

Once you find a business that fits your goals, you will likely decide to make an offer. This step is then followed by a period called due diligence where you will get a chance to review things like finances and contracts in depth. After this review you will decide if you would like to proceed with the sale or not.

Are you ready to take the entrepreneurial plunge? Do you have questions about the search process or are you unhappy with the help you are getting from your current broker? Leave us a comment or question; we look forward to assisting you with your business search!

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 Become a Business Owner, Buyers Articles

It probably shouldn’t be a surprise that buying a business can be a bit of a process.

You have to sign non-disclosure agreements, go through documentation, have meetings and conference calls, deal with bureaucratic red tape for licensing and permitting, negotiate with sellers and landlords – all while making the massive decision of whether or not this business is for you.

The process might seem difficult, but it’s not impossible. Businesses are inherently complex, and business transactions involve a lot of moving parts and people.

What happens far more often than it should is a buyer gets fully immersed in the process, decides it’s too aggravating and throws in the towel – leaving a perfectly good business ownership opportunity behind.

If you are considering business ownership, you should consider this – if you can’t handle the stress and rigors of buying a business, you probably can’t handle the stress and rigors of owning one either.

Entrepreneurship is just as tough as the business buying process, and it’s not for everyone. If you are considering the leap into business ownership you need to take a moment and decide if it’s the right move for you. Owning your own business is incredibly rewarding, but those rewards come with a lot of work. If you are ready, willing and able to do that work then you can easily survive the business buying process by having one major thing – patience.

Here’s why. It will take some time for you and your broker to decide what types of businesses and what industry sectors will best suit your goals for business ownership and your practical experience. Once you know what you’re looking for you and your broker will have to search for businesses that will fit your budget too. Once you’ve found a few promising candidates, you will need to sign non-disclosure agreements and then wait for the seller and seller’s broker to get you some cursory information on the business. If you like what you see, you can make an offer on a business – but then you will have to wait for the seller to either counter your offer or accept it. If the offer is countered, it will probably take some time to arrive a price both sides can agree on. An accepted offer means due diligence can start, but only when the seller has provided all of the requested documentation. Getting all of the requested documentation also takes time, as a seller is not only trying to round up all of the paperwork you’ve requested, they’re also trying to run their business too. After due diligence, the final purchase contract will take some time to put together and a new commercial lease will need to be worked out with the landlord. You will also need to deal with obtaining or transferring all of the licenses and permits the business needs.

See a trend? Everything takes time, and as such everything takes patience. The goal is business ownership, and a tough entrepreneur will be able to make it through.

Are you looking for businesses to buy but feel like the process might be too overwhelming? Would you like to know more about what it takes to buy a business and what kinds of help are available to you? 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 Become a Business Owner, Buyers Articles

Most business owners and people considering business ownership have a particular type of personality. You could call it type-A, but it’s a bit more nuanced than that. Entrepreneurs are a tough bunch, used to taking risks and working hard to turn those risks into rewards. They’re comfortable with the idea that the buck stops with them and if they fail they only have themselves to blame. 

This grit-based type of personality serves a business owner well. It gets you out of bed in the morning, it drives you to succeed. It’s a good thing – most of the time.

Here’s where having this type of personality can hang you up. The process required to buy a business. 

The business transaction process can be a bit arduous. While an entrepreneur will probably have no trouble with the list of things that need to be accomplished – it can be extremely tough to navigate the difficulties that arise during the purchase of a business because no ONE person can be in control. That’s right. You can’t control the process. 

This can cause entrepreneurs to balk at basically any part of the business transaction. From refusing to sign an industry-standard NDA because you didn’t write it, refusing to share your address in order to access proprietary information about a business you are considering, demanding an in-person walk through of a business location before you’ve ever asked a single question of the seller – the list goes on and on. 

Look, we get it. When you’re used to being the one in command it can be deeply difficult to relent to someone else’s rules. Here’s what you have to remember. The business transaction process exists and proceeds the way it does for a reason. It works to protect businesses for sale while they are being sold. If it was your business on the market – you would absolutely demand that everyone play by the rules so your business wouldn’t falter. 

If you are considering buying a business, you are going to have to let go of the notion that you will be in control. You have to sign NDAs. You have to provide your personal information in order to receive proprietary information about a business. You have to be patient with the seller when they are collecting the documentation you requested. You have to wait for people to call you or email you back. You can’t demand that everyone involved do what you want, when you want it – and then get upset when it doesn’t happen.

We aren’t saying that you should relent to everything. Buying a business is a huge decision and you should have timely access to all of the information you need to make an educated decision. What we are saying is you need to be flexible and patient in a way you may not be used to. 

Are you thinking about buying a business and want to know more about what the process looks like? Would you like to know more about the timeline of a business transaction? 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

No Comments »