Posted in Become a Business Owner, Buyers Articles

2020 was a rough year, for everyone. This New Year’s holiday holds special meaning for many of us. It’s a chance to start again.

That’s right, it’s New Year’s resolution time.

We all do it. We come up with fabulous and complicated New Year’s resolutions and then fail miserably within the first three weeks of the new year. We all want to be thinner, in better shape, more organized.

If you consider them as a whole, what are all of our collective New Year’s resolutions really about? They’re about happiness. If you are thinner, then perhaps you’ll be happier. If you’re in better shape or if you’re more organized, then perhaps you’ll be happier.

The reason these resolutions fail is they only scratch the surface of the underlying goal you are trying to achieve. Losing 20 pounds might initially make you happy, but you still have to get up and go to the job you hate every day.

Happiness is less about superficial changes and is more about living with a sense of purpose. It comes when you feel fulfilled in your daily life.  How do you reach fulfillment?

Take control of your career and follow your passion by becoming your own boss.

It may seem like a daunting proposition to become your own boss, but taking the entrepreneurial plunge doesn’t mean you have to come up with a genius idea and build a business from the ground up. You can enter the world of small business ownership by simply buying a business that already exists.

The benefits of taking this route to business ownership are easy to see. Buying an existing business means you don’t have to contend with coming up with a concept, finding and then equipping a location, finding and training a new staff, establishing a customer base, obtaining initial licenses and permits – the list goes on and on. All of this “start-up” work has already been done, and you even have the previous owner to train you when you take over so you aren’t walking in cold.

If you are thinking that buying a business might be a great part of your 2021 plans, you probably have some questions:

How much money does it take to buy a business?

The answer is, it depends. Sure, there are multi-million dollar businesses on the market – but there are also many smaller businesses that would require a much smaller initial investment. Many business sellers also offer the option of seller financing, so you may be able to get a business that would suit your goals without having to pay all cash.

What kinds of businesses would be right for me?

Remember that the point of business ownership is to have control over your own destiny and to feel fulfilled in your daily life. You shouldn’t buy a business where you aren’t going to be happy – without drive and passion you will most likely run the business into the ground. You also shouldn’t buy a business you know nothing about. Giving yourself the massive hurdle of trying to learn a whole new industry on top of learning how to run your new business just means you are setting yourself up for failure.

Think about what your goals for business ownership are. Do you want a more flexible schedule? Do you have a particular passion that you want to turn into a career? Are you looking to make a long term commitment to a business or are you looking to grow and then sell your new business for a profit? These types of questions will help you decide what types of businesses would be right for you.

What’s the next step?

Contact a business broker. They can help you figure out what businesses would be right for you based on your goals for business ownership and the capital you have available.

Get yourself on the path to business ownership and happiness in 2021!

Do you have more questions about the process to buy a business? Would you like to know what businesses are currently available? Ask us! Please feel free to 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, Buyers Articles

If entrepreneurship is your goal, there are more decisions to make than just picking a business off a list of listings. Figuring out the RIGHT business to buy is crucial to success. Here’s how you do it:

Dig deep.

What do we mean by that?

You need to figure out what you want. When you buy a business, you are buying yourself a life-encompassing job – a job where the buck stops with you. What do you want your future life to look like? Figuring out what really means the most to you, as well as what tools you have to help yourself be successful can mean the difference between buying yourself a successful new business and buying yourself a nightmare.

What factors should you consider?

Your background.

Why is your background so important? Owning and operating your own business is tough. It can sometimes mean long hours, tough decisions and navigating lots of issues. Your background matters because the steep learning curve that happens whenever someone buys a new business will become impossibly steep if you add learning an entirely new industry to the mix. Don’t do that to yourself. Pick a business that compliments the practical experience you already have. If you’ve spent the last 15 years in the manufacturing industry, and have never worked a single day of your life in the restaurant industry – buying a huge bar on the beach isn’t going to end well. Talk to your business broker about your experience and strengths – they can help you find business choices that will compliment your background and set you up for success.

Where you want to live vs. what type of business is actually possible in that area.

It should go without saying that some types of businesses can only be successful in certain areas. For instance, service-type industries (think restaurants, landscaping, housekeeping) do really well in places like southwest Florida where people are coming to second homes for vacation – and probably don’t want to be doing a ton of housework or cooking while they’re here. The same type of service business probably isn’t going to be as successful in a very rural part of Montana, for example. Take a look at the area where you’d like to live. What works there? What doesn’t? Talk to your broker about what businesses do better – and worse – in the area you’d like to end up.

What is your ultimate goal for business ownership?

Are you looking for a goal of making a certain amount of money in the next 5 years? Are you looking for a challenge and are willing to push the envelope with a business that will require more work on your part for a potentially bigger return? Or would you prefer a nice, safe and steady shop without a ton of room for growth – where you won’t have to push as hard but returns won’t be as big either? Your ultimate goal for business ownership will obviously have a big impact on your search. Talk to your broker about your income goals as well as about how much of a challenge you are willing to take on. 

Can you realistically get the licenses required?

Red tape can be very strange. There are certain industries in certain states that require a business owner to have prerequisite requirements for an operating license that might be hard to get. Think requirements to have x amount of years doing a specific type of work before you can even apply for a license. Some licenses require background checks, fingerprinting and the like. Ask your business broker about the industries you are interested in. The licensing requirements for an industry might preclude you from owning the business you think you want, so figuring out licensing limitations will be important early on in your search.  

The message here is buying yourself a new life needs more than a cursory search through listings. You need to dig deep and decide what you want your life to look like, then have a discussion with your broker about what type of businesses will fit with those goals.

Are you considering buying a particular type of business and have questions about whether or not it will meet your goals? Do you have questions about licensing requirements? Would you like to know more about the business search process? Ask us! Leave 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

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
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Posted in Become a Business Owner, Buyers Articles

When the dream is owning your own business, you have a lot of questions.

A big one is “how much money do I need to buy a business?“

There’s an issue with this question. The issue is the answer – it depends.

It depends on what type of business would be right for you. 

Many new business owners walk into the business market under the mistaken assumption that anyone can own and run any type of business. Nothing could ever be farther from the truth. To keep your new business profitable, you will need to be able to both navigate and compete in the market you are in. If you have little to no relevant experience in your business, there is likely no way for you to stay competitive. To avoid this pitfall you should look for businesses in industries where you have practical experience. By staying with what you know you will avoid the potentially catastrophic learning curve that comes with learning a new business and a new industry at the same time. 

Every industry is going to have options in terms of price. There will be some larger, well-established – and thus highly priced businesses as wells as smaller, more affordable businesses with room for growth. Focus first on the type of business, then look at price.

It depends on how much capital you have available, and how you allocate that capital.

Do you have enough money ready and available to buy and run a business? You should really have at least 50% of a purchase price if a seller is offering seller financing, and all cash or third-party financing already in place if seller financing is off the table. You need to allow for not only the purchase price, but all of the other costs involved in a business sale – like fees for licensing and money available to keep the business running until you are able to start turning a profit at the helm.

Be honest with your business broker about how much capital you have available for your new venture and then listen to their advice about what you can reasonably afford.

It depends on what your goal for business ownership is.

Are you looking to invest almost all of your capital in order to buy a well-established, highly profitable business – or are you looking to hang onto more of your funds and buy a business that has lots of room for growth? You will likely have to work a bit harder in the second scenario, but you will have the benefit of having enough funds to ride out any issues that you come across.

You will have to decide what you want your day to day life to look like, and discuss those desires with you business broker.

The message here is there’s more to look at than just the price of a business. You need to figure out your goals, look for industries where you can be successful and then decide how you’d like to allocate the money you have available.

Are you thinking about buying a business? Do you have questions about seller financing and the best type of business for you? Ask us! Leave us a comment or question here, and we will be happy to help you on your business ownership journey.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

No Comments »

Posted in Become a Business Owner, Buyers Articles

If you are a prospective entrepreneur looking to buy your own business, you may have already noticed the unique nature of business listing prices – they seem to be all over the place.

How do you as a buyer interpret the listing price of a business as it relates to its fiscal health?

Listing prices are typically based on the cash flow the business generates, but there are other aspects that will speak to the overall health of a business which buyers should pay attention to. Here’s a few to consider:

Consistent Numbers

If a business has very consistent numbers, it might mean less risk for a buyer. Remember that the value of a business to you is the earnings it will have in the future. Consistency year over year is what you are looking for. Many businesses will have seasonal fluctuations that have everything to do with the local economy and seasonal shifts and nothing to do with the health of the business. If you are seeing large annual fluctuations, ask your business broker if those fluctuations are merely seasonal or something more problematic.

Operating Profits

In order for you to pay yourself and pay back any debt you incurred with the purchase of the business the business will need to be generating operating profits. A business with numbers that consistently show operating profits will be a better bet than a business that is only breaking even. A caveat here – a business that isn’t doing so well but has easily remedied issues (like staffing changes, adding a marketing plan where none exists, etc.) might be a good deal if you can get it for a great price. 

Diverse Customer Base

In a business that has a diverse customer base the loss of a single customer will not be as catastrophic as it would be for a business with only a small handful of clients. Look for both a large number of clients and clients across a diverse spectrum. 

Reputation and Brand

A business with a great reputation or a very well established brand will have a more loyal clientele, meaning less work for you as the new owner. Instead of having to spend your time rebuilding a poor reputation you will be able to focus your marketing time on acquiring new customers.

Good Managers

If a business is well managed by the staff without the owner having to be present 100% of the time – and if those managers/staff are willing to stay on if the business changes hands, it can be a good sign for a potential buyer. It will mean less disruption when the business changes hands and less of a learning curve for you as a new owner because there will be staff present to help with many aspects of day-to-day operations.

If you need help determining if the listing price of a business really reflects reality, talk to your business broker. They know the current market, what recent comparable businesses have actually sold for and what aspects of a business can bring the most to a new owner.

Are you a future business buyer who has questions about the value of businesses you have seen for sale? Have you come across businesses that seem over or under priced? Leave us a comment or question and we will be happy to assist 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

No Comments »