Posted in Become a Business Owner, Buyers Articles

Some people just like to have meetings. We get that, and it’s a request we get a lot. In a few cases meeting face-to-face with the business seller so you can watch their mannerisms and facial expressions might help you learn a lot about how that person conducts themselves.

However, in today’s small business marketplace it’s much more likely that you will do the majority of your meetings via conference call. 

Why?

Business transactions require a lot of moving parts. The schedules of the sellers, the buyers, the brokers involved and the attorneys involved all need to be considered when trying to figure out when a meeting could take place. If this meeting is to take place at the business that is for sale, it will also have to be scheduled when employees are not present for confidentiality reasons.

If you’ve every tried to get 6 or 7 people together for anything at the same time you can imagine how tough that can be. As such, if you are serious about buying a business you are going to have to concede that the majority of initial meetings are going to have to be held over the phone.

Conference calls can be taken in a car in the parking lot while the seller is away from their staff. They can happen while the seller is at home. They can happen over lunch breaks or even behind a closed office door.

Asking for physical meetings may seem important – but in business transactions they really don’t matter. When you are buying a business you aren’t buying a physical space. You are buying cash flow, so the aesthetics of said space are far less important than the numbers the business generates. Those numbers can be communicated to you via email or share files online and then discussed via conference call, so there is no need to spread paper out on a table and stare at each other in the face.

Heading into the business buying process with the understanding that most of your communication with brokers and sellers will be through conference calls will help you to navigate the process more successfully.

Wait, does this mean we never meet face-to-face?

Absolutely not. Face-to-face meetings are an important part of the business buying process – they are just far more useful much further along in the transaction process. Any initial questions can be answered over the phone and don’t require the scheduling nightmare that meetings sometimes are.

Another note – demanding everyone constantly travel to meetings will probably only aggravate the seller and other professionals involved to the point where they might refuse to work with you in the future. If you do make appointments for meetings, do not cancel unless absolutely necessary. Making everyone bend and adjust their schedule and then casually canceling last minute for something other than a dire emergency only shows your lack of respect for others in the transaction and your lack of commitment to seeing the sale through.

The point here is you need to be sensible and realistic when asking for meetings versus conference calls. Listen to the advice of your business broker when they tell you one would be better over the other in your current situation. Most things can be accomplished in a phone call that doesn’t require schedule juggling and travel time for everyone involved.

Are you thinking about buying a business and would rather have face-to-face meetings? Would you like to know more about how most things can be accomplished via conference call? Ask us! Leave any questions or comments here.

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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Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

You’ve been going to your friend’s bar for years. You even helped him paint the bar top when he first opened. Now he’s ready to sell and you think you’d like to buy.

Buying a business usually requires the assistance of an experienced and qualified business broker because business transactions are inherently tough.  The process of  buying and selling a business is complicated.  Lengthy and detailed purchase contracts need to be negotiated, commercial landlords and property managers need to be negotiated with, licenses and permits need to be obtained – the list goes on and on.

Owning your buddy’s bar might fit with your goals for business ownership and you might be able to afford his reasonable asking price – so you might think that there’s no need to enlist professional help to get the deal done. Just a handshake between friends should suffice, right? 

While going it alone might seem like a good idea because it’s just a transaction between friends – you don‘t want to end up in a situation where your friendship is lost over the complications that always arise in a business sale. Complications will absolutely, positively happen. You can not avoid them.  Using a business broker for your transaction will give the two of you as friends a buffer when those complications come up and will allow both sides to get what they need when they need it.

Many first-time business buyers and sellers don’t understand all of the nuances and important details that need to be addressed in the purchase of a business. For example, you don’t want to write your friend a huge check only to find out too late that the landlord of the commercial space refuses to transfer the bar’s lease to you as a new tenant. There are a million things that can (and maybe will) go wrong. Having someone involved who has been through the process many times will be essential for success. 

You also should include a business broker if any seller financing is going to be involved. Seller financing is essentially a loan, and in this case a substantial loan from a friend. Friendships have been lost over far less – so using a business broker to help with the seller financing portion of your purchase contract will ensure everyone knows upfront what is expected and what the ramifications are for reneging on the deal.

Money and business shouldn’t come between friends, so enlisting the help of an experienced and qualified business broker will ensure that the friendship can outlast the business transaction. Mixing your personal and business life requires everyone to be upfront, honest and on the same page. It also helps to have a buffer should anything go sideways. A business broker can fulfill both of these needs. Protect yourself, your friendship and your future as a business owner by hiring a broker to help you with your transaction.

Are you considering buying a business from a friend but aren’t convinced you need the help of a broker? Do you have questions about what a purchase contract entails? Ask us! Leave any questions or comments 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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Posted in Business Broker Why & How, Buyers Articles, Sellers Articles

We know that buying a business is a very stressful endeavor. Selling a business isn’t any easier.

Guess what? The person at the center of that stressful and difficult situation isn’t always in the land of sunshine and rainbows.  They’re there to keep the transaction on track. That person is a business broker. 

A business broker’s day is full of sending and receiving emails, conference calls, travel to and from meetings and the meetings themselves. When they aren’t in direct communication with one of their clients they are putting together listing packages, writing purchase contracts, dealing with bureaucratic licensing issues – they’re very busy people.

A business broker’s job is to act as a buffer during negotiations and get a transaction to closing. They are there to help sellers get their business ready for market and there to help buyers find a business that fits with their goals. A big part of a business broker’s job is talking to everyone involved – keeping the business transaction on track by making sure everyone is getting what they need when they need it.

Your transaction is, obviously, a big deal to you. It’s probably the one major thing you’ll have going on in your life. If you’ve got a good broker your deal will absolutely be a priority – but an important caveat to remember is it won’t be their only priority.

If you hired an experienced and qualified business broker, then you probably aren’t (and shouldn’t be) their only client. If you call, text or email your broker, you should expect a response in a timely fashion. Timely, however, does not mean instantaneous. If a broker doesn’t answer the phone during business hours, perhaps they’re in a meeting or on a phone call. An unanswered phone call doesn’t mean you should then call them an additional 30 times in a few hours. A constant barrage of requests for contact – be they calls, texts or emails – isn’t going to get a quicker response. All this lightly-stalker behavior will do is complicate the day of the broker who’s trying to help you. Call once, and if you don’t hear from your broker in a realistic amount of time send a quick text or email to follow up. That should be enough.

A note here. If they aren’t getting back to you at all, where you go days and days without a response – then perhaps you need a different broker.

You should also remember that business brokers have lives outside of work just like you do. If you call at 10 at night on a Friday or at 7 in the morning on a Sunday, you probably shouldn’t expect a broker (or anyone for that matter) to immediately return your call.

Calling or texting constantly doesn’t help your broker help you through your transaction, all it does is fill up their inbox and make it impossible to get back to everyone in a reasonable amount of time.

Calling over and over again isn’t going to get you an answer any quicker, especially if the information you need is coming from the other side of the table. Sometimes your broker‘s hands are tied if the other side of the transaction isn‘t being cooperative. Business transactions are big and messy, and can sometimes involve buyers, sellers, buyer’s brokers, seller’s brokers, buyer’s attorneys, seller’s attorneys, CPAs – the list goes on. Having to get a single information request through that string of very busy people can sometimes take a few days. If your broker says they’re on it and they’re waiting for a response, calling them 16 times a day isn’t going to get the information any faster.

Keeping realistic expectations in terms of response times from your broker, along with a good dose of patience for all of the parties involved, will help immensely in getting your transaction all the way to closing.

Are you looking at businesses to buy and want to know more about how a business broker can help you? Have you thought about selling your business but have questions about the selling process? Please feel free to leave any questions or comments 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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Posted in Become a Business Owner, Buyers Articles

Buying a business is a huge decision. You are deciding on a whole new life and are about to write a very big check.

We get that.

A minor case of cold feet is absolutely to be expected with a decision this big, but the mistake many business buyers make is they allow their cold feet to become a major problem. They let their hesitation overshadow their rational side – and they slow the buying process to a near halt.

This will always cost you money.

We aren’t saying that you should immediately buy the very first business you look at. You should absolutely take a reasonable amount of time to make decisions about the business you ultimately buy.

What we are saying is you shouldn’t procrastinate indefinitely. If you’ve found a good business – put in an offer. If you don’t, you risk several scenarios that will mean more money out of your pocket.

The sellers could decide to raise the price. Many new buyers think that this move is unfair, but a seller is completely within their rights to raise the price of their business if no written offers are currently on the table. If the business is experiencing a period of tremendous growth or if the sellers are seeing a lot of interest in their business and are hoping to cash in on the popularity of their listing – they might decide to get more bang for their buck and jack up the price. If you haven’t put in an offer, your only choice will be to pay the new price or move on.

You risk taking over the business out of season. If the business you are considering is in a seasonal market where businesses do well for part of the year and then have to survive the lean off-season (common in areas where tourism is big) dragging your feet could mean you get handed the keys right as the slow season starts. This could force you to eat up your working capital surviving until the busy season starts again instead of using that working capital to grow the business during the period of the year when customers are flocking in your door. Help yourself by using the timing of the sale to your favor. Don’t procrastinate yourself into a rough six months.

Another buyer might buy the business out from under you. Time is money, so if you are constantly losing out on good businesses because you are waiting too long and other buyers are pulling the trigger before you do – you will be perpetually stuck in the search phase of buying a business. It takes a fair amount of research time, search time, conversations, meetings, conference calls and the like to narrow down your business choices. Don’t waste all of that time (and therefore money) by prolonging your decision and losing out to a more decisive buyer.

You have every right to be nervous about your decision to buy a business, but the most successful small business owners are those who can be rational and decisive when it counts. Do yourself a favor and don’t wait.

Are you thinking about buying a business but are nervous about taking the plunge? Would you like to know more about the process to buy a business? Please feel free to leave any questions or comments 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

No Comments »

Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Buying a business?  Figuring out what you want is the first step.

A dream about owning a bar on the beach might not be realistic if you’re looking to have your evenings free to spend with your kids.

What do you want your life to look like? What kind of hours do you want to work? What’s going to get you out of bed every morning? These are the kinds of questions you should be asking.

A lot about the buying process is deciding what your goals are and then finding businesses that fit those goals. If you don’t know what your goals are, have a talk with an experienced and qualified business broker about what you want out of business ownership.

Some people take the jump into entrepreneurship because they want to be their own boss, have control over their own schedule and work for themselves. While these are some of the benefits of owning your own business, they aren’t really well-defined goals. More well-defined goals might be I want to spend evenings with my family, I don’t want to have a job that requires a lot of manual labor and I want to stay within a defined budget in terms of purchase price.

You might be surprised that the industry and business has you had initially wanted won’t fit with your goals at all, and another business you would never have considered would better fit the life that you’re looking to have.

It’s important to remember that when you buy a business you are essentially buying yourself a job – so just like with a job search you need to have well-defined characteristics that you’re looking for. For instance, when you look for a job you look for jobs you would be qualified for, hours that would fit with the schedule you’d like to have and a location near where you live. You also might consider the amount of money you need to make to maintain your lifestyle. The same goes for buying a business. These are the type of well-defined goals you should come up with.

Another consideration? Your family. Whether you want it to be or not, having a business is a family affair. Owning your own business means the buck stops with you, so sometimes that can mean sacrificing time with your family to keep the business running – or maybe even having to bring your family members in as employees in a pinch. It’s important when you start the business buying process that everyone in your family is on the same page and are also on board with potential sacrifices because you don’t want to have issues down the line. An important note here – if you are expecting your children to work in and eventually take over the business, you need to make sure that they are ready, willing and able to go down this new career path with you.

If you are ready to start your business search, sit down with your family, come up with a set of goals and realistic expectations for life as a small business owner. Then talk to a business broker about these goals and they can help steer you towards a business that will fit (and make you and your family happy). 

Have you always wanted to own your own business but haven’t yet come up with a list of goals for business ownership? Would you like to know what types of businesses would fit with the life you’d like to have? Please ask us! Leave any questions or comments 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

No Comments »