Empowering Yourself: Why Business Buyers Need To Do Their Own Independent Research

In the complex list of necessities when buying a business, one aspect often overlooked is the buyer’s role in conducting thorough research. While your business broker can offer valuable guidance and expertise, you can’t relying solely on them to make every decision. They can’t. At the end of the day, all decisions are yours – so business buyers need to take a proactive role in their research and decision-making process, empowering themselves to make informed choices. 

 

Here are some thoughts to consider:

 

 

Be Realistic About What Your Broker Can And Can’t Do

 

Before delving into the buyer’s responsibilities, let’s first acknowledge the vital role that business brokers play in the acquisition process. A reputable broker brings a wealth of knowledge, experience and industry insights to the table, guiding buyers through every step of the journey. From finding potential businesses to negotiating terms and navigating due diligence, a skilled broker acts as a trusted advisor – helping buyers make informed decisions and achieve their goals. However, it’s essential to recognize that while brokers can provide valuable support, they cannot—and should not—make every decision on behalf of the buyer.

 

You Must Must Must Do Independent Research

 

Business buyers must recognize the importance of conducting independent research to supplement the guidance provided by their broker. While brokers can offer insights based on their expertise, it’s ultimately the buyer’s responsibility to thoroughly evaluate potential businesses/locations/terms and assess their suitability. Independent research allows buyers to gain a deeper understanding of the market landscape, industry trends and competitive dynamics. By conducting market analysis, financial due diligence and risk assessments of their own, buyers can mitigate potential pitfalls and make well-informed decisions.

 

Your Broker Is There To Help, But They Aren’t You

 

Relying solely on a broker to make decisions simply isn’t going to work. This is your money that will be spent, your day-to-day life as a business owner that needs to be lived and your choice as to what that ultimately looks like. You also have to live and work in this community. Does the area have the amenities or lifestyle you’re looking for? Are there places to live nearby the business where you could potentially buy or rent a home? Where are the schools your kids might need? Are there local concerns, like crime or frequent natural disasters that you will need to account for? The point here is only you can make choices on the litany of variables you need to consider before you buy a business. 

 

In the world of business transactions, the importance of independent research cannot be overstated. While business brokers play a valuable role in providing guidance and expertise, buyers must take an active role in conducting their own due diligence – on everything (from the business to the school districts and beyond) to ensure the life as a business owner you’re after is the one you end up with. 

 

Are you looking at businesses to buy but hadn’t thought about researching the community? Would you like to know more about how a business broker can help you find a great business? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

 

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Don’t Hop On A Plane Cold – Why Smart Business Buyers Plan Ahead

 

You’ve made the decision – you’re going to bite the bullet, buy a business and move to Florida. You buy plane tickets and head down, ready to drive around and scope out the local small business scene. When you get to town, you try calling brokers to have someone drive you around to see what’s for sale – but you aren’t having any luck. No one is answering or returning your calls, and those that do tell you there’s no way you can see any businesses today.

 

What gives? You’ve got money to spend – why won’t anyone help you?

 

Buying a business is a very complicated process that contains a multitude of moving parts, and as such the business buying process is nothing like buying anything else. When you buy a house or a car the process involves driving around and taking a look, but houses and cars are physical things. A business is different because a business has customers, has employees, has contracts, has leases, requires licenses and permits, has vendors – the list goes on. When you buy a business you aren’t buying a thing, you are buying cash flow. Since you aren’t buying a physical thing, the process is more complicated.

 

For starters, business sales are confidential. Confidentiality is important because there is a very powerful misconception that a business for sale is a business on the brink of failure. Think about it. The last time you saw a “For Sale” sign in the window of a business your immediate thought was that the business was in trouble, right? Why would anyone sell a perfectly good business?

 

Great, profitable businesses are sold every day. Business owners sell for a myriad of reasons. Retirement, a desire to change industries, personal reasons, or because a financial milestone has been reached. Sure, there are businesses for sale because the owner is in trouble and the business is faltering – but those businesses are fairly rare and can be a great opportunity for growth.

 

The fact that a business is for sale says nothing about the financial health of that business, but the misconception that exists can cause catastrophic damage to an existing business if the for-sale status is disclosed to the wrong people – like if the staff finds out the business is for sale and quits en masse.

 

The need for confidentiality means you will have to sign a non-disclosure form for each and every business you want to see, and you will most likely need to see the physical location before or after hours when the staff isn’t there. In addition to the required paperwork and the need to avoid a staff, physical visits to a business require aligning the schedules of the buyer, the seller, the buyer’s broker and the seller’s broker. This type of schedule wrangling takes time, so showing up in Florida and demanding to see businesses isn’t going to work.

 

What should you do instead? PLAN AHEAD. Before you get on a plane, call and have a conversation with an experienced and qualified business broker. They can help you find businesses that fit with your goals and your financial means, then you can narrow your field to just a few choices. Your broker can set up conference calls, meetings and site visits long before you land so you can see the businesses you want in a way that works with everyone’s schedule.

 

Don’t hop on a plane cold – plan ahead and you will be set up for business buying success.

 

Are you thinking about buying a business and want to know more about why confidentiality is important? Would you like to know what businesses are currently available that might work for you? Ask us! Please leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Walk Before You Run: Why New Owners Should Take It Slow

 

When you buy an existing business it comes with the seller’s personality, whether you like it or not. Their choices are everywhere – from the paint color on the walls to the employees they keep. It can be tempting to want to make your mark and change it into the business you’ve always dreamed of right out of the gate – but that is a colossal mistake.

 

Here’s why.

 

You bought an existing business because it’s existing. The doors are open and it makes money. It runs. Before you go gutting the interior, tossing the furnishings and replacing the staff you need to take a breath and instead start paying attention.

 

Why does this business work?

 

What parts of the decor, the current menu, the personalities of the staff, the operating procedures, the equipment, etc. add to the functionality and value of the business? 

 

What is it about this business that keeps customers coming back for more?

 

If you rush in and change everything, you are missing the opportunity to learn what makes the place successful. Listening and learning should absolutely be your number one priority in the early days of owning your new business. Take every chance you have to learn from the seller, even if you aren’t a fan. While you negotiate ask lots of questions and pay attention to the answers. Be willing to take advice. Most business purchase contracts come with a two week training period – use that time to absorb everything you can.

 

When the reins are finally yours, slow down. Run the business as-is for as long as it takes for you to truly understand what works and what doesn’t. Talk to the staff – ask them to give you their thoughts about what is important and what they would change if they could. Talk to the customers and ask them the same thing. What would they like to see changed and what would they like to see stay the same?

 

Take all of this data that you collect and then make small, incremental changes that will benefit the business. Don’t make changes just because it’s something you would prefer.

 

Are you considering buying a business but hadn’t thought about when and why you should make changes? Do you have questions about the training period in a purchase contract? Ask us! Leave any questions or comments and we would be happy to assist.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Where You Can Find The Financing To Buy A Business (And Why It Won’t Come From Your Bank)

The entrepreneurial story we tell ourselves is full of flaws. You can’t come up with an idea in your garage or spy a cute coffee shop for sale downtown and simply waltz into your bank for a small business loan to cover the entire cost. It’s just not how it works. 

 

Why?

 

Banks are gun shy about risks in general, but even more so since the debacle of 2008. Small business ownership is risky, particularly if you are trying to start a business from scratch. According to the U.S. Bureau of Labor Statistics 65% of businesses fail in the first 10 years, 45% fail in the first 5. 

 

What that means for future borrowers is your local bank isn’t likely to grant you a small business loan for your start-up. They are also unlikely to fund the purchase of an existing business. 

 

 

If the bank is out, where can a business buyer get financing?

 

The most common source of funds is the buyer themselves. Using property for collateral, sourcing capital from friends or relatives or using savings can typically generate enough to buy a business. If you’re going to own your own business, you’re going to have to get comfortable with putting your own skin in the game. A caveat here, if you are borrowing form friends and/or relatives a handshake deal will not suffice. You really need to consult a business transaction attorney and have some sort of contract before you take money from people you know. It will save everyone involved from the issues that can quickly arise when money needs to be paid back.

 

Another common avenue is a loan from the Small Business Administration (SBA). This path obviously will have it’s share of red tape, and not all businesses currently for sale will qualify for this type of loan – but it can be a great way to secure a business without having to fund the entire purchase yourself. Talk to your business broker about how you might qualify for a SBA loan and what businesses currently for sale would work for this scenario.

 

In many situations a buyer can also get financing from the seller themselves. This is called seller financing and many small business owners use this as a way to attract buyer to their business. A seller willing to keep skin in the game says a lot about how they think the business will do in the future (if the business fails they don’t get all of their money) and it opens the pool of potential buyers to those who might not have all the capital they need up front. An important note here – no seller is going to finance the majority of the purchase price for a buyer. Buyers need to come to the table with a substantial down payment. Ask your broker if there are any seller financed businesses available in the industries you’re considering.

 

There are also creative ways to get a deal done. Earn-outs, angel investors and the like are possible – but unlikely. Your best bet as a buyer is to see how much capital you can raise on your own, research your options with the SBA and talk to your business broker about business owners who might offer you seller financing.

 

Have you always wanted to buy a business buy aren’t sure how to raise the capital? Would you like to know what types of businesses are currently offering seller financing? Ask us! Leave any questions or comments here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Navigating Negotiations – Why You Should Listen To Your Broker

When you enter the business-for-sale market, you will find that some businesses are listed really, really high – priced no where near what you would be willing to pay. If you are still really interested in the business, you can put in an offer that makes sense to you.

 

If these two numbers are so different, how do buyers and sellers come to an agreement on the difference?

 

 

Negotiations and intermediaries.

 

In business transactions, the buyer and seller are the boss. A business broker has to let a seller set the price of their business, and on the other side, whatever a buyer chooses to offer the broker must present to the seller. Business brokers are known as business intermediaries because they act as a buffer between the parties in a transaction so that the transaction happen.

 

Having someone in the middle allows a buyer or seller to ensure they are getting what they want, but the nature of business transactions means both sides can do or say whatever they want – which sometimes means one side offends the other and kills the deal.

 

If you are a buyer preparing an offer, and your broker is telling you that the offer is only going to offend the seller – it would be wise to listen. You always have the ability to walk away from the deal, but you would be surprised how many buyers and sellers are able to reach a middle ground that works for everyone if both sides are able to stay amicable.

 

The moral of the story? Listen to the advice of your business broker!


Are you a buyer who wants to know how to make offers that will keep both you and a seller happy? Ask us! Leave a comment or question here, and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Is It Really Better To Buy An Existing Business?

 

The first question on any entrepreneurial journey is a big one. Is it better to buy an existing/operating business or should you choose to start one instead? The short answer? Buying an existing business is typically the better path.

 

Why?

 

An existing business has a history that you can examine.

 

If you start a business from the ground up, there is no way to know what the track record will be. If you are fortunate, the record will be good. If you aren’t, you probably won’t be around long. An existing business removes a bit of this risk by having financial records that you can examine closely prior to purchasing the business. An existing business also has a proven location and comes with an already established customer base.

 

Another plus to getting a business with records? As you go through the numbers you may find new business growth ideas, unused niches or overlooked areas that could be streamlined.

 

An existing business has cash flow.

 

New businesses fail when new business owners don’t take into account the period of time, typically 12 to 18 months, between opening the doors and when the business will actually start generating a profit. Many new businesses go under because they have no cash left after getting to the grand opening – they end up running on fumes and having to shut the doors before anyone even knows the business is there.

 

An existing business is already generating income. Even if you will need to find financing for operating expenses, there is no need to guess how much money you will need and how much you will be able to pay back because you already know what cash flow the business currently generates.

 

An existing business comes with someone to show you the ropes.

 

When an existing business is sold, there is usually a training and/or consulting period written into the contract. This ensures that the new owner gets the proper training to keep the business up and running.

 

If you start your own business, you will be going it alone. Although there might be business owners who are willing to give you advice, you won’t have someone to show you exactly what works (and more importantly what doesn’t work) for those critical first few weeks of ownership.

 

It is typically easier to get financing for an existing business.

 

It is fairly common in the sale of small businesses that the owner will offer seller financing. This is great for a new entrepreneur for two reasons. First, it says a lot about a business that the current owner has enough confidence in the business model to take payments over time. By offering seller financing, they will be dependent on the continued success of the business for years to come. Second, traditional sources of financing can be very hard to come by. For a buyer who can’t pay all cash up front, seller financing allows for the purchase of a business with just a sizable down payment.

 

For all the reasons above and more, deciding to buy an existing business will likely put you in a profitable position much sooner and with less risk than creating a business from scratch.

 

Have you ever started a business and wished that you had just bought one that was already established? Do you have questions about the success rates of existing businesses once they change ownership compared with the success rates of start-ups? Ask us! Leave us a comment or question here and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Buying A Business? Why You Should Observe The Seller

 

When you are in the market to buy a business, you will likely see a few before you find the one you ultimately purchase. These first visits are important for a number of reasons. You will want to see the physical state of the business, what equipment and furnishings you will be inheriting and perhaps even how the business functions during normal operations.

 

One often overlooked indicator of the health of a business is the actions of the ownership.

 

Whether you are in for a surreptitious visit where no one is aware you are a buyer, or if you are in a meeting with the seller for the first time – watch their actions. The phrase “actions speak louder than words” plays heavily in the small business world.

 

Here’s an example: A restaurant owner who spends an entire dinner service at the bar drinking while the food quality lags will be able to tell you a lot about how the rest of the business probably functions.

 

An owner who is checked-out like this will likely not own a business that is as profitable as it could be. The financial state of the restaurant may not be up to par, but this kind of information is not always bad news for a buyer.

 

Simple fixes that an engaged new owner can implement, like holding staff accountable or changing food suppliers and/or the menu can get you a business for less than you might have thought with a fairly quick opportunity for growth.

 

You can find all of this out just from observing the owner.

 

On the other end of the spectrum, an owner who is punctual to all meetings with a buyer, who is meticulously organized, and whose staff snaps to attention as they enter a room likely runs a tight ship.

 

What you will inherit is a well-oiled machine that is likely in great financial shape, but you will likely have to pay a bit more than for the business in our first example.

 

In the initial stages of the business buying process – pay attention. You can get a general idea of the state of affairs just by carefully noticing the actions of ownership.

 

Are you a buyer who would like to know more about what to watch for when visiting a business? Would you like to know the kinds of questions you should be asking a seller in the first meeting? Ask us! Please feel free to leave a comment or question here and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Keeping Appointments When Buying A Business – Why It’s So Important

 

It might seem insignificant. You had an appointment with a broker for a call or you’re supposed to do a walk through of the business after coordinating with the brokers and the seller. What’s the harm if you let everyone know you can’t make it or if you forget and don’t show?

 

Keeping appointments is very, very important when you are trying to buy a business. It can make or break your journey to becoming a business owner.

 

Why?

 

When you buy someone’s business you aren’t buying a simple physical object. You’re buying someone’s blood, sweat and tears. Most business sellers care a lot about who buys their business because they want the business to continue as a success. They want their employees to be happy and keep their jobs. They want the brand they started to continue in the community. 

 

A business buyer can’t just write a check. You need to have an amicable, professional relationship with the seller. You need them to trust you with their business. You need them to train you when you first take over. You need them to negotiate with you.

 

This is why it’s so crucial to keep all of your appointments in the business buying process.

 

Consider these thoughts:

 

Showing up when you said you would demonstrates commitment and professionalism.

 

When you’re in the process of buying a business, keeping appointments demonstrates your level of commitment and professionalism to the seller, the brokers, your prospective future commercial landlord and the like. It shows that you value their time and take the deal seriously. Consistently showing up (and showing up on time) for meetings and appointments establishes a positive impression, making it more likely that everyone involved will view you as a reliable and trustworthy part of the process.

 

Keeping appointments helps you build trust.

 

Buying a business involves a lot of negotiation and collaboration. Keeping appointments allows you to build trust and rapport with the seller. Trust is vital in a successful business transaction. It can lead to more open communication, smoother negotiations and a greater likelihood of finding solutions when inevitable problems arise. 

 

Respecting everyone’s schedule and time can keep the deal on track.

 

Time is often of the essence in the business buying process. Missing appointments can lead to delays in decision-making, which might allow competing buyers to swoop in with a better offer or the business’s situation to change unexpectedly. Appointments often need to be made by coordinating the schedules of (at the very least) you as the buyer, the seller, the seller’s broker and your broker. Rescheduling this many parties can take a lot of time – time you might not have if something changes. Staying on schedule ensures that you have the necessary information to make timely decisions, helping you seize opportunities before they slip away.

 

Keeping appointments might seem like a minor detail in the grand scheme of buying a business – but the impact of this simple act can’t be understated. From building trust to making informed decisions, every aspect of the business buying process is influenced by your ability to honor your commitments. 

 

Are you thinking about buying a business and hadn’t considered how important it it to keep appointments? Would you like to know more about why your relationship with the seller is so crucial to success? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Natural Disasters (Like Hurricanes) Shouldn’t Stop You From Buying A Business

Natural disasters shouldn’t stand in the way of your business dreams, they’re a part of life. If you want to live in a place that has a somewhat regular natural disaster risk (like hurricanes in Florida) you have a couple of ways you can think about this risk if your dream is to own your own business. 

 

 

Deciding whether or not to buy a business should be made with a long-term perspective in mind. Remember that while natural disasters can cause immediate disruptions, they rarely dictate the long-term trajectory of a business. Also, buying a business that has survived and navigated through these types of challenges in the past showcases its resilience and ability to adapt to adversity. 

 

There’s also the needs of a community that occur in the lead up to and after a disaster like a storm. Businesses that are well-prepared for emergencies (or those that provide essential goods and services during recovery) can experience heightened demand. As a prospective business owner, you can identify these emerging needs and position yourself to meet them. 

 

After a natural disaster there can be a surge in construction, renovation, and related services. If you’re considering a business that caters to these industries (such as construction, disaster response, tree removal and the like) a post-disaster environment might present a unique chance to establish yourself in a market with increased demand.

 

Another potentially beneficial post-disaster situation? Some business owners might be more motivated to sell due to the challenges they’ve faced. This situation can lead to negotiation opportunities and potentially more favorable terms for you as a buyer. If you’re able to see beyond the immediate setbacks and have a solid plan for recovery, you could end up with a business at a better price.

 

Experiencing a natural disaster first hand can also teach you a lot. It provides invaluable insights into risk management and preparedness. When looking at businesses in a potentially disaster-prone area, you should consider what strategies you might use to safeguard the business and its operations against whatever mother nature throws your way. 

 

Something like a hurricane can initially seem like an insurmountable obstacle to your business ownership dreams, but it should not deter you from pursuing your entrepreneurial goals. Resilience and adaptability really can turn adversity into opportunity – what defines success is your approach. 

 

Have you always wanted to buy a business in a disaster-prone area but have concerns about what something like hurricane season might mean for you future business? Would you like to know more about businesses that do well in the aftermath of a hurricane? Ask us! Please leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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The Power Of Practical Experience: Why Business Buyers Should Stay In Familiar Territory

 

Practical experience rarely gets the credit it deserves. Aspiring entrepreneurs looking to venture into the world of business ownership really need to follow the age-old adage “stick to what you know” – it can mean the difference between success and failure. Buying a business where you have practical experience offers a multitude of advantages.

 

Here’s a few:  

 

Practical experience in a specific industry provides buyers with an invaluable understanding of its nuances, trends and challenges. Armed with this knowledge, buyers can make informed decisions and devise effective strategies to navigate the market successfully. This level of insight is often difficult to acquire without hands-on experience in the field.

 

Buying a business in a familiar domain allows a buyer to hit the ground running. They are already equipped with the skills, know-how and practical experience needed to run the business. This significantly shortens the learning curve and the saves time and resources that would otherwise be spent on learning an entirely new industry from scratch.

 

Buyers with practical experience are more likely to get approved for a transfer of the commercial lease when a business purchase doesn’t involve the associated real estate. A commercial landlord is going to be far more comfortable with a tenant who already knows what they’re doing.

 

A deep understanding of an industry also enables buyers to identify gaps and untapped opportunities. Leveraging their practical experience, they can innovate and introduce unique solutions or products to cater to specific market needs. This ability to innovate can give their new business a competitive edge and the opportunity for growth.

 

Purchasing a business in an industry where you have practical experience is a strategic move that offers you numerous benefits. Beyond the familiarity and knowledge of the industry, you walk in with a competitive advantage and a head start in business operations. 

 

Have you always wanted to own your own business but didn’t think about choosing one in an industry you already know? Do you have questions about what businesses currently available would match with your practical experience? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202




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