Become a Business Owner Archives - Infinity Business Brokers

Published September 23, 2024

Business ownership daydreams are often of the Steve Jobs variety – dreaming up some fantastic new techy business idea, starting in your garage in your spare time and then ending up reinventing the world.

As fun as these daydreams are, they are extremely far from reality for all but a lucky few – and they derail many a prospective business owner from taking the plunge because business ownership and success at that level seem impossible to attain.

If you really do want to be an entrepreneur, there is a much more realistic and possible path. Buy a small, service-based business.

While owning a maid service or auto garage may not sound as sexy as becoming the next tech billionaire, this type of service-related business can absolutely give you the financial and life-goal rewards you are looking for – often without a massive amount of risk.

Here’s why:

Service businesses always have recurring customers.

Houses don’t stop getting dirty and cars always break, so owning a business that meets these type of everyday, every person needs means you never have to go far to get a new customer and with great service you will be able to keep the customers you have. This type of business is also easily scale-able. With a simple marketing campaign and a bit more staff you can make your business as large as you want it to be.

Service businesses can allow you to have a life, too.

If you choose something like an auto shop or maid service, no one is going to expect you to be open 24-7. You can choose to be on call for emergency situations, or you can staff accordingly to take emergency calls – but you don’t have to because the situations where you would be called to an “emergency” certainly wouldn’t be life or death. You can schedule your clients around your kid’s activities, your date nights with your spouse and your vacations.

It’s easy to keep a customer if customer service is your goal.

If you own a service business, that’s what you should be providing – service. Keep you customers happy and they will likely be a customer for life, as well as recommend you to their friends and family. Focus on a great customer service experience and your business will reap the benefits.

Need employees? They won’t be hard to find.

Most service-based businesses only require on the job training, so entry-level employees will be easy to find (and easy to replace if they don’t work out). The flexibility of this business model also means you will be able to offer your employees flexibility so they can have a life too – which means you can find and keep great employees to help you grow your reputation and brand within the community.

Business ownership doesn’t need to be grand, and it doesn’t need to be complex. You can make a great living with a service-based business while maintaining that all important work-life balance. You can be a great boss and an important part of your community as well. If you’ve ever considered business ownership but didn’t think you had what it takes to be the next Steve Jobs – you don’t have to. Small business ownership can mean serving the needs of your community today.

Have you always wanted to own your own business, but were too intimidated to start the process? Would you like to know what service-based businesses are available in your community right now? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

Why Florida Business Buyers Should Research (Not Freak Out About) Hurricane Risks

Published July 29, 2024

If you’ve considered moving to Florida and buying a business, then the news cycle during the hurricane season might have you considering somewhere more inland. And north. And away from the ocean.

Don’t let it.

Natural disasters happen everywhere – the up side to a hurricane (as opposed to a tornado or raging forest fire) is you get lots of time to prepare. Boarding up windows, sand bagging doors, moving expensive electronics and important papers out of harms way, etc. works to lessen the blow by these large, but infrequent, storms.

Let’s talk about that frequency for a minute. It might seem like hurricanes are a part of everyday Florida life, but the big and bad ones really don’t happen that often in one location. Southwest Florida, where hurricanes Irma and Ian caused havoc, hadn’t seen the impacts of a big storm since 2004 (Charley) – a 13 year break between large storm impacts.

If you want to be in Florida and are worried about the impact of storms remember that the majority of Florida is inland – most business owners can’t see the ocean from their front door. Only those businesses very close to the beaches, bays and rivers need to be extra vigilant and worry about concerns like storm surge – and those businesses can successfully recover if they properly prepare and keep up to date on their insurances. Your location is going to matter a lot if you’re worried about hurricane impacts, so do your research and see what areas you would be most comfortable in – then work with your business broker to find businesses in those areas.

Once you own a Florida business, preparation is the key to success in a storm. Although some business owners can have hard road ahead in the aftermath of a storm (because of the damage they sustain), most businesses who plan ahead are able to reopen relatively quickly. Generators and full spare gas cans mean that some businesses are even able to open their doors before the power comes back on. New construction codes (like hurricane windows and roof tie-downs) that were put in place in the last few decades have also dramatically decreased the amount of damage a storm can do.

The point here is you shouldn’t let hurricane season dissuade you from the chance to be a part of the booming Florida small business economy. In fact, if you’re considering a business in the construction, fencing, tree service or roofing industries – then our occasional bashing by a big storm means more job security for you.

Have you considered buying a business in Florida but are concerned about how hurricanes can affect your business? Do you have questions about what areas are more prone to the effects of a hurricane? Ask us! Please feel free to leave any questions or comments here and we would be happy to help.

Michael Monnot

What Type Of Business Owner Do You Want To Be?

Published July 15, 2024

Someone who wants to buy a business needs to consider many things, like what industry they want to be in and what they can realistically afford. What many prospective business buyers miss, however, is a more basic question.

What type of business owner do you want to be?

Why does this question matter? The answer fundamentally changes your approach to the business buying process, as well as narrows the focus of your search to just those businesses that meet with your ultimate goal.

Let’s look at some of the basic categories of business owners:

Category 1: The Franchisee

If you are looking for a turn-key business where everything from operating procedures to marketing plans is already spelled out, a franchise might be for you. Franchises do require that you follow the instruction of the franchise at large, so you will have less control over things like decor and products/services offered, but they do come with the added benefits of brand recognition, established business practices and an existing franchise will already be built out with a fully trained staff. Franchise businesses are good for someone who wants to be a business owner, but is willing to give up some of the decision making in return for having much of the planning work done by someone else.

Category 2: The Serial Entrepreneur

The serial entrepreneur is very similar to someone who likes to flip houses. You look for a business that may not be in the best financial shape, but has potential for growth – and then build it to a pre-determined level before selling and moving on to the next business opportunity. This type of entrepreneur is someone who gets bored or burned out quickly, but likes to work very hard and doesn’t mind a big challenge.

Category 3: The Long-Term/Family Business Owner

If you are looking to get into business ownership because you want to buy your dream business and potentially pass it on to your children, you would be a long-term business owner. You are looking for a business you will own until you retire or pass on the reins, so an established business that is already a fixture of the community might be right for you. This type of business buyer might also look for a business with potential for growth, but they typically look for a less-risky investment.

Do any of these types of business owners resonate with you? Do you see how different the “right” business would be for each of these types of buyers? Have a conversation with an experienced and qualified business broker about your goals for business ownership, and then the two of you can really narrow the field of potential businesses to those that would help you achieve those goals.

Have you always wanted to buy a business but don’t know what type of business would be right for you? Does one of the types of business owners above sound like you? Would you like to know what businesses are currently available that would work for you? Ask us! Leave any questions or comments and we would be happy to help!

Michael Monnot

Buying A Business? Confidentiality + Why It Matters

Published July 1, 2024

This is a topic we write about a lot, and for good reason. Buying a business is one of the few major purchases people make that requires a level of secrecy. When you buy a house or buy a car, those are done out in the daylight, where all of the relevant and pertinent information about what you’re buying is available – often with just a Google search.

If you’re in the market to buy a business then you may have realized that it is really, really difficult to get information on businesses for sale. Listings are super vague and don’t typically include any pictures that would tell you what business you’re looking at. Calls to the listing broker lead to vague information as well, along with requests to sign a non-disclosure agreement (NDA) – which requires your full name, physical address and your phone number/email. You might also have to provide a financial disclosure in order to find out more than just ancillary information.

You may be thinking “I’m about to spend a ton of money, why do I have to jump through so many hoops and provide so much information about myself?”

The short answer? What you are giving pales in comparison to what you receive.

What do we mean by that?

When you sign a NDA you are then given access to potentially devastating information – most importantly the name and address of a particular business.

Why is the name and location such a big deal? This information is kept under a veil of strict confidentiality for good reason. When the for-sale status of a business is disclosed bad things can happen. Most people wrongly assume that a business for sale is a business on the brink of collapse, although that is rarely the case. When a staff finds out the business is for sale, they can all quit en masse. When clients find out a business is for sale they can jump ship to the competition. The repercussions of the disclosure of the for-sale status to the wrong people can be catastrophic.

As such, business sales are done behind closed doors, behind non-disclosure agreements and done out of the sight and earshot of the staff and clientele.

In some cases a seller might also require a financial disclosure from you before the name and location of the business can be discussed. From a seller’s perspective this makes sense. The fewer people who know about the for-sale status, the better – so they may only want to grant access to buyers with the financial means to actually purchase the business. Think of it like having to provide a real estate agent with a pre-approval from a bank to see a house (which is very, very common).

Once you have signed the NDA and provided proof of funds, you will not only be given access to the name and location of the business. You will also get access to financial records, employee information, contract information, proprietary information and the like. What a seller is providing to you is far more than you are giving in return.

Are you looking for a business to buy and have been frustrated by the lack of information you can find online? Would you like to know more about the NDA you will have to sign? Ask us! Please leave any questions or comments and we would be happy to help.

Michael Monnot

Buying A Business? 6 Ways To Set Yourself Up For Success

Published May 21, 2024

Buying yourself a business is a big deal, and you obviously want to give yourself the best chance at success.

How can you give yourself a leg up before someone hands you the keys? Here’s 6 ways:

1. Do your homework

This one might sound ridiculous – but most people would be shocked at how little research some business buyers do. You shouldn’t just be searching business listings. You should be looking at market trends, looking at what types of businesses are doing well and what types of businesses are struggling, what the local market actually looks like in the areas you’re considering, who your competition would be and how they’re doing things differently, what the areas for potential growth are, what the marketing opportunities could be – the list is long and should be exhaustive. You should have a decent grasp on the area, the market and the trends long before your first meeting with a seller.

2. Stay within your skillset

When you make a major life change like buying a new business it can be tempting to jump into something completely new, but if you’re buying a business this is a huge mistake. Taking over as the owner of a business is hard enough because there’s a steep learning curve. You have to learn absolutely everything. Buying a business where you have zero practical experience takes that learning curve and makes it terrifyingly steep. Do yourself a favor and look at business opportunities that will utilize the skills you already have.

3. Make yourself a business plan

Starting any new venture without a plan is foolhardy at best. You need to go into your new business with an idea of where you think the business is headed, what you need your metrics to be in order to remain sustainable and where the line is when you walk away and lock the doors. A properly laid out business plan will help you hit the ground running, instead of guessing where you are and where you need to be.

4. Don’t kill all of your capital

If you have $100,000 to spend on a new business, you should not be looking at $100,000 businesses. You need to reserve a decent chunk of your available capital for all the things you’re going to need to spend money on. Commercial rental deposits, licensing and permitting fees, initial payroll, new inventory orders, etc. Burning up all of your capital with the purchase alone will put you in a very precarious position right out of the gate. Reserve some of your cash to keep yourself from ending up in a bind.

5. Don’t focus on the wrong things

It can be exciting to walk into your new business on your first day as owner and “make it your own” – the temptation can be enormous to immediately start changing things to your liking. The problem here is you bought a functional, operating business. You have no idea on day one why that business is able to keep the doors open. Too many changes too fast (particularly changes meant only to satisfy your tastes) are almost always a waste of resources and time – and have the potential to drive away your regular clientele and staff. Focus on learning why things are the way they are, then make slow and incremental changes as needed.

6. Don’t ignoring marketing

Many small businesses fail to use every marketing opportunity – some because of lack of time or resources, some because of burnout. Many new business owners walk in on day one and focus all of their energy on things other than marketing. Learning the business, getting to know the staff and regulars, making changes and the like. While these are important parts of your first days as owner, a big chunk of your energy should be focused on getting that business out to as many new customers as possible. Maybe the business needs a new website, maybe it needs a social media strategy, maybe it needs more community engagement. You need to be planning your new marketing strategy before you get handed the keys so you can begin to roll it out on day one.

The message here is there are some very important things you can do both before you buy your new business as well as in your early days as owner that will help you set yourself up for success.

Are you looking at businesses to buy but aren’t sure what types of businesses would fit with your skillset? Would you like to know more about how to create a business plan or how to implement a new marketing strategy? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

Why Buying A Bar Can Be A Good Or A Bad Idea

Published May 6, 2024

A smart, capable guy who has never worked a single, solitary second in the restaurant industry buys himself a bar – and within six months he’s out of business. How does that happen?

We like to use the classic bar example because it illustrates a really crucial point that all business buyers must consider. You really need to have some practical experience if you want to have hope for success.

Why?

Getting handed the keys and walking in to run the business you now own is a daunting, uphill task. You have EVERYTHING to learn. How the business runs, what the standard operating procedures are, how to run payroll, how to keep the books, how to manage the staff, what contracts need to be fulfilled and renewed, how to fix equipment, how to keep on top of your licenses and permits, etc. – the list is incredibly long.

What you don’t want to do to yourself is add learning an entirely new industry to the mix. You really need to know something about what a business like this is like, day to day. Otherwise you’ve just created an alarmingly steep learning curve for yourself. One that many, many failed business owners have been unable to overcome.

We’ll go back to the bar example. The guy who bought the bar wasn’t necessarily bad at running a business, the issue was the type of business he bought.

Bars are fun when you patronize them, but many people mistakenly assume that owning a bar will be just as fun – particularly those people who have never worked in one.

The hours are long and brutal because your day starts in the morning for deliveries and the like and then ends extremely late at night after last call and cleaning. The margins can be razor thin, you constantly have to monitor your staff as theft is easy, you have to stay on top of your inventory, employee turnover is high so training new staff is a constant (as is having to work the shifts yourself for said staff when they can’t or don’t show up), you have to watch for fake ids, overserved patrons, support your staff when it’s busy – all things a former bar employee would know.

Lots of people leave their 9 to 5 jobs and buy a bar because they think owning a bar will allow them to make their own schedule, be able to attend their kid’s baseball games in the evenings and sit at their own bar having drinks with their favorite regulars a couple nights a week. See how vast the difference is between the dream and reality? That vast gap is the reason people fail.

How do you keep this from happening to you?

Buy a business in an industry where you have some practical experience. An accountant doesn’t have to buy an accounting firm, but they can buy a business that uses the practical skills they’ve acquired as an accountant.

And if you really want to buy a bar, go spend a couple of months working in one first. Learn the ins and outs. See if you really want that life. If you do, fantastic. You can now use those skills and practical experience to make the purchase of a bar successful.

Have you always wanted to own a particular type of business but hadn’t considered the importance of practical experience? Would you like to know what types of businesses could work for you with your specific set of practical experience? Ask us! Leave questions or comments for us here and we would be happy to help.

Michael Monnot

Why You Can’t Offer Less Because You Don’t Like Something

Published April 29, 2024

Think about buying a house. You assume going in that the house is priced based on comps and the current market. As you walk in you see that the current owners painted the kitchen a color you hate, and you aren’t a big fan of the style of cabinetry in the bathrooms. Should a difference of aesthetic opinion mean you should get a steep discount on the house? Obviously not. The house is worth what it’s worth – as is.

The same holds true for businesses. You don’t’ get to steeply discount an offer just because there’s something about the business you would have done differently. The business is listed for the price it’s listed for – as is.

Perhaps you feel differently about the salary the owner takes. Maybe you aren’t a fan of the way contracts with clients are structured or you wouldn’t have as many employees. Differences of opinion do not mean that you can change the value of a business. The business operates and generates cash flow today because of the decisions of the current owner. You can either accept the value that the owner has placed on their business or not.

If you hate the choices of the current owner, guess what? You can easily change those choices when you become the new owner.

We aren’t saying that you have to accept a listing price or a counter offer. The point we are trying to make here is there’s a difference between disagreeing with the value of used commercial kitchen equipment and negotiating for a lower price and trying to negotiate a lower price because you hate a choice the current owner made.

A word of caution here. It’s a terrible idea to walk into a currently operating business and immediately change everything. The business operates and generates the cash flow it needs to survive based on all the choices then previous owner made. If you change too much too soon you risk missing the reasons why the business works.

Perhaps the quaint, vintage-style of the café you just bought is the entire reason your regular clientele frequents the place. Changing the decor and style might drive your bread-and-butter regulars away. Keep the business as-is for a time after you take over – then make small, incremental changes to better suit your ownership style in ways that don’t hurt your bottom line.

If you don’t like the way a business is run or choices an owner has made you have two paths to take. You can walk away from that business or make changes when you take over. Your opinions of past ownership choices don’t change the value.

Are you considering buying a business and want to know more about how sellers price businesses? Would you like to know what you should look for in a business when comparing the listing price to what the business should be worth? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

Why Do You Need That? Why Business Buyers Have To Provide Financial Statements

Published April 15, 2024

Talking about how much money you have is well, uncomfortable. It would be profoundly odd to approach someone at a party and ask how much cash is in their checking account. It’s considered extremely private information, and as such it’s not something most people want to be forthcoming about.

This natural resistance to disclosing your financial situation becomes a problem, however, if you’re trying to buy a business. Business brokers, sellers, commercial landlords and the like are all going to ask you how much money you have and to put that information into writing. Yikes, right?

Not really. Try to buy a house (or even look at houses to buy) without written preapproval from a bank. Most real estate agents won’t allow you in the door of their listing without proof you have the funds necessary to buy that house. Why? If you don’t have the money, it’s a colossal waste of everyone’s time.

The same rules apply in the business-for-sale world. You have to prove that you have enough to buy a business, have enough collateral to qualify for special funding, have the capital available to pay your lease and make payroll out of the gate, etc. No one wants to waste valuable time disclosing a business to someone who can’t actually buy it.

Notice we said disclosing and not showing. You can’t just go see a business for sale. Business sales are conducted under a veil of confidentiality – for many reasons. Sellers don’t want the entire staff to find out the business is for sale and quite en masse. They don’t want to lose critical contracts. They don’t want vendors to switch to the competition. They don’t want the profoundly powerful (and almost always profoundly incorrect) assumption that a business for sale is a business on the brink of failure to drive their regular clientele away. Confidentiality is very, very important.

What that means for you as a buyer is you can’t just waltz in anywhere, whenever you feel like it. You have to look at relatively vague business listings and then pick a few you like. You’ll then have your business broker get you the non-disclosure agreements (NDAs) for those businesses so you can find out the name, location and other confidential information like P&L statements.

In some cases, the sellers are going to request a financial statement from you before any NDA will be available to sign. This is a completely fair thing to request. They have the right to ensure that you’re a real buyer before they disclose to a complete stranger potentially damaging information. You’ll likely have to provide a statement about how much cash you currently have, stocks and the like, property you own and so on. And you’ll have to share this information with not only your broker, the seller’s broker and the seller but your future commercial landlord as well. So get comfortable with the idea early.

The point here is although it might initially feel like you’re divulging a lot of private information – you need to consider the trade off. You’re proving you’re a real buyer and a business owner is trusting you in return with everything about their business.

Are you looking at businesses to buy but aren’t comfortable with providing a financial statement? Would you like to know more about why confidentiality (and ensuring buyers are real buyers) is so important in business sales? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

The Power Of Preparation: Why A Comprehensive List Of Questions Is Better

Published April 1, 2024

When you’re in the process of buying a business, you’re going to have questions – lots of them. It might be tempting to ask each question individually and as they come to you, but the best approach (and the true power) lies in preparation – in assembling comprehensive lists of questions that not only makes a more efficient use of time but also helps you to better understand the business you are considering.

Why can’t the seller just answer my questions as they come to me? Why do I need to make lists of questions instead?

To begin with, asking a question and then getting an an answer during a business transaction isn’t a simple process. You come up with a question, you send that question to your business broker, they send it to the seller’s broker, that broker then sends your question to the seller, the seller has to get you an answer and then the process repeats itself in reverse. This takes time, time a seller has to find somehow while running the business you’re trying to buy. Sending question after question after question will only bog down the deal, annoy all those involved and won’t help you figure out exactly what you need from your seller.

Instead, look at the initial information you are provided and make a list of questions. Bounce that list of questions off of your business broker and see if they already have some of the answers. Focus on the areas that are of real importance – for instance it would be beneficial to ask about the length of employee contracts but a complete waste of time to ask what color the walls are painted.

Every question of substance holds weight because every answer to those questions is a potential pivot point. This is why it’s so important to only ask questions that matter, and to ask them in batches. Asking one question at a time can lead to a disjointed and inefficient exchange of information – as well as a frustrated and annoyed seller. Well-structured lists also keep you thinking about the different aspects of the business. As you make and edit your lists invariably new thoughts and questions will come to you – as well as ideas to help your new business grow with you at the helm. Your lists will keep the conversation (and your thoughts) focused and organized, maximizing the use of time and resources. This efficiency is particularly crucial in negotiations, as an irritated seller is going to be far more difficult when it comes to the big pieces of your deal.

The most successful business buyers are efficient partners in negotiations. By demonstrating your preparedness with thoughtfully curated lists of questions, you signal to the seller that you are serious, diligent and committed to a fair process – and you aren’t going to waste their time. This fosters trust and goodwill, paving the way for smoother negotiations and a stronger foundation for the future relationship you’ll need throughout the training period and the transition from one owner to another.

Are you looking at businesses to buy and hadn’t thought about asking questions in bunches instead of individually? Would you like to know what some common business buyer questions are? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

Practical Experience: Why Buying A Business In An Industry You Know Matters

Published March 18, 2024

In the world of entrepreneurship, the decision to buy a business is a significant step that demands careful consideration. While the allure of diving into a new industry might seem like a good idea, there’s a compelling argument for purchasing a business within an industry where you already have practical experience. This approach brings with it a host of advantages that can significantly enhance your chances of success.

Let’s delve into why buying a business in an industry you know matters.

The first big benefit of buying a business in an industry you’ve worked in is the depth of knowledge you bring to the table. Practical experience provides insights that Google searches, books and market analyses can’t replicate. You understand the nuances, challenges and opportunities specific to your field – giving you a distinct advantage. This familiarity breeds confidence in your decision-making process, reducing the likelihood of costly mistakes.

Secondly, business is built on relationships – and your existing network within the industry can be a game-changer. When you buy a business in your field, you’re not starting from scratch; you’re tapping into an established ecosystem of suppliers, customers, and collaborators. Leveraging these connections can fast-track your growth.

Third, stepping into an entirely new industry comes with a steep learning curve, but buying a business in an industry you know can significantly flatten that curve. You already have the basic knowledge – no training or education required. You can focus your efforts on refining existing processes, optimizing operations and implementing improvements from day one because you don’t need to learn EVERYTHING.

Buying a business in an industry where you have practical experience isn’t just a good business decision – it’s a strategic advantage that can set you up for long-term success. Your insider knowledge, network and ability to navigate the intricacies of your field position you ahead of the curve. This enables you to make informed decisions and capitalize on opportunities effectively.

While venturing into uncharted territory may hold its allure, the importance of buying within an industry you know can’t be overstated. Before you embark on your entrepreneurial journey, consider the power of practical experience.

Have you been considering business ownership but didn’t think about focusing on businesses where you have practical experience? Would you like to know what businesses are currently on the market in your areas of expertise? Ask us! Please leave any questions or comments and we would be happy to help.

Michael Monnot