Great Broker/Bad Broker: How Asking Questions Ensures The Best Help

Posted in Business Broker Why & How, Buyers Articles, Sellers Articles

Published November 13, 2023

Like any industry, there are great business brokers and there are those who shouldn’t even call themselves business brokers.

 

How do you ensure that the broker you choose to list or buy with is one of the great ones?

 

 

Ask questions.

 

What kinds of partnerships do they have with other brokers and with broker’s associations?

 

If a broker is a lone-wolf of sorts with no industry connections, they might have a tough time properly marketing your business or getting access to the listings you are interested in.

 

How many transactions have they closed in the last year?

 

If a broker has only closed one business transaction in the last year (or none at all), they are likely not the broker for you. Results will speak volumes about work ethic and knowledge of the industry.

 

Do they work in a very large office with many brokers, or do they work in a much smaller brokerage?

 

The benefits of choosing a broker that is part of a much larger firm may be the associations with other brokers that they have in-house. This might give you access to more listings and more potential buyers. Just remember to ask about a broker’s individual results. The firm they work for may have sold 50 businesses last year, but they may have only been responsible for one. On the other hand, there are some in the industry (usually those who are part of a very large office) who will tell you that using a one man shop or a small brokerage is a mistake. This is not necessarily the case. Look at results and inquire about the industry associations they have. A one man shop or a small brokerage might be your best bet because they are able to achieve success without the backing of a larger firm – a surefire testimony to how they work.

 

Are they really a business broker?

 

This might sound like a ridiculous question to ask, but it is an important one. Some involved in the real estate industry will try to help clients with buying and selling businesses while they are working on home and property listings. Selling a house and selling a business are two completely different animals. You might have a great realtor, but that doesn’t mean that they will know the first thing about a business transaction. Other types of professionals may try to broker business transactions as a side business. Business brokers are specialists and their field, so use an actual business broker for any business transaction if you want to ensure success.

 

Are past clients happy?

 

Look for a business broker with positive reviews and testimonials from former clients. Ask about whether they have repeat clients, and if they have any references. Also inquire about how they get the majority of their new business. If it comes from referrals, then you know they are good at what they do.

 

As with any major business decision, do your homework. The right choice of business broker can make your buying or selling experience a very positive one.

 

Are you a buyer or seller and want to know more about how to choose a business broker? Would you like to know more about how we help our clients through a business transaction? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Why A Franchise Buyer Needs Their Own Business Broker

Posted in Business Broker Why & How, Buyers Articles

Published October 23, 2023

Are you interested in buying a franchise? Do you already have a franchise in mind that you would like to be a part of?

 

 

If you answered yes to either of these questions, you might think that your first step is to get in touch with the person in charge of new franchises or franchise sales. This should NOT be your first step. Your first step is to find a business broker familiar with franchise sales and hire them to help you.

 

Why? Don’t the franchises themselves have people who can help me?

 

They do, and they don’t. Some franchises do have a business intermediary or business broker of sorts, but what you need to question is where the loyalties of a broker employed by the franchise will be. They most certainly will not be with you.

 

Something else you should know. The commission paid to a business broker at the close of a business sale is paid by the seller of the business. Franchise companies without an in-house broker will essentially use the broker who is the lowest bidder. Is that the kind of person you want helping you? Buying a business is a major personal investment; you will definitely want quality instead of someone else’s bargain.

 

When you are buying a franchise, you want someone on your side who can help you through the ins and out of the process. Using an affiliate of the franchise might not be the best fit for you, so do a bit of homework beforehand and get yourself a broker who is qualified, experienced and above all there to assist YOU.

 

Are you interested in buying a franchise, but you have questions about how to begin? Would you like to know what types of franchise businesses are currently for sale in the areas you’re interested in? Ask us! Please feel free to leave us a comment or question here, and we will be happy to assist you on the road to franchise ownership.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

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You Don’t Want Us To Tell You What You Want To Hear: Choosing A Business Broker

Posted in Business Broker Why & How, Sellers Articles

Published September 28, 2023

When it comes to selling your business one of the most critical decisions you’ll make is selecting the right business broker. A trustworthy and experienced broker can be your guiding light through the complex process of selling your business.

 

One of the first things you’ll discuss with potential brokers is a listing price for your business. A caveat here: not all brokers are created equal – and it’s imperative to choose one who tells you the unvarnished truth about what your business is worth.

 

It does you no good to go with a broker who only tells you what you want to hear. 

 

Why would a broker tell you what you want to hear instead of listing your business for a realistic price? Your listing benefits them whether your business sells or not. 

 

 

A business broker who lets you list your business for whatever you want only wants your listing because the listing generates calls from potential buyers. Those potential buyers aren’t going to go for your absurdly priced business, but the broker doesn’t care because they can just offer those buyers a different listing that’s more reasonably priced. This is an important (but ugly) part of the business-for-sale market that’s important for you to understand when you’re deciding on a broker. The broker who pushes back, who is brutally honest and has the rationale to backup their thoughts is far, far better for your success than the guy who tells you yes to anything. 

 

Here’s why:

 

Many business owners understandably have a strong emotional attachment to their business. You’ve likely put in countless hours and your blood, sweat and tears. Consequently, you may overestimate the value of your business based on sentiment rather than a realistic assessment of market conditions, financials and other objective factors. This is where a blunt business broker becomes invaluable.

 

A broker who actually has your success as the primary goal will conduct a thorough and objective business valuation based on market trends, financial data and industry benchmarks. They won’t inflate the value to appease your expectations, but rather provide an accurate assessment, even if it’s less than what you had hoped for.

 

While it’s natural to want a ton of money for your business, a good broker will help you set realistic expectations. Look for someone who backs up their thoughts with real metrics and has your best interest at heart, whether you like what you hear or not.

 

Would you like to know what businesses like yours are currently selling for? Do you have questions about how we help you put together a realistic listing price for your 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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Buying Businesses: Why You Shouldn’t Sign A Million NDAs

Posted in Business Broker Why & How, Buyers Articles

Published April 24, 2023

A million NDAs? Yes, that’s a profound exaggeration. It would be nearly impossible and ridiculous to sign a million of anything. The point we’re trying to make is your approach to buying a business will greatly impact your ability to get to a closing table.

 

How?

 

The NDA (non-disclosure agreement) is a document you sign before the name, location and any sensitive information about a business for sale can be revealed to you. It is a critical step in the business buying process, so if you’re in the market to buy a business – you’ll be signing NDAs.

 

 

What you shouldn’t do is sign a ton of them. Why? It’s an enormous waste of you time and energy.

 

The NDA should only be signed after you have completed a few other steps. First and foremost you need to figure out your goals for business ownership (a more flexible schedule or greater income potential, for example) and then decide how much money you have to invest in your new venture. The second step would be to have a conversation with an experienced and qualified business broker about your goals, the industries where you have interest/practical experience and your available capital. Your broker should then find you some cursory listings to review. If any of those listings look promising, then and only then would you sign the NDA for that particular listing.

 

If a business broker is doing their job the only people who are allowed to sign the NDA are people who would not only be a successful buyer of the business (they have enough capital) but also a successful owner of the business (they have the practical experience and passion to keep the business in the red). It serves absolutely no one to randomly send NDAs to people who can’t successfully buy and run that business. All it does is put the business at risk for disclosure of the for-sale status to the wrong person (read why that is bad here).

 

There are brokers out there who will automatically send NDAs to anyone who shoots them an email, no questions asked – so as a buyer it’s possible to ask for, receive and sign a ton of NDAs. The issue is those NDAs are likely for businesses that you either would be unable to buy or wouldn’t suit the life you’d like to have – so why waste your time?

 

Talk to the right broker – someone who asks you questions and helps you narrow down business listings. Then sign.

 

Are you interested in buying a business and have questions about the NDA? Have you signed a ton of NDAs without much success and are looking to try a different approach? Talk to us! Feel free to leave any comments or questions and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Red Tape For Business Buyers: A Guide

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

Published April 17, 2023

You know how everyone always jokes about what a nightmare bureaucracy can be? If you are buying a business, prepare yourself – you are going to have your fair share of red tape. All of it will need to be completed in the correct order and to the correct level of repetition before you can operate your business.

 

 

It can be frustrating and might (at times) feel impossible, but every operating business has made it to the end of this process. Consider it an annoying right of passage. 

 

This is a part of the business transaction process where your business broker can be worth their weight in gold. A good broker will have someone who can help you with any and all red tape, or they will be able to help you themselves. Some business buyers choose to have their broker (or a specialized contractor) do all of the licensing, others are able to get it completed with just a few suggestions. How you handle this part of buying your business is up to you.

 

Want some pointers? Here’s a sample of our best advice, derived from many trips down bureaucracy lane:

 

DO NOT PROCRASTINATE!!!

Many red tape items are contingent on one agency completing or signing off before another can even begin, so start early and stay on top of it. You can’t get all of your licensing and permitting done the day of (or even the day before) closing. 

 

Gather All Of The Documents Before You Start:

First you will want to try to get together the list of everything your broker and the seller think you will need. Ask the seller for copies of the licenses and permits they hold, as you will need their license and permit numbers to fill out your own.

 

Go online and print out every application you think you might need, even if you are going to be submitting them online. A printed version will allow you to collect all of the needed numbers/addresses/names/titles/etc. so you don’t end up timed out of the online application process (they pretty much all have a time limit and then they force you to start over).

 

Once you have assembled your pile of seller information and printed applications keep all of it together and take it everywhere you go. Many applications require signatures from multiple government agencies or departments.

 

Naming And The IRS:

The very first step is the naming process, even if you are buying an existing business and keeping the business name the same. Why? Your business will technically have two names, the DBA or “Doing Business As” (also called the Fictitious Name) and the legal name which can literally be “Anything You Want, LLC”. You will need to file your DBA with the Division of Corporations in your state, and the legal name will need to be filed through your attorney or an online legal service like LegalZoom. You will also need to get a Federal Employer Identification Number (also called a FEIN or an EIN) from the IRS.

 

Operational Licenses:

If the seller currently holds a license needed for the operation of the business, like a liquor license, then instead of starting from scratch you will be using applications for transferring that license. A word to the wise here – don’t rely solely on the information you find online about what is required to get the licenses issued or transferred. Get someone – a real, live person on the phone. Better yet, find the local office (instead of the statewide call center), and get a local agent on the phone. The local agents are the ones who will be processing and issuing your license, so they are the ones you need to keep happy. Another caveat? Be really patient with this part of the process. You can call the same call center three different times and get three completely different answers to a single question. 

 

Local Licenses:

You will also need to get yourself a Certificate of Use and your local Business Tax Receipt or BTR (also called the Occupational License). The Certificate of Use gets issued after your building and fire inspections, your BTR after your Certificate of Use goes through. If you are buying an existing business, you may not need an inspection if the business has had one recently, but you will need to call and check. Again, get a living person on the phone to discuss the requirements and process and you will be far better off than trying to divine what you need from a cryptic government website.

 

Costs:

Did we forget to mention that pretty much all licensing and permitting applications come with a fee? Yes, they all do. While rarely astronomical in price, the costs will be completely dependent on what applications you are filling out, what inspections you need, etc. Be ready with your credit card or checkbook when you start the process.

 

It Can Be Done, Really.

This is one of the parts of being your own boss that is not very fun, but with a good dose of patience and a bit of organization it will all fall into place. Most of the real, live people you will get on the phone are very helpful, and remember that your broker is always there as well.

 

Are you thinking about buying a business, or do you already have a business in mind and are wondering about what kinds of licenses or permits you will need? Are you having trouble finding the agencies you need to get your applications going? Ask us! Please feel free to leave us a comment or question here, and we will be happy to help you with navigating the red tape.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Business Sellers – Is Your Broker Protecting Your Business? They Should

Posted in Business Broker Why & How, Sellers Articles

Published April 6, 2023

 

If you are considering selling your business you don’t just need help, you need the right help.

 

You risk way more than you should by sticking a for-sale sign in the window. The powerful misconception that any business for sale is a business on the brink of failure can mean devastating consequences if your for-sale status is revealed. You entire staff can panic and quit. Clients can cancel contracts. Your competition can see a potential sale as a weakness to be exploited. It’s all bad.

 

How do you get the word out about selling your business without exposing yourself to the downfalls of everyone knowing it’s for sale? An experienced and qualified business broker.

 

A good broker acts as a shield and a buffer. They keep the for-sale status of your business a closely guarded secret while also marketing your business to potential buyers. They verify every person is who they say they are before they are allowed any access.

 

How? They actually talk to every potential buyer.

 

They get real legal names and true physical addresses – then they look people up. They ensure the proper nondisclosure agreements (NDAs) are signed and that everyone understand the rules. They make sure the people who are looking at your business can actually afford it so no one’s time is wasted. They act as a communication buffer between you and a buyer so the deal can stay on track. 

 

It should go without saying that keeping potentially damaging information out of the wrong hands is extremely important.

 

Guess what? Not all business brokers do the job the way they should.

 

There are brokers who essentially robo-send NDAs to anyone who shoots them an email, no questions asked. They never actually speak with buyers, never verify identities or ask about available funds to by a business. These brokers don’t care about your business. They are just using your business to generate calls and emails from any and all buyers – without caring if those buyers are someone who should know about your for-sale status or listing details. 

 

Avoid these brokers by asking questions – lots of questions – before you list your business. How will this broker ensure confidentiality? Do they require buyers to identify who they are before information is disclosed? Do they actually talk to every buyer before sending them the details of your business? They should. 

 

Are you considering selling your business and want to know what measures we use to protect the confidentiality of your business and transaction? Would you like to know more about the questions we ask potential buyers? 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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Does Your Broker Care About Qualified And Informed Buyers? They Should

Posted in Business Broker Why & How, Buyers Articles, Sellers Articles

Published February 6, 2023

The process of buying and selling businesses can be a bit frustrating. There are rules and procedures in place that ensure the for-sale status and proprietary information of a business on the market only ends up in the hands of the people it should. Those rules and procedures rely on vetting potential buyers and then having buyers who are qualified sign the appropriate nondisclosure agreements (NDAs).

 

 

Here’s how it typically should look. A buyer calls a business broker and has a conversation about their goals for business ownership, the capital they have ready to invest and their past experience. The broker then uses that information to put together a few listings that look like they might match. If a listing or two catches the buyer’s eye, they sign the NDA for that business in order to find out more (like the location, basic financials, etc.). If they like what they see, they will then coordinate a conference call or face to face meeting with the business seller to ask questions. After a few of these meetings/calls a site visit might be scheduled before or after hours when the staff and customers won’t be around. If a buyer is interested they can submit a purchase offer and negotiations can begin.

 

Notice something? The sale of a business is complicated, requires a lot of steps and a lot of time. If the brokers involved are doing their job the buyers who enter this complex and time consuming process are both aware of what they’re looking for and actually able to buy the business in the end.

 

Here’s what you don’t want. A broker who will send you dozens of NDAs to sign without ever speaking to you, meaning you end up wasting your time looking at businesses that would never meet your goals. A broker who will bring a parade buyers through your business for site visits that could never afford to actually buy your business. A broker who will entertain the whims of a buyer who doesn’t have the practical experience necessary to qualify for a SBA loan or that your commercial landlord would immediately reject.

 

A broker who asks the right questions keeps a deal on track and keeps from wasting everyone’s time. You want a broker who actually talks to buyers. You want to be (if you’re a buyer) and want to work with (if you’re a seller) a buyer who understands the process, knows what businesses will actually fit with their goals and has the money necessary to get a deal to closing. 

 

The message here is you need to ask any broker you work with questions and you need to keep an eye out for red flags. If you’re a buyer a broker should be asking you LOTS of questions before they send you any NDA. If you’re a seller your broker should only be bringing you buyers who are qualified and would be successful future owners of your business. 

 

Are you looking at businesses to buy and haven’t had a broker yet who asked you a single question? Are you considering selling your business and want to know what type of buyer would be a good for your 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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Is My Business Broker A “Good” One? What You Shouldn’t Pay For

Posted in Business Broker Why & How, Buyers Articles, Sellers Articles

Published December 12, 2022

Like any industry, there are good business brokers and there are those who should find another way to make a living. Determining if the broker you’ve chosen falls into the “good” category might seem tough, but one way you can decide is by looking at the things your broker is willing to do without you having to pay extra for that service.

 

 

Most brokers earn a commission at closing, and the amount is based on a percentage of the sale price. If you are a seller, this percentage will be negotiated at the time of listing and will be a part of the listing agreement.

 

Beware the broker who will forgo the listing agreement or who will drastically cut their commission percentage just to get your listing. A great broker will stand firm of their typical percentage because they know how much work they are putting into selling your business. A desperate broker who can’t get and keep regular business will be willing to do anything to get you to sign on the bottom line. Also beware of a broker who charges extra fees for something as basic as your marketing package or advertising costs. These basic elements necessary to sell your business come out of the commission your broker makes at the time of the sale, not before.

 

For buyers, your broker gets a chunk of the money you pay for the business, so technically you are paying them even though you don’t have an agreement. Beware the broker who forces you to pay up front for their services. This shows a lack of confidence in their ability to find you a business and get you all the way through to closing. A great broker is not going to demand a retainer, nor are they going to charge you extra for help with the things every buyer needs – like basic assistance with licensing. If you are getting billed for basic services, then you probably need a different broker.

 

The key here is to watch for those brokers who put the amount of money they make in front of the reason they do what they do for a living. A great broker likes their job. They like helping the small business community grow, and they live for the chase and the thrill of negotiations. They don’t live to nickel and dime their clients. They get the vast majority of their listings through the referrals by former clients and members of their local small business community. They go to bat for their clients and are willing to help.

 

If the things we’ve named for a great broker don’t sound anything like the broker you are currently working with – it might be time for a change. When you initially interview brokers – ask about their referral rate, what kinds of fees they charge (there shouldn’t be any besides the commission) and what kind of percentage they take for commissions. The answers to these questions will speak volumes about the motivations of your broker and give you a good idea of where they fall on the great vs. not-so-great broker divide.

 

Have you had a not-so-great broker experience? Do you have questions about our referral rates and typical commission percentages? Ask us! Leave a comment or question, and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

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Buying A Business? Why Research & Questions Should Be Your Top Priority

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

Published April 25, 2022

We get it. Once you’ve decided that you are ready to make the leap and buy a business it can be hard to keep from going directly to the shopping phase. It’s fun to look at business listings and envision yourself as the owner. Guess what? Shopping for businesses in this way is unproductive and ultimately won’t get you what you’re hoping for from business ownership.

 

Why?

 

Any business, large or small, can be condensed down to one major thing. A business is cash flow. You are providing goods or services that you pay for and then your customers pay you. It’s the money in and money out that makes a business successful, and hopefully you’re making more than you’re spending.

 

If a business is essentially just cash flow it really doesn’t matter what color the walls are. Looking at pictures of businesses on the internet isn’t telling you much of the story. Neither is perusing vague P&L statements.

 

What you really need to know about a business is does it generate (or have the potential to generate) the amount of cash flow I need to live day to day as the owner – and is it possible for me to be successful in this industry.

 

How do you figure that out? Research and questions.

 

 

Research the areas where you’d like your business to be. Can you afford to live there? How much would you need to make to have that be possible? Will the area work for you and your family? If you’d love to live on the beach, but your target area has zero schools for your kids you might need to redirect your target area.

 

Research the different industry sectors possible in that area. Do you have any practical experience or education that would make a particular industry better for you than another? Will the industries available in your target area match with your skills? If you’ve always wanted to own a big restaurant but have never spent a single day in the restaurant industry, then looking at food service industry business is likely a mistake.

 

Once you’ve done some research, start asking questions. Have a conversation with an experienced and qualified business broker about the areas you’re considering, your practical experience and education, your goals for business ownership and the amount of capital you have to invest. Ask lots of questions – about the area, about the industries that do well in that area, about what types of businesses would both fit with your experience and with what you hope to get out of owning your own business.

 

Notice something? So far we haven’t said “look at listings” because it isn’t helpful until you know where you want to be and what you need to be successful.

 

Don’t waste a ton of time scouring the internet for your future business. Do some research and then get in touch with a business broker.

 

Do you have questions about the process to buy a business? Would you like to know what types of businesses would match 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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Planning Your Trip: 3 Tips For Relocating Business Buyers

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

Published March 28, 2022

 

Maybe it was the lockdowns of the pandemic. Maybe it’s just that you’re burned out. Whatever the reason, you’ve been daydreaming about moving somewhere else and buying a business. Guess what? There’s no better time than now to make the leap.

 

Want some tips on how to start? Here’s 3:

 

Do lots of research:

 

This one might sound obvious, but most people would be shocked at how little research most buyers do before taking a huge leap like this. Take a deep dive into the locations that interest you. If it’s somewhere you’ve only ever visited on vacation, research what it’s like to live there year-round. Is it a seasonal economy that you’ll need to account for when choosing the type of business to buy? Can you afford to buy or rent a home close enough to your business to make your commute make sense? If you have kids – what are the schools like and where do you need to live in order to get your kids into a school where they’ll be successful? What are the property taxes like? Are crazy weather events like hurricanes something you need to think about? The point here is you need to have a good handle on where you both want to and realistically can be long before you start a serious search for businesses to buy.

 

Find the right help:

 

If you’re serious about buying a business in a new area, a local business broker is going to be an immense help. They know the area, the local small business economy, the local licensing/permitting requirements, the major players in terms of commercial property managers – the list goes on and on. Having someone with local experience as your guide will make both finding the right business and navigating the buying process much easier than going it alone or using someone who doesn’t know the area.

 

Have the site visits planned way before you leave for your trip:

 

Seeing a business you are considering is an important step, but what many buyers don’t understand is this step never comes first. Businesses are bought and sold under the protection of confidentiality (see why here), so you can’t just fly into town and waltz into whatever business you please. The steps that are required before you set foot in a physical location go like this:

 

You talk to a local business broker about your goals for business ownership, the industries you’re interested in and the amount of capital you have to invest. They find you business listings that would match your goals and means. If any of those listings look promising you can request more information by signing a non-disclosure agreement for each business you’re still considering. After looking over the information a conference call with the sellers is next, so you can ask questions about the business and see if it’s still a good fit. If after your calls you’d like to see the physical location this can be arranged. It usually requires seeing the business before or after hours when no staff or customers are around and will need to be coordinated between the schedules of the seller, the buyer and the brokers involved. It should be obvious that this process can’t be completed once you’ve landed on your scouting trip and have called a local broker for the very first time. You need to plan your site visits when you are doing your initial trip planning – like before you’ve even bought your plane tickets. It is a colossal waste of your own time to fly in and see businesses you haven’t already vetted, so plan your trip with that in mind. 

 

If you’re considering a big move – now is the time. Contact a local business broker and get the process moving!

 

Have you always wanted to move somewhere else and own your own business? Do you have more questions about the steps of the business buying process? 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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