You are very excited about your decision to buy your own business, but a few days into your search, you discover that you are having trouble getting cooperation from anyone in the industry.

Why is this happening? The business marketplace is complicated, and there are fundamental differences about this market that a buyer will need to understand in order to navigate it successfully.

First of all, buying a business is almost nothing like buying a house, something most new buyers are surprised to hear. The major difference is the concept of confidentiality.

In business transactions confidentiality (the concept that the only people who know the business is for sale are the sellers and the people who are going to buy it) is paramount for a number of reasons.

When the news that a business is for sale lands in the hands of the wrong people, like the staff or vendors, it can cause major issues for the business (like an entire staff quitting or the loss of vendor contracts).

As such, business buyers must follow a few guidelines in order to protect the businesses they are considering buying. You will need to sign something called a non-disclosure agreement. This agreement means that there will be legal consequences if you disclose the knowledge you have about a business that is for sale to an inappropriate party. This agreement protects the seller from such disclosures.

Confidentiality also means that you can’t drive around and pop into businesses that you know are for sale whenever you please. Meetings and visits must be scheduled in advanced with the seller to ensure that employees will not be present. It can be catastrophic for a business if a buyer walks in during business hours and starts asking questions.

How does a new buyer navigate the business marketplace successfully? Get your own business broker. They know the “rules or the road”, are able to get cooperation from sellers and other brokers, and can help you get the appropriate non-disclosure agreements from the businesses you are interested in.

Are you looking for businesses to buy, but haven’t had much luck getting anyone to help you? Do you have questions about what a non-disclosure agreement means for you as a buyer? Please feel free to leave us a comment or question here, and we will be happy to answer any business buying question you may have.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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“I own my own business.” This phrase has a great ring to it, and if you’ve ever thought about owning your own business you will have a few options.

Option one? Come up with a concept and a location and start from scratch.

The plus side to this option? The business is 100% yours from day one. Every paint color, piece of furniture, operating procedure, etc. will be something you created or decided on.

The downsides to starting this way? Everything is yours, but everything is also unproven.

Your location might be perfect, but it also might not work at all for your type of business. The only way to figure out if a location is going to work is to put a business there and see what happens. Your operating procedures, the inventory you chose – everything has not yet stood the test of time and the test of the market, so in reality you are essentially going in blind.

The other major downside? The money.

Buying a business may seem like an expensive venture, but believe us when we say that starting a business can be far more expensive, especially with the added risk of an unproven model. A brand new business needs a location – then that location needs a build out complete with the permitting and licensing to do so and also new equipment, furnishings, flooring, paint, décor, lighting…the list goes on. Then you will need to stock the place with supplies, inventory, etc. You will then need the working capital to keep the place open and running a minimum of six months – which is typically the time needed for a new business to start turning a profit. Sounds expensive, right? It is.

Option two? Buy an existing business and then make it your own.

If you buy an existing location – the location, the product or service, the operating procedures – they all work, otherwise the business wouldn’t be open.

You will be paying for the already existing, built-out and stocked location, but this price will be far less than if you did it all on your own.

Would you invest your money in an unproven business, or would you invest in a company who’s proven their staying power? Think about entrepreneurship in the same way. It is a far better bet to buy a business that already works instead of starting from the ground and building up.

Are you thinking about buying or starting a business? Do you want to know what the numbers really look like when you compare the costs of the two options? Ask us! Leave us a comment or question here, and we will be happy to help you on your journey to entrepreneurship.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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We all know the stories of the truly great entrepreneurs who started with nothing and built a business empire from the ground up. Does this really happen? Sure, we know it does, but this scenario is hardly the norm. Depending on where you find your statistics, a very large percentage (sometimes 75% or more) of startup businesses fail before their 5th year.

Why does this happen? The business world is tough, and startups are expensive. Any brand new business is gambling on an unproven product, an unproven business model, unproven operating methods and an unproven location. Many budding entrepreneurs simply see starting a business as finding a space and letting the rest fall into place. What they fail to see is balancing the enormous expense of opening a new location (lease costs, build-outs, equipment, furnishings, inventory purchasing, permitting, licensing, etc.) and then saving enough capital to make it the six-month average that it takes a new (and successful) business to start turning a profit.

Should the scary world of startups keep you from becoming a business owner? Absolutely not!

One of the best ways to enter the world of entrepreneurship is to buy a business that has already passed the startup test. If the doors are still open and better yet if the business is a success, then the initial hurdles have already been jumped for you.

What if the reason I want to own my own business is because I want to create something that is uniquely mine? You can accomplish this easily by buying an existing business. Here’s how:

Let’s say you have a really great restaurant concept. Instead of building an entire restaurant infrastructure from scratch, you can buy an already proven location that is fully equipped, furnished, licensed, staffed and stocked. When you take over the restaurant (and after you are careful about decisions on changes, see The Over-Confident Buyer: Why You Should Take Baby Steps With Your New Business) you can begin to implement your own concept over time. You will save yourself the money and the headaches of starting from scratch.

If you still are not convinced that buying an existing business is for you, talk with an experienced and qualified business broker about the difference in expense for a startup versus an existing business in the industry you are considering. A broker will also be able to talk to you about the difficulties of obtaining a location, the necessary permits and licenses, etc.

If business ownership is something you would like to see in your future, then an existing business can be a great option. Want to see what’s currently out there? Try our search page to see what kinds of businesses are available and then talk to us about the businesses that interest you.

Are you still not sold on the idea of buying an existing business? Do you have questions about how the two options for business ownership compare? 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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You have decided to buy a business, that’s great news. Now you are trying to decide if the business you buy will be from a private owner or part of a franchise. Which type of business would be right for you? Let’s look at both sides.

To Franchise

If you buy an already existing franchise location, you inherit all of the benefits of a franchise without many of the downsides. You get a built-out location, the brand, an already trained staff and tried-and-true operating procedures. You typically won’t pay the same franchise fees that the original owner of the location did, instead you will pay a transfer fee.

Although the franchise fees may seem expensive, you need to remember that what you are buying with those fees is a brand and structure that you won’t have to come up with on your own. If you buy into a larger franchise, then you may not need as much focus on marketing as you would in a privately held business as customers with brand loyalty will seek you out.

Not To Franchise

If you want your business to go in it’s own direction, then a franchise is definitely not for you. You will not be able to change the name, the menu, etc. as you see fit.

If you want to start with a new franchise location, you will face the same issues any start-up would with the additional cost of buying into the franchise with franchise fees. You will need to pay for the location and the build-out, which will need to follow the guidelines of the franchise. You will have to train your own staff, and while you might be able to borrow some training help from the franchise itself, the staffing responsibilities will be all up to you.

If you do deviate from the franchise agreement, you risk having your franchise license suspended, which is not an issue you would ever have to contend with as a private business owner.

What To Do?

As with any business decision, there are risks that cannot be avoided. Owning a franchise can be a very profitable endeavor, but you will have to play by the franchise rules. The best thing to do if this a decision you are considering is talk to an experienced and qualified business broker about the good and bad of franchise ownership. They will be better able to guide you than the brokers and representatives of the franchise you are considering who are hardly objective in this situation.

Are you considering becoming a franchisee? Do you have questions about the process? Do you have questions about the good and the bad of franchise ownership? Ask us! Please feel free to leave us a comment or question here, and we will be happy to help you with buying a franchise.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Are you tired of working for someone else? Are ready to take the entrepreneurial plunge?

Here are your first considerations when starting out on your own:

Should I buy or start a business?

Starting a business can be very tough, and a large percentage of start-up businesses don’t make it more than a few years. If this is your first foray into business ownership, it is usually a much better idea to purchase an existing business.

Why? In an existing business the business concept has proven itself to be effective because the business is still open. You will have the previous owner to show your the ropes when you first take over, and the physical space is already built out and functional. Systems of operation are already in place, all you have to do is learn how the business runs.

What kind of business is right for me?

This is where we always use the classic bar example. If you have always wanted to own your own bar, but have never worked in any aspect of the restaurant industry – then buying a bar will probably be a huge mistake. You need to choose a business where you already have some experience and expertise. Jumping into business ownership is difficult enough, you don’t want to add trying to learn an entirely new industry to the mix.

Think about work or education experiences you’ve had in your life that you enjoyed, or jobs you were very good at and try to find businesses that are in the same categories. Talk with your business broker about what industries you are considering, and they can help you narrow down your search.

How do I find a business for sale?

The best way to find businesses that might be right for you is to use the services of an experienced and knowledgeable business broker. They will know what is on the market, and will be able to find you businesses that fit your experience and budget.

Another way to scout potential businesses is to use an online business search like this one.

I found a business I want to buy, now what?

Tell your business broker that you have found a business that you are considering. They will contact the listing broker to get a non-disclosure agreement for you to sign. Once you have signed the non-disclosure, you will get to take a look at the business and some financial records to see if you would like to make an offer.

If you like what you see, you can make an offer. Once an offer gets accepted, you will enter a phase called due diligence where you will get a chance to look at everything – all financial records, contracts, etc. If you still want to buy the business, then negotiations will proceed based on what you found during due diligence. If you decide not to buy the business after due diligence, you don’t have to.

Buying a business is a big step. Make sure you choose a business that will be right for you. You also need to get help from a qualified business broker to make your transition to business ownership a positive one.

Are you thinking about buying a business, but you aren’t sure what kind of business would be right for you? Do you have more questions about the business buying process? Ask us! Please feel free to leave us a question or comment here and we will be happy to help you.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Most people dream of being their own boss, but what most fail to realize that an entrepreneur still has a boss – that boss is their business. Instead of answering to management, they answer to their bottom line, their customers, their employees, their vendors. Owning a business is a life-encompassing venture, so unless you are prepared for the responsibility and workload, then you might want to reconsider.

There are a few questions you should ask yourself in the beginning stages of the entrepreneurial plunge to assure you are prepared for the challenge:

What kind of personality do you have?

Someone who goes to engineering school because both of their parents are engineers may end up miserable because all they really want to do is paint. Your personality will drive what ultimately makes you happy in your occupation. The same is true for business owners. Some people have the natural tendency to be organized leaders (an entrepreneurial must), some people just want to own their own bar because they enjoy being a patron. The former will have great success, the latter will have a tough time finding the drive to make their establishment profitable.

What do you want to be when you grow up?

This sounds like a silly question you were asked as a child, but it will fundamentally determine what kind of business will be right for you. An owner’s job can seem at times like a 24/7 affair, so if you are passionate about what you do, you will be willing to do the extra work.

Where do I have knowledge and/or practical experience?

Back to the bar example, if you have never worked in any sector of the restaurant industry, then a food and beverage business is probably not for you. New ownership is hard enough, you don’t want to have to start from scratch the day you take over your business. Having some experience behind you will be instrumental to your success.

Do I have the blessing of my family?

If you are transitioning from a traditional 9 to 5, Monday through Friday gig to owning your own business, you must have the support of your loved ones if you have any hope of business success and keeping your family together at the same time. As entrepreneurs ourselves, we frequently have to work long hours and weekends. Vacations may only be a two or three-day long affair and then only if wi-fi is available at the hotel and cell phone reception is possible. Your entire family will likely have to sacrifice, so you will need to get them together and decide if this is the life for all of you before you proceed.

Business ownership is extremely rewarding, but it is also challenging. Do some soul searching before you decide if ownership is for you, and you will be better equipped for your new venture.

Are you considering buying a business, but are not sure what kind of business would be right for you? Do you have questions about what types of businesses would fit the amount of hours you would want to work? Please feel free to leave us a comment or question here, and we will be happy to help you on your journey to entrepreneurship.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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If you are considering taking the entrepreneurial plunge, then one of your major considerations may need to be the financing to purchase a business. One option available to those interested in purchasing a small business is what’s known as SBA (U.S. Small Business Administration) financing.

How does SBA financing work? A business buyer finds a lender who cooperates with the SBA, and up to 80% of the loan will be guaranteed to the lender by the SBA if the buyer ends up in default. This helps budding entrepreneurs tremendously because traditional lending institutions have become very gun-shy about financing in the aftermath of the economic collapse.

Sounds great, right? Ok, here’s the downside. Since the SBA is essentially a government program, it comes with a fair amount of red tape. It can sometimes be difficult to fund your business purchase this way, but it is rarely impossible. The key is to start early and talk to your business broker from the start about whether this type of financing is for you.

Have more questions? Click through the links below to find more information about SBA loans:

http://www.sba.gov/content/sba-loans

This is the official website of the U.S. Small Business Administration. Here you will find information on SBA options and the forms you will need to begin the application process.

http://www.entrepreneur.com/article/52730

An article about how to get started with a loan from the SBA.

http://www.inc.com/jeremy-quittner/sba-pulls-more-levers-for-smallest-loans.html

An article highlighting the newest move from the SBA – eliminating fees for the smallest loans, which is good news for small business buyers.

Still have more questions? Contact us here or leave us a comment or question below and we will be happy to help you find out if SBA financing will work for you.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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