Running a small business can be very challenging. You get pulled in 16 different directions every day and have the fate of your business and your employees on your shoulders. While it might seem like you should be able to be all things at all times for your business, there is one very important part of your business you shouldn’t try to handle all on your own.

Your accounting.

Keeping track of the finances of your business needs a great deal of time and energy – time and energy you as a business owner should really be spending growing your business and your customer base. It may seem like an unnecessary expense, but by handing over the incredibly important task of managing the financial record keeping of your company to someone who specializes in that work – the time that delegating your accounting gives you will pay for itself with the growth you can create.

Your numbers are also critically important when the time comes to sell your business, as your financial records are the only way you can justify your asking price to a potential buyer. You don’t want a box of crumpled receipts to be the face you put on your business when the first buyer wants to see documentation. A properly curated account of your business will not only make your numbers clear, it will show potential buyers that you had the foresight to keep this very important responsibility in the proper hands.

If your business is so small that you can’t afford an accountant yet – there are options like QuickBooks, Xero and Wave, just as examples, that will give you a guided approach to keeping your financial records on track.

The point here? When it comes to the accounting part of your business, don’t try to go it alone. Get the help that will pay off with the growth and the future sale of your business.

Do you own a business and do all of your own accounting? Would you like to know more about how professional accounting help will make your business more desirable to buyers? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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You’re in the final stages of selling your business and are more than ready to start the next phase of your life. You and a buyer have agreed on a sale price and are in the final days of due diligence. As the final sale contract begins to come together one very important part of the agreement needs to be discussed – training.

No one in their right mind is going to take over a new business without having someone show them the ropes, and if you care at all about the future of your business, the jobs of your employees and your financial return from selling – you need to take the training part of your transaction very seriously. This is even more crucial if you have seller financing as part of your deal, because if the business falters after you leave – you won’t get paid.

So, what does a typical training period look like?

For the typical small business sale, the training period is two weeks.

If you and the buyer don’t think two weeks is enough time, there are a litany of options. You can agree to stay on to train in a full-time capacity for one period of time and then a part-time capacity for a period after that. You can also agree to the two full weeks and then agree to be available on a consulting basis for several weeks or months.

You don’t want to stay on any longer than necessary, but you do need to show a new owner EVERYTHING you do – from how you unlock doors to payroll. You need to introduce the new owner to your clients, your vendors and your staff. All of these things take time. 

They don’t, however, take forever. A buyer’s cold feet and nervousness about taking the reins shouldn’t dictate the amount of time you spend training. If you can teach them what they need to know in two weeks, then that’s it.

Here’s a very important caveat that you may not have considered. Once you hand over the keys, even if you are staying on in a training capacity, you are no longer the owner and no longer the boss. The new owner is in charge, and everyone needs to answer to them, not you. This dramatic shift in the power structure at a business you very recently owned can be emotionally difficult for some sellers, especially if the new owner makes changes you don’t agree with – another reason you should keep the training period as brief as possible. 

Talk to your business broker about what they would suggest for a training period in your case. Then remember to keep your cool when dealing with the new owner.

Are you thinking about selling your business and hadn’t considered a training period after the sale? Would you like to know what we would suggest as an acceptable training period for your business? Please feel free to leave any questions or comments here and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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If you are trying to sell your business, you may already realize what a stressful process this can be. You have to assemble all of your records, answer a constant stream of questions, deal with new requests from prospective buyers – all while trying to maintain your business in good working order.

You’ve worked hard at your business – invested time, money and energy. To you, the value is more than money. The business is an extension of your life.

The problem is, to any buyer walking through the door your business is just one of many, and the numbers on the bottom line mean more than anything else.

What happens when these vastly different views of a business collide? In some instances the result is a low-ball offer, where a buyer makes an offer so low a seller won’t even consider it, and oftentimes makes a seller unwilling to even negotiate with that buyer.

The low-ball offer is just a reality of having your business on the market, so if you are trying to sell your business, you’d better be ready to get one – and also be ready to keep your composure if it happens.

Many sellers see a low offer as a personal offense, but you have to remember that the only person who sees your business the way you do – is you.

You really shouldn’t be insulted by low-ball offers. Be happy you got an offer at all. The reality of the business market is your final selling price will be somewhere between your initial listing price and the first offer from a buyer. If you listed your business at the absolute rock-bottom price you are willing to take, that is a mistake, as is demanding that you get a full-asking price or there’s no deal. You need to be realistic and you also need to have thick skin.

Any offer, even a ridiculously low one, can be a starting point for negotiations.

Low-ball offers are typically from two kinds of buyers. The first are tire-kickers who low-ball sellers just to see if they can get a business for a steal. Most of the time this type of buyer never actually buys a business, they just shop around indefinitely. You will know if a low-ball offer is from this kind of buyer if the number is obscenely low, if the reason for the low offer is from way out in left field or if they have no explanation for the low offer at all.

The second type of buyer who makes a very low offer is a buyer who is looking for a deal. They low-balled you on the value of your business because they feel that you need to prove your asking price, but they want to get the deal rolling. For this type of buyer it is important to remember that your listing price is a jumping off point, not a non-negotiable price tag.

No matter what kind of offer comes in, consider it a step in the right direction. You will quickly be able to figure out if a buyer is serious or is just shopping around.

Are you a seller who wants to know how to handle a low-ball offer? Do you have questions about what makes an offer reasonable or how to begin negotiations? Ask us! Please leave us a comment or question here.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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Should I wait?

If you own your own business and have thought about selling in the near future, you are probably watching the markets fluctuate with apprehension – especially if you are a business owner who survived the downturn of 2008. Business is booming right now, and your business is probably doing better than it has in years – but business was booming in 2007 too.

It can be excruciatingly difficult to pull the trigger and sell your business when there’s no real way to know if you’re leaving a bunch of money on the table because you’ve sold too soon. The healthy state of the economy is driving up the sale prices of businesses every quarter, but we all know we’re closing in on the top of that upward trend.

What to do? Sell now while the selling is good. Business owners that didn’t go under after the 2008 slide had to take what they could get from the tiny pool of buyers who still had capital to buy a business. Many scrambled to find buyers in their industry when there were no buyers to be had. If you leave some money on the table because you sold six months or a year before the market reached it’s peak you can comfort yourself by knowing that you didn’t have to sell after the tide turned and prices slid.

Taxes and regulations for business and industry are likely going to change, but only the future knows how those changes will affect small businesses. The economy is booming, and has been for quite a while. Housing prices are at bubble-like levels again, and many investment groups have slowed their rate of investing. A downturn is in the tea leaves – so if your tentative plan is to sell in the next five years – sell now.

Are you a business owner who is on the fence about selling? Would you like to know what businesses like yours are currently selling for? Ask us! Please feel free to leave any questions or comments here and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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Owning a small business is often a family affair, where children grow up working in the family business and sometimes take over the reins when mom and dad decide to retire.

While this idyllic business model might seem smart and straightforward, some aspects of your children’s role in your business can be detrimental to the financial return you get on that business if you ever decide to sell.

Here are three things to consider when you think about your kids and the future of your business:

Making Your Kids Work For Free

Having your children as staff members who only earn tips might save you on your payroll today, but it can dramatically affect the value of your business. Any potential payroll for any underpaid or unpaid staff will need to be adjusted and will affect the amount a buyer is willing to offer. This also goes for family business situations where family members earn way more than fair market value for the job they do. The solution? Pay family members a fair market wage for the work that they do today so you can keep future buyers from taking that amount off the top.

Only Trusting Your Kids To Do The Job Right

It can be difficult to find good employees, so some small business owners make their children responsible for almost everything. Leaning so heavily on your children can make your life easier today, but if your children have no intention of taking over the business when you retire their massive role in the business can cause major issues with a new owner.  If you sell, your kids probably won’t continue on as employees because their loyalty is to you, not to the business itself. This will leave a massive void in the business that a potential buyer will see as a massive issue. How can you solve this problem? Keeping your entire staff, or at least some key players, cross-trained in everything that makes the business run will help with the transition to a new owner.

Using Your Children As Your Only Retirement Plan

More often than they should, family businesses that get handed down to children falter or fail completely. Why? The drive and passion you have for your business is yours alone. As we said before, in many cases children are loyal to their parents, not to the business itself. If your kids don’t want your business but do want to continue the entrepreneurial legacy of your family, a good path can be to sell your business and then use that money to invest in a business that your kids are actually passionate about.

Do you own a family business where one (or all three) of these considerations might become an issue down the road? Do you have questions about how payroll adjustments are calculated in negotiations? Protect the future return on your business investment and contact us today.

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

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