As a seller, you want to get top dollar for your business, but wanting the world and getting the world are vastly different matters. Every seller wants top dollar for their business, but what is most important when the time comes to sell is to be realistic.

What kinds of things are buyers looking for when they are determining what to spend on a business? They are looking for industries that are in demand, for businesses with a large market share, for businesses that are performing well and are profitable.

What if my business doesn’t have those qualities? Don’t be disheartened if your business isn’t the industry leader or even if your business isn’t currently turning a profit. Businesses in the red sell all the time, and for the right buyer with the time and resources to make the changes necessary to get back in the black – that business can be a terrific buy.

The key to getting the best price for your business is to focus on the strengths, the opportunities for growth, and on the parts of the business that make it unique. If you play up the plusses, you will get a better return on your investment.

The key here is to be realistic. It is incredibly important for the success of your transaction that you keep your eyes on the goal of selling your business. If you don’t get the premium price you had hoped for, you can at least get a fair price for what you are offering. If you still insist on waiting for an unrealistic price, you may languish in the market indefinitely.

Are you trying to sell your business but your numbers don’t look good? Are you curious about how much you could get if you sold your business today? Please feel free to leave us a comment or question here and we will be happy to help you with selling your business.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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My Secret to Selling a Business

Do you know what drives business sales?

Marketing, proper pricing, the right presentation, the network of the broker, finding qualified buyers, proper documentation… I can go over a plethora or reasons but I want to focus on the marketing package that a broker SHOULD prepare but many do not.

As we all know the importance of a first impression and unfortunately the marketing materials we get from other listing brokers is a simple P&L, tax return or something similar but most buyers do not know how to read and interpret them properly and most businesses P&L or tax returns do not reflect true income such as the typical add backs like depreciation, interest, many personal items like health insurance, cell phones, personal vehicles…but that buyer is going to look at the bottom line and usually that does not look the best.

Buyers today want real information and I know what buyers are asking for.

1. Recasted Financials: Let me properly recast your financials and show the true benefits of the business. I n the past I have found a business that paid for all personal airplane fuel, I have properly amortized large expenses to increase revenues and many more examples

2. Benchmark Data: I will actually research the industry to provide market data about the industry to a buyer to make sure they are comfortable. This often assists in weeding out many of the bad businesses so that we can get a properly educated and focused buyer.

3. SWOT (Strengths – Weaknesses – Opportunities – Threats): This is a true key to selling a business. It is important to make sure a buyer know the flaws of a business to understand the opportunity to grow the business.

4. Trends: Another important part in selling a business is providing the positive trends in either the business or the industry

5. Expert Comments: I will provide expert comments and recommendations from industry experts and insiders to back up my information

6. Media: Most of our buyers are from other states or even other countries. Every package I put together includes some type of media which allows us to direct buyers to reviews, articles, video or pictures. It is shocking how many brokers do not even include simple pictures.

7. Sellers Duties: You may be surprised but most brokers do not know the actual duties of the seller and this is very important to obtain qualified buyers and not to waste the sellers time.

8. Employees: Many buyers are coming here and bringing family members. Knowing the employees pay and duties are another great way to sell a business as we will incorporate the family in the opportunity and show a bigger bottom line.

9. Website: To many brokers do not even have their listings on their own site. If this minimum duty cannot be accomplished would you want to list your business with them?

Again this is just one small part of the overall process of selling a business but picking the proper broker to sell your business can save you time, money and frustration. Picking me as one of the top business brokers in Florida will be one of the best decisions you will make.

I do not sell a business by just putting it on a website, I have streamlined my systems, accumulated an extremely large database and developed my own technologies to sell businesses.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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If you are interested in selling your business, there are some basic mistakes business sellers make that can absolutely be avoided if you know what they are. Business transactions are inherently complex, so knowing what the most common pitfalls are can help to streamline the process by avoiding them.

Big Mistake #4: You are letting buyers get to due diligence without knowing if they are qualified to actually buy the business.

If you are trying to sell your business on your own, this is a situation that you should cause you some concern.

Why? By going it alone, you will be exposed to buyers who may not be able to pay, buyers who are just kicking tires and buyers who assume they will be able to get third-party financing when they can’t. Every seller is going to come across buyers like this, but if you don’t find out ahead of time you could get stuck with your business off the market in due diligence for no reason.

What is due diligence? Due diligence happens when a seller gets a serious offer from a buyer and accepts that offer. What happens next is the business gets temporarily taken off the market so the buyer can conduct a thorough investigation of the business. If, after the due diligence period, the buyer wants to proceed with the sale, the business transaction moves to closing. What can happen in these situations when a buyer has not been qualified is the business gets pulled from the market for several weeks for due diligence only to have closing not happen for lack of funds.

How can you avoid this situation? Use a professional business broker. They are able to determine if a buyer is a truly serious buyer with access to the adequate funds to purchase your business. They will weed out buyers who don’t have the funds or are hopeful for a third party loan from a bank that probably won’t happen in this economic climate.

Do you have questions about how to find buyers with enough capital? Are you wondering if you need a business broker or if you will be able to go it alone? Please leave a question or comment here and we will be happy to help you with your business sale.

Want to read Mistake #1: The Cold-Feet Seller? Click here.

Want to read Mistake #2: The Box-O-Paper Financials? Click here.

Want to read Mistake #3: All-Cash Greed? Click here.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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If you are interested in selling your business, there are some basic mistakes business sellers make that can absolutely be avoided if you know what they are. Business transactions are inherently complex, so knowing what the most common pitfalls are can help to streamline the process by avoiding them.

Big Mistake #3: You refuse to accept an offer that is not all cash.

Your business means a lot to you, and the value you place on it may not be objective because you add to the value all of the time, energy and money you have put into it over the years. Even if you are able to be objective and take the advice of your business broker when pricing your business, you may run into problems when you decide what type of payment you are willing to accept.

What would be ideal? An all cash, full price offer is always ideal, but in the reality of the business market this rarely happens. There are many sellers who enter the market demanding all cash, but this is a huge mistake.

Why? Great buyers are few and far between, and there are hardly any buyers in the market who can come up with the capital to make all cash offers. Buying a business is an expensive proposition, and most small business owners and prospective small business owners don’t have that kind of cash available.

What can happen if a seller demands all cash? The short answer is your business won’t sell. Sure, there have been cases where a seller wanted all cash and all cash is what they got, but this is an incredibly rare scenario. The reality is your business will remain listed indefinitely and you will miss many great potential buyers.

How can a buyer who can’t raise the capital to make an all cash offer be a great buyer? A great buyer should not be defined by capital alone, they are defined by their ability to pay.

What do we mean by that? The most common situation in today’s business market is for a seller to offer seller financing. This is means a buyer brings a substantial down payment, and then an agreement is made for the buyer to pay for the remainder of the business over time directly to the seller. Offering seller financing can be a great option to offer when you sell your business.

Why? Seller financing opens your business to a much larger pool of buyers and it shows that you have faith in the future of the business, so it is an option that is good on two levels. You will have  a much better chance of selling if more buyers are able to make offers, that goes without saying. Also, buyers are always a bit suspicious of anyone who is willing to sell a perfectly good business. By offering seller financing you are letting buyers know that you have faith in the future of the business because if the business fails, you don’t get your money.

The moral of the story is be flexible. You may get an all cash offer after all, but chances are by offering seller financing you will find a great buyer and still get the price you want from your business.

Do you have questions about what types of options you should offer to buyers? Are you still determined to accept only an all cash offer? Please leave us a comment or question here, and we will be happy to assist you with questions about your business sale.

Want to read Mistake #1: The Cold-Feet Seller? Click here.

Want to read Mistake #2: The Box-O-Paper Financials? Click here.

Want to read Mistake #4: Letting Unqualified Buyers in the Door? Click here.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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If you are interested in selling your business, there are some basic mistakes business sellers make that can absolutely be avoided if you know what they are. Business transactions are inherently complex, so knowing what the most common pitfalls are can help to streamline the process by avoiding them.

Big Mistake #2: Your books and financial records are an absolute mess.

Small business owners sometimes love being their own boss because it means no oversight from management where paperwork is concerned. This might be nice for your stress level, and your system of shoving any business-related material into an ever-growing stack of file boxes in the back room might work for you, but it will become an absolute nightmare when the time comes to sell your business.

Why? No buyer is going to give you a penny for your business if you can’t prove that the business is worth what you are asking. There are a number of ways to determine or evaluate the value of a business, but the most straightforward way is to use current and past financial statements. Any prospective buyer is going to want to see at least the last three years of tax returns and your current P&L’s.

What you will need to do before you list your business is get your financial ducks in a row. You need to find and make legible all of your financial records, make copies of your tax returns, and (if your records really are just a stack of miscellaneous boxes) maybe even hire a business transaction CPA to get the books in order. This may seem like a monumental task, but it will pay off in the end as there will be no ambiguity about what your numbers really are, they will be right there for buyers to see in black and white. It also removes the risk of creating mistrust between you and a serious buyer if what you said the numbers would be and what they figured out the numbers are after slogging through your financials themselves don’t add up.

This mistake is easily avoided by being prepared ahead of time. Ask your broker for help, for a list of what you’ll need, and for the name of a good business transaction CPA if you’ll need one. A note here, you probably should not use your usual CPA that does your tax returns for this project. Only a CPA familiar with the buying and selling of businesses will be able to properly assemble and evaluate your financials for prospective buyers.

Are you a business seller with less than legible financials who wants to know how to get your books organized? Do you have questions about what kinds of documentation you’ll need to have ready? Please leave us a comment or question here, and we will be happy to help you get your business ready to sell.

Want to read Mistake #1: The Cold-Feet Seller? Click here.

Want to read Mistake #3: All-Cash Greed? Click here.

Want to read Mistake #4: Letting Unqualified Buyers in the Door? Click here.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

No Comments »

If you are interested in selling your business, there are some basic mistakes business sellers make that can absolutely be avoided if you know what they are. Business transactions are inherently complex, so knowing what the most common pitfalls are can help to streamline the process by avoiding them.

Big Mistake #1: You aren’t 100% sure that you actually want to sell.

This one may seem a bit bizarre at first glance, but it is by far the most frequently encountered problem when it comes to deals coming apart on the seller’s side.

It can be frightening as a seller to look towards a closing table and see yourself as basically unemployed at the end. Your business is and has been your baby, and if you are the typical entrepreneur it has been basically your entire life. You really need to be ready before you decide to sell. Some serious introspection is necessary long before your business is listed.

Turning away buyers at the last minute because you have changed your mind can cause major problems with your credibility in the business market, as well as driving away good buyers you may not be able to get back if you change your mind once again and want to sell in the near future. Those good buyers you had a crack at will have bought something else and be long-gone. Ask anyone in the small business market, a good buyer is a precious commodity, not one you want to waste because of cold feet. In the same light, businesses that have come on and gone off the market repeatedly will cause suspicion in the buyer pool because anyone who looks at the business will wonder why you keep pulling it from the market.

Another huge no-no? Don’t test the waters to see what you could get for your business if you really want to sell quite a few years down the road. This causes the same problems we already have discussed, causing mistrust in the buyer pool from doubts about the stability of the business.

The key here? Decide if you really want to sell. Ask yourself (and answer) some hard questions before your business hits the market. Are you ready to do something else with your life? Do you have the financial means to be without a source of income for the period between closing and your next business venture? Are you going to be able to relinquish control of your business to someone who might completely and totally change everything you have built?

Are you considering selling, but have not yet made up your mind? Do you have questions about when the best time to sell would be? Please leave us a comment or question here, and we will be happy to assist you.

Want to read Mistake #2: The Box-O-Paper Financials? Click here.

Want to read Mistake #3: All-Cash Greed? Click here.

Want to read Mistake #4: Letting Unqualified Buyers in the Door? Click here.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

No Comments »