Sample Blog Post

hpbanner9

No Comments »




The Art of the Negotiation: Tips for Business Sellers

If you are trying to sell your business, then you probably already know that one major step on your path will be the negotiation of a purchase price and the negotiation of the purchase contract.

 

If you’ve ever been involved with the purchase of a house or a car, then you already know a little bit about how the negotiation phase is going to go. A buyer offers a price, the seller counters – and after a bit of back and forth the deal is done.

 

The major difference with business sales? There will be many, many more moving parts. The best way to deal with these many moving parts is to prepare yourself for the negotiation process by following these tips.

 

Top view of african and caucasian men shaking hands after working with reports on laptops

 

Tip #1

Hire a business broker and use them as an intermediary.

With so much money changing hands and with the complexities of a purchase contract, having an intermediary like a business broker can keep the deal on track. Buyers and sellers will often offend one another unintentionally and kill the deal, so the best way to avoid this pitfall is to hire a broker and listen to their advice when it comes to matters of negotiation. The most important piece of advice you will get about the negotiations? Keep the broker in the middle. Any communication during the negotiation process should go through the broker. This is the only way to keep the opposite sides of the table from offending one another.

 

Tip #2

Don’t freak out over the initial offer.

An initial offer is usually lower than a seller would like it to be, and in some cases the offer is perceived to be so low the seller refuses to even begin to negotiate. If you are a seller, you need to put yourself in a buyer’s shoes. If you were trying to buy a business, you would want to get it for the least amount possible, allowing for more working capital the day you take the keys. Don’t take low offers personally, instead consider them a jumping off point for negotiations. A decent buyer will justify a low offer with points that you can address individually. Just remember that the initial offer, just like your listing price, isn’t the end of negotiations – it’s the beginning.

 

Tip #3

Keep your head in the game and your heart off the table.

Although your business might feel like your first-born child, please remember that it isn’t. It is an investment you are now cashing in. Strong emotional attachment brings issues with letting go, issues with being easily offended and issues with overvaluing the business. Keep a level business-head and try to keep your personal feelings in check.

 

Tip #4

Be 100% prepared for compromise.

One last and very important point to make regarding negotiations – the final purchase price and purchase contract will be a compromise for both sides. Go into this process understanding the reality that you are not going to get everything that you want, no matter what side of the table you are on. Many deals have died because one side (or both) refused to budge over something tiny, like the value of a piece of equipment or the closing date. Stay calm, patient and willing to compromise and you will have a far better chance of reaching the closing table.

 

Are you a business owner who is thinking about selling and want to know more about the process? Would you like to know what businesses like yours have recently sold for? Do you want to know what a purchase contract might look like for your business? Please feel free to leave any comments or questions 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

http://www.infinitybusinessbrokers.com

No Comments »




Florida LLC Agency Law

By Guest Contributor Gregory A. May, Esq. – www.kieselandmay.com

 

African-American and Indian young adult business women working together in office.

 

When you buy or sell a business, and limited liability companies are involved, it is important to understand who can obligate the businesses. Why? Well, first it is important to understand who can bind your company on contracts and various agreements. This is good information to have regardless of whether or not you are considering selling. Second, nobody wants to buy a business only to find out that the Seller was not authorized.

 

So how do we determine who is authorized to act on behalf of a LLC? The answer lies in Section 605.04074, Florida Statutes, which provides the framework for defining these issues; and the law varies depending on whether the Company has been set up to be a member-managed or manager-managed.

 

In the case of a member-managed company, it is assumed that a member may act on behalf of the company for the purpose of its activities and affairs. Acts of a member for those purposes are deemed to be authorized unless the person whom the member was dealing knew or had notice that the member lacked authority. However, any act not done in the ordinary course of business affairs binds the company only if the act was authorized by the appropriate votes of members. I would argue that the sale of a business or all of its assets is outside of the scope of its ordinary business affairs, and that is why we like to be sure that all members have executed or approved business sale agreements.

 

In manager-managed limited liability companies, actions by managers are deemed authorized if they are in the ordinary course of the business affairs, and the person with whom they were dealing had no notice that the manager was unauthorized. And actions by managers, not in the ordinary course of business, bind the company only if they are approved by appropriate vote of the members. However, it is important to note that a member is not an agent of the LLC for the purposes of its business solely by reason of being a member.

 

One way to resolve this issue is to file a statement of authority as defined in Section 605.0302, Florida Statutes. The other is to obtain a business law attorney to handle your closing. Happy negotiating and good luck in your new business!

 

*This communication is for informational purposes only and shall not be deemed formal legal advice or the formation of an attorney-client relationship.

 

greg may

Gregory A. May, Esq.
Kiesel and May, Attorneys at Law
2121 McGregor Boulevard
Fort Myers, Florida 33901
T: (239) 334-1800
F: (239) 332-3927
www.kieselandmay.com

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

No Comments »




Too Many Fingers In The Pie: Why Buyers And Sellers Need To Understand The Role Of Lawyers In Business Deals

 

Let’s start this one off by saying we are absolutely not advocating an attorney-free business deal. A business transaction involves contracts that you will need to sign and a lot of money changing hands – so the assistance of an attorney is absolutely necessary.

 

Business transactions, however, are also inherently very complex and businesses themselves involve a decent amount of risk. If buying a business gave you a 100% chance of getting a return on your investment then that’s what everyone would do. This 100% scenario is, of course, far from reality. Buying and running a business means a fair share of risk and hard work.

 

What do lawyers do for a living? They protect their clients from any and all risk. See how your lawyer and a business transaction can never really agree with one another?

 

It is absolutely impossible for your attorney to keep you from any and all risk and also give you the absolute thumbs up on a business transaction contract. It is because of this conflict between what a lawyer does for a living and what you are trying to do (buy or sell a business) that we are suggesting that you keep your lawyer out of many parts of the deal.

 

What do we mean by this?

 

Your attorney doesn’t need to be giving you advice about price. Determining what a business is worth in the current market isn’t what they do. They don’t know how to derive value from cash flow and inventory or how to price a business based on what comparable businesses have actually sold for.

 

Your attorney shouldn’t have a major role in negotiations. At the end of the day, a deal is happening between the buyer and the seller. These two parties will have a tough enough time coming to a consensus – even when using intermediaries like business brokers who act as buffers. Adding more voices and opinions to the mix by having the attorneys intimately entwined in the negotiations more than likely means no deal will ever be reached. It becomes a “too many cooks in the kitchen” scenario.

 

I get why my attorney might cause problems, so what should I use them for?

 

Your attorney will be instrumental in putting together contracts and advising you of your risks in association with these contracts. You should absolutely listen to what they have to say in regards to these parts of a business transaction that are very much their specialty. You should listen to their advice, weigh what they have to say based on the fact that their job is to completely protect you from risk – and then use common sense to make up your own mind about what you should do.

 

Keeping a business transaction as simple as possible is the only way to successfully navigate a process that is inherently complex. Use each advisor for the role where their advice is the most appropriate and you will have a far better chance of transaction success.

 

Are you a buyer or seller who wants to have their attorney involved in everything? Do you have more questions about why this might be a problem? Ask us! Leave any comments or questions 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

 

No Comments »




White House Memo Recognizes Immigrants as Innovators

By Guest Contributor Sabine Weyergraf – www.weyergrafimmigraiton.com

 

Button idea bulb business web

 

According to a July 2015 White House memo, “Modernizing our visa system to meet the needs of the 21st century is critical to ensuring that we continue to reap the cultural and economic benefits of an immigration system that encourages innovators and entrepreneurs to build lives in the United States and contribute their vitality and creativity to our economy.”

 

This is a special report that reviews a number of initiatives that are underway or will be underway to revise the U.S. legal immigration system and make it more efficient and effective.

 

The report highlighted a number of findings in a 2010 study by Jennifer Hunt and Marjolaine Gauthier-Loiselle. Their research confirms that immigrants are exceptional workers and innovators, and often highly entrepreneurial.

 

Their entrepreneurial spirit helps them to start businesses that create job opportunities for millions of Americans.

 

Some of the study’s findings include:

  • 25 percent of companies backed by venture capital between 1991 and 2006 were started by immigrants.
  • Immigrants started a quarter of engineering and technology companies founded between 1995 and 2005.
  • In May 2012, the Small Business Administration’s (SBA) Office of Advocacy found that immigrants have high business formation rates and create successful businesses that hire immigrant and U.S citizen employees and export goods and services.
  • The study found that immigrants file patents at two times the rate of U.S.-born workers. This may have a direct correlation to immigrants’ relatively heavy representation in science, engineering, and other technical occupations. However, analysis revealed that immigrants in those fields patent at an above-average rate even when compared to other U.S.-born scientists and engineers.
  • Hunt and Gauthier-Loiselle found that high-skilled immigration has significant spillover effects. The rate of patenting by U.S.-born innovators doubles in response to a one percentage-point increase in the percentage of immigrant college graduates.
  • Encouraging high-skilled immigration can increase the rate of technological innovation in the United States, increasing the productivity of American workers and growing the economy.
  • Even outside the high-tech sector, immigrants are more than twice as likely to form new businesses in a given month compared to U.S-born individuals, according to the 2012 SBA report, and immigrants are significantly more likely to run a company with more than 10 workers.
  • A study by the Partnership for a New American Economy reported that more than 40 percent of Fortune 500 companies were founded by immigrants or their children. The study also noted that these companies are responsible for many jobs here and abroad—employing more than 10 million people worldwide—and that they generate annual revenues of $4.2 trillion.

 

The decision to immigrate is a complex one. The United States is a magnet for skilled immigrants who bring their innovation and entrepreneurship to grow our economy and create jobs for all Americans. The United States has flexible labor markets that are able to integrate immigrants relatively quickly. The country also recognizes the skill premium where exceptional ability and willingness to work hard are compensated in the form of higher income, education and job training.

 

 

Heandshot_Sabine_WeyergrafLogo_Weyergraf_page_001
Sabine Weyergraf is founding partner and New York licensed attorney practicing solely immigration law with Weyergraf Immigration, PA in Sarasota, Florida.
Contact: 941-706-4102, sabine@weyergrafimmigration.com

This article is provided for general informational purposes and does not constitute legal advice.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

 

No Comments »




Corporation Deadlock and Judicial Dissolution

By Guest Contributor Gregory A. May, Esq. – www.kieselandmay.com

 

Many times closely held corporations commence with a great idea and a trusting partnership. Over the years, shareholders may be replaced, partners alter their roles, and some businesses simply fail due to unforeseen circumstances. These situations can give rise arguments as to how the business affairs should be managed, and ultimately lead to a corporate deadlock amongst directors of the corporation. If this occurs, the directors are left with few options including but not limited to: 1) selling the business or 2) forcing a judicial dissolution of the corporation.

 

Florida Statutes provides that a shareholder may move the Court to judicially dissolve a corporation if the directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is being threatened or suffered. §607.1430, Florida Statutes. If the court finds that the judicial dissolution is necessary, then an Order is entered in the Court and the business is forced to liquidate its assets and wind down its affairs. Corporate dissolution are quite effective, however they often involve lengthy litigation and substantial expenses that can eat away at the equity in the business.

 

With that said, it’s easy to see that in most cases it would be beneficial if the shareholders could agree to terms of a buyout or simply place the business for sale on the open market. If you choose to sell your business, then the use of a business broker can be quite beneficial in obtaining a top market price. However, if you have questions concerning a corporate deadlock or judicial dissolution, then seek the advice of an experienced business attorney. Good luck with your business ventures!

 

This communication is for informational purposes only and shall not constitute legal advice and formal of attorney-client relationship.

 

greg may

Gregory A. May, Esq.

Kiesel and May, Attorneys at Law
2121 McGregor Boulevard
Fort Myers, Florida 33901
T:•(239) 334-1800
F:•(239) 332-3927
www.kieselandmay.com

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

No Comments »




Visa Processing Update

By Guest Contributor Sabine Weyergraf – www.weyergrafimmigration.com

 

The Department of State reported on Friday, June 13, 2015 that it is experiencing technical problems which prevent the issuance of visas and passports worldwide. Especially affected are applications submitted on or after June 9, 2015. However, based on the feedback coming from interview attendees, no visas are being issued right now, even if the application was submitted prior to June 9, 2015.

 

A similar issue occurred last summer. It took about 4 weeks before everything was back to normal.

 

This delay will certainly create a backlog, considering that over 70,000 visas are issued every day around the world.

 

If you are in the process of purchasing a business, please be aware that this delay can affect scheduled closings of business transactions. If the foreign buyer is already in the United States with a B1/B2 visa, he or she might consider changing to an E-2 status in the United States. This would provide the security of the business being legally operated by the foreign buyer after the closing. This status is valid for two years; however, this E-2 status is only valid as long as you are in the United States. Thus, traveling outside of the U.S. is not an option. This might be a short-term solution until the Embassies are operating normally and seems to be the most viable option since a change of status can be processed within 15 days.

 

Heandshot_Sabine_WeyergrafLogo_Weyergraf_page_001

 

Sabine Weyergraf is founding partner and New York licensed attorney practicing solely immigration law with Weyergraf Immigration, PA in Sarasota, Florida.

Contact: 941-706-4102,
sabine@weyergrafimmigration.com

This article is provided for general informational purposes and does not constitute legal advice.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

No Comments »




Does Your Business Really Need an Operating Agreement?

By Guest Contributor Jo Ann M. Koontz, Esq., CPA – www.koontzassociates.com

 

If you’re launching a business in 2015 you probably have an overflow of ideas, priorities, and questions running through your head. You might be overwhelmed by everything you need to do, or you might be wondering what the next step should look like. A common question we hear from our clients is:

 

Does my business really need an operating agreement?

 

An operating agreement dictates the management and operation of a limited liability company (LLC). It could include details about profit and loss sharing, the management structure of the company, and procedures for removal and addition of new members.

 

We understand why you may want to skip this step. You probably have a great relationship with your business partners and you’re all on the same page about how you want to move forward with your business. What you may not realize is that an absence of an operating agreement means you have to run your business the way the State of Florida sees fit. This could cause some major headaches.

 

Florida law has very specific guidelines regarding the distribution of profits and losses among company members. It’s calculated based on each member’s capital contribution, which could be in the form of cash, services, or property. Each member must also follow tax liability guidelines, regardless of whether or not the profit or loss is actually collected. If your company distributes profit and loss differently but you don’t have an operating agreement in place, members could become liable for tax payments on income they never actually received.

 

Florida law also requires a LLC to be member-managed, which means that each member’s power to make business decisions is legally proportionate to the member’s percentage of profit and loss. If you don’t have an operating agreement that outlines decision-making procedures, you could unintentionally give individuals authority to make decisions that they were not intended to make.

 

These are just a few of the possible obstacles your business could encounter without an operating agreement in place. Generally speaking, your operating agreement should cover the following:

  • Specification of each member’s ownership percentage
  • Rights and responsibilities of each member
  • Distribution of profits and losses
  • Voting rights
  • Management structure
  • Meeting requirements
  • Transitional procedures for the removal, addition, or sale of members and their respective interests

 

When you prepare an operating agreement, you should always consult with an attorney who has experience and knowledge in the formation of new business entities. The future of your business depends on the navigation of legal nuances involved in creating the business, so make sure you’re not missing any important details.

 

1653623_472334476201971_290208713_n

Jo Ann M. Koontz, Esq., CPA

Koontz & Associates, PL
1819 Main Street, Suite 910
Sarasota, FL  34236
Phone 941-225-2615
Fax 941-951-2618
joann@koontzassociates.com
www.koontzassociates.com

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

No Comments »




Annual Resale Certificate: What You Need To Know About Sales Tax Exemptions In 2015

By Guest Contributor Jo Ann M. Koontz, Esq., CPA – www.koontzassociates.com

 

If you run a business in Florida, there’s a chance that you qualify for certain sales tax exemptions. According to the Florida Department of Revenue, products or services that you purchase with the intent to resell are often exempt from sales tax. But what does this mean, exactly?

 

Let’s say you run a hair salon. You probably buy plenty of hair styling products from your favorite supplier. You use some of these products during your client appointments – when you wash their hair, apply highlights, or style a new haircut. On the other hand, some products stay on the shelf for resale to clients.

 

The guidelines here are pretty simple: the products you use throughout the day at your salon are generally taxable, because they are used during the normal operation of your business. The products on the shelf, though, are probably exempt from sales tax because you purchase this set of products with the intention of reselling them to your clients.

 

Compare this to a service-based business, such as an attorney. At Koontz & Associates, we don’t sell products to clients. We sell services. Any products we purchase — such as office equipment, software, or furniture — are used in our office during the normal operation of our business. Because of this, we generally pay sales tax on these items.

 

If you purchase products that are exempt from sales tax, you need an Annual Resale Certificate. The certificate is issued by the Florida Department of Revenue and is valid until December 31 in the year it was issued.

 

In 2015, the FL DOR updated the way these certificates are issued. Hard copies of this certificate will no longer be issued, but you can register online and easily access your certificate this way. In addition, the certificate no longer requires a signature. By obtaining the certificate, you confirm that you plan to purchase items for resale.

 

For more details about the Annual Resale Certificate, and to determine whether you are eligible to register, you can visit the FL Department of Revenue website.

 

 

1653623_472334476201971_290208713_n

Jo Ann M. Koontz, Esq., CPA
Koontz & Associates, PL
1819 Main Street, Suite 910
Sarasota, FL  34236
Phone 941-225-2615
Fax 941-951-2618
joann@koontzassociates.com
www.koontzassociates.com

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

No Comments »




Hold Harmless Agreements and Holdback Provisions

By Guest Contributor Gregory A. May, Esq. www.kieselandmay.com

 

So you have made the decision to purchase a business, signed the contract, reviewed the financials and performed your due diligence, now what’s to protect you from Seller misrepresentations? That is, what if all of those financials were false, and the business is not what it seems?

 

The answer should be two-part. First, I believe that it is important to include a hold harmless and indemnity agreement in all closing packages. This document provides that the Seller shall be held responsible for any damage caused by misrepresentations in the status and health of the business. It often provides a mechanism and timeline for curing disputes, and possibly a method for determining damages, which should include attorneys’ fees.

 

The second part of the answer is the hold-back agreement, which should be outlined in your purchase contract. The hold-back provision will provide that the closing attorney or escrow agent will hold back a portion of the Seller’s proceeds for a period of time (normally somewhere between a month and year depending on the size of the transaction). If there are no issues with the business, then the money is released and the parties go merrily on their respective ways. However, should an issue come up within the hold-back period, then the buyer has the option of raising a claim. If a claim is raised, then the parties must resolve the issue according to the terms of the contract.

 

By adding these extra provisions, you may encourage the Seller to be open and honest in their disclosures, and avoid unnecessary litigation and attorneys’ fees. However, should the need for litigation arise, do not hesitate to contact a legal professional.

 

Happy negotiating and good luck in your new business!

 

*This communication is for informational purposes only and shall not be deemed formal legal advice or the formation of an attorney-client relationship.

 

greg may

Gregory A. May, Esq.
Kiesel and May, Attorneys at Law
2121 McGregor Boulevard
Fort Myers, Florida 33901
T: (239) 334-1800
F: (239) 332-3927
www.kieselandmay.com

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

No Comments »




Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907




Search



Recent Posts

Categories

Archives

Tags