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.

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

https://infinitybusinessbrokers.com

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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.

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

https://infinitybusinessbrokers.com

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Ok, so we’ll start first with what SEO is. SEO stands for Search Engine Optimization, and what that means is any business that wants to survive in the digital age MUST have a relevant online presence that makes it easy for customers to find them.

Think about how you use the internet yourself. The last time you wanted to try a new pizza restaurant, you probably typed in “pizza restaurant” and the city where you live into a search engine and hit enter. The pizza places that end up on the first page or two of results are there because 1. they actually have a user-friendly website and 2. the website is built and run in such a way (ie. constantly updated relevant content like a blog) that makes it easy for search engines to find. The pizza restaurants on the first page or two of results are also the ones you will most likely choose from. No one is going to page 15 to find a place to eat.

I’m selling my business, why does any of this matter to me?

First of all, any prospective buyer who signs a nondisclosure and then learns the name of your establishment is going to immediately head to a search engine to see what comes up. If you have no web presence at all, they will likely find any bad reviews and a smattering of vague listings on unhelpful sites. Not good for a first impression. If your web presence consists of a poorly maintained Facebook page or a one-page website, then it’s likely that potential buyers will not be impressed.

If you have a decent website, complete with constantly updated content and a user-friendly experience – then that is the first impression you will make (with both buyers and customers). You should list what you offer, your location, the hours of operation, any menus or products, etc. A visit to your website should be as complete as a visit to your business. Your blog should have articles about what you do, advertisements for upcoming events or sales, pictures of the business, and thank you’s to your current clientele. There should also be a way for customers to both call and email you with questions.

Not only does a decent web presence make a great first impression on buyers (and customers) and make it easier for search engines to move you up in search rankings, it can even make your business worth more. There are many services available where a non-tech person can create a beautiful and functional website without enormous costs – and this small bit of financial investment coupled with an investment of your time can create a far bigger return when you sell your business than comparable expenditures of time and money can.

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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We know you want to leave the closing table with a big, fat check and move on to the next chapter of your life, but in the world of business sales you have to be both willing to be flexible and willing to be creative when putting together a deal.

Why flexibility?

Sure, we would all want a full-price, all-cash offer – but the reality is this type of deal is extremely rare and highly unlikely. By holding fast to your original listing price and refusing deal options like seller financing you are drastically limiting your pool of potential buyers.

What is seller financing?

Very simply put, seller financing is keeping some skin in the game. When you offer seller financing, you take a down payment from a buyer, then accept payments over time for the remainder of the agreed upon sale price. Offering seller financing is great for your business on two fronts.

First, it will open your listing to many, many more buyers. Traditional financing is nearly impossible to get for the purchase of a small business, even more so now in the wake of the recent financial meltdown. For those buyers in the market, an offer of seller financing makes the purchase of a business possible and this type of financing is more common than not.

The second reason seller financing is important to the potential sale of your business is because of the message it puts forth to buyers in the market. By delaying your payment, you are telling those who are considering your business that you have a great deal of faith in the longevity and future success of your business. If you didn’t have that faith in the future of the businesses, then you won’t have any chance of getting paid back.

What do you mean by creative?

In the small business market, every deal is different. The multitude of moving parts in any transaction mean there are always ways to bring a deal to closing, as long as the parties involved are open to creative deal structuring. Seller financing is only one of the many creative deal structures, as are earnouts, strategic/silent partnerships – the list goes on. Staying open minded in terms of the structure of your deal is important if you really want to sell.

If you really want to sell your business, stay open to creative deals and make seller financing a part of the conversation. You will have far more success and bring in many more buyers than those sellers who don’t.

Do you have more questions about seller financing? Would you like to know more about creative deal structures? Ask us! Leave us a comment or question and we would be happy to help.

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

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Whether you’re a small business owner already who is looking to sell or someone who is ready to try small business ownership for the first time, marketing (and marketing creatively) should be a top priority. This article is part two of two that will ask both why creative marketing is important and how to do it (read Part 1: Why? by clicking here).

Part 2: OK, I get why creative marketing is important – how do I do it?

The most important message when thinking about a marketing plan? Be creative!

A sign out front or a poorly maintained Facebook page just won’t cut it. Try different ideas to see what works. If something doesn’t work, don’t get discouraged. Just try another approach. Here are a few to get you started.

Creative Marketing Idea #1 – You should have a great website.

This one should go without saying. Businesses who don’t embrace the digital age are making a huge mistake. Your website also needs to be more than a one-pager with nothing more than your address. A visit to your site should be as complete as a visit to your business – so you should include pictures, menus or product lists, hours of operation and ways for customers to both call and email you. Optimize your site for mobile users as well, as many people will be visiting your site from their mobile devices and not just the big screen on their home computer. One of the most important things you can add to a website to make it easier for both customers and search engines to find is a constantly updated blog. Your blog should lists events, promotions or sales, thank you’s to your customers and articles about what your business offers. You should also include a call to action at the end of your posts, inviting customers to comment or ask questions.

Creative Marketing Idea #2 – Answer Reviews

No one likes bad reviews, and let’s face it – there are people out there that you could never make happy, but you should treat all negative reviews like a second chance to win back a lost customer. You should take any review as constructive criticism and avoid the urge to take what was said personally. Answer negative reviewers in an apologetic and courteous tone. Address their reasons for giving you a negative review and discuss the changes you will implement to make any future visit to your business different. Not only will this gesture reach out the the customer who was displeased, anyone who reads the bad review and your response will know how much you care about your customers. You should also respond with thanks to any positive reviews to let those customers know that their opinions have been both heard and appreciated.

Creative Marketing Idea #3 – Be a Local

Any local community has events – from festivals, parades, shows – you get the idea. Find a way to make your business a part of the local community on a regular basis and your customer base will naturally grow. If you are restuarant, take part in local food tasting events or provide food and drinks for a local music festival. If you are an insurance company, doctor’s office or real estate firm you can sponsor local sports teams or sponsor events like marathons. Anywhere you can get your name and your product in front of the folks who live near your business is a chance to spread the word about who you are and what you do.

Some other ideas? Use services like Groupon and the like to offer a special deal to new customers and get them in your door. Take advantage of any and all social media outlets and link them to your blog and website. Join local networking groups and get to know other business owners in your community. The key to successful small business growth is both creativity and persistence!

Are you ready to sell your business and want to know what types of creative marketing you could implement to help with your sale? Are you thinking about buying a business with little to no marketing plan to speak of and are wondering the best place to start? Ask us! Please feel free to leave any comments or questions below.

Want to read Part 1: Why? Click here.

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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Whether you’re a small business owner already who is looking to sell or someone who is ready to try small business ownership for the first time, marketing (and marketing creatively) should be a top priority. This article is part one of two that will ask both why creative marketing is important and how to do it.

Part 1: Why?

I’m selling, why do I care?

Your business is one of many that is currently for sale, and you need to stand out from the crowd. One of the ways you can differentiate yourself from others is to have a creative marketing plan in place. Not only will an already implemented marketing plan be appealing to someone who is looking to taking the reins in your business (it is one less thing a new owner would have to implement themselves), creative marketing can bring value to your business in the form of a growing customer base.

Sellers who mentally check out or who decide that anything to do with growing the business should be the next owner’s problem are setting themselves up for trouble. First of all, it typically takes between 9 and 12 months to sell a business – sometimes longer if you are in a niche category. Secondly, what if your business doesn’t sell? What if something in your life changes and you decide to pull the business off the market? Your focus should stay on your business and the future growth of that business until the day you actually hand over the keys.

I’m buying, why does a marketing plan matter to me?

When looking at businesses to buy, there will typically be two different categories – those that have a creatively designed marketing plan in place and those who do not. Those businesses who take advantage of all available marketing opportunities are probably going to hold greater value for a potential buyer, so you might pay a premium for this type of business but the returns on a consistently growing customer base will be worth the extra cost. Learning the marketing plan and techniques will need to be a big part of your training when you take over the business, as you wouldn’t want the change in ownership to create a gap in communication with your current and future customer base.

For businesses without  a decent marketing plan in place, buyers will need to keep marketing at the forefront of their minds as something that needs to be implemented as soon as possible after the sale. These businesses will have more opportunities for growth, and you may be able to pay a bit less.

You should ask the current owner what they currently do as far as marketing is concerned, and also ask what they would choose to do if they had unlimited time and resources. Sometimes the reason a small business neglects marketing is as simple as a personal issue that has taken too much of the owner’s time. Use their experience within the business as a starting point when considering what ways you could use creative marketing to grow.

Have more questions about why a creative marketing plan is important to you and your current or future business? Want to know how much difference a well-implemented marketing plan will make on a listing price? Please feel free to ask questions or leave comments for us below.

Want to read Part 2: How do I do it? Click here.

Michael Monnot

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

https://infinitybusinessbrokers.com

No Comments »

What does it actually cost to buy a business in the current market? That depends on both the size of the business and the industry you are considering.

The numbers are in for 2014, so if you are curious about what a business you are interested in may cost, click on this chart from BizBuySell to see the median prices for each industry for 2014.

http://blog.bizbuysell.com/the-most-popular-businesses-being-bought-in-the-u-s-and-how-much-they-cost/

If you are looking for a more in-depth look at the business market, the BizBuySell Insight report, found here,

http://www.bizbuysell.com/news/media_insight.html

covers everything from key financials, sale price versus listing price, multiples, and businesses sold by both geography and industry.

Is the industry you’re considering way out of your league? Don’t let these prices scare you off from business ownership. Remember that they are the median prices – meaning some were likely much higher and some much lower. If you have a type of business or industry in mind and want to see what current list prices are running, click here to search for available businesses.

If you have further questions about what type and size business would be right for you, ask us! You can also leave comments or questions here and we would be happy to help you on your journey to business ownership.

Michael Monnot

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

https://infinitybusinessbrokers.com

No Comments »

If you own a business, then it’s a pretty fair bet (and just smart business sense) to think about your exit strategy.

What is your plan for the day when you no longer want to own your business?

For those without an eager adult child ready and waiting in the wings to take over when you retire, the answer for the future of your business is to put it up for sale.

Selling your business is a great way to make a return on the investment of time, money and energy you’ve put in over the years – and selling can set you up with the capital you would need to retire or to invest in another business opportunity.

If selling is in your future, then the next decision is when. Right now most businesses have bounced back from the economic recession and there is a positive outlook for growth in the near future. Interest rates are low, making businesses worth more and there are currently more sellers in the market than buyers.

That all sounds great, but as anyone in the business world who survived the recent recession knows – things don’t stay great forever. We know that interest rates will rise and growth will slow. There is also an impending wave of baby boomer business owners poised for retirement – and when they decide to retire the market will be flooded with available businesses and the favor will shift to buyers.

The message here? If you are even considering selling in the near future, you need to seriously consider selling while the selling is good. And you need the right kind of help.

If you search business-for-sale sites or sign non-disclosures in order to request business information, you will probably be horrified by the lack of information available and the poor quality of the marketing package that has been put together. When we ask for packages from other brokers, we frequently get poorly photocopied tax returns and a P&L, but nothing that makes anyone excited to buy a business or even anything that justifies the listing price.

Selling your business successfully takes the right kind of marketing package. Our marketing packages include a breakdown of the financial information, location information, pictures, links to websites and reviews – the list goes on. A professional business broker knows how important that buyer’s first impression will be, and then puts together a marketing package that truly reflects why someone would want to buy your business.

If you think you may want to retire from business ownership or if you want to seek other business opportunities – now is the time to sell and we are the right kind of help. Contact us today to see what we can do for you and your business.

Have you thought about selling but have doubts about selling in the near future? Have you been presented with a joke of a marketing package and want to share your experience? Leave a comment or question here!

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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If your business has a website and you consider SEO (Search Engine Optimization) in your marketing plans, then knowing how SEO is evolving in 2015 will be pivotal in ensuring your business is benefiting from your online presence. If you don’t consider SEO or don’t even have a web presence to speak of, read this to find out how and why that should change.

The old methods of improving ranking have changed a lot over the past few years (especially after the changes when the Google Panda update went into effect in 2011). Here are a few of the big changes that sellers should be aware of for 2015.

Keywords Versus Content

The old way of climbing the rankings was to cram as many keywords into your site as possible, making it easy for Google and other search engines to find out what category they should stick you in. Keywords still hold some sway, like in the meta tags of your pages, but the new SEO is user-driven (as it always should have been) meaning you need to have content that users will find valuable if you want your site to matter.

This matters to a seller because not only will great content (like a frequently updated blog) bring in new customers and profits thereby driving up the selling price, but it will leave a fantastic first impression on any potential buyers who visit your site – your business takes the time to focus on the newest marketing techniques in the digital age.

Not All Links Are Created Equal

Those who practice SEO have always known that black hat practices like buying links and spinning garbage articles were not technically good – but we did them anyway because they worked. In the new SEO world, the focus is again on user-experience, so garbage articles need to be replaced with really great and continually fresh content. Your focus should be on creating a great web visit for your customers, and then letting things like links occur organically. Paid backlinks and other black hat will only get you into trouble.

This matters to sellers because black hat antics can get your site delisted on search engines, which can be disastrous if you are in the middle of trying to sell. Write nice articles, remove any paid links and let your web presence grow organically with the use of good links and social media.

Want to know more about the new SEO? Click here to visit a great infographic by QuickSprout!

Do you have more questions about how to make SEO work in your favor when trying to sell your business? Have you found ways to get your website noticed and would like to share with the small business community? Please feel free to leave a question or comment here.

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

Is your contract assignable? That is, can you give or “assign” your place in a contract to a third party?

This issue comes up with regard to business sale transactions under two main scenarios. First, there is a question of whether or not the Purchase Agreement itself is assignable, and second, are the Seller’s third-party contracts assignable?

The answer is not always so clear; but in Florida, contract rights can be assigned unless forbidden by the terms of the contract itself, or unless the assignment would violate some rule of public policy or some statute, or the contract rights involve obligations of a personal nature.

Most contracts should have language that will state whether or not the contract is assignable. If they are assignable, you should read on to determine if consent is required.

Buyers often want a contract to be assignable so that they may transfer the property to a new LLC or Corporation that they have yet to establish. Other times, the buyer is acting as an agent for the “real” buyer, who is unwilling to disclose their identity.

With regard to third party contracts, including vendor and supply contracts, the buyer should be careful to check to see if the contract is assignable or if it can be terminated. The last thing a buyer needs is a business with burdensome long-term vendor contracts.

Check with business broker or a business attorney to discuss these issues, and good luck in your new business!

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

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

Michael Monnot

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

https://infinitybusinessbrokers.com

No Comments »