You’ve probably heard the term SEO, and you probably know that it has something to do with the internet and websites – but if that is as far as your knowledge goes, then you are in serious need of a crash course.

SEO (Search Engine Optimization) is an incredibly important tool in the world of business. We are in a digital and technology driven age, and businesses who embrace the tech wave and use tools like SEO to their advantage will quickly surpass the competition who doesn’t.

Want the quick and dirty version of what SEO is and what it can do for your business? Check out the next three links.

This article from Forbes is a good first introduction to the basics of SEO.

http://www.forbes.com/sites/thesba/2014/10/30/seo-basics-for-small-business-owners/

This next article gives great pointers on making the most of SEO for your website and your business.

http://www.inc.com/christina-desmarais/how-to-nail-seo-7-tips.html

The first on the list from this last article, “Become an SEO Expert” can be accomplished with this next link. This takes you to the Moz “Beginners Guide To SEO”. This is an extensive explanation of what SEO is and what it can do for your presence on the web. There are lots of places to find this information, but the reason why we love this one is unlike the majority of SEO information out there – Moz writes this guide in non-techie speak that anyone can understand.

http://moz.com/beginners-guide-to-seo

Now that you know a bit more about SEO, do you want to know why SEO is important to you?

If you are selling your business, then you might feel like all this tech stuff should be the next owner’s problem and not yours. Nothing could be farther from the truth. A business with a good online presence in the form of a great website is going to be worth far more to a buyer than a business who has nothing more than a rarely-utilized business Facebook page.

If you don’t have a website yet, today is as as good a day as any to get one. There are lots of places to build your own site, and many of them are free or a minimal charge if you want to remove ads from your site. Long gone are the days when you needed to know how to write code to build a site. Templates and drag-and-drop editors make it easier than ever to create an online presence.

If you are  a business buyer, then SEO will be important on two fronts. First, when looking at businesses, you should examine their current online presence and then evaluate changes you could implement right away to build an online presence if the business is lacking in some way.

Second, you can use SEO to your advantage when you take over the business to grow your online marketing presence and find new customers.

If you don’t know much about SEO – now is the time to learn! It will help sellers increase the value of their business and allow buyers to grow their new customer base.

Do you have questions about how an online presence can help your business sell? Would you like to know more about taking your new business to the next level by utilizing SEO? Please feel free to leave us a comment or question 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

https://infinitybusinessbrokers.com

No Comments »

With the holiday season fully upon us, we may look forward to all of the upcoming family time (or maybe not). Regardless of your love or apathy for dinner with your parents and siblings, this time of year is the perfect time for having those discussions that are best had face-to-face. If you have a family business or if your family is considering business ownership – then there are some very important conversations you need to have. This is part two of a two part series that will highlight what your family needs to be talking about.

Are you thinking about buying a business with a family member or a business the whole family can run together?

If you are thinking about buying a family business, you should be talking about written agreements.

First and foremost, the business has to be right for everyone. There is nothing worse than having a member of a family business who hates what they do. They take that resentment home with them everyday. As such, your initial discussions need to be open and honest – and everyone who will be involved needs to be heard. You don’t want to end up with the ultimate disgruntled employee.

Also, figure out who is the boss of who from day one. Clarification of each family member’s role within the business is critical if you want to keep bickering at bay and morale up. Once you have this decision in place, it needs to become part of the written agreements between the family members involved.

The second and also very important part of the written agreement needs to answer the question “Who owns what part of the business?”. It is rarely the case that each member of the family brings the same amount of initial capital for the purchase of the  business, and this uneven ownership can get very hairy if one member of the family decides they want to sell their portion and move on. You absolutely must have agreements in place that determine how you would value the business if some kind of split or buyout has to happen in the future, as well as determining the percentage owned by each family partner.

Family businesses can be an amazing opportunity, but the mixing of family, money and business can be a dangerous cocktail. It is absolutely critical to the survival of family relationships that agreements are in place long before the decisions need to be made and that every family member is truly on board.

Are you considering buying a family business and want to know more about what types of agreements need to be in place? Have you already put agreements together and have advice for those just starting out? Please feel feee to leave a comment or question here.

Want to read part 1: Buying Or Selling The Family Business – Part 1: The Exit Strategy? 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 »

With the holiday season fully upon us, we may look forward to all of the upcoming family time (or maybe not). Regardless of your love or apathy for dinner with your parents and siblings, this time of year is the perfect time for having those discussions that are best had face-to-face. If you have a family business or if your family is considering business ownership – then there are some very important conversations you need to have. This is part one of a two part series that will highlight what your family needs to be talking about.

If you own a family business, you should be talking about exit strategy.

Have you had the exit strategy discussion with your family? Many family businesses haven’t. If not, then now is as good a time as any. This discussion should include decisions about selling versus handing the business down, decisions about what will be done with the money gained from selling the business, time frames for selling or retirement of the current ownership, etc.

A very big question? Do your kids even want to take over? Many parents just assume that their children want to and will take over when mom and dad decide to retire, but oftentimes this is not the case. Are your children capable of bringing the same passion and drive to the business you’ve had all these years? If not, then a very serious discussion needs to take place. See My Kids Are My Staff: Considerations For Business Sellers With A Family-Run Business for more.

Family run businesses need to look at payroll costs if the family members work only for tips or are otherwise “off the books”, as this skirting of payroll costs will affect the amount of money you will be able to get for your business. If you are discussing exit strategy, then you also need to discuss these types of payroll issues. Read Making the Kids Work For Free: Why the Family Business Looking To Sell Needs To Think Ahead if this is an issue your business will have when the time comes to sell.

If you are the younger generation in this discussion, then you need to do some reflection of your own. Do you really want to follow the same career path as your folks? Do you have other dreams but are agreeing to take over ownership out of a sense of duty or guilt? These questions and their answers will be critically important to the success of the business – as a business with an owner who has no desire to be there will surely fail. Read Should You Stay In The Family Business, Or Follow Your Own Path? to help you get the discussion with your parents started.

No one stays the owner of the family business forever, so having open and honest discussions about the exit strategy are crucial for determining the future of the business and the future of your family.

Do you own a family business, but aren’t sure your kids want to take over? Would you like pointers for getting the discussion started? Have you already had the exit strategy talk and have advice for those who haven’t? Please feel free to leave a comment or question here.

Want to read part 2: Buying Or Selling The Family Business – Part 2: The Written Agreement? 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 »

If you are buying a business, there are a few things that are critically important if you have any hope of successfully getting to the closing table. Here are our top 7:

Don’t Be Greedy

Many buyers come to the market looking to buy a business for pennies on the dollar. This is both unrealistic and unfair to the business seller. You should expect to pay a fair price for a business, as that business wouldn’t be around for your to buy if the seller hadn’t worked hard to build it.

Know Why You Are Buying

Buying a business only because you want to be your own boss is a mistake. Entrepreneurship takes hard work, long hours and a great deal of responsibility. Take some time before trying to buy a business to decide if this really is the life for you.

Be Ready To Provide Background Info On Yourself

Many buyers come to the business market expecting sellers to disclose highly confidential business information like tax returns and financial statements but then refuse to provide any information on themselves. You will have to provide sellers with a financial statement and a resume, so be ready.

Realize The Perfect Business Does Not Exist

Yes, that’s right. Buyers who are looking for a perfect business will never find one. Look at businesses with an open mind. Most issues you find in small businesses can be overcome with some creativity and hard work by a new owner.

Offer A Decent Down Payment

Offering $10,000 as a down payment on a $750,000 business is insulting to a seller. It also shows a complete and total lack of commitment on your part to the negotiations and potential sale.

Don’t Take Forever

Once you enter into the due diligence phase, you take the business off the market for other buyers who might be interested. It is completely unfair to the seller for you to drag your feet during this phase. If you are serious about buying the business you will complete your due diligence and move forward with closing in a timely fashion.

Be Nice To The Landlord

Landlords typically have nothing to gain by being helpful or cooperative, and landlords are also famous for both holding up and killing deals because they didn’t like a buyer. Always show up on time to meetings with your future landlord, be nice (even if they aren’t) and come prepared to prove you can be successful as the business owner by bringing your financial statement and resume.

Business transactions have a lot of moving parts, so if you want to be successful in your decision to buy a business you will have to be prepared to put in the effort and cooperation during the sale process.

Do you have questions about the requirements of a buyer during the transaction process? Would you like to know what kinds of financial information you will be required to provide? Feel free to leave a comment or question 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

https://infinitybusinessbrokers.com

No Comments »

Deciding when to sell your business can be tough. Ideally, you want to sell when conditions are favorable – interest rates are low, there are more buyers than sellers in the market and the economy is peaking.

The timing of your sale can mean everything in terms of the amount you get for your business, so staying on top of market trends is critical if you are even considering selling.

If the sale of your business is something you see as a possibility in the near future, then the state of the market would suggest that the time to sell is now. Currently there are more buyers in the market than sellers, but with a wave of baby boomers poised for retirement – that balance is about to shift.

If you want to get out in front of the wave of boomers looking to sell, then there are a few steps you will need to take to ready your business.

First, you will need the services of an experienced business broker to help you through the process and take the pressure of finding and negotiating with buyers off your shoulders – so you can focus on running your business.

Second, you will need to get the business and all financial records ready for a buyer’s eyes – make repairs to your equipment, give the business a thorough cleaning, have your records assembled in a format that is easy to understand and have your numbers recasted so a buyer can quickly understand the value you have placed on your business.

In addition to these tangible steps, you also need to ready yourself. In the small business market, most deals involve at least a bit of seller financing and quite a bit of back-and-forth negotiation, so banish from your mind the ideal of an all-cash, full-price offer.

If you’ve thought about selling – now is the time. While the economy is good and the market favors sellers over buyers, get your exit strategy in place to get the best return on your investment.

Michael Monnot

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

https://infinitybusinessbrokers.com

No Comments »

The International Business Broker Association (IBBA) and M&A Source, in a partnership with Pepperdine University, have released survey results that concern businesses listed for sale and sold during the 2nd quarter of 2014, and the findings give current and future sellers insight into the current state of the market, as well as what they can do to increase their chances of a successful sale.

For most small business owners, the data of greatest interest would be defined as “Main Street”, or businesses with a value of up to $2 million.

For most small business sectors, the EBITDA Multiple (the estimate valuation of a business) increases with the size of the business. Very simply, the larger you grow your business the larger it’s value will become to a buyer.

For businesses that have a valuation lower than $5 million, seller financing is still the king, Nearly one out of five businesses in the $500,000 to $1 million price range required some type of seller financing as part of the deal.

Another creative deal structure? The earn-out, where a seller and buyer bridge the valuation gap in a fast-growing business, although for smaller businesses valued at less than $5 million, this type of deal structure is uncommon.

For businesses that fell the less than $1 million category, first time buyers dominated the market, outnumbering any other type of buyer in the second quarter. The prevalence of first time buyers can create a challenge for business sellers because most new buyers don’t have a clear understanding of how to read business financial statements or how to understand recasted numbers that make adjustments for things like personal expenses.

To avoid any confusion or the appearance of “cooking the books”, streamline your financials before you list your business. Remove your personal expenses, make sure your payroll includes all key employees (including you) and have your business broker help you recast and organize your financial records and other pertinent documents. This way any first time buyer can clearly see what they are buying.

Unclear and unorganized financial records weren’t the only downfalls of the 78% of deals that ended without closing in the second quarter of 2014.

The other biggest mistakes sellers made were setting unrealistic expectations, letting business sales decline, waiting too long to list the business and letting emotional ties to the business hold them back.

If you are trying to sell your business, it can be very easy to demand a high price and an all-cash offer, but the reality of the market is your business is only worth what someone is willing to pay – and the vast majority of deals come with at least some seller financing. By having realistic goals in place from the start, you can avoid getting hung up on expectations that will never be realized.

Another big mistake involves mentally checking out the moment your business is listed, typically causing falling numbers and a corresponding decrease in your valuation. It can take 9 to 12 months to sell a business, so if you want to get the best return on your investment, the time between listing and selling is when your business needs you the most.

If you are waiting for the perfect time to sell your business, now may be the time. The rebounding economy has buyer confidence up, and the wave of baby boomer retirees has yet to flood the market with other businesses for sale. Waiting too long may mean you enter the market when there are more sellers than buyers, so get out in front of the wave now.

The last pitfall, emotional ties, can be one of the most difficult to overcome. Your business is your baby, but to a prospective buyer it is nothing more than a potential investment opportunity. By seeing your transaction from the buyer’s side, you will be less likely to be offended by low offers, renegotiations and the like.

If you are a business seller – the market looks good. Avoid the most common pitfalls and you could be well on your way to a successful sale.

Michael Monnot

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

https://infinitybusinessbrokers.com

No Comments »

By Guest Contributor Sabine Weyergraf – www.weyergrafimmigration.com

The ultimate goal for many immigrants is permanent residency via the Green Card. The question is: how does one achieve this goal?

The most common answer to this question is by marriage. Marriage to a U.S. Citizen certainly is an option, but it must be a real marriage.

Married couples who would like to jointly immigrate to the United States do not have this option. However, there are some alternatives. The alternatives are in general two non-immigrant visas, an L-1 Intercompany Transfer Visa and an E-2 Investor Visa or an Immigrant Visa through the “purchase” of a green card.

The L-1 Intercompany Transfer Visa permits the transfer of a Manager of an overseas company to a subsidiary or affiliate in the United States. The manager can also be the owner of this company. The requirements are: a) that the transferred employee has been in a managerial or executive position in the overseas company for at least one year, b) that the U.S. company is a subsidiary or an affiliate of the overseas company, and c) that the U.S. company has a large enough operation that it will be necessary to hire U.S. workers.

Interestingly enough, the U.S. company does not have to have the same business activity as the overseas company. Also, there is no requirement to invest a set amount of money.

However, the overseas company has to remain operative during the entire visa validity. The L-1 Visa for a start-up company will be issued for one year with the option of renewal for three years and then another three years. The renewal of an L-1 Visa requires a significant number of employees.

For people who do not operate an overseas business or would like to get a Visa that is valid for more than one year, the E-2 Investor Visa is a viable option. In general, the E-2 Visa requires an investment of around $100,000 into the establishment of a U.S. company.

In order to apply for an E-2 Visa by owning a U.S. business, the investment has to have been made prior to submitting the Visa request. The investor must either have a purchase contract for an existing business with the purchase price in escrow or invest $100,000 into a new business with the potential for growth. If the investor uses the purchase of an existing business to qualify for an E-2 Visa, the business must already have employees. If the investor creates his own new company, he or she has to show that the business has the potential to employ U.S. workers and that the investor has already begun a search for employees.

As previously stated, the L-1 and E-2 are temporary non-immigrant Visas. Now the question is how does an L-1 or E-2 Visa holder qualify to stay permanently in the United States?

If your U.S. company is well established, profitable and providing employment for U.S. workers and your overseas company is still operating, then you can apply for a Multinational Manager Green Card. This type of Green Card is based on the fact that you are managing two companies in two different countries which both have employees.

For the Multinational Manager Green Card, it does not matter if you are in L-1 or E-2 status. The requirements are that you are managing two different companies in two different countries, you worked for the overseas company for at least one year before coming to the United States, and both companies currently have employees. It is not a necessity to hold an L-1 Visa in order to receive a Multinational Manager Green Card. However, if you closed your overseas business, you cannot apply for a Multinational Manager Green Card.

If you do not want to pursue an L-1 or E-2 Visa and prefer to go straight to permanent residency, then you can “purchase” a green card. This is the EB-5 program. This requires the investment of $500,000 to 1 Million Dollars either in the establishment of your own U.S. company or in the investment of a Regional Center. The amount of $500,000 is sufficient if invested in a designated rural or high unemployment area. If you choose to invest anywhere else, the minimum amount of investment is 1 Million Dollars.

A Regional Center is basically an administrative company that collects money from foreign investors and then invests it in designated projects, such as the build out of an airport, a solar field, housing or farms.

If you would like to invest in your own company, then 1 Million Dollars is necessary to qualify. Income or expenses of an existing U.S. business cannot be used as proof toward the 1 Million Dollar investment. There must be a clear paper trail showing the investor is putting $1 million of his own money into a U.S. based business.

After the respective investment is completed, you receive conditional residency for two years. By the end of these two years, your project at the Regional Center or your own company is required to have created at least ten full time jobs. If you can prove these jobs are real and ongoing, you will receive your permanent residency.

These are just three ways to qualify for permanent residency. Other ways get a green card include the Green Card Lottery, receiving a job offer from a U.S. company or by showing and documenting extraordinary abilities in the arts or other specialized fields.

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

https://infinitybusinessbrokers.com

No Comments »

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

There’s something to be said for small business owners… they are creative individuals not afraid to take risks and are living their dream with passion. Our country is made up of thousands of those like minds, now more than ever, and they are making our country stronger and more viable.

Stepping out in the very beginning is not only a test of the strong-hearted but it should also prove a slow and steady race. Yes, you take risks as a business owner. Making major mistakes, however, can cost you everything. Here are some tips to help you venture down that “Road to Success” with as little detours as possible.

1. You Need More Than One Captain
Trying to do it all will drain your energy and passion quickly. No one can simply know and do-it-all. Being mindful of your limitations and willing to hire someone with the talents you don’t have will not only make your job much easier, but your business more successful.

2. Honesty Matters
Social Media is the window that can and will expose you faults to the world. If you make a mistake, own up to it. Those days of covering them up and quietly shuffling them under the rug will prove your downfall. It’s not good for business and if you’re the one who fesses up to your error, you’ll be looked upon as an individual with a straight-up sense of doing business honestly.

3. Have A Clear Vision
You can’t go into business blindly and expect your clientele to know what you’re all about, where you’re located and how you operate. The message you send has to be clear, precise, informative and even entertaining each and every time. First impressions count and if the message you’re sending is convoluted, a new prospect will turn the other way.

4. Changing Prices
When products and services aren’t selling, the first thing you should do is drop prices, right? Well, experts say wrong! If the quality can stand on its own accord, most customers are more than willing to pay extra. If times are tough prospective customers will purchase if convenience, added benefits, and top quality prevail. Constantly slashing prices can lead to your business failing because the money isn’t streaming in to cover expenses.

5. Stay Focused
Don’t reach too high first out of the gate. Set realistic financial goals for yourself. Yes, there’s nothing wrong with wanting to make millions, but it’s more important to get your business off the ground and grow slowly.

6. Be A Boss Not A Buddy
Being successful is dependent on how strong and effective a leader you are. However, that doesn’t mean being a tyrant. Your employees are the foundation to your success. They don’t need a buddy. They need someone at the helm who inspires them, shows his appreciation, and knows where they’re going and how to get there.

7. Never Assume You’re The Best In Your Field
We all know what happens when we over-assume. Never, ever assume you are the best and greatest at what you do. Competition exists, it’s lurking and snipping at your heels, ready to take over the #1 spot. The minute you let down your defenses, someone can and will step into the lead. You’ll keep your customers because you work hard every day.

8. Get Rich Quick Fails Every Time
If anyone is an overnight success, it never lasts and goes the distance. Success takes years of slow and steady growth to achieve. Remember that it’s luck, perseverance and time that will get you there.

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

No Comments »

It’s part of the job, and it’s also a big part of why we get paid to do what we do. Business brokers act as buffers – in negotiations, during buyer and seller meetings and at the closing table.

The business transaction process has a lot of moving parts, and typically involves at least a handful of people and their advisors (like brokers, CPAs and attorneys). It can be very difficult, if not occasionally impossible, to get all parties to agree on a consensus and get a deal all the way through to closing. Avoiding miscommunication, maintaining confidentiality, putting out emotional “fires” when one side has offended the other – these are part of the day to day duties of a good broker.

The reality of the business buying and selling process is that some kind of issue during the course of your transaction is probably unavoidable. You could have the greatest broker in the world and your deal might still fall apart. If you are unfortunate enough to be stuck with a not-so-great broker, then the chances of a deal getting all the way to closing successfully are probably pretty slim.

So how can you tell if your broker is doing a good job or if what is happening is truly out of their control? Let’s look at the types of things that typically happen during the course of a transaction and what your broker can (and can’t) do about it. This third article in our series? The Other Side.

Other Sides

Sending requests for information to some brokers is like sending requests into a vortex of no return. It can take days, even weeks for some in our business to answer an email, send over a P&L – and that can be very frustrating both for us as brokers and also for our clients.

The same issue can come from many parts of the transaction. An attorney taking two weeks to amend a purchase contract, a CPA going over financial records for more than a month, even sellers going weeks and weeks without responding to requests for more information.

All of these unanswered requests can slow down and even kill a deal.

If your own broker is really good about responding to your calls and emails, but you still aren’t getting requested information – then the broker’s hands are probably tied. They can only pass on to you the information they receive, so try your best to be patient.

That is not to say you should wait for crazy amounts of time for information. If it’s just too long, ask your broker if the time has come to move on to another deal. Sometimes the mere threat of walking away can get information flowing, although you should let your broker decide when the time is best to play that card.

If your own advisors are part of the problem, do your best to hurry them along. Sellers should also do their part in ensuring requested information is provided in a timely fashion. It can sometimes seem like the requests are neverending – but it is important to remember that the buyer is about to spend a very large amount of money on your business. You would want lots of information and answers too.

The problem is not always on the seller side. Buyers can hold up the transaction just as easily. Many buyers go into due diligence, thereby pulling the business off the market, only to repeatedly request more and more time. If you are serious about making a decision on a business, it really shouldn’t take you any more than two weeks to go through the financial records and determine if the business fits with your goals. Holding a business off the market for extended periods of time, especially if you don’t end up closing, is incredibly unfair to the seller’s side. Extremely long due diligence can cause a seller to kill the deal simply because for every day you aren’t buying the business – someone else can’t either.

The business transaction process needs the cooperation of all parties in order to be successful, so you must do your part and also be fair to the other side. Demanding and impatient requests can derail a deal, as can dragging your feet. Listen to your broker when they tell you what reasonable time frames should be, and then stick to those suggestions.

Are you a seller who has questions about what buyers can and can’t ask for during due diligence? Are you a buyer who is frustrated by the amount of time it takes to get information on a business and want to know what can be done to speed up the process? Ask us! Please feel free to leave us a comment or question here.

Want to read part 1: The Bad Offer? Click here.

Want to read part 2: Confidentiality? 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 »

It’s part of the job, and it’s also a big part of why we get paid to do what we do. Business brokers act as buffers – in negotiations, during buyer and seller meetings and at the closing table.

The business transaction process has a lot of moving parts, and typically involves at least a handful of people and their advisors (like brokers, CPAs and attorneys). It can be very difficult, if not occasionally impossible, to get all parties to agree on a consensus and get a deal all the way through to closing. Avoiding miscommunication, maintaining confidentiality, putting out emotional “fires” when one side has offended the other – these are part of the day to day duties of a good broker.

The reality of the business buying and selling process is that some kind of issue during the course of your transaction is probably unavoidable. You could have the greatest broker in the world and your deal might still fall apart. If you are unfortunate enough to be stuck with a not-so-great broker, then the chances of a deal getting all the way to closing successfully are probably pretty slim.

So how can you tell if your broker is doing a good job or if what is happening is truly out of their control? Let’s look at the types of things that typically happen during the course of a transaction and what your broker can (and can’t) do about it. This second article in our series? Confidentiality.

Confidentiality

Confidentiality is a very big part of business sales, as it is the only way for a functioning business to stay in business long enough to be sold. Many bad things can happen if the sale of a business is disclosed – from the entire staff quitting, vendors and clients cancelling contracts or the competition moving in for the kill. Why? A business that is for sale is perceived to be weak or on the verge of going out of business, even though this is rarely the case. Even though most businesses for sale are far from closing the doors, it is imperative for the future of the business that the sale stays under wraps until after the sale is complete.

We give everyone the speech. We tell sellers not to tell their staff or their friends and neighbors about the business going on the market. We make all prospective buyers sign legally-binding non-disclosure agreements and tell them not to tell anyone outside the circle of the sellers, brokers and themselves anything about the business. We refuse to work with real estate agents or attorneys who are attempting to “moonlight” as business brokers because they know nothing about confidentially marketing and showing a business – we know that they will invariably disclose the business improperly.

We do all of these things, but every now and again the news of the sale of a business gets out anyway. We’ve had a chatty seller tell a woman sitting next to him on a plane all about the business he was selling – and unbeknownst to him she lived in the community where his business was located. She told all of her friends and neighbors about the business being for sale as soon as she got home, and within days the entire staff and community knew. We’ve had buyers waltz into restaurants demanding to talk to the management and get a tour during business hours when all of the staff is present, even with the looming legal penalties of a non-disclosure agreement. We’ve had real estate agents take pictures of the business and post them, with all of the confidential information they should have withheld, on the MLS system available to anyone with an internet connection.

The point here is a good broker is going to do everything in their power to keep the status of a business confidential, so if you are selling – beware the “moonlighting” broker as the consequences of disclosure can be enormous. If your business gets disclosed because of a buyer, a good broker will immediately make the necessary moves to impose the consequences of the non-disclosure. However, disclosure on the buyer side is not nearly as common as disclosure by the seller themselves. Be tight-lipped about your business sale, and if you aren’t – then you can’t really blame your broker for your lack of discretion.

Are you a seller who would like to know more about how we are able to successfully market your business while maintaining confidentiality? Are you a buyer who would like to know more about non-disclosure agreements and what they mean for your business search? Please feel free to leave us a comment or question here, and we will be happy to help.

Want to read part 1: The Bad Offer? Click here.

Want to read part 3: The Other Side? 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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