Don’t Shoot The Messenger – What Your Broker Can (And Can’t) Control: The Bad Offer

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 first article in our series? The Bad Offer.

 cartoon angry businessman throwing crumple paper

Bad Offers

 

If you are trying to sell your business, there’s a chance that a buyer will come along and write an offer on your business that is so ridiculous your broker really wishes they didn’t have to tell you about it. They know the instant they tell you the offer, you’re going to be angry as hell.

 

“Are you joking?!? Has this buyer lost their mind?!? Why would you even bring me this?!?”

 

Well, we have to. Legally, we do. Any offer that is submitted to your broker must go to you, so the point here is don’t kill the messenger. Your broker has no desire to make you angry, as they are the ones in the transaction who have to deal with you.

 

Try to remember that even a garbage offer can be a starting point for negotiations, or at the very least can tell you whether a prospective buyer is serious about buying or not.

 

On the flip side, if you’re a buyer, your broker has to submit every offer you write – even the ones that they know are going to blow up in your face and prevent any future negotiation on a business you actually want. So listen when they tell you that an offer is a bad idea. They want you to get the right business, and that won’t happen if you leave a trail of angry sellers in your wake.

 

The bad offer is entirely dependent on the buyer in a transaction, so while a good broker might be giving the best advice, bad offers can and do happen. Remember that the business transaction process is just that – a process. Listen to the advice of your broker when receiving or writing an offer and you will have a far greater chance of success.

 

Are you a business seller who wants to know the best way to deal with a bad offer? Are you a buyer who wants to know what a decent offer looks like? Ask us! Please feel free to leave a comment or question and we will be happy to assist you throughout the transaction process.

 

Want to read part 2: Confidentiality? 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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Does My Company Really Need An Operating Agreement…?

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

 

Operating agreements, which are akin to corporate bylaws, dictate the management and operation of a limited liability company (“LLC”). An operating agreement serves to reinforce the limited liability status a company has elected, may prevent misunderstandings between owners, and plays an important role in determining the requisite authority for conducting LLC business and transactions.

An LLC with multiple members should utilize an operating agreement to specify the profit and loss sharing, management structure of the company, and procedures for the removal and addition of members. In the absence of an operating agreement, a Florida LLC is subject to Florida’s Statutes which may or may not be appropriate for the goals and structure particular company.

Florida law provides for the distribution of profits and losses among company members in accordance with the agreed value each member’s capital contribution to the company as stated in the company records. Capital contributions may be made in the form of cash, services, or property. Further, if an operating agreement provides for the reinvestment of profits, or portions of profits, back into the company, it is important that such allocations contemplate each member’s income tax liability with respect to their distributions. An LLC member is required to pay income tax on his or her entire distributive share, not just the portion of such share that he or she collects. Acknowledgement of the value of each member’s contribution, clearly stated in an LLC’s operating agreement, will avoid conflict among members regarding the method and manner of distributions of profits. Further, proper tax planning and consideration of such provisions when drafting an operating agreement will ensure that the applicable distribution scheme is practical for the members.

An LLC may choose to operate as a member-managed or manager-managed company. In the absence of an operating agreement, Florida law provides that an LLC shall be member-managed. This means that the power to make decisions regarding the management and operation of the LLC’s affairs are vested in proportion to each member or managing member’s percentage or profit share of the LLC, unless specified otherwise in an operating agreement. In the alternative, a manager-managed LLC may appoint a manager, or managers, with the authority to make certain decisions and conduct day to day operations on its behalf. Depending on the size, purpose, and goals of an LLC, one form of management may be more appropriate than the other and, therefore, should be considered when drafting the operating agreement.

Voting rights and requirements often become important in determining the direction and operation of an LLC as well. Typically, voting rights are structured either in accordance with each member’s percentage interest or each member is entitled to one vote (also known as “per capita” voting). In the absence of an operating agreement, Florida law provides for the members of an LLC to vote in proportion to their current percentage interest as stated in the LLC records or determined in accordance with each member’s respective capital contributions.

Clear procedures provided by way of an operating agreement for the removal, death, or retirement of a member and/or sale of a member’s ownership interest will further assist in the smooth operation and evolution of an LLC. Such procedures are useful for planned and unforeseen transitions, and typically eliminate any confusion or misunderstanding which may arise otherwise.

Every LLC is unique, and review and consideration of its specific goals and needs should be made when determining the structure and content of an operating agreement. However, certain essential terms, including the following, appear in most operating agreements and should be included:

– Specification of each member’s ownership percentage or interest;
– The rights and responsibilities of members;
– Distribution of profits and losses;
– Voting rights;
– Management structure;
– Meeting requirements; and
– Transitional procedures for the removal, addition, or sale of members and interests.

The assistance of an attorney, or other professional, who specializes in formation of business entities should always be sought when preparing an operating agreement.

 

 

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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
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

 

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VIDEO: The 3 Question Success Formula!

By Guest Contributor Ron Frost – www.PostitiveMomentumCoach.com

 

By asking these 3 questions… you will gain both purpose and clarity in how to best move forward and enable new ways to conquering your vision and your goals…

 

ron frost

Ron Frost
Motivational Speaker | Life Coach | Business Coach
www.PositiveMomentumCoach.com
239-265-4380

 

Michael Monnot

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

https://infinitybusinessbrokers.com

No Comments »




The Proof Is In The Numbers

A recent industry survey directly from business brokers was just released last week. I have picked some of the things that surprised me that anyone wanting to sell their business would want to know.

Given that we are in the age of technology, I feel that this one surprised me the most and this is further proof that most business brokers wait for the phone to ring rather than marketing your business, being proactive and trying to sell your business.

businessman drawing business plan on wall

With what frequency did you use each marketing service in 2013?

Email Marketing used by 72%
2x/mo+            monthly      1/4ly        2x          1x
19%                   25%        13%         10%       05%

We will distribute your listing to our network of buyers, pull data on strategic buyers for your business, referral partners, attorneys and so many more to ensure that your business is exposed to the greatest number of potential buyers as possible.

79% of brokers have been in the business at least 5 years so a good website would be expected, with a blog – a place to write about and promote their businesses, right? Less than 1/3 are even utilizing a blog, while only 21% have been using one for over a year. Unfortunately the same thing goes for the most utilized social media site, Twitter.

How have you utilized the following professionally?

Blog

Using currently for 1year or more       21%
Using currently for less than 1 year    11%
Used previously, but not now             06%
Never used                                      61%

Twitter

Using currently for 1 year or more      21%
Using currently for less than 1 year     7%
used previously, but not now               6%
Never used                                       66%

 

Nearly 2/3 of business brokers are sole practitioners so the average monthly expenditure on advertising is only $653 per month. So you are getting charged, 10%, 12% or maybe even 15% to sell your business; what kind of exposure are you getting for your money?

What does your office spend on advertising per month (not counting recruiting)?

  • SP Average was $653.
  • Office Average was $1575
  • 81% of respondents spent $1000 or less.

 

On average most business brokers are using less than 2 sites to advertise your business while some do not use any internet advertising.

What NATIONAL internet listing exchange programs do you use?

bizbuysell     82%
bizquest     67%
businessbroker.net     47%
businessesforsale.com     48%
businessmart.com     22%
craigslist     29%
IBBA     24%
mergernetwork.com     37%
mergerplace.com     12%
other     25%
do not use any     7%

 

This is real simple, over 50% of business brokers charge an upfront fee to take your listing. So if an average business broker is only spending $653 in advertising why would you pay them an upfront fee?  For the trouble of taking your listing?

I am here to sell businesses, I am confident in our system and the amount of businesses that I sell and will risk my own funds, give a free evaluation and market the business.

Do you charge an up-front fee (not including those for valuation/pricing)?

MS
Always                             12%
Very Often                      09%
Often                               06%
Rarely                              28%
Never                              45%    

 

This shows that at least 20% of business brokers are taking listings just to take listings, will tell you what you want to hear or are desperate and need listings. If a business broker is not trying to evaluate the business is worth, how can they confidently and professionally sell the business for what it is worth?

Do you perform an actual valuation, with or without a fee, prior to taking a listing?

            Total    MS

Yes       79%     79%
No        21%     21%

 

Although it is good to see that over half do not charge for a valuation, the other half are charging in the range what a certified appraisal would cost for a main street business.

What do you charge for this valuation?

  • 54% do NOT charge

 

Of those who do charge:

  • MS Average $2008

 

 

With my marketing system we reach clients all over the country and all over the world. Proof that the system works is that well over 80% of my buyers are from another state or outside of the country. Why limit yourself to such a small pool of potential buyers?

Of the buyers WHO ACTUALLY BOUGHT a business from your office in 2013, what approximate percentage came from:

 

Locally 50%
From Own State 20%
Within the U.S. 19%
I don’t know 07%
Internationally 04%

 

 

68% of brokers have cooperated with another broker less than 25% of the time.
I am here to expose your business to as many qualified buyers and brokers as possible. I am often times in the position of selling another broker’s listing because it is right for the buyer, likewise if another qualified business broker brings a qualified buyer I am happy to split a deal for the benefit of my seller. And many times I have found that this exposure brings more and better offers, which equals more money for you.

 

What percent of your deals were

co-brokered (outside of your own firm)?

0 to 5%                                                                  42%

6 to 10%                                                                11%

11 to 15%                                                              06%

16 to 25%                                                              09%

26 to 50%                                                              08%

51 to 75%                                                              03%

76 to 100%                                                            03%

I don’t co-broke                                                     18%

 

 

I am in the top 5 of all business brokers in Florida according to the BBF, so I sell more businesses than the average office.

What was the total number of businesses sold in 2013?

Office Average                   21 sold

SP Average                        9 sold

Total Average                   13 sold

 

One of the benefits of my marketing program is that I draw a large amount of international buyers. Over 80% of my deals are all cash allowing the seller to walk away without having to worry about payments.

What percentage of your 2013 transactions were financed by the following sources?

All Cash              27%
Seller Only          22%
Seller + SBA        16%
Seller + Bank      11%

 

After being able to see and evaluate information provided by other business brokers, it really should make any potential seller think about who they want to list their business with.

The facts are co-brokering/cooperating has proven effective, a solid marketing program proves to sell businesses as it shows in my numbers of sales and the amount of cash I get for businesses should make me your first and last call to sell your business.

 

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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Non-Compete Agreements: What is a Reasonable Restriction?

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

 

Most savvy buyers aren’t willing to purchase a business without some type of assurance that the Seller is not going to compete with them going forward. The answer in most cases is a non-compete agreement, but what makes an enforceable agreement?

First things first, you need to be sure that the agreement is in writing and executed properly. Be sure that the corporate entity and the underlying individuals execute the agreement. If the agreement is to benefit a third party or assignee, then the agreement should specifically identify the third party and/or specifically provide for assignees.

Next, the courts will only protect “legitimate business interest”, which includes, but is not limited to: trade secrets, confidential business or professional information, substantial business relationships, goodwill and extraordinary or specialized training. Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable. §542.335, Florida Statutes.

Finally, what is a reasonable restriction in terms of time and geographical scope? Well, Florida Statutes provide that any restraint three (3) years or less is presumed to be reasonable and any restraint in excess of seven (7) years would be deemed unreasonable. §542.335, Florida Statutes.

So depending on the size of your customer base, type of business, and the training involved, a “reasonable” time period is probably going to fall somewhere between 3 and 7 years, with 3 and under being the safest of bets. With regards to geographical scope, the area in which competition is restricted must not be broader than is necessary to protect the employer’s interests. This is a judgment call, which again, is based on the individual business.

Happy negotiating and good luck in your new business!

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
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

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How to Handle Embassy Delays or Denials When Buying a Business

By Guest Contributor Sabine Weyergraf – www.weyergrafimmigration.com

 

Buying a business and applying for an E-2 Investor Visa has its timing challenges. Typically, the seller would like to transfer the ownership as soon as possible and receive his funds. In the past, it was hard to convince a seller to wait 3 months for an E-2 Visa to be processed at one of the busiest E-2 Embassies, London. With shorter processing times, sellers were willing to wait four to six weeks until the closing was conducted. At that time, we were experiencing processing times of four or sometimes even less than four weeks. Unfortunately, this has come to an end. Processing times around the world are averaging about eight weeks. The U.S. Embassy in London is still the fastest, with a four weeks processing time, while processing times at the U.S. Embassy in Sweden are currently taking around 12 weeks.

Hopefully, processing times will become faster in the future. The question for now is how to handle these delays from a visa perspective. There really are no alternatives to the E-2 Investor Visa. The only possible option is a L-1 Intercompany Transfer Visa. However, this requires that the buyer and applicant for the visa operate a midsized company outside of the U.S. and will continue to do so. The processing time of an L-1 is about four weeks.

There are various ways a buyer can explore the market to find an appropriate business. Buyers from visa waiver (ESTA) countries can visit the United States for 90 days at a time to search for a business, conduct the due diligence, and make preparations. A buyer does not have to have a work visa in order to purchase a business. The buyer just cannot operate the business and, instead, has to have personnel in place to conduct the business activities.

A B-1 Business Visitor Visa provides a little more time and more frequent entries into the United States. A B-1 Business Visa allows a stay of up to six months per entry. The visa is issued for ten years. While the visa is very easy to receive in Brazil, it is the most denied visa in Europe and other South American countries. If a B Visa application was denied, the applicant can no longer travel on ESTA.

If an E-2 Visa is denied at an Embassy, there is no appeal to a denial at the Embassy. Very rarely is it possible to change the decision by contacting the Consul or Head of the E-2 Visa section.

The applicant can ask for a B-1 Visa in order to look for another business or to resolve any issues with the already conducted steps towards purchasing or establishing of the U.S. business.

If the buyer then finds another business or any other circumstances change, an immigration status change from B-1 to E-2 can be filed in the United States without having to return to the Embassy. This status change is not a visa. It does not give any permission to travel and it is only valid for two years. However, it is a start and avoids having to go back to the Embassy which has just denied an application.

Heandshot_Sabine_WeyergrafLogo_Weyergraf_page_001

Sabine Weyergraf is the founding partner and New York licensed attorneypracticing 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
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

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Get Out In Front Of The Wave: Why Now Is The Time To Sell Your Business

Many business owners have watched with hopeful optimism the return of the economy to near pre-recession levels and have reaped the benefits of the return of customers and clients who are able to afford the extras that were cut from many budgets a few years ago.

 

For many business owners who survived the tough economic times, the question of when to sell may have entered the conversation.

 

When is the best time to sell your business? Now that there are buyers with money and customers to boost your numbers, you may have wondered how long you should keep your business. If you wait another 6 months, two years or longer, will the economy and your numbers continue to improve thereby giving you a better return when you sell?

Businessman with cash

The decision of when to sell can be a tough one. There are many things an owner must weigh when deciding when to list, like years until retirement, health and personal issues, the strength of the economy – the list goes on.

 

If you think you may want to sell sooner than later, then a new statistic may help give you the push you need to get your business listed sooner. In recent months more than half of all new businesses that were listed on the market were owned by baby boomers. With the greatest generation poised for retirement, there are going to be many business owners looking to sell.

 

If you want to catch the wave early, thereby entering the market in a better position – where there are more buyers than sellers, now is the time.

 

Talk with your business broker about the state of the market for your particular industry. They will be able to tell you what comparable businesses have sold for recently, they will know if there are buyers currently searching for a business like yours and they will be able to help you decide if now would be a good time to get your business out there in front of buyers.

 

If you’ve thought about selling, but have questions about timing – now is the time to ask! Please feel free to leave us a comment or question here, and we will be happy to assist you with selling your business.

 

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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Why Didn’t It Sell? The Business Seller’s Guide To Transaction Success

negotiations at the desk

If you have been on the market a while and your business hasn’t sold, you aren’t alone. Not all businesses that list on the market sell the first time around (within the first listing agreement timeline). Most listing agreements are for one year, and the average time it takes to sell a business is in the neighborhood of 9 to 12 months. Just as there are things that will definitely hurt your chances of selling, there are a few things that can help you if your ultimate goal is the closing table.

 

Have the right broker.

Like any industry, there are great brokers and there are brokers who are not so great. Having an experienced and qualified professional selling your business will definitely help you on your way to a closing table. A good broker should answer your phone calls and emails in a timely fashion, should recast your financials to make them easy for buyers to understand, should bring you buyers who are appropriate for your business, should have a comprehensive marketing package to distribute to those buyers, should hold the confidentiality of your business sale to the highest priority and should have your business listed in all the places buyers (and the brokers for buyers) will look. Some businesses are tough to sell, whether it’s because the business is very niche or the market isn’t bringing the right kind of buyer, so if your broker is doing all of the things we listed and your business still hasn’t sold in the first year – it might just be a matter of time and patience until the right buyer comes along.

 

Be realistic.

Sure, everyone would love to get millions and millions for their corner cafe, but the reality is your business is only worth what someone is willing to pay for it. We see businesses languish on the market indefinitely because sellers (or bad brokers) forced the listing price too high, and it scared any potential buyers off. The pricing conversation you have with your broker is very important, as you want to get the biggest return on your investment while still pricing it to sell. A big dose of reality will help you actually achieve those goals.

 

Be forthcoming with records.

A good recast of your financial records is essential to show buyers what benefits they will get by buying your business, but a good recast only happens when you give your broker and prospective buyers complete access to the information they need. We see deals fall apart because sellers refused to provide information, or because requests for information went unanswered or took too long. No one is going to pay for a business they haven’t been able to see, so be prepared to be forthcoming with documentation like tax returns and leases. Buyers will also have questions, lots of them. Sellers who seem unwilling to answer questions give the impression that there is something to hide, so answer questions truthfully and in a timely fashion.

 

Don’t lie.

You will get caught. You will also get caught trying to withhold information that you think may be damaging to the image of the business, so just don’t do it. There is no such thing as a perfect business, and most buyers are willing to overlook even moderate issues so long as they know about them from the start. We have seen deals fall apart over dishonesty too many times. Lying about profits, about taxes that are due, about the motivation for selling – during due diligence the truth will come out and it will more than likely kill your deal.

 

Transaction success is possible with the right help, realistic expectations, a cooperative attitude, complete honesty and a good dose of patience.

 

Has your business been listed for a while and doesn’t seem to be attracting buyers? Are you frustrated with what your broker is (or isn’t) doing to market your business? Please leave us a comment or question here, and we would be happy to help you with getting your business sold.

 

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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The Gift Of Past Experience: What Veteran Business Sellers Know – You Need Reality

If you are thinking about selling your business, and this is the first time you will be entering the business marketplace, then you probably already know there will be a lot to learn before you get to a closing table. This is part four of a series that will let you in on the practical knowledge you would typically have to get by going through the process and making every mistake possible – only you have the benefit of our experience to help you navigate this complex road. Here are the things only experience can teach you about selling your business.

Businesswoman walking.

You Need Reality

 

When sellers put their businesses on the market, they tend to have a few preconceived notions about how the whole process should go. The problem is, these notions are usually far from reality – so these expectations can really cause problems.

 

Bidding wars don’t exist.

If you’ve ever bought a house in a hot market, you might be familiar with the concept of a bidding war. If several buyers really want a home, they might try to outbid one another to secure the property. In business sales, this almost never happens, so banish from your mind the idea that a whole hoard of buyers are going to fight over your business – thereby driving up the price to untold millions. For a good business, you might have multiple offers, but this is rarely the case. More commonly, you will get a decent offer, accept it and move to the due diligence phase. While in due diligence with one buyer, you might get a back-up offer from a second buyer, but since you accepted the first offer – no bidding war will happen – you just have another buyer in line if the first deal falls apart.

 

All-cash buyers are extremely uncommon.

We hear this one all the time. “I’m not accepting a penny less than asking and I only want all-cash buyers.” Wouldn’t it be great if this was a realistic expectation? Sure, but it’s not. Yes, all-cash buyers do exist and some businesses sell for their asking price, but it is far more common that the actual selling price falls somewhere below asking and the seller finances a part of the deal. Going into negotiations with buyers knowing and understanding these two facts will put you in a far better position.

 

You are not the only person in this transaction.

Yes, we know, your business is your baby – but sellers often forget that they are exchanging that baby for a very substantial amount of someone elses’ money. Emotions are going to run high on both sides of the negotiating table. Remembering this fact will help you understand why the other side balks at your refusal to lower the price or answer more questions. Try to keep in the back of your mind the day you bought (or started) the business and what it was like to write that big check.

 

Talk to your business broker about what your expectations should be for your transaction, then listen to their answers. Your broker is there to help you on your journey to the closing table, so take their advice and it will serve you far better than sticking with any unrealistic expectations.

 

Are you a business seller who’s concerned that the price you’d like to ask for might be unrealistic? Do you have questions about how to handle prospective buyers? Ask us! Please feel free to leave us a comment or question here, and we would be happy to help.

 

Want to read part 1 – You Need Help? Click here.

Want to read part 2 – You Need Time? Click here.

Want to read part 3 – You Need Organization? Click here.

 

Michael Monnot

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

https://infinitybusinessbrokers.com

 

 

No Comments »




The Gift Of Past Experience: What Veteran Business Sellers Know – You Need Organization

If you are thinking about selling your business, and this is the first time you will be entering the business marketplace, then you probably already know there will be a lot to learn before you get to a closing table. This is part three of a series that will let you in on the practical knowledge you would typically have to get by going through the process and making every mistake possible – only you have the benefit of our experience to help you navigate this complex road. Here are the things only experience can teach you about selling your business.

 

 Overworked businessman.

 

You Need Organization

 

Business owners work really hard, and one of the common issues we see when the time comes to sell is a complete lack of buyer-ready organization.

 

You need to be somewhat organized to run a business, but what works for one person (like horizontal filing a.k.a. a room full of stacks and stacks of paper, taking every business-related piece of paper and shoving it unceremoniously in a box on the office floor) probably won’t work for everyone.

 

If you are even considering selling your business, you will absolutely need to have someone look at your books and business records and get everything into a format that buyers will be able to read and understand.

 

Most business owners who try to sell their business on their own or those who enlist realtors or attorneys to help them sell will likely end up only giving buyers a quick and dirty P&L and a copy of tax returns.

 

Look at the numbers on the bottom of your tax returns. Do they really give a good picture of how your business did last year? The answer is probably not.

 

What you need before you sell is a recast of your financials. In a recast your numbers will be re-assessed (see this article about recasting) and the benefit you actually get from your business will be translated into a form that buyers can understand.

 

Recasting is an essential part of getting offers from buyers. A business with properly recasted financials will look far better on paper than a business with just tax returns.

 

Talk to your business broker about how to get better organized and how to get your records recasted so your business is presented to buyers in the best light possible.

 

Are you a business owner who is famous for horizontal filing or the box-o-receipts? Would you like to know more about how to make your business stand out from the crowd? Ask us! Please leave us a comment or question here, and we will be happy to help.

 

Want to read part 1 – You Need Help? Click here.

Want to read part 2 – You Need Time? Click here.

Want to read part 4 – You Need Reality? Click here.

 

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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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202




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