Business Owners: You Need To Read This!



You are a business owner, an entrepreneur. The economy of the United States depends on people like you because small businesses form the backbone of this great country. You have put your own blood, sweat, and tears into building your business. You work every day to keep your business running.

 

Have you thought about the end of your participation in your business? Most small business owners don’t give this idea much thought, but its inevitable nature makes it something you should prepare for.

 

What will you do when you decide not to be the owner of your business anymore? There are three basic choices.

1.       Lock the door and walk away.

This is not the path that any new business owner dreams of the day they first open, but it is a reality that many business owners will face if they are unprepared for the end. From the start, you should have an exit strategy that ensures you won’t end up with this option.

2.       Liquidate your business assets.

When a business ends up in real trouble, many take this road in an attempt to recover at least a small part of their business investment. This is another path that can be prevented with the right planning from the very beginning.

3.       Sell your business.

This is by far the best option, as you can benefit from your enormous investment of time, energy, and money. This option starts with a strong exit strategy, even if that exit isn’t in the foreseeable future. Lay out the reasons why you would sell, and always have the business in order in case something happens that would force you to sell. It is far easier to keep the business in good order than to scramble at the end. Ask yourself what you would want to see if you were the buyer coming in to look at your business. Seek the advice of a business broker early on, as they know what buyers are looking for.

Are you a business owner who has never thought about an exit strategy? Are you a business owner who would like to know more about what buyers are looking for? Leave a comment and we will answer any questions you might have.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Business Brokers: Why You Need One to Buy a Business- What They Can Do, and What They Can’t Do



If you are in the market to buy a business, you will be making what could potentially be one of the biggest decisions of your life. Working together with a professional business broker will make this process work out best for you in the long run. Only by working with a broker can you ensure that you are buying the right business for you with the very best terms and price possible.

 

So what can a business broker do? A business broker is a transaction broker. They facilitate the buying and selling of businesses. A good broker will help you match potential businesses for sale with the skills and goals you have, and will help you avoid businesses that are not well suited for you. They will help throughout the acquisition process, and act as intermediaries between you and the seller. They work with both parties to ensure a transaction structure that ultimately works well for everyone.

 

A business broker is not able to conjure up the perfect business. All businesses and all business ventures do come with a certain amount of risk. The business sale process is rarely easy, so you should be prepared to have issues at times. These issues may arise between you and the seller, with your new competitors, with the staff and vendors, or just with the economy in general. When you first take over the business, you may have difficulty producing the same results as the former owner, and should prepare yourself for a bit of struggle. Your broker should help you to understand and be prepared for both the acquisition and the transition of the business.

 

Have you used a business broker in the past, or do you have more questions about what a business broker brings to the transaction table? Leave a comment for us here, and we will be happy to hear your thoughts and answer your questions.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


I’m Ready to Buy, How Long Will It Take Me to Find a Business?



The first question to ask is “Are you really ready to purchase a business?” The answer will depend on one main aspect- finances. Do you have the money you will need for at least a down payment already in place? If you are looking to expedite the business purchase process, it is typical that the larger the down payment you have, the faster you will be able to make a business acquisition. Fifty percent of the purchase price is ideal, although business transactions do close with smaller down payments. The reason for a large down payment is to give confidence to the seller. If you are not offering a full price payment, the seller will likely be giving you some kind of seller financing package. A seller wants to know that you will be able to make loan payments, and a reasonable down payment is the first step to creating this trust.

 

Once you have your down payment in place it generally takes about six months to acquire a profitable and solid business. Remember that six months is an average, and the timing will greatly depend on what specifics and locations you are looking for. You will need to give these desired details to your business broker in order to expedite the process as well.

 

A key to success in business ownership is practical experience. A common misconception is anyone can run any type of business, as long as they own it. Nothing could be farther from the truth. You must have relevant experience if you want to be able to compete in the market you are entering. Talk to your business broker about the areas where you have expertise so they can match you with an appropriate business.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


First-Time Buyers: Should I Buy an Existing Business or Start a New One?



If you are a first-time entrepreneur, the lure of business ownership may have you thinking about starting your own business from scratch. Although it is possible to start a new business and succeed on your very first try, only 1 in 5 new businesses will make it past their five year anniversary.

 

Why is this the case? There are a number of reasons. The initial cost involved in a start-up is usually much more than anticipated, and this often leaves an owner cash-poor before the doors even open. Another common problem is overexpansion long before the business is ready, which can put a great deal of financial strain on the business. The most likely cause of start-up failure is the inexperience of the owner. If you have never run a business before, trying to put in place a location, equipment and furnishings, operating procedures, and an inventory can be really tough.

 

If you are intimidated by the chance of failure right out of the gate, there is another option for your road to entrepreneurship. You can buy an existing business. As a first-time business owner, this option means that your business comes ready-made. Businesses often come with an inventory, have a fully equipped and furnished location, and operating procedures that are successful. In many cases the current owner will agree to stay on for a time after the business is sold in order to give you training.

 

It is important to remember that any business venture comes with a certain amount of risk. As a prospective business start-up or potential business buyer, you will need to decide which road (and risks) you are willing to take on.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


What Does a Business Broker Bring to the Deal?



When buyers and sellers consider entering the business market, they often consider whether or not to use the services of a business broker. Do you really need one? The short answer is a definite YES. What follows are the roles that your business broker would play in your business transaction:

 

-Evaluation

An important role that a business broker plays is in the proper evaluation of businesses. As a seller, it is often difficult to give your business an accurate evaluation, and buyers want to know that the evaluation of a business they are considering is correct.

 

-Confidentiality

It is critically important for the sale of the business to remain confidential throughout the sale process, as the business can be adversely affected if staff, clients, vendors, or competitors find out it is on the market. Business brokers always work to keep confidentiality in place.

 

-Marketing

As a seller, you may not have the experience in business marketing necessary to properly highlight your business and attract buyers. Your broker also has access to potential buyers that you wouldn’t, so they can bring critical exposure that can help to get your business sold.

 

-Red Tape

Do you know all the ins and outs of a business transaction like licensing, permitting, contracts, and leases? Your broker does, and this knowledge can be invaluable when getting a deal through to closing.

 

-Intermediary

When large sums of money are exchanged between strangers, a certain level of distrust is common. How do a buyer and seller get a deal closed if they don’t trust one another? They use a broker to communicate with one another, and the broker can help create compromises when difficulties arise.

 

When deciding whether or not to use a broker in the business market, consider that if you don’t, all of the responsibilities above will fall to you. Do you have the time and expertise that will make your business transaction go smoothly?

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


What Kind of Business Should I Buy?



The best way to set yourself up for success as a new entrepreneur is to get yourself into a business that you already know. You have a great deal of workplace knowledge and practical experience in the fields where you have already worked, and it will be important to tap into those personal resources of knowledge when you set out on your own.

 

If owning and operating a bar has long been a dream of yours, but you’ve never even worked in one, then it’s probably a bad idea to buy into this industry. You want to start your business on day one with at least a general idea of what to expect. Entering a completely new field often ends with disastrous results.

 

While staying within a field you know is the probably the most important consideration, there are some other aspects of business ownership that you should consider before deciding on a business to buy.

 

You need to have realistic expectations about business ownership. Make sure that you understand the time constraints and level of responsibility that will be necessary for any type of business that you are considering.

 

Also, pick an industry that plays to what you love. Someone who loves golf but is not a big fan of kids should go into a golf retail business instead of a children’s’ sporting goods store. The most successful entrepreneurs love what they do, so take some time early on in your decision deciding what will make you happy for the long run.

 

Set yourself up for success on your entrepreneurial journey by going with your strengths, keeping realistic expectations, and deciding on a business that you will love.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

 


Advice for Business Buyers: How to be Taken Seriously



The less-than-serious buyer is an issue that plagues every sales market. They are known as tire-kickers, but more realistically they are time-wasters. If you are someone who is very serious about buying a business, it will be important for you to distinguish yourself from this group. By showing your sincerity, you will get the attention you deserve from business brokers and sellers in the marketplace. Here are some pointers that show you mean business:

–          You are ready, willing, and able to sign the necessary non-disclosure or confidentiality agreements.

–          You have realistic goals and expectations like knowing there is no such thing as the perfect business and that any business venture comes with a certain amount of risk.

–          You have already done your homework. You know what type of business you would like to buy and you have a general idea of what’s available on the market based on internet research.

–          You have your financial ducks in a row. You have a down payment ready, have equity in assets you are ready to borrow against, or have secured financing from an outside source. You need to be prepared to disclose your financial means to your business broker so that they can find you a business that you can afford. There are options like seller financing that you may be able to consider, especially if you have a down payment ready.

–          You are ready to submit an offer or letter of intent along with a deposit to show a seller that you are serious.

Sellers and business brokers will know if you are a serious buyer or someone who is just shopping around (and wasting their time). If you wish to be taken seriously, follow these pointers and you will be one step closer to business ownership.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


What Happens During Due Diligence?



Due diligence is an all too important part of buying a business. This phase of the business transaction allows the buyer access to all the records and contracts of the business, and is the time for the buyer to determine whether or not to proceed with the business purchase and how much they are ultimately ready to pay.

Some things you will want to consider during due diligence:

-Why is the seller selling the business? You don’t want to inherit a business that someone else is trying to run away from.

-Evaluate the last three years of financial records.

-Look into unresolved legal actions

-Examine relationships with clients and vendors

-Understand any intellectual property rights like copyrights and patents

During due diligence, be sure that you are speaking only with your business broker and the seller, as it is incredibly important to maintain the confidentiality of the sale. Once you have been over the necessary information and records, you can go ahead and make your decision on the purchase of the business. Due diligence is your best opportunity to examine the business, so be sure to use the time wisely.

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Seller Financing: Will I Need It?



If you are a budding entrepreneur who is looking to purchase an existing business, you will likely need to consider seller financing. The days of full third-party financing are long gone, as traditional financial institutions are much more careful and selective when financing small business deals. Any financing intuition will go over the business details thoroughly, as they need to be wary of mismanagement and fraud. It is highly unlikely that as a new business buyer you will get 100% financing, so it is best to have some kind of down payment together and look for business sellers willing to finance part of the purchase price.

On the seller’s side, visions of a full-price, all-cash buyer need to be brought back to reality. This type of deal rarely happens. It is much more common to find buyers with a down payment ready, and the desire to pay back the rest of the purchase price to the seller over time. As a business seller, you need to be flexible and patient when it comes to the terms of your deal.

In the interest of both sides in a business transaction, seller financing is an option that should be considered. It can overcome the financial difficulties that would otherwise stop a deal from happening. Ask your business broker about the seller financing option.

Michael Monnot

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

http://www.infinitybusinessbrokers.com



Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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




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