Business Broker 101: How To Pick The Right Professional To Sell Your Business, Part 3



Sometimes business brokers get a bad rap and in most cases it isn’t deserved. What is most important for the success of your business sale is enlisting the right professional to help you. The handful of bad business brokers out there have made business owners apprehensive about getting the help that they desperately need during a business sale. What you need to do before you list your business with just anyone or with the first name you found online is ask questions. Save yourself the bad experience and get a good broker right off the bat.

 

How do you find a good broker? Again, ASK QUESTIONS. What follows are a series of articles about the questions you need to be asking a potential broker and why:

 

What kinds of questions should you ask a broker before you let them list your business? Part 3:

 The big question for most business owners when the time comes for a listing agreement is:

 

“How would you price my business?”

 

The answer to this question will truly separate the good brokers from the bad.

 Why? A good broker will advise you to price your business so that it will be appealing to buyers and so that it will sell. A bad broker will let you answer the pricing question yourself and list the business for whatever you want, regardless of how ridiculous the price you demand sounds. We all want someone who will tell us what we want to hear, but in business transactions being told what you want to hear might be setting you up for failure instead of for success.

 

A good broker will go through your numbers with you, will show you comparable businesses that have actually sold (not listing prices, because for the very reason above they are an unreliable guage of what your business might actually sell for) and will discuss with you what they think you should list your business for and why. There are any number of factors, like the value of your inventory or multiples of your sales figures, that will differ from industry to industry. A really great broker will know how to use all of these factors to get you the best price possible for your individual business. A bad broker will try to use the same pricing method for every business they list, regardless of the size or industry.

 

The other major pricing mistake is made when a business owner has hired a good broker but then refuses to listen to their advice on pricing. You may want more than your business can give you, and you need to be realistic about pricing if you ever hope to make it to a closing table. If your broker has a comprehensive argument for a specific price range, you should consider it, as you hired them for their advice. It would be a waste of your money to ignore what they have to say.

 

Pricing your business appropriately right from the start will bring in eager buyers while your business is fresh on the market- the best situation possible. Get yourself a good broker and then listen to their advice on how to price your business.

 

Are you a business owner who has wondered what kind of price your business could bring? Have you talked to a few brokers and heard vastly different prices? Do you want to know if the price you have in your head is an appropriate one? Please leave us a question or comment here, and we will be happy to assist you with your listing questions.

 

Want to read Part 1 of this series? Click here.

Want to read Part 2 of this series? Click here.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Business Broker 101: How To Pick The Right Professional To Sell Your Business, Part 2



Sometimes business brokers get a bad rap and in most cases it isn’t deserved. What is most important for the success of your business sale is enlisting the right professional to help you. The handful of bad business brokers out there have made business owners apprehensive about getting the help that they desperately need during a business sale. What you need to do before you list your business with just anyone or with the first name you found online is ask questions. Save yourself the bad experience and get a good broker right off the bat.

 

How do you find a good broker? Again, ASK QUESTIONS. What follows are a series of articles about the questions you need to be asking a potential broker and why:

 

What kinds of questions should you ask a broker before you let them list your business? Part 2:

When you call up a business broker for the first time, the stat they will usually throw at you first is how many listings they have. This number may seem impressive in some cases, but the much more important question is:

 

How many business transactions have you closed in the last year?

 

A broker who will let buyers list businesses for whatever they want or brokers who will take any listing, no matter what it is, just to boost their numbers – these are not the people you want working for you. You want a broker who is selective in their choices of listings, and most importantly you want someone who is actually good at their job.

 

The easiest way to determine if a broker is good at their job is to ask them what their results have been- recently. Fifty closed deals is impressive until you find out that’s the total since they became a broker and they’ve been in business for 30 years. You should also ask if the number of closed transactions they are giving you are theirs or if they include the whole region or company (if they are part of a larger brokerage firm instead of a one-man shop). Many brokers in these larger companies will give company stats as their own.

 

An individual broker who has at least a few closings in the past year would probably be a better bet than a broker with 50 listings and only one annual closing. You want someone who can close deals because the point of putting your business up for sale is to sell it. It may also be helpful to point out hat the bigger the deal, the more time a broker must devote to it, so a few very large deals may mean more than just a few small ones, although it depends entirely on the brokers involved and the deals themselves.

 

The key here is to ask “How many business transactions have you closed in the last year?” because it will give you a good idea of the work ethic, results and knowledge/experience you will see in your own transaction.

 

Would you like to hear about the number of transactions we have closed in the last year? Do you have questions about what we could do to help you get your business sold? Please leave a comment or question here, and we will be happy to help you with any questions you may have.

 

Want to read Part 1 of this series? Click here.

 Want to read Part 3 of this series? Click here.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Business Broker 101: How To Pick The Right Professional To Sell Your Business, Part 1



Sometimes business brokers get a bad rap and in most cases it isn’t deserved. What is most important for the success of your business sale is enlisting the right professional to help you. The handful of bad business brokers out there have made business owners apprehensive about getting the help that they desperately need during a business sale. What you need to do before you list your business with just anyone or with the first name you found online is ask questions. Save yourself the bad experience and get a good broker right off the bat.

 

How do you find a good broker? Again, ASK QUESTIONS. What follows are a series of articles about the questions you need to be asking a potential broker and why:

 

What kinds of questions should you ask a broker before you let them list your business? Part 1:

 

This first question might seem a bit silly at first glance, but it is critically important.

 

Are you really a business broker?

 

Many other professionals moonlight as business brokers. What these moonlighters lack in terms of experience and market knowledge will cause major problems with your transaction. Typical offenders in this category are real estate agents, CPA’s, and attorneys.

 

Selling a business is almost nothing like selling a house or even selling a commercial property. Confidentiality needs to stay in place to protect you as the seller and your business, so businesses don’t have open houses and brokers don’t give out addresses of businesses for “drive bys” with buyers. If your “broker” suggests either of these marketing techniques, they are probably not a professional business broker. A professional business broker only discloses your business as one that is for sale to potential buyers who have signed the appropriate non-disclosure agreements. Ask any potential broker about how they intend to keep your confidentiality in place.

 

Your accountant knows even less about the sale of businesses than a real estate agent, so only use them for your books. What typically happens in this instance is an owner will ask a CPA to help them set a value for the business and the listing price. This almost never turns out well as a CPA doesn’t understand the nuances of business pricing. Seek the advice of a broker before deciding on a listing price.

 

Attorneys might be familiar with the legalities of business transactions, but rarely do they have the expertise to actually complete a business transaction. Your attorney has one job, to protect you from any and all legal risk. Business transactions, and business decisions of any kind for that matter, are inherently risky. Your attorney will not be able to reconcile protecting you from risk while advising you on business transaction matters. By trying to cover you completely from risk, they will ultimately kill any deal you try to strike with a buyer. Use a business broker instead, as they are able to advise you more appropriately throughout a transaction without killing a deal unnecessarily.

 

Remember to ask questions, especially “Are you really a business broker?” before you sign any kind of listing agreement.

 

Are you ready to sell but are unsure of whether or not you want to use a business broker for your transaction? Do you want to know more about what we would bring to your business sale process? Please leave us a comment or question, and we will be happy to get you the answers you need.

 

Want to read Part 2 of this series? Click here.

Want to read Part 3 of this series? Click here.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


The Business Seller’s Market Is Back



The economic downturn hurt everyone, small business owners were no exception. Now the economic climate is improving, and so are the prospects for business owners who are thinking about selling.

 Businesses have been selling quicker, for higher multiples and the amount of businesses on the market and coming to market have decreased dramatically.

According to BizBuySell’s Second Quarter Insight Report, the second quarter of 2013 saw an improvement in the overall financial health of small businesses. As these small businesses do better, their numbers improve and they become more appealing to buyers.

 This turn in the outcome for small business ownership has changed the perception of buyers back to owning your own business as part of the American dream. This perception change has been a big help to those thinking about selling.

 The financial recovery has helped business sellers in other ways too. As home values and stock prices rise, so does the ability and confidence of buyers taking the entrepreneurial plunge. Better financial portfolios means buyers are able to generate bigger down payments and get business capital from third-party lenders.

 Banks and other traditional lending institutions who slammed shut the channels for third-party financing are slowly beginning to lend again, which is helping to bring more buyers to the market. There has also been a surge in the number of business sellers who, because their businesses are on the rise again, are willing to offer seller financing. These two financing options have opened the entrepreneurial market to substantially more prospective buyers, which is, of course, good for sellers.

 Have you been thinking about selling your business, but have wondered if now was the right time? For many business owners it might be. If you had considered selling in the last few years, but were apprehensive because of the state of the economic climate, now could be a great time to reconsider.

 Please feel free to leave us a question or comment here, and we can get you the information you need to answer the question “to sell or not to sell?”

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Your Biggest Asset: How Do You Set A Listing Price For Your Business?



Entrepreneurs are smart people, and most are great at math. A problem arises, however, when a small business owner decides that they are interested in selling their business. More often than not, a business that is put up for sale by the owner alone will be priced incorrectly – so incorrectly that the business might never sell.

 

How is it that such successful people have no idea what their largest asset is worth?

 

First and foremost, deciding on a listing price for a business is complicated, and it can be difficult to remove yourself from the process. An owner knows exactly how much money and effort they have put into the business over the years, but a listing price is not a tally of those numbers.

 

Realistically, your business is only going to sell for what someone is willing to pay for it.

 

That being said, a business owner still wants to get top dollar and a good return on their investment of time, money and energy.

 

How do you reconcile those two needs with one number? Enlist some help.

 

Seek the advice of a professional business broker. They work in the market and know the nuances of setting the right price.

 

You might want all the money in the world for your business, but if you set the price too high right off the bat, potential buyers will be driven away, probably for good. Set your price too low, and you could wind up selling yourself short or inspiring suspicion from prospective buyers. A price that seems low might conjure the idea that you are selling because you want to get off a sinking ship.

 

Gather your financial information and have a talk with a qualified business broker. They will be able to help you price your business so that you can get the most out of the sale without scaring buyers away.

Are you a business owner who doesn’t know what your business should list for? Are you interested in finding out what your largest asset is worth to a buyer? Please feel free to leave a comment or question here, and we will be happy to assist you with your listing and pricing questions.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Business Sellers: What It Takes To Get A Fantastic Price For Your Business



Every business seller hopes to get top dollar for their business when the time comes to sell, but what factors can make this hope into a reality? What follows are some factors that can mean a better selling price for your business:

 

Top Of The Pile

If your business is the industry leader, or even just the industry leader in your area, this can be a major selling point. A business buyer is looking for a business with a great reputation and a long history of good performance. If you are the top business, you likely have those attributes.

 

Not there yet? If you are thinking about selling, but you are not your local industry leader, look at ways to increase your performance and improve your reputation.

 

Trending Upwards

Most business buyers want a business on the way up, so if your numbers can prove that your business is steadily growing, you will be very attractive on the business market.

 

Not there yet? Most businesses can improve their numbers by taking a fresh look at marketing and streamlining costs. If you want to sell in the next few years, begin implementing changes that will show growth.

 

A Hot Industry

This has less to do with your individual business than with the nature of the market, but regardless it can be a big bonus for a seller if your type of business is the one everyone is looking for.

 

Not there yet? If you’ve considered selling, but don’t know when the time will be right, pay attention to market trends. If your type of business becomes a hot commodity, you don’t want to miss the window to sell.

 

The Only Show In Town

An obvious advantage as a seller is to be the only business in your industry in your area. Your monopoly will be a great selling tool, as buyers interested in your industry will come only to you.

 

Not there yet? The way to become a local monopoly, if you aren’t one already, is to make strategic buys of all of your competition. If this strategy is not a possibility, look for ways to differentiate yourself from the competition. This will not only be great for your bottom line, it will be appealing to buyers as well.

 

The most important point to remember is that your business will only sell for what a buyer is willing to pay for it, so try not to get hung up on your listing price. If you are not quite ready to sell, but thinking it may be a possibility in the future, now is the time to start implementing changes that will appeal to buyers down the road.

 

Are you a business owner who is getting ready to sell, or thinking about putting your business on the market in a few years? Do you want to see what kinds of changes could help your buyer-appeal? Please feel free to leave us a comment or question here and we will be happy to get you answers.

 

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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