Selling your business can be very tough.

There are questions to be answered, documentation that needs to be provided, brokers and attorneys involved – it can become very complicated very fast. In addition, all of your hard work is about to be exchanged for a substantial amount of someone else’s money, so emotions are likely to run high.

If you have never sold a business before, knowing what you’re in for can be very helpful in preparing yourself for this very stressful time. This is part 3 of a series of articles that will address the elements of selling a business you may not have considered, but will shortly be confronted with. Part 3? Expect some push-back…

What do we mean by this? When you are attempting to sell your business, you will find that not everyone involved with your business will be happy about the impending sale, and some may even try to sabotage your sales efforts in an attempt to keep the sale from happening.

Here’s an example of what we see on a fairly regular basis. You meet with your business broker and come up with a listing price for your business, but then when you talk to your regular business accountant – a guy you’ve known, worked with and trusted for many years – he balks at the price, telling you the price is ridiculously low and that this new broker has no idea what he’s doing. You panic and insist that the broker raise your price. Your accountant must be telling the truth, right? Only one outcome will come from this situation. Your business, which now has a crazy initial listing price, will drive buyers elsewhere and you will be stuck in listing purgatory indefinitely.

Was your accountant wrong about what your business is worth? Yes, because a listing price should not be just a multiple of your bottom line. When you list a business, the point of the exercise is to sell that business. A good broker will use the sold price of comparable businesses, market trends, add-backs, etc. to determine a price that will actually get buyers coming in the door.

Why would your accountant give you a bad valuation? The answer here is simple, he doesn’t want to lose you as a client. In many small accounting businesses, the loss of a major client will mean a big hit to the bottom line. When a business goes up for sale, those professionals who earn a living serving your business will worry (and rightfully so) that the new owner will bring their own CPA, attorney, etc. to the business.

Should you ignore their advice? No, as they are professionals you know and trust. What you should do is take their advice with a grain of salt. Take the advice of anyone (including your broker) this way, as in any business transaction there are many people who have a lot to lose or gain if the business changes hands. Expect push-back from your CPA, your attorney, your family and others so you will be better prepared to determine for yourself what is best for you and the sale of your business.

Are you thinking of selling your business, but are confused by all of the conflicting advice you’ve received? Please feel free to leave us a question or comment here, and we will be happy to address any concerns you may have.

Want to read Part 1? Click here for The Dark Side Of Selling: What Business Sellers Need To Be Ready For, Part 1: It’s Not Your Baby Anymore

Want to read Part 2? The Dark Side Of Selling: What Business Sellers Need To Be Ready For, Part 2: They’re Not Your Employees Anymore

Michael Monnot

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

https://infinitybusinessbrokers.com

Amazing built out old fashioned ice cream parlor, sandwich shop & retail in the historic picturesque part of the tri cities area in Washington County, also rates as one of the top places to live in the country. Whether this is your first business, last business or anything in between you will be excited at the prospect of being able to increase business in many different ways. Business just over 1 year & growing monthly. Sellers owns other businesses & just does not have the time to run this. Building will also hold either additional business or offices or living quarters.

Includes over $50,000 in FF&E and $20,000 in inventory.

Contact for details

Michael Monnot

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

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“A leader has the vision and conviction that a dream can be achieved. He inspires the power and energy to get it done.”

 — Ralph Lauren

We all know that importance of having a vision for our business, yet many of us never take the time to create one. Quite often we find ourselves preoccupied with the everyday activities of operating the business and seldom step back to look at the grander vision of why we do what we do. However, many successful entrepreneurs believe that it is their unique compelling vision that truly propels their business forward.

In today’s world we spend most of our time talking about creating goals; however most goals, objectives and tasks are best formed after a clearly stated vision is created. The vision becomes the major focal point in which all secondary goals are lined up with. Additionally, a clearly defined vision should arouse an emotion of excitement for the business owner as well as all members on the team. It makes everyone enjoy working for the company and mysteriously attracts the perfect clientele to make the business prosper.

Simon Sinek, author of “Start with Why, How Great Leaders Inspire Everyone to Take Action” says “people don’t buy what you do; they buy why you do it.”  He relates his message to the examples of several great inspiring leaders (Steve Jobs, Martin Luther King Jr., and the Wright Brothers). In each case he shows how each leader positively affects their teams, followers and customers through their vision of why they do what they do. The result is the success of a massive movement!

We can all create our own vision for our lives as well as our business. There are many books on the subject; however following these five basic steps will get you off in the right direction:

1.)  Define Your “Why” and Your Companies “Why”. 

Why do you do what you do? Make a list of all of your whys. For example “I’m doing this to put my kids through college”, or “I love making customers happy and giving them a quality product that they enjoy”. Write down whatever comes to your heart of why you are doing what you are doing and reconnect to your purpose.

2.)  Does it Excite and Inspire You? 

If you’re inspired, those around you will feel inspired also. It will cause a renewing of spirit that will reflect in employees performing better and even make customers happier. It’s also important that your vision is in alignment with your core values or your company’s core values.

3.)  Does it set you aside from your competition?

What is your unique offering that makes your business stand out of the crowd? How are you going to better serve your customers? Take a moment to write a few sentences describing how your company is special and what specific things that you can do or offer that will create extra value.

4.)  Does it positively impact others (customers, employees, vendors, you)? Does it make the world a better place? 

Several years ago one of my clients shared his vision with me of how he wanted to once a year throw a huge customer appreciation picnic for his top customers and their families (and his employees and their families too). He said that he truly enjoyed the fun activities of an outdoor summer picnic and felt that it would strengthen his rapport and relationships with his top clients. Today his dream has become a success!  Held on July 4^th every year with kids, families, hot dogs, fireworks and fun!  And not only is his business doing phenomenally well, his yearly customer appreciation picnic is a well-attended, well-loved success.

5.)  Is it shared and “Top of Mind” with your team? 

Great leaders inspire great teams! We all know how important it is to all be on the same page with our company’s vision and goals. Our companies grow and prosper by constantly sharing and keeping the vision alive and top of mind in our team. In addition to the shared excitement, your staff will feel both valued and connected and this will generally reflect in their positive attitude and commitment to their job. Author and speaker John Maxwell says it quite well with his simple quote “Leadership is influence”.

Additional Notes and Comments about Creating a Vision:

There is no set rule as to how many words should be in your vision. I have seen some that were two sentences and others that were two pages long (and some with pictures). It’s you vision and what’s most important is how it makes you feel when you read it.

Author, speaker and entrepreneur Mary Morrissey instructs her audience to start writing their vision with the words “I am so happy and grateful now that_________________________ (fill in the blank)”. She says by visioning as if it’s already happening now, you will create an energy in both you and the universe around you that will begin to produce miracles. Today her popular method of visioning is used and shared by thousands of leaders and business owners throughout the world.

A great way to get started is to leave the office, find a quiet place, quiet your mind and contemplate on several simple questions: “How do I create a company that my clients, my staff and I absolutely love?”, or “What can my company do better than anyone else?”, or “Where do I see my company 1 year, 5 years and 10 years from now?” Make sure to write down anything that inspires you and comes to mind. You can always go back and refine, spell check and polish the vision into a simpler and more powerful format. This process may take several minutes, several hours or several days. However, once completed you will begin to feel a renewed sense of drive, direction and purpose, and your business will begin to thrive on the rocket-ship of success!

Ron Frost – Business Coach and Life Coach

www.PositiveMomentumCoach.com

Michael Monnot

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

https://infinitybusinessbrokers.com

There is no easy way to say it but purchasing a business is a lot of work!

No matter what I write, what I prep buyers for, there are many times that a buyer will just call it quits, stop looking, maybe try another broker… so it makes sense that around 90% +/- of buyers will never end up purchasing a business.

But why?

I am currently working with a client that needs to purchase a business. He comes from a retail executive position, has been open to the process as to what type of business he wants to purchase, has been extremely patient and has been everything that you want when working with someone.

So I asked him about the process. What are your thoughts over the first four months of your search? What advice would you give someone? This was his response:

There is such a wide variety of businesses, and what seems like such a wide variety of brokers presenting those businesses, that the task of finding the “right business” can seem daunting, if not impossible.  It is no wonder that so many people give up and become part of the 90% of lookers that end up not buying.  So having a positive attitude and belief that the right business will come along, and not giving up when times get tough, is critical in buying the “right business”.  

With so much research needed to filter through the different businesses, one can easily get analysis paralysis as every business is a bit like buying a used car.  A used car is not new, so it’s not perfect.  Therefore you end up spending a lot of time looking for what isn’t right about it.   Does “the car” have a little cosmetic damage that can be fixed fairly easily, or does it have a major engine issue that is going to cause problems and cost a lot of money to fix.  Is it too expensive or simply not worth the price?

The challenge is to find a good “used car” (business) and make it great, not a bad one to try to make good.  And just like when buying a used car, I have learned that there just is no perfect business, and if there is anything close it is bought very quickly.  So if there are any major doubts about a particular business meeting the criteria of being “good” with the potential to be “great”, it’s time to move on to the next business.  But at the same time, when you find the right business, it is time to act!

Having the right support to get through it all is critical too.  Not only support from family and friends, but having the support of the right broker.  I have learned that there are different levels of experience and different levels of work ethics of brokers that can also make the process more frustrating than it needs to be.  Having patience and persistence when calls aren’t returned, or information is not provided, or the information is less than optimal to make a decision to move forward, is key to finding the right business.  While you can choose the right broker that will help you buy, and you should, you can’t do much about those brokers that are listing a business except be patient and persistent, and work closely with your broker to get what you need.  

I have heard it takes about 6 months to find and buy the right business.  As I approach the end of my 4th month, I look forward to taking the next step of negotiating an offer on that “right business”.

Hopefully some information from a buyer currently going through the process will be helpful to anyone looking to purchase a business. The main piece of advice that we got from him is really to be patient. Unfortunately some of the businesses are not always what they appear to be as there are subjective add backs, declining sales, maybe a large cash influx is needed for equipment, sometimes we do not get the necessary information to make a proper decision or even get any information at all as there have been instances where it is the brokers fault and other times when it is the sellers fault. And the very first business we looked at he believes that was the business he wanted to purchase but we did not move quick enough so you do have to move very quick when you find that business.

The good news is that it appears we are closing in on a business for him to purchase so I look forward to part 2 and going through his perspective on the contract, due diligence process and any other adventures that may happen. Then on to part 3 which we will wrap it up post closing and will go over the closing, the training period and go over the business he purchased and why.

Michael Monnot

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

https://infinitybusinessbrokers.com

After reviewing quarter one it appears that some things have remained the same while there are changes happening.

What has held true consistently is that restaurants, bars and similar types of businesses have dominated the market sales but there are a couple of segments where business sales are surging.

Restaurants, bars and similar types of businesses have actually increased year to date taking 30.9% of the business sales compared to 28.6% the prior year. This segment always has been popular as many buyers from other states and countries have particularly always wanted to have a bar or restaurant and what better place than sunny Florida.

Another perennial heavy hitter, salon based industries, has fallen from 5.6% down to 3.9% of all business sales year to date.

The real estate related industries (brokerages, property management…) that took 5.1% last year has fallen to 2.4%. The real estate counterpart, construction, has actually doubled from 2.9% last year to 5.8% of all sales so far this year. This seems to be in direct correlation with our economy and the construction industry picking up again. Don’t be surprised to see ancillary businesses increasing if this trend continues.

Although not the largest increase it is a great sign and it appears it will continue to increase. Distribution businesses have increased from 2.4% of all sales last year to 3.9% this year. On top of that there are a greater number of distribution based businesses on the market than in prior years. The reasons can vary, baby boomers are starting to retire, valuations are increasing and sellers are getting the value they wanted, but with over 60% of the businesses on the market have been established for 10 years or more, these are the types of businesses that buyers are looking for.

Michael Monnot

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

https://infinitybusinessbrokers.com

I recently had an experience of purchasing a vehicle from a dealership as I am sure many people have had. We negotiate the terms of the purchase, come back on Monday to pick up and sign for the car and get on my way but when I get into the office to sign not everything I was told on Saturday is what is on the paperwork on Monday.

What do you do?

With a car a couple hundred dollars is not a big deal or it is simple to walk away from but did you know the same thing happens with businesses all too often. I recently received a compliment from a closing attorney that I just took for granted. He told me he enjoys closing my transactions and that he has had a lot of problems with other brokers.

It’s real simple right? You manage the deal flow, set expectations, push for due diligence items, assist in licensing, make sure the proper paperwork is signed and that timelines are followed. Evidently it is not that common. Although I have been involved in some difficult transactions I have always been able to overcome lazy brokers, tough CPAs, licensing issues or ruthless attorneys.

The attorney took some time to go over some recent deals and to go into the disorganization. It is not fun sitting in the dealership finding out my terms have changed and had added a few fees, imagine sitting at the closing table for a business and find out inventory was not handled properly and you owe a significant amount for something you did not verify as had happened as the buyer assumed it was included in the sale, that lease deposits do not transfer, not being informed of the process, things the broker said not to worry about or it will be done a certain way and unfortunately it was not in writing. These are just some of the things the attorney was explaining to me that has happened recently.

The extra couple hundred dollar difference from what I had to pay for a car pales into comparison compared to what can happen when purchasing a business as I could have easily walked away but business buyers may have uprooted and moved already, quit jobs, incurred legal fees for representation or costs for due diligence. So there is so much more invested and at stake.

Do not make the mistake of using someone whose only sole focus is selling the business but rather someone that will manage the deal flow, set expectations, push through due diligence, assist in licensing and to make sure timelines and closing the business properly is the most important.

Michael Monnot

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

https://infinitybusinessbrokers.com

If you are thinking about buying a business, the path ahead can be navigated with success if you are aware of what’s ahead of you and you have some experienced and qualified help along the way.

Here’s a quick look at the path to entrepreneurship:

First things first, you need some help.

The professionals who assist with the buying and selling of businesses are called business brokers or business intermediaries (see more about why you need a broker here, Business Broker 101: A Business Buyer’s Guide to Working With a Broker, Part 1: Why Do I Need a Business Broker?).You will want a broker who knows what they are doing and actually works in the industry (see Beware the Part-Time Business Broker: Why Only a Full-Time Intermediary is Right for Your Business for more on why this is so important).

When you find a broker you would like to work with, the very first thing they should do is interview you (see more about the buyer interview here Business Broker 101: A Business Buyer’s Guide to Working With a Broker, Part 2: The Questions a Great Broker (Like Us) Will Ask You and Why). They will need to find out what your goals are, how much capital you have to work with, the kinds of businesses that interest you, and the industries where you have experience.

With this information they will be able to guide you to businesses that will fit with what you are looking for.

Your broker will send you business listings to consider, and if any peak your interest you will be asked to sign a non-discolsure agreement (NDA) in order to see more about the business –  like the tax returns, P&L statements, the name of the business, the location, etc. This agreement protects the seller of the business, and you will need to sign a new NDA for every business you want disclosed to you (see more about this process here, Do I Have to Sign a NDA (Non-Disclosure Agreement) When Looking to Buy a Business?).

If you come across a business you really like, the next step will be to make an offer (see more about making offers here, Why Won’t Anyone Take Me Seriously? The No-Offer Business Buyer and The Offer: What A Business Buyer Needs To Know About What’s In An Offer And How To Write One).

Once you put an offer in writing, a negotiation will begin over the terms of the sale, like the price and conditions.

An accepted offer will start the next phase of the process, called due diligence (read more about due diligence here, What Happens During Due Diligence?). During due diligence you will get a chance for an in-depth look at the business. At the end of this process, you will decide if you want to go ahead with the sale.

As the soon-to-be new owner you will need to make sure you have your licensing handled (see a step-by-step to this process here, The Joys of Red Tape: Licensing and Permitting For Small Business, The Basics) and make sure that any and all contracts are transferred to you (like the lease, see Buying a Business: The Ins and Outs of Your New Lease ). Once this part of due diligence is complete, you move ahead to closing.

During closing, all necessary agreements will be signed by both parties, keys and documentation will change hands, and the negotiated funds will be released to the seller. Congratulations – you are now the owner of a business!

Do you have any additional questions about the process to buy a business? Would you like to know what we offer to buyers? Ask us! Please leave us a comment or question, and we would be happy to help you with your journey to business ownership!

Michael Monnot

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

https://infinitybusinessbrokers.com