Sure, there are brokers in the industry who have been around forever – from back in the days when your best marketing techniques were an ad in the phone book and sending postcards to potential clients.

It isn’t the paper age anymore, and those in our industry who don’t embrace the digital changes will be left in the technological dust.

One of the most frustrating aspects of our job is requesting information from brokers who are either living contently in the paper age or who just don’t care about the marketing of the businesses they list. One of the major reasons you use a broker is their expertise in the confidential marketing of your business to potential buyers, and it seems counter-intuitive that when we request a marketing package, that’s rarely what we get.

What we typically get is poorly photocopied tax returns and perhaps a recent copy of a P&L. That’s it. With that scant information we (and our clients) are supposed to divine whether an asking price is legitimate and if the numbers the owners claim they are pulling are really true. We’re also supposed to figure out such essential facts as the history of the business, the amount of local traffic they receive, their current marketing initiatives – the list goes on.

What should the marketing package for your business look like?

At IBB, our packages vary from business to business, but for the most part contain all of the information a buyer might be interested in. Here are some examples. We go over the history of the business, from it’s inception to the length of time the current owners have had it. We talk about why the current owners are selling. We provide maps with links to show you not only the location of the business, but where it is in proximity to local competition and what kind of vehicle traffic passes by everyday. We include pictures of the entire business and if appropriate, we also include a video tour. We include a financial breakdown, explaining not only the numbers on the tax returns, but what the numbers mean for you as a buyer and what the owner benefit looks like. We provide links to reviews of the business and a link to any related websites and Facebook pages. Our packages are in an electronic form, and as such can easily be sent to anyone who has signed the appropriate non-disclosure agreements. (We also use electronic signatures, which removes the delay required when buyers have to print out the non-disclosure, physically sign it and then scan and fax it back to us. Non-disclosures can be signed and returned to us in a matter of minutes, not hours or days). More simply put, our marketing packages are comprehensive and aligned with the digital age.

What should you do if the “marketing package” your current broker is using for your business contains nothing we’ve discussed? For starters, you can ask questions. How are they getting the details of your business, particularly its strengths, across to potential buyers? Are they doing anything more marketing-wise than just talking about the business when someone calls? If the answers to these questions don’t sound satisfactory or allay your concerns that your business listing is just sitting in idle – perhaps it’s time to find a new broker.

Michael Monnot

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

https://infinitybusinessbrokers.com

If you have thought about selling your business – it’s time!

Although I never like to compare the real estate market to the business opportunity market there is an obvious analogy there.

What happens when there are too many homes on the market? Home values decrease due to the demand, pretty obvious.

We definitely do not see a glut of businesses on the market, for now. Search businesses for sale, you will find many attractive looking businesses on paper but is there anything that looks truly appealing?

On top of that, when searching for a business for buyers we will request packages from other brokers and rarely are we finding anything that makes sense. Numbers are not accurate, no financials, wild projections that cannot be substantiated…

Most of the businesses have a lack of real information a buyer would want to see, usually a paragraph or an extremely unprofessional presentation.

A professional presentation is needed so a buyer can determine whether to pursue the business or not – and this is just one of the areas we excel in.

I have spoken to many business owners that had plans to retire but the unfortunate change in the economy starting in 2006 forced many to keep their businesses longer than anticipated, but most of these businesses have recovered.

Here is your opportunity:

With the massive amounts of baby boomers getting set to retire – these boomer-owned businesses have yet to hit the market. But when these businesses start to pop up for sale, we are expected to go from the current seller’s market with having very favorable multiples to a buyer’s market with a glut of businesses which will push down values.

Start to factor the length of time that it typically takes to sell a business (9 to 12 months) and how much longer we will have a shortage of businesses, the uptick in the economy, the low interest rates…and knowing it will not last forever, how much time do you have to sell?

This is the time to sell! Don’t wait for the downward trend and prolong your exit any further.

Contact me to discuss the process; how we would prepare your business for sale and the opportunity you have right now.

Michael Monnot

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

https://infinitybusinessbrokers.com

Haven’t read Part 1? Click here first.

If we can’t just drive around, how do I see businesses?

The process to buy a business obviously includes taking a walk through and seeing a potential business, there are just a few more steps involved than jumping in a car. Although the steps will vary on a case-by-case basis, they will (for the most part) follow this progression.

Step One: Find and Talk to a Business Broker

Many of us have dreamed of owning our own business, but many times the goals you have for business ownership and for your life in general don’t match with the type of business you think you might want. For instance, you may think you want a bar – but you want to be home with your kids for dinner every night. The bar business and that life schedule can’t possibly coincide. Having an initial conversation with an experienced and qualified broker will help you narrow your search and probably open up some businesses and industries you hadn’t even considered.

Step Two: Go Through Potential Listings

Once your broker has a good idea of what you’re after they will send you listings to look at. The information on these listings will be very general, as again, the confidentiality of the business needs to be maintained. Look at listings with an open mind as there will likely be a few from industries you hadn’t initially put on the list, but would be a great business for you in the long run.

Step Three: Sign the Non-Disclosures

After running through the listings you will no doubt have a few favorites that have peaked your interest. Your broker will have you sign the appropriate non-disclosure forms and will then be able to disclose the names and locations of the businesses you find interesting. At this point you may be permitted (with permission from the sellers and brokers) to visit the business during regular business hours if you maintain a low profile. This may not be appropriate in all circumstances. For example, if you are looking at a small cafe, you could go in and quietly have lunch as long as you didn’t do things like demand to see a manager or ask strange questions of the staff. It would probably not be possible, however, to visit the floor of a manufacturing facility during business hours when your presence could not easily be explained to the staff. Ask your broker if an incognito visit would be possible and when the best time to go in would be.

Step four: Set Up a Conference Call with the Sellers

You will probably have a meeting and/or call with the sellers and the brokers involved before you do a walk-through of the business. This meeting will allow you to ask questions and see if the business corresponds with what you are looking for. This is a great opportunity to further narrow down your choices and focus your energies on the final contenders.

Step Five: Schedule a Walk Through

After all of the above steps, it will finally be time for a walk through of the business. You will need to be flexible on the time frame for this tour because it will likely happen before or after business hours to avoid the customers and staff. This appointment will take a lot of moving parts, like coordinating the schedules of the sellers, the brokers, the buyers and the business – so once the appointment is made it is very important that you keep it and arrive on time. All of the moving parts for these appointments are another reason you need to go through the previous steps – it would be impossible for a seller to maintain regular business if they were constantly trying to accommodate showing after showing.

Sure, it would be easier for buyers if buying a business was just like buying a house, but a house doesn’t lose value if everyone knows it’s for sale. The protection of the integrity of a business you are considering will be very important, especially if you end up the owner. Have patience with the process because it works to protect all sides and the business itself.

Michael Monnot

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

https://infinitybusinessbrokers.com

Many new buyers enter the business-for-sale market with the expectation that buying a business will be a lot like buying a house. As such, it is fairly common that a new buyer will contact us for the first time one afternoon requesting that we spend the next day driving them around and “showing them some businesses”. To be completely frank, this is absolutely impossible.

Why? I’m going to be spending a lot of money on a business, why can’t you accommodate me?

First of all, a business and a house are completely different animals. Houses are sold by sticking a sign out front and a lockbox on the door. The address of the home is listed on multiple websites and is made available to anyone who might be interested in buying.

Business sales are completely different because of the importance of confidentiality. We are talking about existing, operating businesses. Think about the last time you heard a business was for sale. You probably said to yourself something along the lines of “they must be bankrupt and going out of business” or “I wonder what’s wrong with the business that’s forcing them to sell”. This powerful, yet untrue misconception that a business for sale is a business on the brink of failure can cause untold havoc for a business seller.

For this reason the status of a business for sale is held with the utmost confidentiality. The only people who know the business is for sale are the sellers, the business brokers involved and any buyers who have signed the appropriate non-disclosure agreements. That’s it.

The mission is to keep the fact the business is for sale a well-guarded secret from the staff (they may all quit and take their regular clientele with them), from vendors and suppliers (who may cancel contracts) and from the public at large (who may take their business elsewhere if they believe that the business is going under).

Confidentiality means there are a few more steps to the process than driving up to an address, but these steps protect the integrity of the business. If the integrity of the business remains intact, then a successful business can change hands without any issue and continue on as a successful business. These successful transitions happen everyday, but can only happen if all parties involved follow the appropriate procedures.

For these reasons you as a buyer will have to be patient with the process.

What is the process? Click here to read Part 2.

Michael Monnot

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

https://infinitybusinessbrokers.com

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

If you run a business in Florida, there’s a chance that you qualify for certain sales tax exemptions. According to the Florida Department of Revenue, products or services that you purchase with the intent to resell are often exempt from sales tax. But what does this mean, exactly?

Let’s say you run a hair salon. You probably buy plenty of hair styling products from your favorite supplier. You use some of these products during your client appointments – when you wash their hair, apply highlights, or style a new haircut. On the other hand, some products stay on the shelf for resale to clients.

The guidelines here are pretty simple: the products you use throughout the day at your salon are generally taxable, because they are used during the normal operation of your business. The products on the shelf, though, are probably exempt from sales tax because you purchase this set of products with the intention of reselling them to your clients.

Compare this to a service-based business, such as an attorney. At Koontz & Associates, we don’t sell products to clients. We sell services. Any products we purchase — such as office equipment, software, or furniture — are used in our office during the normal operation of our business. Because of this, we generally pay sales tax on these items.

If you purchase products that are exempt from sales tax, you need an Annual Resale Certificate. The certificate is issued by the Florida Department of Revenue and is valid until December 31 in the year it was issued.

In 2015, the FL DOR updated the way these certificates are issued. Hard copies of this certificate will no longer be issued, but you can register online and easily access your certificate this way. In addition, the certificate no longer requires a signature. By obtaining the certificate, you confirm that you plan to purchase items for resale.

For more details about the Annual Resale Certificate, and to determine whether you are eligible to register, you can visit the FL Department of Revenue website.

Jo Ann M. Koontz, Esq., CPA
Koontz & Associates, PL
1819 Main Street, Suite 910
Sarasota, FL  34236
Phone 941-225-2615
Fax 941-951-2618
joann@koontzassociates.com
www.koontzassociates.com

Michael Monnot

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

https://infinitybusinessbrokers.com

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

So you have made the decision to purchase a business, signed the contract, reviewed the financials and performed your due diligence, now what’s to protect you from Seller misrepresentations? That is, what if all of those financials were false, and the business is not what it seems?

The answer should be two-part. First, I believe that it is important to include a hold harmless and indemnity agreement in all closing packages. This document provides that the Seller shall be held responsible for any damage caused by misrepresentations in the status and health of the business. It often provides a mechanism and timeline for curing disputes, and possibly a method for determining damages, which should include attorneys’ fees.

The second part of the answer is the hold-back agreement, which should be outlined in your purchase contract. The hold-back provision will provide that the closing attorney or escrow agent will hold back a portion of the Seller’s proceeds for a period of time (normally somewhere between a month and year depending on the size of the transaction). If there are no issues with the business, then the money is released and the parties go merrily on their respective ways. However, should an issue come up within the hold-back period, then the buyer has the option of raising a claim. If a claim is raised, then the parties must resolve the issue according to the terms of the contract.

By adding these extra provisions, you may encourage the Seller to be open and honest in their disclosures, and avoid unnecessary litigation and attorneys’ fees. However, should the need for litigation arise, do not hesitate to contact a legal professional.

Happy negotiating and good luck in your new business!

*This communication is for informational purposes only and shall not be deemed formal legal advice or the formation of an attorney-client relationship.

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

https://infinitybusinessbrokers.com

Ok, so we’ll start first with what SEO is. SEO stands for Search Engine Optimization, and what that means is any business that wants to survive in the digital age MUST have a relevant online presence that makes it easy for customers to find them.

Think about how you use the internet yourself. The last time you wanted to try a new pizza restaurant, you probably typed in “pizza restaurant” and the city where you live into a search engine and hit enter. The pizza places that end up on the first page or two of results are there because 1. they actually have a user-friendly website and 2. the website is built and run in such a way (ie. constantly updated relevant content like a blog) that makes it easy for search engines to find. The pizza restaurants on the first page or two of results are also the ones you will most likely choose from. No one is going to page 15 to find a place to eat.

I’m selling my business, why does any of this matter to me?

First of all, any prospective buyer who signs a nondisclosure and then learns the name of your establishment is going to immediately head to a search engine to see what comes up. If you have no web presence at all, they will likely find any bad reviews and a smattering of vague listings on unhelpful sites. Not good for a first impression. If your web presence consists of a poorly maintained Facebook page or a one-page website, then it’s likely that potential buyers will not be impressed.

If you have a decent website, complete with constantly updated content and a user-friendly experience – then that is the first impression you will make (with both buyers and customers). You should list what you offer, your location, the hours of operation, any menus or products, etc. A visit to your website should be as complete as a visit to your business. Your blog should have articles about what you do, advertisements for upcoming events or sales, pictures of the business, and thank you’s to your current clientele. There should also be a way for customers to both call and email you with questions.

Not only does a decent web presence make a great first impression on buyers (and customers) and make it easier for search engines to move you up in search rankings, it can even make your business worth more. There are many services available where a non-tech person can create a beautiful and functional website without enormous costs – and this small bit of financial investment coupled with an investment of your time can create a far bigger return when you sell your business than comparable expenditures of time and money can.

Michael Monnot

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

https://infinitybusinessbrokers.com