The Trip Down: Why Business Buyers Absolutely Must Plan Ahead



Passenger airplane taking off from airport headed over the Pacific ocean.

 

Living in southwest Florida definitely has its perks, and it has become a destination for the future entrepreneur. Our current business market is booming, and business buyers are flocking from seemingly everywhere to join the ranks of our small business community.

 

If you live outside of the area and are considering a move to buy a business in the sunshine state, here are a few pointers you should consider before you make a trip down.

 

Buying a business is absolutely nothing like buying a house.

 

Many folks come to the business market with the mindset that the process will be very much like buying a house – but nothing could be farther from the truth. If finding a home is the goal of your trip, you might call a local real estate agent and ask them to set up a dozen or so homes to see a week or so before you jump on a plane, but if you try to do the same thing with buying a business you will be completely out of luck.

 

You must, must, must plan ahead.

 

The process to buy business has many steps, and starts with contacting a business broker. This first step should come long before you’ve even bought your plane ticket. You and the local broker should have a conversation about your goals for business ownership, your work experience, how much capital you are planning to invest and the industries that interest you. Your broker will then send you listings that fit with your goals and will ask you to review those listings and narrow down your choices. Once you have two or three listings that appeal to you, you will be asked to sign a non-disclosure agreement (NDA) for each listing (read more about NDA’s here). Once the NDA is signed and submitted to the listing broker, you will be sent the marketing package – complete with the name and address of the business in question. You and your broker will review each package and come up with a list of questions to ask the sellers, which you will have an opportunity to do once a conference call is set up. After the conference call, if you are still interested in the business, a tour of the physical location can be arranged but will have to be coordinated between your travel schedule, the schedule of the business (for confidentiality reasons buyers can only see a business before or after hours when no employees or customers are present), the schedule of the sellers and the schedule of the brokers involved.

 

Doesn’t sound like something that can be done or thrown together in a day, does it? That’s because it can’t.

 

It is very common for a buyer to call us on a Friday to say they are catching a plane the next day to visit some businesses over the weekend – and then they are upset when we tell them their request is impossible. If you are serious about buying a business you will need to go through the proper steps and plan visits to businesses long before you set foot on a plane. Business transactions are inherently complex and require lots of moving parts, so you need to both plan ahead and be flexible.

 

But I’m planning on writing a very big check to buy a business, why can’t you accommodate me?

 

It’s not that we are trying to be difficult; it really is that last minute requests are completely impossible. We also don’t want to waste your time taking you to businesses that don’t fit with what you are hoping to get from business ownership. The process works, and if you follow it you will be better set up for success in your new business venture.

 

Are you considering a move to southwest Florida? Do you have more questions about the process and want to know how to get started? Leave us any questions or comments here, and we would be happy to help.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

 


Confidentiality Or The Kiss Of Death – Why You Need To Be Picky About Who Sells Your Business



If you are thinking about selling your business, then we probably don’t need to tell you that keeping the fact that your business is for sale under wraps is incredibly important. We call this hush-hush practice in the business market confidentiality, and for many business sellers keeping your sale a secret means the difference between a successful sale and major financial upheaval.

 

Gossip

 

What can happen if confidentiality gets breached? We’ve seen an entire staff – or key members of the staff – immediately quit and take their regular customers with them. We’ve seen contract clients cancel their contracts, vendors pull agreements and even the competition move in for the kill – all things that would be dreadful for your bottom line at the same time you are trying to leverage that bottom line for a good price from buyers.

 

How does confidentiality get breached? There are basically two ways this happens. One is careless marketing, and as far as this type of breach is concerned, it is 100% preventable. If you hire someone like a real estate agent or a careless business broker to sell you business, you’d better believe the word is going to get out. We see businesses listed on sites like Loopnet or the general MLS, complete with pictures of the business signage that would allow anyone with an internet connection to know your business is for sale. This type of marketing almost always ends in complete disaster and can even be the kiss of death for a business. The other confidentiality breach happens when someone has loose lips, like a seller telling the woman sitting next to him on a plane that his business is for sale – only to learn later she was the wife of his biggest competitor. For the most part (with very careful attention by a good broker in the form of confidentiality discussions with all parties involved) this kind of breach can usually be avoided as well.

 

How do I prevent disaster and keep my business sale confidential? Hire the right help. We would never post a business somewhere online where anyone could see it. Our business listings are necessarily vague, and are listed on appropriate sites like BizBuySell. We would never post pictures of a business either, especially those with any identifying information in them. What we do instead is put together a comprehensive multi-media marketing package – complete with financial information, photographs, videos (if appropriate), web links and the like – but only give that information to individuals who have fulfilled our confidentiality requirements.

 

What are our confidentiality requirements? First and foremost, anyone who wants the name and location of your business disclosed must sign the appropriate non-disclosure (NDA) agreements. We also make sure anyone who signs an NDA is properly vetted to ensure they aren’t someone you want kept out of the loop (like current or former employees, for example) and that they are a serious buyer. We also discuss the importance of confidentiality and the repercussions of breaching the NDA with everyone who signs it.

 

If your broker just answers every webform and email query they receive by automatically shooting back an NDA with no real knowledge of who they are sending it to – is that careless behavior what you want for your business? Hopefully not. Contact us today to find out more about how we can confidentially market your business.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com

 


Visa Processing Update



By Guest Contributor Sabine Weyergraf – www.weyergrafimmigration.com

 

The Department of State reported on Friday, June 13, 2015 that it is experiencing technical problems which prevent the issuance of visas and passports worldwide. Especially affected are applications submitted on or after June 9, 2015. However, based on the feedback coming from interview attendees, no visas are being issued right now, even if the application was submitted prior to June 9, 2015.

 

A similar issue occurred last summer. It took about 4 weeks before everything was back to normal.

 

This delay will certainly create a backlog, considering that over 70,000 visas are issued every day around the world.

 

If you are in the process of purchasing a business, please be aware that this delay can affect scheduled closings of business transactions. If the foreign buyer is already in the United States with a B1/B2 visa, he or she might consider changing to an E-2 status in the United States. This would provide the security of the business being legally operated by the foreign buyer after the closing. This status is valid for two years; however, this E-2 status is only valid as long as you are in the United States. Thus, traveling outside of the U.S. is not an option. This might be a short-term solution until the Embassies are operating normally and seems to be the most viable option since a change of status can be processed within 15 days.

 

Heandshot_Sabine_WeyergrafLogo_Weyergraf_page_001

 

Sabine Weyergraf is founding partner and New York licensed attorney practicing 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
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com


Why Cybersecurity Is Important For Small Business Too



Word Cloud "Cyber Security"

 

We’ve all heard about the recent major cybersecurity breaches that occurred within the ranks of Sony, Target and the like, but if you are the owner of a small business or someone who is trying to become an entrepreneur – should cybersecurity be of any concern?

 

The answer is a resounding yes. New statistics should give those who already live in the entrepreneurial world and also those just entering pause. As seen in the 2012 Verizon Data Breach Report, small companies with less than 100 employees account for 71% of all data breaches.

 

The most common reason for becoming the target of a cybersecurity attack? Opportunity. Just like locking the doors of your car or your home, the digital aspects of your business need to be locked and protected from easy harm. The Verizon report found that victims were chosen simply because they were easy targets, employing little to no data security of any kind – and with intermediate (or even simple) controls, 97% of breaches were avoidable.

 

You can read more of the Verizon Report here.

 

How do these breaches happen? Simple mistakes made by business owners or their employees, like clicking on a malicious link in an email – can cause major havoc. Think you don’t have any data anyone would want to steal? Do you keep the personal information of clients on file, like credit card numbers? Do you have proprietary information saved on your laptops or phones? Any sensitive information can become an issue if it ends up in the wrong hands.

 

I have a small business, and there’s no way I can afford an IT department – what can I do to protect my data? I’m looking at buying a small business – what can I do to ensure my new business doesn’t fall prey to hackers? According to this article from Inc., the best thing you can do is educate yourself and educate your staff on the importance of cybersecurity. If you already own a small business, make staying on top of current threats a priority. If you are looking to buy a business, make cybersecurity education one of the first new things you implement on day one.

 

What else can I do to keep my data safe? You can outsource your cybersecurity needs. In the article The Big Business Of Hacking Small Business, Leo Shipley of Black Duck Software suggests that by outsourcing your cybersecurity needs, you can protect your data in the same way a very large company does – but without having to hire an IT department.

 

Are you a small business owner who has never considered the security of your data? Are you looking to buy a business and are curious about what you can do to protect your new investment? Please feel free to leave comments or questions here.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Do I Have To Buy The Building Too? Understanding The Role Of The Commercial Lease For Business Buyers



Closeup of male hand about to sign a business contract with a fountain pen.

 

If you are new to the world of buying a business, then you likely have some basic questions that need to be answered before you really get rolling. One very common question we get from the curious future entrepreneur when discussing businesses to buy is:

 

Do I have to buy the building too?”

 

The answer to this question is almost always no, as commercial leases are the norm in the small business world.

 

What do I need to know about commercial leases when I’m looking to buy a business?

 

First and foremost, you can’t simply look at the amount of rent the current owner pays and the length of time left on the current owner’s lease to understand the nuances of the commercial lease market. It is also very important to understand that while you as a new owner will get a new lease, the rent amount itself is unlikely to change in a major way – especially if the current lease has quite a bit of time left. The property owner already has someone who is committed to paying that rate for the remainder of the lease term, so they have no motivation to change the terms of the lease for a new owner.

 

Commercial lease rates depend on a large number of factors, but in general it will depend on where the business is located. In some parts of town you may be able to get a commercial lease at $8 per square foot, while in another part of town not far away the typical lease rate will be more like $40 per square foot. A property on a main street or in a plaza with a strong anchor business will fetch higher rent than a business somewhere off the beaten path. A location on the water will also have a higher rent rate.

 

If you are in the initial phases of searching for a business and think a particular rent rate looks ridiculous, don’t make a judgment on the business or the lease until after you have spoken to your business broker. They will be able to tell you if a lease rate is truly ridiculous, or (more likely) if a lease rate is in line with the current location of the business. It is also far more important to look at the cash flow of a business than the lease rate alone.

 

In terms of renegotiating the lease rate, it will depend on a number of factors – like the length of time left on the current lease and the other factors of location that we’ve already discussed. In some business transactions there will be a little wiggle room on price – but for the most part a property owner is not going to cut a lease rate significantly for a new business owner.

 

While you won’t be able to cut the lease rate in half, you will more than likely get a chance to renegotiate other parts of the lease, like the length. For instance, if the current owner only has six months left on their commercial lease, you certainly can’t be expected to pay $100,000 for a business with no guarantee on the current location for anything more than that short amount of time. Your lease will likely be renegotiated for a much longer term, sometimes 5 or 10 years. Each situation and each property is different – so you will need the expertise of your business broker for this part of the renegotiation.

 

If you are new to the process of buying a business, don’t get hung up on seemingly high lease rates or on short lease terms. Your business broker is there to help you understand any lease and also to renegotiate a lease to best suit your interests as the new owner of a business.

 

Are you searching for businesses and have questions about why certain lease rates are so high? Do you want to know which areas typically have lower lease rates? Ask us! Please leave any questions or comments here and we will be happy to help.

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
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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