Take Control of your Online Business Reviews



By Guest Contributor Krystal F. Burroughs – www.reviewdriver.com

 

Young woman with five stars isolated on white background

 

The online landscape has changed the way most businesses build their brand, attract new customers and maintain the loyalty of their existing customers. According to Dimensional Research “90% of customers say buying decisions are influenced by online reviews”. Ten years ago we were not strategizing on SEO, Google Ad Words and social media campaigns. Today a new influencer has entered the scene, online reviews. A recent study by Pepperdine Business School shows that “80% of consumers will choose a 4 star business, but only 14% will choose a 3 star business.” Online reviews are playing a greater importance in your company being found and chosen.

 

Are you measuring your customer’s experience? Asking for feedback and requesting online reviews is a powerful tool for the future success of your business. Customer feedback gives you the ability to address issues and the opportunity to win back unhappy customers. Positive reviews on public review sites like Google and Yelp will help build your online presence, strengthen your SEO and attract new customers.

 

In the past online review management companies focused only on large corporations, today there are affordable options for every size business. Search your business on Google, Bing and Yahoo today.

 

linkedinreviewdriverFINAL
Krystal F. Burroughs
krystal@reviewdriver.com
Director of Client Happiness
(727) 218-9218

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Underfunded: The Biggest And Most Common Mistake Small Business Buyers Make



Woman trying to get some money out of piggy bank

 

You’ve decided to buy a business, congratulations! Buying a business is a fantastic decision because entrepreneurship can be one of the most rewarding journeys you can take in life. It can also, however, be your worst nightmare. The difference between success and the nightmare scenario can come down to just two, very basic things.

 

YOU HAVE TO HAVE MONEY TO BUY A BUSINESS

 

Of course you need money to buy a business! This may seem like a silly thing to say, but a fair number of the people who come into the business market are working with little to no capital at all and expecting someone else to pick up the rest. These prospective buyers are relying on funding sources like family members, bank loans, Small Business Administration (SBA) loans and seller financing – but the fact of the matter is the small business world just doesn’t work that way.

 

Family Money

You may have had a conversation or two with your well-off uncle or with your parents at Christmas about helping you get the money together to invest in a business, but we have quite literally never, ever seen one of these deals actually go through. Once you start the serious conversations about what dollar amounts you’ll be needing, how long it would realistically take you to pay them back – the checks never get written. If you are depending on a family member footing the bill for your business purchase – think again.

 

Bank Loans

Even pre-recession it was tough to get a traditional lending institution like a bank to fund the purchase of a small business, but in the wake of all of that financial mess it is almost impossible to get a bank to approve a small business loan.

 

SBA Loans

Yes, it is possible to get funding through the SBA to purchase a small business, but there are some very big hoops that need to be jumped through in order for this to happen. First, you as the buyer need to be approved, and if you don’t have a fair amount of capital to invest already – your chances of that approval are going to be slim to none. If you do manage to get approved, then the business itself will have to be vetted and approved – and like any lending institution post-recession, the SBA is going to be very conservative with how much they are going to lend, who they will lend it to and what businesses will even qualify for that buyer.

 

Seller Financing

Yes, seller financing is extremely common – but what most first-time buyers don’t understand is that these deals usually mean the buyer is going to pay at least half, if not quite a bit more, of the purchase price up front. No seller is going to take a tiny down payment and hand you the keys, it involves way too much risk to be sensible on their part.

 

YOU HAVE TO BUY A BUSINESS YOU CAN AFFORD

 

Again, this might sound silly, but business buyers are usually caught up in the hopes that one of the capital-raising schemes we just mentioned will pan out and therefore look at businesses that are ridiculously out of reach. Think coming to the table with $30,000 and looking at businesses in the $500,000 range. Again – no family member is going to write you a check that big, banks will laugh, the SBA will never approve you or the business in that situation and sellers definitely won’t take you seriously.

 

Even if you could get, say, a family member to loan you the money to buy a business that far out of your current reach – you will  be setting yourself up for failure. What new business buyers leave out of the equation is working capital – that is the money you need to both get the doors open under your ownership and then keep them open long enough to get the business turning a profit long enough to pay back your backers.

 

Just like renting a new apartment or buying a new house, there will be costs at closing that need to be paid – think deposits on a new commercial lease, deposits on utilities, first (and probably last) month’s rent, payroll and inventory starting the moment you take over, transfer fees for licensing, inspection fees – the list goes on and on. If all you have is $30,000 when you show up at closing to buy a $500,000 business, you probably won’t have enough working cash to even get the doors open.

 

If you only have a small amount of capital to invest in a business, that’s totally acceptable and doesn’t preclude you from business ownership! If you start small, with a $15,000-$20,000 business, you can grow that business into something larger. It just takes some time and some hard work. Many entrepreneurs start small and grow their businesses to a size they initially wanted, or some sell the business after a time for a profit and move up the business ladder that way. Either way, you will have a far better chance at success if you stay within your means. Don’t make the mistake of starting out underfunded!

 

Are you a business buyer who doesn’t have a lot of capital to invest? Are you curious about what’s out there in your price range? Ask us! Leave any comments or questions 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

 


3 Ways To Stand Out As A Buyer In A Seller’s Market



The business market is currently booming, and it can be a bit difficult for a buyer to stand out from the crowd and get the attention of business brokers and sellers when there are far more buyers in the market then there are businesses to buy. How do you pull away from the pack and let the other side know you’re for real?

 

A bright, gold Up Arrow stands out in a dark field of gray down arrows

 

Be Upfront

Business brokers get calls every day from prospective buyers, but what you as a buyer need to realize is that a full 90% of those prospective buyers never actually pull the trigger and buy anything. This crazy stat means that most business brokers aren’t going to give you the time of day if it appears to them like you are just kicking tires, it isn’t worth their effort or energy. Your initial conversations with a broker will be a vetting of sorts, where you will be asked about the amount of capital you have available to invest in a business, your work experience and your goals for business ownership. If you are evasive or vague with your answers, it will immediately send up red flags for the broker. Someone who is serious about buying a business will be forthcoming with the amount of capital they have because it would be foolish not to. Why waste your time as a buyer looking at businesses you could never afford?

 

Don’t Drag Your Feet

One of the most important qualities an entrepreneur must have to be successful is the ability to be decisive. Eternal back-and-forth “I want this business, I don’t want this business” conversations will never get you any closer to your goals of business ownership and will do nothing but frustrate the sellers and brokers involved. Once you have the necessary information, make a decision and stick to it.

 

Be Realistic

There is no such thing as the perfect business, so constantly passing on businesses because they didn’t have perfectly organized records or because the decor didn’t suit your style means you aren’t really sure you want to buy a business. You are buying cash flow, not furnishings, so you need to be looking at businesses from a big-picture perspective. You also need to make realistic offers. Coming in with an absurdly low offer tells the seller you have no interest in a real negotiation, and if the offer is bad enough you stand the chance that the seller will refuse to work with you at all.

 

The message here is if you are serious about buying a business, then you need to take the process seriously and show the brokers and sellers involved that you are ready and willing to put together a realistic deal. By showing your intentions through your actions, you will be able to differentiate yourself from the sea of buyers who will never make it to business ownership.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Keeping Family Out Of The Loop: Why Smart Business Sellers Need To Stay Quiet



We often talk about confidentiality as it relates to business sales – here on our blog, with our clients and with prospective clients. Whether you own a business you are thinking about selling or you own a business you aren’t planning to sell for the foreseeable future, thoughts about confidentiality should carry the same level of importance.

 

Keeping the fact that your business is for sale a closely guarded secret is critical – both to the success of your business sale and to your bottom line. Confidentiality breaches have caused key employees (or even an entire staff) to quit and take their regular clientele with them, have caused contract customers to cancel those contracts – the list goes on and the effects can be devastating.

 

A good business broker is going to work very hard to maintain confidentiality on their end, but many times it is the seller themselves who ends up disclosing the sale – without realizing at the time the consequences of their actions.

 

What follows is an example of one of these seller mistakes, with the hopes that by telling this story future sellers will know and avoid these unnecessary pitfalls.

 

Keeping Family Out Of The Loop

 

231de5fe-11c7-45d5-b56f-56398e950ba8

 

The seller of a resort restaurant put the restaurant on the market, and followed the broker’s advice about keeping the staff in the dark. She did, however, tell the members of her extended family about the sale. One of these family members, a niece, had just taken the real estate license test and was eager to help her aunt with the sale. Unfortunately, the newly-minted real estate niece was too new to the industry to know the proper confidentiality protocols that are necessary when selling a business. She was frustrated by what she perceived was a lack of marketing on the business broker’s part because she wasn’t seeing her aunt’s business listed on places like Loopnet or the general MLS. Her inexperience told her that the broker should be treating the sale of the business just like you would the sale of a house, so she took it upon herself to post information about the business – including the name, address and pictures of the signage – on the general MLS, so anyone in the world with an internet connection could now find out that the business was for sale. She also told other real estate agents in her office, her clients and her friends about the for-sale status of the business.

 

Needless to say, it didn’t take very long for the staff of the restaurant to find out about a possible sale. Most of the staff didn’t return to the business during the busy season when the owner needed her veteran servers and kitchen staff most, opting instead to find more “stable” work at other establishments. The seller is now contending with high employee turnover and constantly training new staff at a time when her focus should be on growing and strengthening her business to attract buyers.

 

While it might seem odd at first to keep your family members in the dark about your business sale, avoiding the devastating effects of a breach in confidentiality will far outweigh any hurt feelings keeping them in the dark might cause.

 

Do you own a business but don’t think it would be possible to keep your family out of the loop? Do you have more questions about how to keep confidentiality in place? Ask us! Leave 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


Why The Business Buyer Looking For Perfect Numbers Will Never Find Them



It is a very common complaint in the world of business sales. A buyer comes to the market with money in hand and ready to buy the right business – but every time they request financial documentation what they get is poorly assembled numbers, difficult to understand tax returns and no current financials of any kind.

 

Do they want to sell their business or not?

 

What you have to remember about the small business world is owning your own business is a tough and time-intensive enterprise. Small business owners are great at what they do, but most are not trained accountants. Many times record keeping and financial documentation fall down the priority list, and what a buyer is left with is what the seller was able put together in the short time the business has been listed.

 

 

Old Files Stacking Up In A Messy Order Rotated

 

When we take on a listing for a small business we often get handed nothing more than a big box of crumpled papers and register tapes – and have to figure out the numbers from there. This is not true of all small businesses, as some owners are better record keepers than others – but you have to remember that even a great business may not have the world’s most organized books.

 

It is also typically true that the larger the business is, the more likely they have an accountant on payroll and therefore the more complete the records will be – but if you are in the market for a small business you probably don’t have the couple of million dollars you would need to buy one of these higher-priced and more-complete-records businesses.

 

What should I do then? How can I decide with seemingly incomplete records?

 

Have patience, and understand that you will never get perfectly organized books. What you will get is the opportunity to look at all of the financial records of a business once you have entered the due diligence phase. Your business broker will be there to help you, and if the books really are a mess then perhaps an accountant familiar with business transactions will be brought in.

 

What you can do as a buyer is use the cursory information you get with your first requests – like P&L statements and tax returns – to weed out businesses that don’t suit you and focus on the ones that do.

 

Are you in the market to buy a business, but are disappointed with the information you’ve been sent so far? Would you like to know more about how we as brokers turn that jumbled box of paperwork into useable numbers? Please feel free to leave any questions or comments here.

 

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Putting The Customer Before The Business: Why Smart Business Sellers Need To Stay Quiet



We often talk about confidentiality as it relates to business sales – here on our blog, with our clients and with prospective clients. Whether you own a business you are thinking about selling or you own a business you aren’t planning to sell for the foreseeable future, thoughts about confidentiality should carry the same level of importance.

 

Keeping the fact that your business is for sale a closely guarded secret is critical – both to the success of your business sale and to your bottom line. Confidentiality breaches have caused key employees (or even an entire staff) to quit and take their regular clientele with them, have caused contract customers to cancel those contracts – the list goes on and the effects can be devastating.

 

A good business broker is going to work very hard to maintain confidentiality on their end, but many times it is the seller themselves who ends up disclosing the sale – without realizing at the time the consequences of their actions.

 

What follows is an example of one of these seller mistakes, with the hopes that by telling this story future sellers will know and avoid these unnecessary pitfalls.

 

Putting The Customer Before The Business

 

cleaning equipment

 

The owner of a small home cleaning business was looking to sell, but felt he should remain loyal to the contract customers he’d had for many years. He accepted a great offer from a buyer, but as the time for closing approached the seller realized there were some major personality differences between himself and the prospective new owner. Not wanting to upset his customers, he went to each one in turn and told them that he was selling the business, and it was up to them if they wanted to continue with the new owner – but he didn’t like the guy very much. Needless to say, this caused a cascade of canceled contracts and demolished the customer base of the business. Closing day was still a few weeks out, so the buyer ultimately decided to pass on the business because it was now in free-fall. The seller was left to pick up the pieces of the mess he had caused, and now had the vast majority of his original customer base using the services of other cleaning companies – as he had suggested they do before his business ended up right back in his lap.

 

It might seem like your loyalty to your customers is what’s most important, but you won’t have a business if you put their perceived and unknowable future happiness before the health of the business itself. The seller in this case had no way of knowing what kind of job the future owner would do, and he should have held his tongue about his personal feelings in a business transaction, as the personality clash in this instance had nothing to do with the new owner’s abilities. The seller is now unable to retire and instead must spend the next few years trying to rebuild what he lost.

 

Don’t make this mistake and disclose the sale to your customer base before the deal is closed. You have to remember that selling your business means that they aren’t going to be your customers anymore, and it is in the best interest of the business itself to maintain confidentiality all the way to the end.

 

Are you thinking about selling your business and are worried about your customers with a new owner? Do you want to know more about how to keep confidentiality in place? Ask us! Please feel free to leave us questions or comments here.

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Does Your Broker Believe In Follow-Through? They Should



Golf Swing

 

Both parties have agreed on the purchase contract, you’re finished – right? Not quite, and if you have a business broker who’s not on top of their game then thinking that you can kick up your feet and relax will probably end in disaster.

 

A contract does not mean the deal is done, it just means one step in the process has been passed. We have a 90% closure rate once our deals get to contract, but most business brokers can’t get anywhere near that number.

 

Why? Once the contract piece of the puzzle is done, many brokers walk away and let the deal fend for itself. They let things like licensing, SBA loan issues and follow-thru with a franchise slip by the wayside – and when this happens a minor issue can become a major deal-breaker in no time. A transaction isn’t closed until it’s closed.

 

Why would any broker let this happen? Once the contract is put together, most brokers think that their work is done, but the last few details are often the most important.

 

Let’s focus on just one of the often-overlooked last-minute details to give you an example of the importance of getting all those last-minute ducks in a row.

 

If you as a buyer have no idea what the licensing requirements are for the business you are about to take over, how can you possibly have all of those requirements complete on closing day? Any business transaction means that at the very least all licensing must be transferred from the old owner to the new, and many of these licenses come with an inspection requirement that needs to be fulfilled before the business can serve customers. What does that mean if you don’t complete the necessary applications and inspections before the day you take over? You can’t open the doors until they are all complete, so having a broker who is on top of issues like licensing will be crucial for a successful transaction.

 

If you are a seller who offered seller financing, then it is in your best interest for the transition to the new owner to go smoothly. An uncompleted licensing, permitting or inspection requirement will put the transition and the future of the business in jeopardy (meaning you won’t be able to get paid). Having a broker who is proactive on the licensing front (and all other fronts, for that matter) will mean a more successful transition to the new ownership and a far better chance for the new owner to find success right out of the gate.

 

Ask your broker how many of their deals make it to closing once the contract step has been reached. Their answer to this question will tell you all you need to know about their follow-through and whether or not you’ll be able to make it to the closing table.

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Less Meetings, More Questions – How to Be an Efficient Business Buyer



Buying a business might seem like a monumental task – there’s paperwork, red tape, negotiations, money – but there are better ways to go about successfully completing a transaction than others. One of the best ways you can be a more efficient business buyer? Ask questions.

 

businessman thinking

 

Of course I’m going to ask questions! What do you mean?

 

The process to buy a business starts with looking at general listings and pairing down the list of possible businesses provided by your broker to just a few. For those few businesses, you will be asked to sign a nondisclosure agreement for confidentiality purposes – and then you will be forwarded a marketing package that typically includes information about the business, the physical location, a financial overview, pictures, etc.

 

At this point many new buyers ask for a meeting with the seller or for a tour of the location, but if all you’ve done is glance at the marketing package – then a meeting or tour will probably end up a total waste of your time. When you are buying a business, you are buying cash flow – so the seller’s personality or the location décor really aren’t that important.

 

Why?

 

The only way to figure out if a business is really right for you is to dig deeper than just a cursory glance, and you need to do that deep digging right from the start so you can eliminate businesses that aren’t right for your goals – sooner rather than later. The more efficient path? Take a really close look at the information you’ve been provided and come up with a list of questions you’d like answered.

 

What kinds of questions should I be asking?

 

Every business is different, so your questions from one business may or may not be the ones you have for another. Here are some general questions to get you started:

 

What are the seller’s daily duties? What would a typical work day look like for me as the new owner?

How is the income derived? Is it owner-to-prove? What do the tax returns and P&L statements show as far as how much the business makes?

What types of licenses are required for this business? Would I qualify for those licenses?

 

The moral of the story is any question is a good question, for a couple of reasons. First and foremost it will help you weed out businesses that won’t fit with your goals and expectations. Second, your questions will help your business broker understand what is important to you so they can better refine the search for potential businesses.

 

Save yourself a ton of time and energy by carefully reviewing information and asking lots of great questions – before you sit down with sellers and go for a back-of-the-house tour.

 

Are you a new buyer who has additional questions about the process to find the right business? Would you like more pointers on the best types of questions to ask? Ask us! Leave comments or questions 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


Business Sellers – Have We Reached The Peak?



We all know that the economy has made an impressive turn for the better in recent years, but if you are trying to decide when the best time would be to sell your business, there are some indicators that we might be reaching (or already have reached) the peak.

 

Climbing a mountain

 

What are the indicators?

  •  The multiples in business sales are extremely high, sometimes three times earnings. The multiples are often so high that buyers are beginning to question the pricing of businesses for sale.
  •  The euro is close in value to the dollar, so foreign investors will be less likely to buy U.S. based businesses.
  •  The current seller’s market is poised to shift very heavily to a buyer’s market as a wave of baby-boomer business owners make the move to retirement.

 

What should you do about these indicators if you are considering selling your business? Sell while the selling is good! Waiting for a better market is probably a mistake, as the market is unlikely to grow any more than it already has. Contact us today to get your business sold while we’re at the peak!

 

 

Michael Monnot

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

http://www.infinitybusinessbrokers.com


Corporation Deadlock and Judicial Dissolution



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

 

Many times closely held corporations commence with a great idea and a trusting partnership. Over the years, shareholders may be replaced, partners alter their roles, and some businesses simply fail due to unforeseen circumstances. These situations can give rise arguments as to how the business affairs should be managed, and ultimately lead to a corporate deadlock amongst directors of the corporation. If this occurs, the directors are left with few options including but not limited to: 1) selling the business or 2) forcing a judicial dissolution of the corporation.

 

Florida Statutes provides that a shareholder may move the Court to judicially dissolve a corporation if the directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is being threatened or suffered. §607.1430, Florida Statutes. If the court finds that the judicial dissolution is necessary, then an Order is entered in the Court and the business is forced to liquidate its assets and wind down its affairs. Corporate dissolution are quite effective, however they often involve lengthy litigation and substantial expenses that can eat away at the equity in the business.

 

With that said, it’s easy to see that in most cases it would be beneficial if the shareholders could agree to terms of a buyout or simply place the business for sale on the open market. If you choose to sell your business, then the use of a business broker can be quite beneficial in obtaining a top market price. However, if you have questions concerning a corporate deadlock or judicial dissolution, then seek the advice of an experienced business attorney. Good luck with your business ventures!

 

This communication is for informational purposes only and shall not constitute legal advice and formal of attorney-client relationship.

 

greg may

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

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




Search



Recent Posts

Categories

Archives

Tags