Do I Have To Sign A NDA (Non-Disclosure Agreement) When Buying A Business?
Published April 27, 2017


The short answer is YES. You absolutely do.

 

 

The NDA (Non-Disclosure Agreement) is a crucial step. It is a legally binding document that protects both you and the seller.  This agreement shields the seller from those who have no real interest in actually buying the business, and protects you as the buyer from a business that may seem fine from the outside, but is hiding major problems.

 

How?

 

In a business transaction, it is necessary for a potential buyer to see the financial records of that business, but a seller does not want to disclose such proprietary information to just anyone. If it is determined that you are a credible buyer, you will be given the opportunity to sign a NDA so that you will have access to the business’s information.

 

The NDA ensures that any buyer who is given access to the financial and/or proprietary information disclosed by the seller will not disclose that information to any party who hasn’t also signed a NDA. This is necessary to keep the for-sale status of the business confidential and protects the seller and the business from potential harm that an inappropriate disclosure might cause. 

 

The parts of a NDA are as follows:

  1. The location, name, and type of business.
  2. The length of the agreement, typically several years.
  3. A list of those who are party to the agreement.
  4. What information cannot be disclosed (like financial records, contracts with staff and suppliers, etc).

 

Any buyer who refuses to sign a NDA is usually considered to be unnecessarily difficult and any business broker worth their salt will refuse to work with you. The NDA keeps the business you are trying to buy safe from those posing as buyers and from the disastrous consequences of a breach of confidentiality. If you consider yourself a serious buyer, be prepared to sign the NDA.

 

Are you thinking about buying a business and are worried about the legal repercussions of the NDA? Would you like to know more about how the NDA is good for business buyers? Ask us! Please leave 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

https://infinitybusinessbrokers.com


LOVE Going to Work: 3 Keys to Business Ownership Happiness
Published April 24, 2017


It is unfortunate that so few of us jump out of bed every morning looking forward to our work day ahead.

 

If you are considering becoming an entrepreneur, this happy morning might be in your future. They key to achieving happiness as a business owner is to know what you want from the start. By taking the time to do some real soul searching before you begin the business search process, you can ensure you will end up with a business you can love. What follows are some ideas to consider:

 

  • If you already have a dream business in mind, are there aspects of running that business that you might not enjoy? Are these tasks that can be delegated to an employee or perhaps a business partner that has that interest? If your dream is to be a florist, and accounting is possibly your least favorite thing to do, then delegating this responsibility will let you focus on the portions of your business you are passionate about.

 

  • If you haven’t decided on a specific industry, what do you really love to do? A caveat here; if you have absolutely zero experience in an industry, it is probably not a good idea to enter that industry as a brand new business owner. If you have always wanted to own your own bar, but have never worked in any part of the restaurant industry, buying a bar will be a mistake.

 

  • What are your goals for business ownership? If you are looking to be able to spend more time with your family, buying a small pizza restaurant where you would be the only chef (and therefore have to work 7 days a week) this particular business is not going to get you that extra free time.

 

Don’t think that owning your business is always going to be fun, or that business ownership is easy. The benefit of entrepreneurship is that your efforts come directly back to you. Before you begin a serious business search, take the time to figure out what you really want out of this new journey and you will end up loving your work.

 

Are you considering taking the entrepreneurial plunge and are curious about the business opportunities out there? Would you like to know what types of businesses would fit with your goals for business ownership? Please leave any questions or comments 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

https://infinitybusinessbrokers.com


Don’t Hate Your Business Broker, Choose the Right One from the Start
Published April 20, 2017


As with any industry, there are great business brokers and there are those who are not so great. How do you ensure that the broker you choose to list or buy with is one of the great ones?

 

 

Ask questions.

 

What kinds of partnerships do they have with other brokers and with broker’s associations?

 

If a broker is a lone-wolf of sorts with no industry connections, they might have a tough time properly marketing your business or getting access to the listings you are interested in.

 

How many transactions have they closed in the last year?

 

If a broker has only closed one business transaction in the last year, they are likely not the broker for you. Results will speak volumes about work ethic and knowledge of the industry.

 

Do they work in a very large office with many brokers, or do they work in a much smaller brokerage?

 

The benefits of choosing a broker that is part of a much larger firm may be the associations with other brokers that they have in-house. This might give you access to more listings and more potential buyers. Just remember to ask about a broker’s individual results. The firm they work for may have sold 50 businesses last year, but they may have only been responsible for one. On the other hand, there are some in the industry (usually those who are part of a very large office) who will tell you that using a one man shop or a small brokerage is a mistake. This is not necessarily the case. Look at the results and inquire about the industry associations they have. A one man shop or a small brokerage might be your best bet because they are able to achieve success without the backing of a larger firm – a surefire testimony to how they work.

 

Are they really a business broker?

 

This might sound like a ridiculous question, but it is an important one. Some involved in the real estate industry will try to help clients with buying and selling businesses while they are working on home and property listings. Selling a house and selling a business are two completely different things. You might have a great realtor, but that doesn’t mean that they will know the first thing about a business transaction. Other types of professionals may try to broker business transactions as a side business. Business brokers are specialists and their field, so use a business broker for any business transaction if you want to ensure a successful transaction.

 

Are past clients happy?

 

Look for a business broker with positive reviews and testimonials from former clients. Ask about whether they have repeat clients, and if they have any references. Also inquire about how they get the majority of their new business. If it comes from referrals, then you know they are good at what they do.

 

As with any major business decision, do your homework. The right choice of business broker can make your buying or selling experience a very positive one.

 

Are you a buyer or seller and want to know more about how to choose a business broker? Would you like to know more about how we help our clients through a business transaction? 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

https://infinitybusinessbrokers.com


Going to Market: What Business Sellers Should Know
Published April 19, 2017


“I’m ready to put my business on the market, how should it look?”

 

 

Is your business in the kind of shape it needs to be in order to sell? Most owners think that the business is fine as-is. This is typically not the case. If you would like to get top dollar for your business, it needs to be appealing to a potential buyer. While the aesthetics, like cleanliness and fresh paint do a lot for a first impression, the “guts” of your business are what really need to be appealing to a buyer. 

 

How do you make the “guts” of your business more appealing?

 

First, get everything in order. If your financials are a mess or are nothing more than a few boxes stuffed with papers, you will need to sit down with your business broker or business transaction accountant and get them worked out. A buyer will need to be able to understand your numbers if you want them to make a fair offer for the business.

 

Once you have an offer on the table, the examination of your numbers hasn’t ended, it has just begun. What happens after an offer is made is a process called “due diligence”. In this stage the buyer will get a chance to comb over all aspects of the business, and then they have the opportunity to decide if they would like to proceed to the closing table. If your business has any issues that are unresolved, they will most likely come to light during this time, and will drive a buyer away. Solve potential problems before a buyer finds them. This will help keep buyers from walking away.

 

Another way to make your business look like a great opportunity to potential buyers is to use the services of a business broker. There are multitudes of issues that can kill a deal, and in order to be aware of what those are, you need the help of someone who has been through the process many times before. The experience of your broker during the marketing and due diligence aspects of a business sale will be instrumental in securing the very best price and a successful closing.

 

Have any questions about how we would help get your business into “sale shape”? Have you tried to sell a business and lost a deal because of unresolved issues? Please feel free to share your experiences or questions here. We look forward to speaking with you.

 

 

 

 

Michael Monnot

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

https://infinitybusinessbrokers.com

 


Is It Better to Buy or Start a Business? Why Buying is Better
Published April 17, 2017


Is it really better to buy an existing business? Can’t I just start one?

 

 

The short answer is yes, it is far better to buy an existing business. In this article we will examine a few reasons why it is far easier as a budding entrepreneur to buy a business than to start one from scratch. 

 

The first reason? An existing business has a history that you can examine.

 

If you start a business from the ground up, there is no way to know what the track record will be. If you are fortunate, the record will be good. If you aren’t, you probably won’t be around long. An existing business removes a bit of this risk by having financial records that you can examine closely prior to purchasing the business. An existing business also has a proven location and comes with an already established customer base.

 

Another plus to getting a business with records? As you go through the numbers you may find new business growth ideas, unused niches, or overlooked areas that could be streamlined.

 

The second reason? An existing business has cash flow.

 

New businesses fail when new business owners don’t take into account the period of time, typically 12 to 18 months, between opening the doors and when the business will actually start generating a profit. Many new businesses go under because they have no cash left after getting to the grand opening, and they end up running on fumes and having to shut the doors before anyone even knows the business is there.

 

An existing business is already generating income, and even if you will need to find financing for operating expenses, there is no need to guess how much money you will need and how much you will be able to pay back because you already know what income the business generates.

 

The next reason? An existing business comes with someone to show you the ropes.

 

When an existing business is sold, there is usually a training and/or consulting period written into the contract, ensuring that the new owner gets the proper training to keep the business up and running.

 

If you start your own business, you will be going it alone, and although there might be business owners who are willing to give you advice, you won’t have someone to show you exactly what works, and more importantly what doesn’t work, for those critical first few weeks of ownership.

 

The last reason? It is far easier to get financing for an existing business.

 

It is fairly common in the sale of small businesses that the owner will offer seller financing. This is great for a new entrepreneur for two reasons.

 

First, it says a lot about a business that the current owner has enough confidence in the business model to take payments over time. By offering seller financing, they will be dependent on the continued success of the business for years to come.

 

Second, in the wake of the 2008 economic climate traditional sources of financing can be very hard to come by. For a buyer who can’t pay all cash up front, seller financing allows for the purchase of a business with just a sizable down payment.

 

For all the reasons above and more, deciding to buy an existing business will likely put you in a profitable position much sooner and with less risk than creating a business from scratch.

 

Have you ever started a business and wished that you had just bought one that was already established? Do you have questions about the success rates of existing businesses once they change ownership compared with the success rates of start-ups? Leave us a comment or question 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

https://infinitybusinessbrokers.com


Selling Your Business: What Records Do You Need to Have Ready?
Published April 12, 2017


I’m ready to sell my business, what records will I need to provide to my business broker and to potential buyers?

 

 

Think of the records needed for a business transaction this way.  You would like a potential buyer to pay top dollar for your business, and the quality and completeness of your records will be what makes this happen.  You will have to be able to prove to the buyer that the numbers you are claiming are the real numbers.

 

You don’t have to be ready to sell tomorrow to begin getting your financial record ducks in a row. The sooner you start getting your numbers together, the better.  Do your best to keep meticulous records.  The better your records, the better a buyer will feel about paying the price you are asking for.  Keep accurate financial records and statements, receipts from a cash register, and any records that can help you to prove your income and expenses.  Current and past tax returns will also be needed, so be sure you are caught up with your taxes.

 

When you begin working with your business broker, they will want to see your numbers in order to assist you in creating an accurate evaluation of the business, and therefore a realistic asking price. Your listing price will be based on a number of factors, but a big part will be provable cash flow – because that is what buyers are after. 

 

Is it impossible to sell my business if my records are a mess?

 

No, it will just take a little more work to get the records in order.  You will not be the first (or the last) client with less than adequate business records that your business broker has come across.  Give what you have to your broker, and by working together you can get the records in shape. You may also need the services of a business transaction accountant, so ask your broker if they think you will need additional help.

 

What if I have taken cash out of my business without recording it?  How do I prove that income?

 

It can be difficult to prove unreported income, so the best advice is to start reporting all income right now. Including all of your income is crucial if you want to get the best price for your business, although some businesses do sell even without all income reported.

 

The message here is an ounce of preparation will make getting your business on the market much easier – but all is not lost if your record keeping has been sub-par.

 

Are you thinking about selling your business but are worried about the state of your records (or lack of records at all)? Do you have more questions about what business buyers will want to see? Leave any questions or comments 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

https://infinitybusinessbrokers.com



Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

5111-E Ocean Blvd
Siesta Key, FL 34242

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202



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