The Perfect Business? Why Business Buyers Need To Keep The Must-Have’s Short



If you’ve ever watched one of the myriad of home renovation shows, you understand the importance of staying realistic with your must-have’s in a home when you are looking to buy. You can’t expect perfection when you are looking for a deal.

 

A similar truth rings true if you are looking at buying a business. Many new prospective business buyers come to the market with an eternally long list of what their ideal business must have before they buy. They literally want the perfect business. Guess what? The perfect business doesn’t exist.

 

Bullseye target.

 

We’ve seen some interesting perfection-seeking, must-have lists – like only wanting a business where the owner is retiring, the business is at least 10 years old, the landlord is willing to lower the rent and it must be able to run with an absentee owner – all for less than $50,000. Realistic? Definitely not.

 

The problem with this approach is the longer your must-have list, the less likely you are to find a business. You may end up in buyer purgatory forever, always searching for the “perfect” business.

 

Your first step towards successfully finding a business is letting go of the must-have’s and instead focusing on the goals you would like to achieve as a business owner. What are you looking for – a chance to be your own boss, more financial freedom, the opportunity to follow a passion? Ask yourself these questions first, then look for a business that will fit with your goals.

 

Your next step after defining your goals is to decide what issues you will be willing to deal with and which will be deal breakers once you find a business. All businesses are inherently complex and all businesses have issues of one kind or another – so be ready to make decisions on what’s do-able and what’s a deal-breaker.

 

Some examples of do-able issues might be a restaurant with falling numbers but an ineffective and disgruntled waitstaff that could easily be replaced, thereby turning customer service reviews around. Or perhaps a retail business that has zero online presence and no marketing plan to speak of that you could make profitable with some marketing savvy and a good website.

 

A deal-breaker issue, on the other hand, might be finding out during due diligence that you would be inheriting an $80,000 debt that the seller tried to conceal.

 

While searching for a business, remember that the past records of a business are just that, they’re the past, and the future of the business and what you could do with it are up for grabs. Just like in the home renovation shows, it’s not the house at the beginning of the renovation that counts, it’s the finished product that matters.

 

A creative buyer with some decent marketing know-how can turn around a less-than-ideal business in short order if they have a decent plan in place. By applying your personal strengths and experiences you can make many businesses fit with the goal you would like to achieve.

 

Just remember that there is no such thing as the perfect business, so keep an open mind and keep your must-have list short.

 

Are you looking at buying a business, but you can’t seem to find one that fits with your goals? Do you think your must-have list might be too long? Do you have questions about what issues are do-able and what issues are deal-breakers? Ask us! Leave a comment or question 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


They’re Watching – 3 Ways Business Sellers Can Make A Good Impression



If you are in the market to sell your business, you might feel that your business speaks for itself.

 

 

The financials, the location – they will tell buyers all they need to know if they are considering taking your place as the owner.

 

Guess what? Buyers are also taking a long hard look at you. Your actions will speak volumes about the way you run your business and what they can expect from you throughout the sale process. Here are three things you should try to do – to not only gain the trust of a potential buyer, but to put your business in the best possible light:

 

Be honest.

About everything. Sure, every business has a skeleton or two in the closet, but trying to hide or gloss-over these issues when in negotiations with a buyer will make you look like a liar in the end. During the due diligence process, buyers get a chance to dig into your business, so anything you try to keep from them will eventually come out. If you are honest about any issues right out of the gate, most buyers will be willing to deal with those issues. If you try to keep a buyer in the dark, the inevitable unveiling of any issues will probably kill your deal.

 

Don’t be a disorganized mess, even if you really are.

If organization isn’t really your thing, then you need to give yourself an organizational make-over before you get in front of buyers. Your business broker will be able to help you figure out what needs a good once-over, like your records. You want buyers to be able to read and understand your books, as your financial records are what a buyer uses to determine what they are willing to pay for your business. A big box of jumbled sales slips is not going to impress anyone.

 

Follow through.

If you tell your buyer you will meet them, show up and don’t cancel last minute. We see deals fall apart because sellers mentally check-out long before the closing table and start blowing off meetings and phone calls with potential buyers. If you are this cavalier with a buyer, then how cavalier have you been in your relationships with the community or vendors – relationships that a new owner is going to rely on? Show that you are a man (or woman) of your word, and you will be speaking volumes about the value of the reptation of your business.

 

Are you thinking about selling your business, but your records are a disorganized mess? Do you have more questions about what buyers are watching for? Please feel free to 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

http://www.infinitybusinessbrokers.com

 

 


Confidentiality Versus Catastrophe: Why Buyers Need To Be Discreet



If you are new to the business buying game, then one part of this process you may find frustrating is confidentiality.

 

 

You are about to spend a very large amount of money – so you will obviously want to know everything about the businesses you are considering, and you want to know it now.



The problem here? Business sales don’t quite work that way. There is a huge need for discretion and confidentiality.



Why does everything have to be such a big secret?



Confidentiality has to stay in place in order to protect the business. If employees, vendors, clients or the competition find out a business is for sale, it can mean big problems for the bottom line. Employees quit, vendors cancel contracts, clients go elsewhere and the competition can move in for the kill.



Why should a buyer care about confidentiality?



One of the reasons that buyers have an issue with confidentiality is it doesn’t initially seem like something they need for their own benefit – it only seems to be in place to protect a seller and the business itself. It’s not. Think of confidentiality this way, you don’t want the business you buy to be in complete turmoil the day you take over, so keeping a tight lid on the for-sale status will be key.



The best way to illustrate why confidentiality is such a massive deal is with an example of what can happen if confidentiality is breached.



A buyer is very interested in a listing for a small restaurant in a downtown location. The buyer gets in contact with the listing broker and signs the necessary non-disclosure agreement. The listing broker then reviews the “rules of the road” – the buyer may not speak to employees, share any financial information, or tell anyone that the business is for sale. The buyer agrees. Since he now knows the name and physical location of the business, he goes in for lunch and asks to speak with the manager. He asks the manager why she thinks the business is up for sale and then asks for a tour of the kitchen. The manager, a key employee, had no idea that the business was on the market. She immediately runs into the kitchen to ask the head chef if he knew anything about the business being up for sale, which, of course, he did not. In the panic this buyer has now caused, both the manager and the head chef quit to find more stable work.  Now the business has lost it’s two most important employees and has been left in a seriously vulnerable position.



As you can see, the confidentiality of a business sale is extremely important. This buyer seriously damaged the seller’s business, and he didn’t have to do very much to cause all of this upheaval.



As a buyer, you will be expected to maintain confidentiality all the way up to the closing table. This is critical to the survival of the business and to the sale. The non-disclosure agreements you sign are there for a reason and are absolutely enforceable. If you disclose the business sale to an inappropriate party, you can face serious legal repercussions.




These rules are in place to protect the businesses you are trying to buy. Do your future business favor and keep confidentiality in place!



Are you a business buyer who has questions about confidentiality in the business market? Ask us! Leave a comment or question here, and we will be happy to address any questions you have.

 

 

 

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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