Dishonesty, Procrastination And Red Tape – A Cautionary Lesson For Business Buyers



 

Buying a business involves a lot of paperwork and red tape – what can sometimes seem like mountains of the stuff.

 

When mired in this sea of required documentation and applications, there can be times when you are tempted to skip a few steps and just bet on not getting caught.

 

This is a HUGE mistake, for a number of reasons.

 

Reason one? It could be considered fraud.

 

If you are filling out those mountains of applications for financing, fudging the paperwork could ultimately land you in very hot water. Lying about anything, even something small, will almost assuredly come up when the lending institution (be it a bank or the Small Business Administration) goes over everything with a fine tooth comb before they write you a check. It would be very bad for their own business if they were in the habit of overlooking items that would otherwise prevent a loan from happening. Cover yourself from fraud charges or denial of funding down the line and be absolutely honest.

 

Reason two? It could mean your licenses get revoked.

 

If you are buying a business that requires some type of licencing, like most do, your applications for those licenses will seem never-ending. Skipping necessary steps, fudging a bit in your answers, procrastinating and missing deadlines or just not applying for the license at all will likely mean you have to close the business doors when you get caught. Licencing agencies get paid to ensure everyone is following the rules, and they have the right to revoke your licenses and close your business if they catch you trying to bend or break those rules. Do yourself and your investment a favor and don’t skimp on your licencing requirements.

 

Reason three? Fines, fines, fines.

 

Even if you manage to escape fraud charges or license revocations, if you get caught or miss an important deadline you will absolutely be slapped with what can quickly add up to debilitating fines. Again, the bankers and agencies you are dealing with have punishments like fines in place to ensure everyone follows the rules. Don’t spend exorbitant amounts of money unnecessarily. Do the paperwork right the first time.

 

We aren’t trying to scare you, we are trying to give you an honest look at what can happen when you think you can bend or break the rules.

 

The paperwork might seem never-ending, but it’s very manageable if you stay on top of it – and every operating business out there got it done.

 

There is also help available if you feel overwhelmed. Ask your business broker for help, or you can hire someone who specializes in licenses for businesses. The message here is do it right so you won’t get caught.

 

Do you have questions about the licensing requirements for the types of businesses you are interested in? Would you like to know more about the services available to help you? 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

www.InfinityBusinessBrokers.com


Buying Or Selling? Why A Broker Is A Must



Buying or selling a business? Are you ready to negotiate

 

No one has ever bought or sold a business without a great deal of back and forth between the parties involved – and many, many deals have died over the negotiating table. Nothing is more frustrating for buyers and sellers than the death of a perfectly good deal. If you are thinking about buying or selling a business, how do you keep your deal alive?

 

Use an experienced and qualified business broker. A good business broker is essential for success.

 

Of course you would say that you’re business brokers. Yes, you have us there – but we would advise you to use the services of a business broker whether that’s what we did for a living or not.

 

Why? The business selling process and the businesses themselves are both complicated, messy animals.  No where does that inherent messiness come out more boldly than during negotiations.

 

 

What needs to be negotiated? Essentially everything. The purchase price, the length of the due diligence phase, seller financing agreements, a non-compete clause, a new lease, the value of the inventory, the length of the training period, the value of the equipment and furnishings, the continued employment of certain staff, the closing date – the list goes on and on.

 

With such a monumental list of things that need to be agreed upon by two parties with vastly different goals it’s no wonder that many deals fall apart. A seller is dealing with handing over a business with which they have strong emotional ties as it has been a very big part of their life. Sellers are also nervous about selling themselves out of a job, essentially becoming unemployed the moment the deal is signed. They want to get as much as they can out of the sale of their business. Buyers, on the other hand, are dealing with writing a huge check to a complete stranger for a risky new entrepreneurial adventure. They want to spend as little as possible so they can keep working capital available. 

 

How do you meet in the middle of such vastly different goals? An intermediary like a business broker.

 

A broker’s responsibility is to keep the deal together and help it get to the closing table. Your broker acts not only as an experienced advisor who ensures everything that needs to be done gets done, they also act as an all-important buffer between the two parties. Business sellers and business buyers are entrepreneurs at heart – and to be a successful entrepreneur you need a strong and driven personality. If you’ve ever tried to argue with someone who has this personality type – you should understand why a buffer is needed. Too many perfectly good deals have fallen apart because someone asked the wrong question, made the wrong request – and the other side was offended to the point of no return.

 

Don’t try to go-it alone. If you are serious about selling or buying a business, you need a business broker to help you negotiate your way to closing table success.

 

Are you thinking about selling your business and want to know more about how a business broker can help you? Do you want to buy a business and want to know more about the negotiation process? Ask us! Please feel free to 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

www.InfinityBusinessBrokers.com

 


Stand Out! How Business Buyers Can Break From The Pack



Thinking about buying a business? The best way to go about buying a business of your own is to employ the services of a business broker. If you have already started your business search, you may find that it is difficult to get business brokers to pay attention to you. Why is this?

 

For most business brokers, dealing with buyers is frustrating. Up to 90% of potential buyers who enter the market never buy anything, and a big chunk of that 90% are people who are just kicking tires and have no real desire to ever buy a business.

 

 

If you are among the 10% who really do want to buy, separating yourself from the rest will be critical in getting a deal done.

 

How do you as a buyer get business brokers to take you seriously?

 

Ask questions.

Serious buyers ask great questions, and they ask lots of them. Buying a business is very different from buying a house because you aren’t buying aesthetics and a structure, you are buying cash flow. As such, the physical location and furnishings aren’t really important. Great buyers want to see the books and have conference calls with the owners, they don’t want to go on a walk through.

 

Be ready to answer questions.

Yes, personal financial information is intensely private, but when you are buying a business you are going to have to provide proof of funds and answer lots and lots of questions about your money and your work history – so just be willing and able to answer from the very beginning. Sellers don’t want to reveal proprietary information to potential buyers who haven’t proven they can afford the business and landlords/property managers won’t be willing to negotiate a new lease with buyers who don’t have the appropriate financial means.

 

Be patient.

Your business broker (if they’re a good one) has many clients and many listings to manage, so if they don’t immediately call you back – don’t call 17 times in a row. If you have shown that you are a serious buyer, you are important to your broker and they will work hard to get you the best business for you. Likewise, you also have to understand that business sellers are also small business owners, so you aren’t their top priority – the business is. Your questions will be answered, so be patient.

 

Be flexible.

You might think you really want to buy a bar, when in fact a completely different business would better meet your goals for business ownership. Entering the market with a flexible mindset will be instrumental in getting you the right business. You also need to be flexible with the process of a business transaction – negotiations and appointment requests may not always go your way.

 

If you are ready, willing and able to buy a business – stand out from the rest by asking and answering questions, having patience and being flexible. By showing your broker and sellers that you are serious you will be well on your way to business ownership.

 

Do you have questions about the business transaction process? Are you wondering if the business you think you want to buy is actually the right business for you? Ask us! Please feel free to 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

www.InfinityBusinessBrokers.com


Buying A Business? 3 Financing Options



 

If you are looking at buying a business, you may not have the full amount you would need to make an all-cash offer – so financing options might need to be considered.

 

If I need financing, what options are available? 

 

Traditional Loans

 

You may be thinking that you can just head down to your local bank and take out a loan to help you buy a small business, but this option will probably have to be taken off the list. Traditional lending institutions are very gun-shy about financing small businesses.

 

If you are entering the world of small business ownership you already know that starting a small business is a risky venture. You are trying an unproven product or service in an unproven location with unproven operating methods.

 

Buying an existing small business removes the “unproven” part of the equation – good news for business buyers – but a traditional lending institution is only looking at the risk. For most prospective business buyers, a traditional loan from a traditional lending institution probably isn’t on the table.

 

The Small Business Administration (SBA)

 

Some businesses on the market and some buyers who are considering those businesses will qualify for a loan from the U.S. Small Business Administration – just be aware that because this is a government program it comes with it’s fair share of paperwork and red tape.

 

Both the business and the buyer themselves will have to meet the qualifications necessary, but in some instances this can be a great financing option for those looking to buy a small business. If you would like to know more about financing options from the SBA, click here to visit SBA’s website or click here to contact us with questions about this lending option.

 

Seller Financing

 

Most small business transactions involve this third type of financing, where a buyer puts down a down payment (typically 50% or more) and the seller finances the rest.

 

This is a great financing option for several reasons. A seller who is willing to keep some skin in the game speaks volumes about their confidence in the future of the business – and it gives opportunities to future business owners who may not have been able to find more traditional lending options.

 

If you can’t get a traditional loan, and SBA financing isn’t in the cards – talk to your business broker about the possibility of seller financing and about what businesses on the market are currently offering this type of financing. Want to learn more about how seller financing works? Click here to read Seller Financing: The Business Buyer’s Guide.

 

The opportunity to buy a business can come in many forms. The financing option that suits you best and is available for the business you are interested in will vary – just ask your broker about your options.

 

Do you have questions about how to qualify for a loan from SBA? Would you like to know what currently available businesses are offering seller financing? Please feel free to leave comments and 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

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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