The Long Wait – When Sellers Drag Their Feet



As business brokers this has to be one of the most frustrating aspects of the job.

 

You have a motivated buyer who is very interested in a particular business and a decent offer is on the table. You request that the seller send over the information required for due diligence, like financial records, tax returns, etc.

 

Then you wait. And you wait.

 

 

Then the seller sends over partial records, which you forward to your buyers, but the rest of the information your buyers requested has yet to be produced. So you wait.

 

You get constant calls and emails from your buyers, and all you can tell them is you haven’t received the information from the seller so your hands are tied. The inevitable conclusion of this situation is the deal will fall apart and the buyer will move on.

 

Why does this happen?

 

Some sellers go on the market with the initial intention of selling, but once they are in the process, they realize

  1. that it can require a lot of work on their part to produce information and be available for questions/meetings, and
  2. they are shortly going to be out of a job

 

This can cause some sellers to develop a decent case of cold feet. It can also cause a seller to be defensive, as constant requests for more financial information can give the impression that the buyer is trying to dig up dirt on the business.

 

This, of course, is not the case. Buying a business is a huge decision, and most buyers are going to want a thorough look at any business before they pull the trigger.

 

What if the problem isn’t the seller? Could the problem be the broker?

 

If your broker is really good about answering your questions, is prompt with returning phone calls and emails and has been forthcoming about the issues they may be having with the other sidethen their hands are probably are tied. If it takes your broker ten days to return your phone calls, then yes, the problem is likely the broker.

 

As with everything in a business transaction, a good dose of patience will go a long way. This does not mean, however, that you have to sit around and wait for a seller to deliver information they have no intention of ever giving you. Talk to your broker if you have concerns about time frame issues, and understand that sometimes there really isn’t anything a broker can do to speed up the process.

 

Are you a buyer who is having a hard time getting information out of sellers? Do you have questions about whether the issue may be with your current broker and not with the seller? Please feel free to leave us a comment or question here, and we will be happy to assist you.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

 


How Close Is Close Enough? Thoughts For Business Sellers



When you first list your business one of the major points of discussion will be the delicate balance of where to set your listing price. Set the number too high and good buyers will pass your business by in favor of those more reasonably priced. Price it too low and you won’t be getting the best return on your investment.

 

You probably have a dream number in your head – an amount you’d love to get. Here’s the thing. That dream number may or may not be realistic – and isn’t something you should stick to come hell or high water. Instead, consider a threshold where you would still be comfortable making a deal – then add a bit to reach your full listing price. Businesses rarely sell for this full listing price, so the buffer between your threshold and the listing price is the sweet spot where negotiation can happen.

 

 

Ok, I’ve got a buyer and we’ve been negotiating for weeks. So far their offer is still below my threshold. Do I take the offer or walk away?

 

You can always walk away, but ask yourself these questions first:

 

One, is what they are offering unfair – or is it just not ideal? If you haven’t been able to reach a middle ground with your buyer, ask yourself “why aren’t they coming up?”  Is there something about your business that will be expensive to fix or overhaul the day they walk in the door? Are they worried about a customer who makes up a large percent of your bottom line leaving once the business changes hands? Are you asking for your inventory or equipment to be valued as new even though it’s a few years old? If you were the buyer – would what they’re offering make sense? If so, maybe you need to come down a bit instead of trying to force them to come up.

 

Second, is there a way to meet in the middle by making a creative deal? Could you offer seller financing? Is there a way to structure a deal that will hold back money in escrow based on certain markers over a period of time? Every small business deal is different, and it’s this individual nature that allows for creative purchase contracts to come together. If you and your buyer are really deadlocked on price, maybe there’s a creative way to reach a deal anyway.

 

Finally, are you willing to walk away and start over with a new buyer? Selling a business takes time. A lot of time. It also takes a huge amount of effort. If you’ve been negotiating with a buyer for weeks or months and there’s a gap between what you would want in an ideal world and what they are willing to offer – is it going to be worth it to you to start over? Unless the gap is huge – probably not. It can be difficult to end a negotiation by letting the other side “win”, but how many weeks or months will it take you to find another buyer? Will that new buyer be willing to offer you substantially more, or are they likely to come to a similar conclusion and offer something like your current buyer is? You should also think about your deal in terms of the difference in price. For example – is the difference $5,000 or $10,000 in a deal worth hundreds of thousands of dollars? Does it make sense to kill a deal for a relatively small difference in price? In most cases, the answer will probably be no.

 

Here’s where we’re going with this. How close is close enough? You might not be getting that ideal number in your head, or the offer might be under a threshold where you would love to be – but does it make sense to walk away for the difference? In a lot of cases you can bridge the gap with your buyer by using  a creative deal, or by looking at the offer objectively from a buyer’s point of view. 

 

Are you considering selling your business and have questions about what a fair listing price might be? Would you like to know more about creative deals we’ve put together in the past? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

 

 

 

 


Why There’s No Such Thing As The Perfect Time To Buy A Business



 

2020 was a strange year. A pandemic, a contentious election, protests and the like. If you were contemplating the leap to business ownership, are recent events causing you reconsider your jump?

 

Should you wait until things settle down to buy a business?

 

Nope. Here’s why.

 

There is no such thing as the perfect time to buy a business.

 

Sure, small business ownership can be impacted by changes in the overall economy and many small businesses struggled or didn’t survive the shut downs brought about by the pandemic. Here’s what’s also true. Some businesses have been weathering the storm well. Some have thrived. Why?

 

You can’t let what’s happening in the news dictate your entrepreneurial success.

 

The news has always been scary, but this last year it was on a whole new level. If you watch any news at all it might look like the whole world is on fire and every small business tanked. It isn’t, and they didn’t either.

 

In reality there are always going to be issues when you own a small business. Things that are completely out of your control. The wider economy. Global health crisis. Weather events. Political strife. Here’s what separates successful entrepreneurs from the pack. They don’t let the outside world determine their destiny.

 

They are willing to rethink every aspect of their business when things change. They aren’t afraid to do things differently when necessary. They pivot quickly and creatively when the needs of their customer base change. When something they’ve tried doesn’t work, they dust themselves off and move on. They focus on growth, always.

 

What successful entrepreneurs don’t do is wallow in news-driven fear. They take the information they gain from what’s happening around them and use that information to move their business in the right direction.

 

The message here is if you’re waiting for the perfect time to buy a business – don’t.  It will absolutely keep you from your entrepreneurial dreams forever.

 

A few examples?

 

If you’re waiting for the economy to return to full strength, remember that in a booming economy businesses are far more expensive than they are when it’s not. If you wait, you might price yourself out of the game. If you’re waiting for the pandemic to be over, remember that it might take a really long time for life to return to some semblance of normal – and many things are likely permanently changed. The business owners who will do well in our post-pandemic world will be the ones who were creative enough to survive today. Waiting means you will be missing out on that boots-on-the-ground practical knowledge that will help you be successful down the line. Be a part of that tough bunch now instead of having to compete with them later. If you are waiting for political changes, remember that people have been building successful businesses throughout history – and it never really mattered who was in charge. You are responsible for what happens in your business, not a politician on the other side of the country.

 

Don’t wait. Fulfill your dreams of business ownership now.

 

Were you considering buying a business but aren’t so sure anymore? Do you have questions about what types of businesses are doing well right now? Would you like to know more about what types of businesses would meet your business ownership goals? Ask us! Please leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com


Don’t Be Disengaged: Why This Buyer Spells Disaster



Buying a business is a big deal. You are embarking on a whole new life, have a ton to learn and an exciting new road ahead – a road that takes a lot of planning, preparation and hard work.

 

What can sometimes confound business brokers, business sellers and even some buyers is a relatively rare but alarmingly destructive force – the disengaged buyer.

 

 

What’s a disengaged buyer?

 

Someone who waltzes into the business buying process with nonchalance – they don’t take anything seriously.

 

They miss conference calls. They’re chronically late for appointments. They let license applications sit on their desk unfinished. They don’t show up for training with the seller, or they show up and act like they could care less. Sounds frustrating, doesn’t it?

 

Frustration isn’t the only issue. This level of apathy can be destructive as well.

 

It alienates the seller. It angers the commercial landlord. It hampers the ability to run the business because licensing requirements have not been met.

 

Sure, some of the business buying process is tedious. Some of your training will seem unnecessary. Red tape and paperwork are boring. We get it. Guess what? Nonchalance on your part can (and probably will) cause irreparable harm to your business ownership goals.

 

Why?

 

All those conference calls and meetings are crucial to your success. You can’t know if a business is going to be right for you if you haven’t asked the right questions.

 

Licensing requirements are an absolute necessity – and they can take time. Time that is out of your control because the wheels of bureaucracy turn slowly. You need to get going on applications as soon as is feasible and you need to stay on top of all the bureaucratic red tape before it has a chance to strangle your new business venture.

 

Your training period is critical to your success. You need to take every single moment of training seriously and try to gain every bit of knowledge you can from your seller. They’ve already worked through the pitfalls that you will face, and their knowledge will help you avoid them.

 

The relationships you have with your seller and your commercial landlord can make or break your transition to business ownership. If you alienate the seller, they are much less likely to take training you seriously – and you’d better believe they’ll stop taking your calls as soon as the training period is over. An angry landlord can refuse to transfer the lease, raise the rent, etc. Preserving those relationships by being respectful of everyone’s time and effort will go a long way on ensuring your success.

 

Do yourself and your future business a favor – BE ENGAGED.

 

Are you thinking about buying a business and want to know more about how to maintain important relationships throughout the purchase process? Would you like to know more about licensing requirements? Do you have questions about how the training period works? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com


Business Buyer: Is Seller Financing For You?



If you are in the market to buy a business, but don’t have a huge amount of cash available to make an all-cash offer, then the option of seller financing may be for you.

 

What is seller financing?

 

This financing option occurs when a buyer brings a sizable down payment and the seller offers to finance the remaining balance of the purchase price.

 

 

Many traditional lending institutions are gun-shy about offering any kind of lending options for small business – small business ventures can be risky and banks typically want something with more concrete collateral. Seller financing fills this gap between the all-cash offer and the difficult-to-get traditional financing options. A note here – the terms of a seller financing deal may have a smaller time period and higher interest rates than traditional lending would.

 

If you are a buyer who is going to need help with raising capital, there are a few things about the seller’s side of seller financing that you will need to understand and consider.

 

Most of the time you will need to bring a big down payment. Most (but not all) seller financing is for less than two-thirds of the purchase price, so at the very least a third of the price will need to be given as a down payment at closing. The seller is going to want a fair sized chunk of cash up front because once they sell the business, they are essentially out of a job and will be moving on to perhaps another business venture or retirement.

 

You will need to prove that you have the ability to keep the business running and profitable long enough to pay back your loan. You will probably have a hard time getting seller financing in an industry where you have little to no experience because a seller doesn’t want your learning curve to affect whether they get paid for their business.

 

You may have to put up a fair amount of collateral. The business itself we be collateral, in that that seller can take the business back in default. Also, a buyer can offer up personal assets like real estate if they choose to.

 

If you are someone with terrible credit, you may have a hard time getting seller financing. Any seller in their right mind will want to make sure that you have the ability to pay them back for all of their years of hard work, and a buyer with a good credit score will look far more promising than one without.

 

The price overall may be a bit higher and the interest rate might be a bit higher too, but what a buyer needs to remember is a seller has no buffer like a traditional lending institution would, this business is all they’ve got. If you have decent credit, a sizable down payment, know what you’re doing in the industry – but just can’t get traditional financing – then seller financing could be a very realistic option. The better you look as a lendee the more business choices will be available.

 

If this is something you might consider, you need to have the seller financing discussion with your broker early on in the game. The need for this type of financing will drive what businesses you should look at and which ones will be financially out of your league – there are sellers out there who demand an all-cash offer.

 

Are you a buyer who would be interested in seller financing? Do you have more questions about what information you would have to provide to a seller in order to secure financing? Ask us! Leave a comment or question here, and we will be happy to answer all of your seller financing questions.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com


Want Happiness In 2021? The Entrepreneurial New Year’s Resolution



2020 was a rough year, for everyone. This New Year’s holiday holds special meaning for many of us. It’s a chance to start again.

 

That’s right, it’s New Year’s resolution time.

 

 

We all do it. We come up with fabulous and complicated New Year’s resolutions and then fail miserably within the first three weeks of the new year. We all want to be thinner, in better shape, more organized.

 

If you consider them as a whole, what are all of our collective New Year’s resolutions really about? They’re about happiness. If you are thinner, then perhaps you’ll be happier. If you’re in better shape or if you’re more organized, then perhaps you’ll be happier.

 

The reason these resolutions fail is they only scratch the surface of the underlying goal you are trying to achieve. Losing 20 pounds might initially make you happy, but you still have to get up and go to the job you hate every day.

 

Happiness is less about superficial changes and is more about living with a sense of purpose. It comes when you feel fulfilled in your daily life.  How do you reach fulfillment?

 

Take control of your career and follow your passion by becoming your own boss.

 

It may seem like a daunting proposition to become your own boss, but taking the entrepreneurial plunge doesn’t mean you have to come up with a genius idea and build a business from the ground up. You can enter the world of small business ownership by simply buying a business that already exists.

 

The benefits of taking this route to business ownership are easy to see. Buying an existing business means you don’t have to contend with coming up with a concept, finding and then equipping a location, finding and training a new staff, establishing a customer base, obtaining initial licenses and permits – the list goes on and on. All of this “start-up” work has already been done, and you even have the previous owner to train you when you take over so you aren’t walking in cold.

 

If you are thinking that buying a business might be a great part of your 2021 plans, you probably have some questions:

 

How much money does it take to buy a business?

The answer is, it depends. Sure, there are multi-million dollar businesses on the market – but there are also many smaller businesses that would require a much smaller initial investment. Many business sellers also offer the option of seller financing, so you may be able to get a business that would suit your goals without having to pay all cash.

 

What kinds of businesses would be right for me?

Remember that the point of business ownership is to have control over your own destiny and to feel fulfilled in your daily life. You shouldn’t buy a business where you aren’t going to be happy – without drive and passion you will most likely run the business into the ground. You also shouldn’t buy a business you know nothing about. Giving yourself the massive hurdle of trying to learn a whole new industry on top of learning how to run your new business just means you are setting yourself up for failure.

 

Think about what your goals for business ownership are. Do you want a more flexible schedule? Do you have a particular passion that you want to turn into a career? Are you looking to make a long term commitment to a business or are you looking to grow and then sell your new business for a profit? These types of questions will help you decide what types of businesses would be right for you.

 

What’s the next step?

Contact a business broker. They can help you figure out what businesses would be right for you based on your goals for business ownership and the capital you have available.

 

Get yourself on the path to business ownership and happiness in 2021!

 

Do you have more questions about the process to buy a business? Would you like to know what businesses are currently available? Ask us! Please feel free to leave any questions or comments here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.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

5111-E Ocean Blvd
Siesta Key, FL 34242




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