Selling? The Questions Your Broker Should Be Asking Buyers
Published October 21, 2021


If you are ready to sell your business, then you might already know the importance of confidentiality during a business sale (if you don’t, read this now).

 

Keeping the for-sale status of your business as need-to-know-only information will be pivotal to a successful sale, and the best person to help you maintain confidentiality is an experienced and qualified business broker.

 

Notice that we said experienced and qualified. Like any industry there are brokers who know what they’re doing and those who could care less. You don’t want the latter on your team. You don’t want a broker who responds to every form or email inquiry about your business with an automatic nondisclosure agreement (NDA) – without any idea of who the person is that’s signing it. Allowing dozens and dozens of NDAs on your business opens you up to a myriad of problems.

 

 

A prospective buyer should be answering some very important questions before they’re just handed the NDA. If anyone who tries can get access to your business information, the likelihood of maintaining confidentiality (as well as the likelihood of finding the right buyer) will probably be small.

 

The initial vetting of prospective buyers is critically important, and if your broker knows what they’re doing they will be asking questions like these:

 

Do they have any practical experience with a business like yours?

You’ve worked hard to make your business what it is today, so you aren’t likely to hand the keys to someone who is destined to immediately drive your business into the ground. Potential buyers need to have some sort of practical experience, training or education in your industry so they don’t have to add learning an entirely new industry to the already steep learning curve of taking over an existing business. This is also very important if you lease your business location, as a commercial landlord is unlikely to transfer a lease to someone who would have no idea what they’re doing. It’s a safer bet for the landlord to have you stay on as the owner and keep paying the rent.

 

Do they have the financial means to actually buy your business?

The business market is full of buyers who think they can afford businesses they definitely can’t – incorrectly assuming they will be able to finance 80-90% of a sale. In most business deals where financing is involved – be it SBA loans, seller financing or a more traditional loan – a buyer will need to come to the table with a sizeable down payment. A good broker will have a very serious discussion with a prospective buyer about how much cash they actually have available to buy a business, how much financing they would actually be able to get and then only disclose to that buyer businesses they can afford.

 

Is this buyer who they say they are?

One of the ways confidentiality can be breached is by letting the wrong person sign the NDA for your business. Think a current or former employee who is looking to confirm a rumor or a competitor looking to move in on your niche. Your broker should ask you to come up with a list of people who can’t know the business is for sale, and then verify someone’s identity before handing them the NDA to sign. Good brokers ask a lot of questions, require some personally identifying information and then wait to verify that information before disclosing your business.

 

The point here is in order to reach a closing table successfully, you need to make sure you have the right help. Ask your broker what they do to vet potential buyers. Are they asking questions? Or do they disclose to anyone who asks?

 

Are you getting ready to sell your business and want to know more about why confidentiality is important? Would you like to know more about our process to vet buyers? 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
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com


Why It’s Not Worth It To “Win”
Published October 18, 2021


Business deals don’t just have a lot of moving parts, they have a lot of people. People with a lot to lose and people with a lot to gain. People who do this kind of thing for a living and are therefore unbothered by potential issues and people who’ve never bought or sold a business who think every small issue is a disaster. People who have to write very big checks and the people who are counting on those checks.

 

In any situation where you combine a lot of people and relatively high monetary stakes – drama is inevitable. There has probably never been a business transaction where everything was smooth and no one got upset.

 

 

Here’s why we bring this up. People who are going to buy a business and people who already own one are a tough bunch. You could call it type-A personality. You have to be strong, resilient, willing to make decisions and willing to take risks to be a successful entrepreneur. This personality, however, can be a bit of an issue when a business is changing hands.

 

Why? No ONE person can “win” in a business transaction.

 

The contract used for the sale of a business will end up being a very carefully crafted and heavily negotiated document. Heavily negotiated because businesses are inherently complex, and as such there are a lot of things to discuss and then decide on. How much is the buyer going to pay? Will there be financing of some sort? How will the lease be transferred? How will the licenses be transferred? What are the time frame and responsibilities for both parties during the training period? How long will the seller let the buyer have for due diligence? This list goes on and on.

 

The reality that essentially everything needs to not only be discussed but agreed upon as well means that neither side is going to get everything they want, exactly as they want it. Everyone, EVERYONE in the deal is going to have to make a few compromises if they want to get a deal done.

 

What this means for you if you’re a buyer or a seller is you can’t die on your sword every time something isn’t going your way. You can’t be petty about small things because you’re frustrated about something that has happened in the weeks or months that it takes to put a deal together. It means you can’t be petulant and difficult just because you feel like it.

 

At this point you’re probably saying “I’d never do that” – right? You might.

 

When a business changes hands, so does a lot of money. It’s a business that is someone’s blood, sweat and tears – and is getting handed to a complete stranger. The entire process can be long and incredibly stressful. It will be very hard for both sides of the table to always remain objective and not feel personally challenged during many parts of the process. You have to go into this knowing that your buttons will be pushed, your stress might get the better of you and your feelings might get hurt.

 

When that inevitably happens, don’t do this. Don’t make everyone change the time and place for a meeting last minute just because you want to be difficult on purpose. Don’t drag your feet with documentation that the other side has requested just because you think their questions are annoying. Although mildly entertaining for you in the moment, petty nonsense like this only wastes your own time and puts your own deal in jeopardy.

 

Power plays to “win” will do nothing but aggravate everyone in the deal – a deal that’s hard enough already and doesn’t need the additional drama. Go into your deal knowing that this process will be challenging, but worth it if you can remain patient.

 

Have you been in a business transaction where emotions got the better of someone and have an experience to share? Would you like to know more about the challenging parts of a business transaction? Leave any questions or comments, 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


Saving Yourself From A Nightmare – How To Get Ready For Due Diligence
Published October 14, 2021


Selling your business can be tough and time consuming. In addition to your day-to-day responsibilities as a business owner you have to be available for conference calls and meetings with brokers and potential buyers, you have to host on-site tours, you have to train the new owner and most importantly you have to provide the information and documentation a buyer requests during due diligence.

 

This last part – the documentation – can become a massive issue if you as a seller aren’t ready with what a buyer will probably ask for long before they actually ask.

 

 

Here’s why. Once you’ve accepted an offer from a buyer the due diligence period can begin (where a buyer typically gets a couple of weeks to go through your business records and decide if they want to continue with the purchase) – but it only officially begins once you’ve supplied a buyer with the information they’ve requested. Your business is essentially off the market during this time, so prolonging the time before due diligence starts by being unprepared on your end can keep your business away from the eyes of other potential buyers should this deal fall through.

 

This part of a business transaction exemplifies the saying “an ounce of preparation is worth a pound of cure” because you don’t want to be scrambling to assemble lists of expenses, months of payroll, multiple years of tax returns, copies of business licenses and permits, leases for your business location, registration information for equipment and/or vehicles, dates of purchase for equipment or inventory, leases or purchase documentation for company vehicles, client contracts, vendor contracts, lists of assets, multiple months of inventory records, employee files – all while the pressure of a due diligence timeline hangs over your head. It can be a maddening and stress-fueled nightmare if you aren’t ready.

 

The best thing you can do for your sanity, your hopes of reaching a closing table and your relationship with potential buyers is be ready.

 

Talk to your business broker about what a buyer is going to want to see – then get all of that documentation ready. Create files that can be shared, collect copies of documentation and make sure your financial records are easy to read and decipher. If your books are a mess your broker might recommend having a CPA who specializes in business transactions put your financial records together in a way that will make sense to buyers.

 

The message here is it won’t be good for you or your hopes of successfully selling your business if you’re trying to do ten years of books in three days. Get ready first.

 

Is selling your business something you’re considering in the near future? Do your business records consist of hundreds of unorganized pieces of paper currently shoved in a big box under your desk? Would you like to know more about what potential buyers are going to want to see? Feel free to 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


When Is The Perfect Time To Buy A Business?
Published October 11, 2021


When will the time be right for you to take the entrepreneurial plunge and buy a business?

 

This is obviously a very big question. It’s also a bad question.

 

This question is based on the notion that there is such a thing as perfection in life. There isn’t. There will never be a perfect business. There will never be a perfect time. Perfection implies an absence of risk – and like many things in life that are worth doing becoming a business owner comes with a healthy dose of risk. You might not succeed.

 

 

Guess what? You might not fail either.

 

Entrepreneurs buy businesses every day. Most of them work hard and achieve the goals they have for business ownership. You could too.

 

That first step – deciding now is as good a time as any – can seem like an impossible step if you cling to the idea that the perfect time will eventually come. It won’t. Instead, you have to decide that the goals you have for your life – to be your own boss, to follow your passions, to make a better life for yourself and your family – those things are worth taking a bit of a risk.

 

So how do you start? Maybe you’ve had an idea of the type of business you’d like to own for a long time, maybe you aren’t sure what kind of business would work for you. Either way the first step is to have a conversation with an experienced and qualified business broker.

 

That first conversation should be about a couple of very important things. What are your goals for business ownership? How many hours do you want to work per day or week? Where do you want your business to be located? How much money do you need your business to make? Do you have a passion for a particular industry? In what areas/industries do you have practical experience that you could draw on as a business owner? How much capital do you have to invest in your new business venture? Would you need financing and what types of financing would you be comfortable with?

 

The answers to these questions can help a good broker find businesses for you to consider. These questions can also help you figure out what you really want to get out of owning your own business. Knowing what your goals are will be instrumental in making an educated and thoroughly researched decision about which business you buy.

 

It can be scary to walk away from a steady paycheck that you get from someone else, but if you aren’t happy working for that someone else don’t wait for a perfect time that’s never going to come. Take a well-considered yet imperfect jump instead.

 

Have you always wanted to own your own business but were waiting for the perfect time? Do you have questions about what types of businesses would fit your goals? 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


Selling Your Business? Why You Should Keep Your Employees In The Dark
Published October 7, 2021


 

We get it. When you have employees, it can be hard to see them as just employees. They’re trusted colleagues who may have been working with you for a long time.

 

When it’s time to list your business for sale, it can be tempting to keep everyone in the loop. They should know that the business is potentially changing hands in the near future, right?

 

Unfortunately, no. Here’s why:

 

No one likes change. Particularly when that change could upset or derail someone’s paycheck or career plans. Employees who find out their place of employment is for sale invariably panic and a good number of them quit before a sale even happens. Think an entire kitchen staff including the head chef leaving en masse. Or an entire salon staff walking out and taking their regular clientele with them.

 

A huge staffing issue like this, at a time when prospective buyers will be scrutinizing your business and it’s sustainability will obviously kill any potential deals. It can cause massive issues for your bottom line and has tanked businesses completely before they got anywhere near a closing table.

 

Don’t do this to yourself, your business and your chances of successfully reaching a closing table. You have to keep your employees in the dark about the for-sale status of the business until after closing. 

 

What about someone pivotal to the business, like a head chef or manager? Can’t I tell them what’s happening?

 

It depends. There are some instances where a key employee can be in the loop, but for the most part you need to keep anyone who is on your payroll out of the business transaction itself. We realize that it can feel like you’re deceiving the people who trust you – but what you’re actually doing is protecting the integrity of the place where they work. Keeping the business in good standing will keep them employed, and employees who are good at their jobs have little to worry about if they continue to be good employees under new ownership. No one wants to take over a successful business and toss out the people who make that business successful.

 

Talk to your business broker about the employees you have, the roles they play and whether or not you’d like some of them to know about the sale before it happens. Your broker will be able to help you decide if it’s worth the risk to your business to let some of your staff know what’s going on. In almost all cases, the answer will likely be that it’s better if no one knows.

 

Have you considered selling your business but are concerned about the future of your employees after a sale? Do you have questions about what types of employees should be kept in the loop? Feel free to 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 Feedback Matters: Helping Your Business Broker Help You
Published October 4, 2021


 

Are you just beginning your business search? Your first step should be talking to an experienced and qualified business broker about what you are hoping to get out of business ownership.

 

What do you want your life to look like? How much money would you like to spend and how much do you need your new business to earn? Where do you want your business to be located? A good broker will take your answers to these first and basic questions and put together a list of listings for you to consider.

 

Here’s an important point in the process that some buyers miss:

 

Once you have those initial listings take a good, hard look at them and then decide not only if you like or dislike a business – but WHY.

 

Was it the location? The net/gross earning? The number of employees? By giving very specific feedback your broker can fine-tune the search, giving you better choices as the search process progresses. If you are vague with your feedback or give none at all, you will more than likely just continue getting businesses you don’t like – a counterproductive waste of time.

 

A good business broker can point you in the right direction and help you find the right listings, but they can only be effective in that capacity if you give them feedback. Lots of feedback.

 

Why can’t I just look at everything? Why do I have to keep giving feedback?

 

Giving very specific feedback on why you did or didn’t like a business will make your business search more efficient – weeding out listings that you wouldn’t have liked well before you have to take a deep dive. It also helps show your business broker that you are a serious buyer who is willing to put in the work required to get a deal done. No one wants to work with someone that isn’t going to participate – and buying a business is a complicated process best traversed by someone who is willing to do what’s needed to see it through.

 

Another note here. Negative feedback about why you disliked or hated something about a business is important, as you don’t want to end up with a business that will make you unhappy – but feedback about why you liked something is also pivotal to success. Did you really like that a particular business had X number of employees or did you love the type of area where a business was located? Don’t just give your broker the negative feedback. Telling them what you liked about businesses will be just as important as what you didn’t.

 

Are you beginning your business search and want to know more about how feedback can help streamline the listings you see? Would you like to know what businesses are currently available that would meet your goals for business ownership? 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
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

9040 Town Center Parkway
Lakewood Ranch, FL 34202



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