Buying Businesses: Why You Shouldn’t Sign A Million NDAs

A million NDAs? Yes, that’s a profound exaggeration. It would be nearly impossible and ridiculous to sign a million of anything. The point we’re trying to make is your approach to buying a business will greatly impact your ability to get to a closing table.




The NDA (non-disclosure agreement) is a document you sign before the name, location and any sensitive information about a business for sale can be revealed to you. It is a critical step in the business buying process, so if you’re in the market to buy a business – you’ll be signing NDAs.



What you shouldn’t do is sign a ton of them. Why? It’s an enormous waste of you time and energy.


The NDA should only be signed after you have completed a few other steps. First and foremost you need to figure out your goals for business ownership (a more flexible schedule or greater income potential, for example) and then decide how much money you have to invest in your new venture. The second step would be to have a conversation with an experienced and qualified business broker about your goals, the industries where you have interest/practical experience and your available capital. Your broker should then find you some cursory listings to review. If any of those listings look promising, then and only then would you sign the NDA for that particular listing.


If a business broker is doing their job the only people who are allowed to sign the NDA are people who would not only be a successful buyer of the business (they have enough capital) but also a successful owner of the business (they have the practical experience and passion to keep the business in the red). It serves absolutely no one to randomly send NDAs to people who can’t successfully buy and run that business. All it does is put the business at risk for disclosure of the for-sale status to the wrong person (read why that is bad here).


There are brokers out there who will automatically send NDAs to anyone who shoots them an email, no questions asked – so as a buyer it’s possible to ask for, receive and sign a ton of NDAs. The issue is those NDAs are likely for businesses that you either would be unable to buy or wouldn’t suit the life you’d like to have – so why waste your time?


Talk to the right broker – someone who asks you questions and helps you narrow down business listings. Then sign.


Are you interested in buying a business and have questions about the NDA? Have you signed a ton of NDAs without much success and are looking to try a different approach? Talk to us! Feel free to leave any comments or questions and we would be happy to help.




Michael Monnot


Red Tape For Business Buyers: A Guide

You know how everyone always jokes about what a nightmare bureaucracy can be? If you are buying a business, prepare yourself – you are going to have your fair share of red tape. All of it will need to be completed in the correct order and to the correct level of repetition before you can operate your business.



It can be frustrating and might (at times) feel impossible, but every operating business has made it to the end of this process. Consider it an annoying right of passage. 


This is a part of the business transaction process where your business broker can be worth their weight in gold. A good broker will have someone who can help you with any and all red tape, or they will be able to help you themselves. Some business buyers choose to have their broker (or a specialized contractor) do all of the licensing, others are able to get it completed with just a few suggestions. How you handle this part of buying your business is up to you.


Want some pointers? Here’s a sample of our best advice, derived from many trips down bureaucracy lane:



Many red tape items are contingent on one agency completing or signing off before another can even begin, so start early and stay on top of it. You can’t get all of your licensing and permitting done the day of (or even the day before) closing. 


Gather All Of The Documents Before You Start:

First you will want to try to get together the list of everything your broker and the seller think you will need. Ask the seller for copies of the licenses and permits they hold, as you will need their license and permit numbers to fill out your own.


Go online and print out every application you think you might need, even if you are going to be submitting them online. A printed version will allow you to collect all of the needed numbers/addresses/names/titles/etc. so you don’t end up timed out of the online application process (they pretty much all have a time limit and then they force you to start over).


Once you have assembled your pile of seller information and printed applications keep all of it together and take it everywhere you go. Many applications require signatures from multiple government agencies or departments.


Naming And The IRS:

The very first step is the naming process, even if you are buying an existing business and keeping the business name the same. Why? Your business will technically have two names, the DBA or “Doing Business As” (also called the Fictitious Name) and the legal name which can literally be “Anything You Want, LLC”. You will need to file your DBA with the Division of Corporations in your state, and the legal name will need to be filed through your attorney or an online legal service like LegalZoom. You will also need to get a Federal Employer Identification Number (also called a FEIN or an EIN) from the IRS.


Operational Licenses:

If the seller currently holds a license needed for the operation of the business, like a liquor license, then instead of starting from scratch you will be using applications for transferring that license. A word to the wise here – don’t rely solely on the information you find online about what is required to get the licenses issued or transferred. Get someone – a real, live person on the phone. Better yet, find the local office (instead of the statewide call center), and get a local agent on the phone. The local agents are the ones who will be processing and issuing your license, so they are the ones you need to keep happy. Another caveat? Be really patient with this part of the process. You can call the same call center three different times and get three completely different answers to a single question


Local Licenses:

You will also need to get yourself a Certificate of Use and your local Business Tax Receipt or BTR (also called the Occupational License). The Certificate of Use gets issued after your building and fire inspections, your BTR after your Certificate of Use goes through. If you are buying an existing business, you may not need an inspection if the business has had one recently, but you will need to call and check. Again, get a living person on the phone to discuss the requirements and process and you will be far better off than trying to divine what you need from a cryptic government website.



Did we forget to mention that pretty much all licensing and permitting applications come with a fee? Yes, they all do. While rarely astronomical in price, the costs will be completely dependent on what applications you are filling out, what inspections you need, etc. Be ready with your credit card or checkbook when you start the process.


It Can Be Done, Really.

This is one of the parts of being your own boss that is not very fun, but with a good dose of patience and a bit of organization it will all fall into place. Most of the real, live people you will get on the phone are very helpful, and remember that your broker is always there as well.


Are you thinking about buying a business, or do you already have a business in mind and are wondering about what kinds of licenses or permits you will need? Are you having trouble finding the agencies you need to get your applications going? Ask us! Please feel free to leave us a comment or question here, and we will be happy to help you with navigating the red tape.




Michael Monnot


Stepping Into Big Shoes: How To Take Over A Beloved Owner’s Business

Buying a business comes with a unique set of challenges. You have to learn operating procedures, you have to become acquainted with clients and vendors, you have to navigate the licensing and permitting process, you have to develop relationships with your new employees – the list is long.


Sometimes the previous owner was burned out and unpleasant, and as such the employees and clients might be happy to see them go in favor of a fresh face and attitude.


What if the opposite is true? What if you are replacing a highly respected and beloved owner? How do you successfully fill those seemingly enormous shoes?



First, don’t try to emulate the previous owner. Attempting to change who you are will always come across as inauthentic. The best thing you can do is be yourself, even if you are a vastly different person than the seller. Sure, some of the seller’s success came from their personality and the way they interacted with everyone related to the business – but that doesn’t mean that you can’t also be successful. Be authentically yourself, upfront and honest with with those around you and you will show the staff and clientele that you are someone who can be trusted.


Second, hit the ground running. Use the training period with the old owner to learn absolutely everything you can about both how the business runs and why that methodology is successful. Look for ways to grow the business from day one, but implement new growth strategies and marketing ideas while maintaining the operating procedures that have served the business well so far. If you come in motivated and willing to listen and learn (instead of rushing changes and forcing new policies right out of the gate) your staff will feel like their contributions to the business are respected and you can earn their respect in return.


Third, be nice. A truly beloved and respected boss is never an angry jerk, so although you might be very different from the previous owner – as long as you are kind to your new staff that thread of the positive owner relationship will continue. 


While it might initially seem intimidating to take over from an owner that everyone is really going to miss – if you can be yourself, be willing to learn and be nice your new business and those in it can learn to embrace you too.


Are you considering a business with a well respected owner and have questions about what the training period will be like? Would you like to know more about how you can successfully navigate the transition to new owner? Ask us! Please feel free to leave any questions or comments and we would be happy to help.




Michael Monnot


Business Sellers – Is Your Broker Protecting Your Business? They Should


If you are considering selling your business you don’t just need help, you need the right help.


You risk way more than you should by sticking a for-sale sign in the window. The powerful misconception that any business for sale is a business on the brink of failure can mean devastating consequences if your for-sale status is revealed. You entire staff can panic and quit. Clients can cancel contracts. Your competition can see a potential sale as a weakness to be exploited. It’s all bad.


How do you get the word out about selling your business without exposing yourself to the downfalls of everyone knowing it’s for sale? An experienced and qualified business broker.


A good broker acts as a shield and a buffer. They keep the for-sale status of your business a closely guarded secret while also marketing your business to potential buyers. They verify every person is who they say they are before they are allowed any access.


How? They actually talk to every potential buyer.


They get real legal names and true physical addresses – then they look people up. They ensure the proper nondisclosure agreements (NDAs) are signed and that everyone understand the rules. They make sure the people who are looking at your business can actually afford it so no one’s time is wasted. They act as a communication buffer between you and a buyer so the deal can stay on track. 


It should go without saying that keeping potentially damaging information out of the wrong hands is extremely important.


Guess what? Not all business brokers do the job the way they should.


There are brokers who essentially robo-send NDAs to anyone who shoots them an email, no questions asked. They never actually speak with buyers, never verify identities or ask about available funds to by a business. These brokers don’t care about your business. They are just using your business to generate calls and emails from any and all buyers – without caring if those buyers are someone who should know about your for-sale status or listing details. 


Avoid these brokers by asking questions – lots of questions – before you list your business. How will this broker ensure confidentiality? Do they require buyers to identify who they are before information is disclosed? Do they actually talk to every buyer before sending them the details of your business? They should. 


Are you considering selling your business and want to know what measures we use to protect the confidentiality of your business and transaction? Would you like to know more about the questions we ask potential buyers? Ask us! Please leave any questions or comments and we would be happy to help.




Michael Monnot



Upfront And Honest: How Uncomfortable Questions Help You

Answering personal questions can be tough. No one likes telling strangers where they live or how much money they have – but if you’re going to buy a business know that these uncomfortable questions are coming.


Why? They are critical to your success. 


When you first interact with a qualified and experienced business broker they will ask you questions like these, and if you really want to buy a business you need to be upfront and honest with your answers. The bright side? Giving up some information about yourself only helps your broker help you. 



Why do you need to know where I live?


Business sales happen under a veil of confidentiality. This secrecy is important for a number of reasons. There is a powerful misconception that a business for sale is a business on the brink of failure. Although the failure scenario is rarely the case, this misconception can cause catastrophic losses for a business (an entire staff can panic and quit en masse or important clients can cancel contracts). Businesses often have proprietary information or financially sensitive information that will need to be disclosed to a potential buyer during the transaction process, in addition to exposing the for-sale status of their business, so a business seller is putting a lot on the line. To be allowed access to such important information you as a buyer must sign a nondisclosure agreement (NDA). When you sign the NDA for a particular business listing you are asked for your legal name and physical home address. This information is used to verify who you are and to identify you as an individual. There might be ten Matt Smiths in a town, but only one Matt Smith lives at his unique home address. When you consider the gravity of the information that is being exchanged, what you give on the NDA is paltry in comparison with what a seller risks by giving you access to their business. 


Why do you need to know how much money I have?


We aren’t asking how much money you have in your bank account. We’re asking how much money you currently have to invest when you purchase a business. If you can’t afford a $500,000 business then it’s a colossal waste of your time (and everyone else’s) to look at $500,000 businesses. We also need to know if you are looking to pay all cash up front for a business or if you are looking for financing options. What we do with the information you provide is find businesses that you can successfully afford and/or financing options you would be able to qualify for. Your honest disclosure of the capital you are working with only helps find the right options for you. You are also going to have to prove to your future commercial landlord that you have enough funds to cover your lease expenses. If you’re going to buy a business you are going to have to get comfortable talking honestly about how much money you have available. 


The message here is although you might not want to give up information about yourself a business broker isn’t doing their job if they don’t ask these questions. Giving up potentially damaging information to the wrong person could hurt a business that would have been perfect for you. Showing you businesses you could never successfully afford is a waste of your time and energy. Be upfront, be honest and be willing to help your broker help you. 


Do you have more questions about what information is required for the NDA? Would you like to know what businesses fit with the funds you have available? Ask us! Leave any questions or comments and we would be happy to help.





Michael Monnot


Michael Monnot


5111-E Ocean Blvd
Siesta Key, FL 34242

Michael Monnot


9040 Town Center Parkway
Lakewood Ranch, FL 34202


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