be your own boss Archives - Page 6 of 21 - Infinity Business Brokers

Published April 11, 2022

When you are looking at buying a business, one aspect of any business you will need to consider is the size of the customer base. Ideally, you should look for businesses with a large number of clients spread out over many accounts where each client makes up only a small portion of the total revenue.

Why is this important?

A company that has one (or just a few) large client(s) who make(s) up a very large percentage of revenue can be problematic.

Here’s an example. A lawn service company has a handful of independent regular clients, but the majority of their business is for a large real estate firm that has a contract with them to maintain the lawns of homes that are on the market. This one client makes up 70% of their revenue. Say you purchase this business, and then three months into ownership the real estate firm is bought out by another company who already has a lawn service contract in place. In one swift move, 70% of your revenue goes up in smoke.

The way to avoid this pitfall is to look for a diverse customer base when you are screening prospective businesses. Ask yourself these questions as you consider a business:

What does the customer list look like?

How does the business acquire new customers?

What is the cost of customer acquisition?

What kind of customer retention does the business currently have?

On the other hand, what if you find a business that you really like, but the customer list isn’t very diverse? Does that mean you shouldn’t buy it? No, but it does mean that creating customer diversity needs to be priority #1 the day you take over as owner.

Only you can decide which business is ultimately right for you and for the goals you are hoping to achieve. You just need to be aware of the inherent perils that exist when you are buying a business with a very small customer base.

Are you looking at buying a business, but are curious about what a diverse customer base would look like for a particular industry? Do you have concerns about a business you are already considering? Ask us! Please feel free to leave a comment or question here, and we will be happy to help.

Michael Monnot

Buying A Business? Invest Your Time + Energy For Success

Published April 4, 2022

When you are serious about buying a business and ready to jump into the process, you aren’t going to show up one day and own a business the next. It’s going to take time. Probably more time than you thought. Most business transactions take months to get from the initial interest of a buyer all the way to a closing table, and that’s if both sides agree on most things.

Why does it take so long? Small businesses are complicated animals, and business transactions have a lot of moving parts. On the buyer’s side of the equation you will be putting together offers, going through documentation, getting your own licenses and permits sorted out, negotiating with sellers, meeting with attorneys and CPAs, talking to your business broker, touring physical locations, negotiating with your commercial landlord, having meetings and conference calls with the seller – you get the idea. It can at times feel like you have a new part-time or even a full-time job.

If you really want to buy a business you’re going to need to make the time to do the things that need to be done. You can’t come in and expect it all to be finished in a few days with very little effort on your part. You’re going to have to spend evenings researching. You’re going to have to be patient with the negotiation process. You’re going to have to be willing to put in the work to provide the information about yourself that’s requested. You’re going to have to get your license and permit applications done. You’re going to have to make lots of phone calls and have lots of meetings. It can feel like a long list – but it’s not impossible.

If you’re worried about the amount of time and effort you’re going to have to put into buying a business, don’t. Small business ownership is a life encompassing affair – so if you aren’t willing to put in the effort and energy it’s going to take to get through the business buying process you probably shouldn’t be buying a business in the first place. Remember that all the work that you do before you sign at the closing table is work you are doing to help yourself. All of the time and effort you spend up front will be instrumental for setting you up for success in your new business venture.

For example, the bureaucracy that is the licensing and permitting process for small businesses can be complicated and slow. If you drag your feet on licensing and permitting requirements, putting everything off until your closing date is looming, you’re going to be scrambling when the business keys get handed to you and you’re not properly squared away in terms of license requirements. In many cases if you haven’t worked out your licensing requirements you won’t be able to open the business until you get it straightened out. If you stay on top of what needs to be done you won’t cause yourself any issues when it’s your turn to take the reins.

The message here is you need to be prepared to spend some time and exert some effort if you want to become a business owner – but all the work you do will pay off once you get handed the keys.

Have you always wanted to buy your own business but are worried about what’s required for the transaction process? Would you like to know what businesses are currently available that would meet your goals for business ownership? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot

Planning Your Trip: 3 Tips For Relocating Business Buyers

Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Published March 28, 2022

Maybe it was the lockdowns of the pandemic. Maybe it’s just that you’re burned out. Whatever the reason, you’ve been daydreaming about moving somewhere else and buying a business. Guess what? There’s no better time than now to make the leap.

Want some tips on how to start? Here’s 3:

Do lots of research:

This one might sound obvious, but most people would be shocked at how little research most buyers do before taking a huge leap like this. Take a deep dive into the locations that interest you. If it’s somewhere you’ve only ever visited on vacation, research what it’s like to live there year-round. Is it a seasonal economy that you’ll need to account for when choosing the type of business to buy? Can you afford to buy or rent a home close enough to your business to make your commute make sense? If you have kids – what are the schools like and where do you need to live in order to get your kids into a school where they’ll be successful? What are the property taxes like? Are crazy weather events like hurricanes something you need to think about? The point here is you need to have a good handle on where you both want to and realistically can be long before you start a serious search for businesses to buy.

Find the right help:

If you’re serious about buying a business in a new area, a local business broker is going to be an immense help. They know the area, the local small business economy, the local licensing/permitting requirements, the major players in terms of commercial property managers – the list goes on and on. Having someone with local experience as your guide will make both finding the right business and navigating the buying process much easier than going it alone or using someone who doesn’t know the area.

Have the site visits planned way before you leave for your trip:

Seeing a business you are considering is an important step, but what many buyers don’t understand is this step never comes first. Businesses are bought and sold under the protection of confidentiality (see why here), so you can’t just fly into town and waltz into whatever business you please. The steps that are required before you set foot in a physical location go like this:

You talk to a local business broker about your goals for business ownership, the industries you’re interested in and the amount of capital you have to invest. They find you business listings that would match your goals and means. If any of those listings look promising you can request more information by signing a non-disclosure agreement for each business you’re still considering. After looking over the information a conference call with the sellers is next, so you can ask questions about the business and see if it’s still a good fit. If after your calls you’d like to see the physical location this can be arranged. It usually requires seeing the business before or after hours when no staff or customers are around and will need to be coordinated between the schedules of the seller, the buyer and the brokers involved. It should be obvious that this process can’t be completed once you’ve landed on your scouting trip and have called a local broker for the very first time. You need to plan your site visits when you are doing your initial trip planning – like before you’ve even bought your plane tickets. It is a colossal waste of your own time to fly in and see businesses you haven’t already vetted, so plan your trip with that in mind.

If you’re considering a big move – now is the time. Contact a local business broker and get the process moving!

Have you always wanted to move somewhere else and own your own business? Do you have more questions about the steps of the business buying process? Ask us! Leave any questions or comments and we would be happy to help!

Michael Monnot

It’s Never The Perfect Time – Why You Should Buy That Business NOW

Published March 21, 2022

We all have the dreams. Dreams of quitting the job we hate, of striking out on our own and finally becoming our own boss.

What stops us? Taking a huge leap into the unknown can be absolutely terrifying.

No one wants to fail, and to prevent that failure we try to get our ducks in a row before we make big changes. Like waiting for a housing market peak before listing your house for sale. Like detailing your car before you sell it. We all strive for things to be perfect when we’re about to take a big step.

Here’s the thing about that push for perfection. It can hold you back.

Entrepreneurs can’t be risk averse. Buying or starting a business, operating that business, growing that business – all of these come with their fair share of risk. Guess what? If you need to be comfortable with risk you can’t also demand perfection.

Any business you look at will have a few skeletons. The news is always going to look bleak. The timing could always be better.

You can always find a reason not to do something. That’s the path of least resistance. If you don’t let go of your hope for perfection you aren’t going to be able to achieve the dreams, take the leap or change your life.

Should you disregard what’s going on in your life, disregard global catastrophes or settle for something that isn’t ideal? Of course not. The point we are trying to make is you can’t chase your dreams of business ownership if you always wait for everything to be just right.

If you really want to own your own business but aren’t sure if you’re ready or aren’t sure that the timing is right – have a conversation with an experienced and qualified business broker. They can help you decide what types of businesses would fit with your dreams and goals for business ownership and also give you guidance on the current state of the market.

Don’t wait for the perfect time to buy a business because that time will never come. Instead, have a conversation about your goals for business ownership and get started on the path to the life you’ve always wanted – today.

Have you always wanted to have your own business but aren’t sure if now is a good time? Would you like to know more about the business buying process? Ask us! Please leave any questions or comments and we would be happy to help.

Michael Monnot

Are You Set Up For Success? 2 Ways Business Buyers Can Help Themselves

Posted in Buyers Articles

Published March 14, 2022

Buying a business? Congratulations on your start in the world of entrepreneurship! It’s hard work, but the benefits of owning your own business can absolutely outweigh the challenges – as long as you’ve set yourself up for success.

How can you get yourself off to the best start as a business owner?

Choose Something You Know

One of the most common mistakes new entrepreneurs make is they buy a business they know absolutely nothing about. For instance, if you’ve spent your whole career as a pharmaceutical salesman – you definitely shouldn’t buy a bar. Why not? Although it might seem like slinging a few beers isn’t that hard – the restaurant industry (or any industry where you have zero experience) can be impossibly tough. Do you know what your food and beverage costs should be to keep you in the black? Do you know enough about what it takes to be a good bartender so you can vet and hire the right staff or fill in when needed? Would you be able to tell if your current vendors are giving you the right stock and the best price? Probably not, and these are just a few points in the restaurant industry that can mean the difference between success and bankruptcy. Choose a business in an industry where you already know the ropes. Adding a brand-new industry to the already precipitously steep learning curve of business ownership is almost always a mistake.

Don’t Change Everything Right Away

Many entrepreneurs who buy an existing business walk into their new business on day one and decide they want to focus on something physical – like changing the color of the upholstery, buying new furniture or even a full renovation so they can make the space feel like their own. This a huge mistake and a big waste of resources. Why? You bought an existing business. That business has an already existing set of customers. Your mission in the first few months is twofold. One, don’t drive away your existing customers. Two, get as many new customers as you can. One surefire way to keep from accomplishing those two goals is to focus on physical things like aesthetics. Maybe the reason your new café is so popular is the regular clientele love the existing quaint atmosphere – redecorating to your sleek modern style might run them off. Instead, focus on building that customer base and take some time to learn why your current customers are there – before you make any changes.

Get yourself on the right path by buying a business you already know and don’t make any immediate changes.

Are you thinking about buying a business in an industry where you have no experience and want to know what other industries would fit with your specific skill set? Would you like to know more about how a new business owner can get new customers in the door? Ask us! Leave questions or comments here and we would be happy to help.

Michael Monnot

Buying A Business? Why You Should Be Decisive And Make An Offer

Published February 21, 2022

You think you’re ready to buy. You’ve researched the market and found that in the industry you’re considering there is room for growth. This industry will suit you because you already have practical experience and familiarity. You’ve searched for businesses and discussed the options available for sale with your business broker, and you’ve settled on one choice that really interests you. The next step is to make an offer – but that idea seems terrifying. What if it turns out this isn’t the business for you?

It’s hard to make big decisions. You can research, ponder and then research some more – but at the end of the day the only way to move forward is to act.

Here’s the good news.

There are two types of offers that you can make, and you should consult with your business broker to determine which would work better in your unique situation. One is a Letter Of Intent (LOI) and the other is a Purchase Contract (sometimes just called an Offer). Either way you choose to proceed – you can walk away from the deal if you decide (for whatever reason) that this business isn’t for you. It’s that simple. You will also get ample time to go through the business (financial records, contracts, commercial leases and the like) during a process known as due diligence.

Once you’ve submitted your offer you will have both the time and information you need to make an educated and carefully considered decision about a business.

What happens if you don’t make an offer? Well, nothing. You don’t get a chance to really look at a business because no owner is going to allow a due diligence level investigation of their business if you don’t have ay intention of actually buying it. If you never make offers you end up in a business buyer purgatory with everyone who is just there to kick tires.

If what you really want is to own your own business, you have to start taking those next steps and being decisive. Making an offer tells everyone involved in the deal that you’re a serious buyer and deserve to be treated as such.

Do you really want to buy a business, but making an offer seems like a daunting step? Are there questions about the types of offers you’d like answered? Have you made an offer on a business that you ended up not buying and have an experience to share? Please feel free to leave any questions or comments, we would be happy to help.

Michael Monnot

Buying A Business? How To Make The Tough Decisions

Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Published February 14, 2022

There are a litany of decisions in any business transaction. Some are small. Some are huge. If you’re going to successfully navigate the process and end up at a closing table you’re going to have to be able to make these decisions – without second guessing yourself to the point where you can’t make a decision at all.

Here’s how:

Listen To Reason And Keep Your Emotions Out

Staying reasonable and rational in a highly stressful situation can be tough. It can be easy to let the stress of big decisions overwhelm you and let reason give way to panic – but here’s why you can’t. Choices made while you are in a panic-state can be knee-jerk and purely emotionally driven. The decisions you need to make during a business transaction need to be informed and rational. Go into the process of buying a business knowing the stress will be there – and get the right help. At the very least you should have your own experienced and qualified business broker who can talk you through each step in the process. You can also use their expertise and advice as you think about the decisions you have to make. If you are feeling overwhelmed about a decision or by the sheer number of decisions – talk to your business broker. They know how stressful this process can be and are an objective third party who can help you see your choices from a rational and experienced point of view.

Trust You Gut

You made the decision to start on a path to business ownership, so while the prospect of actually seeing that vison through to completion can be a bit scary at times – you know in your gut it’s the right path for you. With any monumental life change like buying a business cold feet, nerves and the like should be expected. There’s a difference, however, between decision jitters and a gut feeling that something isn’t right. If you feel like something is amiss, talk to your business broker. Any good broker is going to tell you if they think a particular business would be a mistake for you – and they also are going to agree with you if your gut (and not your nerves) are telling you to walk away.

The message here is although the process of buying a business can be stressful, you shouldn’t allow that stress to keep you from following your path to business ownership. Enlist the right help, stay rational and trust your gut.

Have you always wanted to own a business but are nervous about making that dream a reality? Do you have questions about the process required to buy a business? Would you like to know more about the role of a business broker in a transaction? Ask us! Leave us any questions or comments, we would be happy to help.

Michael Monnot

Your Social Media Persona – Why Business Buyers Need To Google Themselves

Published February 7, 2022

You’ve decided you’d like to buy a business, so you start a cursory business search. Listings are purposefully vague (see why here), so after you’ve signed the appropriate NDA you’re finally given the name and address of a potential business.

What’s the first thing you do? That’s easy. You Google it.

In the digital age, this is a natural first step. You want to know everything about this potential business – the good, the bad and the ugly. The internet will absolutely provide all three.

Have you thought about this? If you like a business and want to move forward with conference calls and meetings with the seller (the next step) – they find out who you are too.

Guess what they’re going to do? Google you.

A seller doesn’t just see their business as a building and some inventory. It’s their energy and money, their passion and time spent, it’s employees and customers they consider friends. Simply put, their business is their baby – and they aren’t likely to hand over their baby to someone they don’t feel is up to the job. They want to know that the person who takes the reins is capable, mentally stable and likely to succeed. Does the you that exists online look like that?

Does your online persona appear professional, or do you exist on the internet as someone who you would think twice about hiring as an employee?

It’s easy to get sucked in to the darker side of social media by going on long political rants, engaging in heated comment arguments, by posting funny memes, pictures and videos that even on a good day are problematic. Engaging with friends and strangers through a screen tends to remove the socially acceptable filters that you would normally have during in-person interactions.

While it might be fun to be able to do and say things you normally wouldn’t – it can be a huge problem when people who are deciding if they’d like a professional relationship with you (think business sellers, commercial landlords and the like) find the pseudo-anonymous social media you.

Here’s how to keep your online persona from derailing your chances of buying a business. Look yourself up, before anyone else does.

Throw your name into a search engine and see what comes up. Scroll through your social media feeds and have a look. Pretend you’re an employer researching a potential employee.

If the online you is less than professional, take some time and clean up your feeds. Delete posts, comments or accounts. Remove problematic profile pictures. Add back in professional accounts that show your accomplishments.

You wouldn’t show up to a job interview in dirty pajamas yelling about the news. Treat your online existence the same way.

Are you considering buying a business and haven’t considered how you look on the other side of a Google search? Do you have questions about when and how business sellers find out who you are? Would you like to know more about the process to buy a business? Ask us! Please leave any questions or comments, we would be happy to help.

Michael Monnot

Buyer Question: Why Would Someone Sell A Great Business?

Posted in Buyers Articles

Published January 31, 2022

The root of this question is a mistaken assumption that any business that someone is willing to sell is obviously a business on the brink of failure. People hear a business is for sale and they immediately conjure images of giant, yellow liquidation signs and lost jobs.

The truth is businesses large and small are bought and sold every day, and for the most part businesses on the market – especially those with the best chance of selling – aren’t just good businesses, they’re great. A business with great prospects to sell has solid numbers backed up by years of steady growth. It has a well-trained staff and a large customer base. It has established name recognition in the community and a well-implemented marketing strategy.

So why would anyone in their right mind sell a business like that?

Retirement.

No one lives forever, and successful businesses are bound to outlive their founders. A seller looking to retire is probably selling in order to fund their retirement plans.

Personal reasons.

Health or family issues sometimes mean that you can’t continue doing the job you are currently doing – either because you physically can’t or because your family obligations mean moving somewhere else. When a business owner has to leave town or take a protracted leave of absence, the best path is usually to sell the business.

A serial entrepreneur.

Some entrepreneurs buy a business and then build it to a pre-planned metric of some kind – be it size or profits, and then sell to move on to the next business project. Think of it like flipping a house, only they’re doing it with businesses instead.

Burn out.

Doing the same thing for extended periods of time can cause some business owners to burn out a bit, not on the idea of entrepreneurship but of the specific business they currently own. These sellers are looking to take the profits from this sale and move to another industry. They’re a bit like serial entrepreneurs – except the initial motivation for owning the business was different.

See a trend among these categories of sellers? Not one is motivated by the desire to get off a sinking ship. They all have different motives for getting the most out of the sale of their current business – and that motivation means they are working hard to make the business as strong as possible so they can get the best return on their investment of time, money and energy.

These types of sellers and the businesses they run are good news for business buyers. You can be assured that a business you buy from someone like this is in pretty good, if not great shape.

Have you thought about buying a business but wondered why anyone would sell? Would you like to know what businesses are currently on the market in your area? Please feel free to leave questions or comments, we’d be happy to help.

Michael Monnot

The Boomer Exit: Why Now Is The Time To Buy A Business

Published January 17, 2022

It’s all over the news. A mass exodus of employees from the workforce in the last 18 months. Sure, the pandemic was largely to blame – but many of those who left or lost jobs during the pandemic haven’t returned to those same jobs now that the economy has rebounded. While some of this exodus and failure to return has been blamed on stagnant wages and working conditions there’s a portion of this exodus that can be very important of you are considering buying a business.

That portion? Baby Boomers.

Many Baby Boomer business owners had plans to close up shop, sell their businesses and retire in the pre-recession era of 2007 – but the economic collapse in 2008 meant many of those business owners had to stay in the workforce and wait for a better time to cash out.

Guess what? Now is that time. The Baby Boomer generation isn’t getting any younger, and many are well past the age they had hoped to retire. With the economy in a good place any smart business owner on the threshold of retirement isn’t going to waste the opportunity to sell while the selling is good.

What does that mean for you as a business buyer? There are going to be a lot of really great businesses hitting the market. Long-term businesses that not only survived the recession – they were strong enough to weather the pandemic as well. Businesses with good reputations and staying power. Businesses with experienced ownership and a devoted clientele. The kinds of businesses any prospective buyer hopes to find. A bonus? There will be a lot of them.

This influx of businesses to the market can change the game in your favor. The large supply of listed businesses means we’ve shifted to a buyer’s market – one where you will have more choices and a bit more negotiating power.

What should you do if you think you might want to try and buy one of these great retiring-Boomer businesses? Don’t wait. Once the Boomer businesses have all changed hands we’re likely looking at a shift to a seller’s market and fewer choices in terms of long-standing businesses out there for sale. Talk to a qualified and experienced business broker today about your goals for business ownership, the capital you have to invest and the industries you think might work for you. They can help you find great businesses to consider so you can get on the path to your entrepreneurial dreams.

Have you recently considered business ownership and want to know what businesses are currently listed on the market? Do you have questions about the benefits of buying a long-standing business instead of a brand new one? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot