How To Get Your Deal To Close – Managing Reality and Expectations

No matter what the economic climate looks like, there are always businesses changing hands. Buyers and sellers are always working together – but even in the most favorable of circumstances some deals are destined to die. 

 

Why?

 

The main reason that deals fall apart before they hit a closing table? Unrealistic expectations

 

Business buyers and business sellers come into the business transaction process with an idea in their head of how that transaction is going to go and what they will get out of the deal. The problem with this initial vision is they are almost always an impossible reality. Businesses and business transactions are complicated, messy and involve many moving parts and personalities. Considering your business transaction with a focus on reality will help you immensely in having a successful sale or purchase.

 

 

First and foremost, there is no possible way that you are going to get everything you want. If you are buying a good business, you are not going to get it for a rock-bottom price. If you are selling, you are not going to get 10 times what businesses like yours are actually selling for. Business deals are full of negotiation – and not just about price. You will have to negotiate things like the length of due diligence, the length of the training period, the terms for seller financing, the clauses of a new lease – the list goes on. Be realistic in the negotiation phase of your business transaction. Go in knowing that there will need to be a lot of give and take from both sides of the transaction if you are going to get a deal done.

 

Another major issue that requires a reality check? We’ve already mentioned it – personalities.

 

There are a lot of people in a business transaction. There is a seller, a buyer, a couple of business brokers, business transaction attorneys, CPAs, landlords and property managers – and each one of these people will be seeing the transaction unfold from their own unique point of view. You need to be realistic because there are going to be times during the negotiation that one or more of these personalities are going to clash. For the most part, differing opinions can be sorted out, but only if all sides stay in the negotiation. Going into your business transaction with the understanding that problems will absolutely be a part of the game will help you see the end goal instead of focusing on temporary personality clashes.

 

Keep your expectations in the realm of reality and you will have a much better chance of reaching a closing table.

 

Are you thinking about selling your business and are curious about what businesses like yours have actually sold for? Would you like more information on the process to buy a business? 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

No Comments »




Buying A Business In 2020? What The Q2 BizBuySell Report Says For You

BizBuySell’s Second Quarter Insight Report shows what a roller coaster of a year 2020 has been. There was a promising start, then March hit and the business-for-sale marketplace sort of ground to a halt. None of this is news to prospective business buyers, as many who were already looking or were engaged in negotiations when the bottom dropped out saw lending dry up and deals fall apart.

 

Guess what? There’s finally some good news.

 

The Q2 Report shows that the small business market is picking back up again.

 

 

Here’s what you need to know:

 

The market is slowly returning to normal, with 71% of the owners surveyed saying they are back to work and open after the initial shut downs.

 

Many buyers are currently seeking pandemic-proof businesses – so much so that these businesses are booming. What do we mean by pandemic-proof? All across the country consumers are adjusting to a new normal where take-out food and delivery services are in high demand, where school happens at home and the majority of shopping is done from a couch – and the businesses that have adapted their model to continue producing throughout the pandemic are now at the top of buyer’s lists. The new Insight Report shows some 60% of prospective buyers are currently looking for a pandemic-proof business. What does this means for you as a buyer? If this is the direction you want to go, you’ll need to act fast when these “essential” businesses hit the market.

 

Another section of business buyers are searching for businesses in trouble, some 28%, hoping that with a rock-bottom price and some patience they can turn the ship around. If you are a buyer looking for one of these low price deals, be careful. You shouldn’t buy a depressed or closed business just because the price is good. You should have a clear plan in mind to get the business back on it’s feet again and have metrics in place as part of your business plan that give you a definitive point to pull the plug and move on.

 

In the industries that were hit hardest by the shut downs, another opportunity for buyers revolves around the sudden glut of built-out commercial spaces that are suddenly available. With many businesses deciding to keep their doors closed despite the reopening of local economies – many down on their luck business owners are selling in order to get any return on their now permanently closed business venture. Some 58% of current business owners who are doing well are actively looking for other businesses to buy in order to expand into those now vacant (and sometimes coveted) locations.

 

The point here is although the market is nowhere near where it was at the very beginning of 2020, it is showing some signs of life again. A careful, creative and motivated buyer can make the best of the current market and find themselves a booming pandemic-proof business or one at a low, low price. Talk to your business broker about which choice would be best for your situation.

 

Do you have questions about what the Insight Report says about the current state of the business-for-sale marketplace? Would you like to know what opportunities are available in your area? Please fell free to 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

 

 

 

No Comments »




Unexpected Problems: What To Do When Your New Business Gets Sticky

You’re a brand new business owner and you’ve successfully navigated the path of purchasing a business. You took your time and really delved in during due diligence. You paid close attention during training with the seller and took copious notes. You’re pretty sure you’ve got the hang of this new business, and that you know everything about it.

 

 

Until you don’t.

 

Suddenly there’s an unforeseen problem. Something you didn’t find during due diligence. Something that happened out of the blue.

 

What can you do?

 

It depends. If a seller purposefully withheld something like a fatal flaw you will likely have some kind of recourse. If this is the case, call your business broker and discuss what options are available.

 

What if it’s not a secret fatal flaw? Then what?

 

Roll up your sleeves and get to work. Business ownership is tough stuff, and sometimes no matter what’s being thrown at you – you just have to find a way to persevere.

 

For instance, say you just bought a restaurant. Shortly after you take over the whole staff quits because they can no longer get away with things the previous owner allowed. Although a potentially rough situation, it can be solved by working some shifts yourself while you hire new staff or temporarily limiting the restaurant’s hours until you can right the ship.

 

What’s important to remember when you hit those initial and inevitable bumps in the road is no business is perfect and no business is smooth sailing. You are going to encounter problems – your success or failure as a business owner depends on what you do when faced with those problems.

 

It is also important to remember that the buck ultimately stops with you. If you aren’t willing to work with a staff who wants to get away with whatever they want – it’s not the previous owner’s fault when that staff quits en masse. It’s yours. Deal with the fallout and do what you need to do to get a new staff in place. Business buyers who sit on their hands and blame everyone but themselves are probably going to have a hard time as entrepreneurs.

 

The message here is you can research all you want and learn all you can about your new business and still end up with unexpected problems right out of the gate. Just remember that with some thought and hard work you and your new business can overcome anything.

 

Are you considering buying a business and want to know what recourse you might have if a seller hides issues? Do you want to know more about how you can find and deal with potential issues during due diligence? Ask us! Please 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

 

 

No Comments »




When To Jump: Thoughts For Business Buyers In 2020

These are interesting times, to say the least. Making the call to buy a business and jump into entrepreneurship was a difficult decision before the pandemic invaded all of our lives – now it seems like an impossible decision to make. 

 

 

Should I really buy a business right now?

 

If living through this madness has you rethinking all of your life choices and has you seriously considering making the jump – then you still can if you do so with the right planning and a good dose of flexibility. 

 

If you were seriously considering buying a business before the madness, the madness doesn’t necessarily mean you should stop. Whether entrepreneurship was the plan then or suddenly now, you should take another look at the businesses you consider and ask this question – will this business help me meet my goals for business ownership?

 

Defining your goals for business ownership will be pivotal to finding the right business for you – one where you can be successful and achieve the life you are looking for. Think about how much money you need to make to keep your life moving. Think about what you want your work week to look like. Think about how many hours you are willing to work everyday. Think about how much money you want to realistically spend right now. Think about jobs and industries where you think you would do well. 

 

These considerations will be very important, as will the ability to be flexible. You might have your heart set on a specific type of business, but buying that business will be an exercise in futility if that business meets none of the goals we discussed above. The current world we live in will also play a part in what business will meet your goals. For instance, if you are a buyer without a lot of free cash available, it’s probably not a good idea to buy a business that can be affected by shutdowns – you won’t have the cash to sustain it.

 

The message here is that business ownership is still in cards if you want it to be. There are good businesses for sale and with the right planning and forethought you can find one that will meet the goals you have for your life.

 

It probably also needs to be said that not only will you need to be flexible with your initial business choices, but also with the process. There are new protocols to keep everyone safe – so meetings will need to be planned ahead of time or take place via conference call or Zoom, masks will need to be worn for on-site visits, documents will be signed electronically instead of in person and requests may take a bit longer than they once did.

 

If you want to buy a business, you can. If you have questions – about the businesses that are currently for sale, about the changes to the business buying process, about how you can find a business that meets your goals – 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

 

 

 

 

 

No Comments »




Dream Bar Or Huge Mistake – Meeting Your Goals For Business Ownership

We all have that daydream. You sit at your desk at the accounting firm where you’ve worked, well, it feels like forever – and your mind begins to wander. In your daydream you own your own business, like a famous downtown bar. You, the charming owner – are a friend to every regular. You spend your evenings sitting in a bar stool with your name on it, casually having a beer and mulling over the receipts for the day.

 

 

Everyone has this daydream. It’s a pleasant break from the drudgery of the day. The problem with this daydream, however, is it can quickly become a nightmare if you try to make it a reality. We talk people out of this scenario all the time, and for good reason.

 

What? Aren’t you someone who sells businesses? Why would you try to talk me out of my dream bar?

 

For starters, owning your own business and owning a business in the restaurant industry are not for the faint of heart. Entrepreneurship is hard work. Successful bar owners aren’t having a beer and casually going over receipts. They are behind the scenes grinding out new marketing strategies, dealing with vendors, filling in behind the bar when it gets busy, making schedules, training new staff, tweaking the menu, fixing broken equipment – the list goes on and on.

 

Secondly, if all of your work experience is at an accounting firm and you’ve never spent a single day of your working life in the restaurant industryyou have no business buying a bar. Business ownership is tough, and that road becomes impossibly tougher when you compound the problems you will face as a new owner by adding the learning of a whole new industry to the mix. Think of all of those reality shows where they go into failing restaurants and bars and try to turn things around. In almost every episode where the business is in catastrophic free-fall, the major problem is the owners had zero restaurant experience when they took over.

 

We don’t want to talk you out of your dream, we just want you to think of it in a realistic light. What is your dream really about? It’s not really about the bar itself. It’s about the freedom to be your own boss. It’s about having a personal connection with your clients. It’s about doing something different than you are right now. Guess what? You can have all of those things without buying a bar. As a matter of fact, owning a bar would be the exact opposite of those things if you are walking into bar without experience.

 

There are a myriad of businesses for sale, and many will meet those all-important goals for business ownership while also being in industries where you have experience. Talk to us today about the types of businesses we would recommend for someone with your resume and goals. You might be pleasantly surprised what’s out there that’s just right for you.

 

If, by the way, you do have loads of restaurant and bar industry experience – by all means, buy a bar. Finding the right business instead of the wrong business is all about matching goals and experience.

 

Are you curious about what type of business would meet your goals and match your experience? Do you have more questions about the business buying process? Please feel free to leave any comments and questions, 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

No Comments »




Can I Still Buy A Florida Business In 2020? Yes! Just Plan Ahead

 

Living in southwest Florida definitely has its perks, even in the middle of a pandemic. We still have year-round summer, white sand beaches and a relaxed lifestyle.

 

Our small businesses have adapted to the new normal and the business market has many new opportunities for those who may be ready to make the jump to entrepreneurship. If this year’s events have you rethinking your life choices, now is a great time to buy a business. 

 

If you live outside of the area and are considering a move to the sunshine state as an entrepreneur, here are a few pointers you should consider before you make a trip down.

 

Buying a business is absolutely nothing like buying a house.

 

Many folks come to the business market with the mindset that the process will be very much like buying a house – but nothing could be farther from the truth. If finding a home is the goal of your trip, you might call a local real estate agent and ask them to set up a dozen or so homes to see a day or so before you jump on a plane, but if you try to do the same thing with buying a business you will be completely out of luck.

 

You must, must, must plan ahead.

 

The process to buy business has many steps, and starts with contacting a business broker. This first step should come long before you’ve even bought your plane ticket. You and the local broker should have a conversation about your goals for business ownership, your work experience, how much capital you are planning to invest and the industries that interest you. Your broker will then send you listings that fit with your goals and will ask you to review those listings and narrow down your choices. Once you have two or three listings that appeal to you, you will be asked to sign a non-disclosure agreement (NDA) for each listing. Once the NDA is signed and submitted to the listing broker, you will be sent the marketing package – complete with the name and address of the business in question. You and your broker will review each package and come up with a list of questions to ask the sellers, which you will have an opportunity to do once a conference call is set up. After the conference call, if you are still interested in the business, a tour of the physical location can be arranged but will have to be coordinated between your travel schedule, the schedule of the business (for confidentiality reasons buyers can only see a business before or after hours when no employees or customers are present), the schedule of the sellers, the schedule of the brokers involved and considering the social distancing measures that must be in place. 

 

Doesn’t sound like something that can be done or thrown together in a day, does it? That’s because it can’t.

 

It is very common for a buyer to call us on a Friday to say they are catching a plane the next day to visit some businesses over the weekend – and then they are upset when we tell them their request is impossible. If you are serious about buying a business you will need to go through the proper steps and plan visits to businesses long before you set foot on a plane. Business transactions are inherently complex and require lots of moving parts, so you need to both plan ahead and be flexible.

 

But I’m planning on writing a very big check to buy a business, why can’t you accommodate me?

 

It’s not that we are trying to be difficult; it really is that last minute requests are completely impossible – especially right now. We also don’t want to waste your time taking you to businesses that don’t fit with what you are hoping to get from business ownership. The process works, and if you follow it you will be better set up for success in your new business venture.

 

Are you considering a move to southwest Florida? Do you have more questions about the process and want to know how to get started? Would you like to know what measures we currently use to ensure safety during site visits? Ask us! Leave us 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

 

No Comments »




Is It Crazy? Help With Business Listing Prices

 

If you’re new to the business buying marketplace you will probably notice something right out of the gate as you begin your search – listing prices seem like they’re all over the map. 

 

How are you supposed to figure out if the listing price is fair?

 

While initially confusing, the listing prices of businesses can and do make sense in most cases – you just need to know how to look at the number the seller wants objectively.

 

Your best bet as a new buyer is to get some professional expertise on your side. Talk to a qualified business broker about some of the business prices you’ve seen and ask for their input. The listing price of a business can be a very nuanced thing. It’s often based on cash flow, but sometimes metrics like industry standard multiples, values of equipment and inventory, what comparable businesses have recently sold for, etc. can be part of the equation that leads to a listing price. Experienced eyes will be necessary to tease out the important details and help you decide if what a seller wants is fair – or well beyond the realm of reality. 

 

Why would someone list a business for a crazy high price? Sometimes those sellers are more interested in being told what they want to hear than they are interested in selling. Sometimes they are listing just to see if someone will make them an offer. In some cases these sellers will negotiate with buyers who come up with a fair and justifiable offer, but if they won’t – it’s probably time to move on. An extreme price can be a red flag that it will be very difficult to put a deal together. 

 

A realistic seller will be able to back up the number they’ve asked for. They will have the financial documentation that shows their request is legitimate. These sellers are willing to negotiate when presented with a fair offer, because ultimately a business is only worth what someone is willing to pay for it. This does not mean that you as a buyer should throw extreme low-ball offers to see if they stick. A small business is someone’s blood, sweat and tears. The personal attachment to all of that work means that it is relatively easy to offend a seller to the point that they will refuse to work with you. Just as you would like the listing process to be fair – you need to return the favor and offer a fair price. 

 

The message here? Enlisting some professional guidance will be essential in helping you navigate the listing prices of the businesses on the market. Once you’ve determined that a business is what you want – put together a fair and justifiable offer. 

 

Are you just starting your business search and want to know what’s out there? Click here to search for current listings! Would you like to know more about how businesses are priced? 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

No Comments »




What Can You Realistically Afford? Thoughts For Business Buyers

We all have big dreams. A bigger house. A nicer car. Lavish vacations. Your own private island. What keeps these wonderful flights of fancy in the realm of dreams is the fact that we just can’t (currently) make them happen.

 

 

Big dreams can become a big problem in the small business market. Why?

 

New buyers will often consider businesses that are completely out of their price range – like drastically so.

 

Why do many new business buyers have unrealistic expectations? It may be, in part, because of the way people buy homes.

 

When you go into a bank to get a mortgage, you might walk out with a pre-approval for $750,000. Does that mean you have $750,000 in the bank in cash? Nope. It just means the bank is willing to loan you that amount because they can take back your new house as collateral if you don’t pay them back.

 

Small business transactions don’t work that way. There are financing options if you don’t have a huge amount of cash available – but that financing is very different than what you see in the housing market. You might be able to get a loan from the Small Business Administration (SBA) or from the seller of the business via seller financing – but no matter where you get your loan you are going to have to put up a large down payment and prove that you have the capital to both get through the transaction process and sustain yourself as the new owner of the business.

 

What do we mean by that? The business buying process can be expensive. If you get a loan from the SBA, they are going to require an appraisal of the business – one you as the buyer have to pay for. There are application fees for SBA, as well as application and licensing costs associated with the licensing requirements for your new business. If your future business is in a commercial space, your new landlord is going to want first-last-security and to see your financials to assure them you can not only pay those initial costs, but be able to pay your rent going forward. You might need capital for payroll in the first few weeks or months. The list can be long and pricey.

 

This doesn’t mean you can’t fulfill your dream of buying your own business. It just means you need to be realistic with what you can afford. If you only have $50,000 to spend, you shouldn’t even look at a business that is $750,000. It can’t happen. What you can do is find an affordable business that you can grow. Smaller, more affordable businesses can be very successful – and have lots of room for that all-important growth.  

 

If you want to know what you can realistically afford, ask an experienced and qualified business broker. They can look at your current financial situation, your goals for business ownership and your previous experience – then assist you with finding the right business to buy. The right business will both meet your goals and keep you from extending yourself beyond what is currently financially possible.

 

Have you always wanted to buy a business but aren’t sure what you could afford? Would you like to know what types of businesses are currently on the market in your price range? 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

No Comments »




Get Ready For The Google: Why Buyers Need To Think About Their Online Reputation

You have the capital ready, you’ve found a business you like and you are ready to write the check. The seller finds out who you are and then suddenly the deal is dead. What happened?

 

They Googled you.

 

When you buy a small business, you are buying something that the former owner spent their blood, sweat and tears for. You are getting the employees they care about, the business reputation they built. Who you are as a person, what you bring to the table in terms of stability and the ability to cement the future of the business they care about matters. It matters more than you may have considered.

 

While you and a business seller don’t have to be best friends or even agree on most things that occur outside the realm of running the business, what your online reputation says about you absolutely has the potential to sink a deal.

 

Try this. Look yourself up. What’s out there with your name attached?

 

Most people don’t have the celebrity-esque issue of having negative news articles all over the internet. That isn’t the problem. What most people have is their social media life. Your Facebook page. Your YouTube channel. Your Twitter account. Your blog. While this realm of your social life was probably intended to be for personal use only, it will absolutely impact the way a business seller thinks about you. It might even make them decide they don’t want you to buy their business.

 

But my LinkedIn page is very professional. Isn’t that the one that matters?

 

Not really. While most people aren’t posting long political rants or inappropriate memes on their “professional” online profiles – many people do on “personal” sites. The problem? Those personal thoughts, jokes and comments can be just as easy to find as your carefully curated professional page.

 

What can you do about it? Google yourself long before a prospective business seller does. See what’s public and make it private. Find what, in retrospect, wouldn’t be considered appropriate for a professional reputation and delete it. Clean up your online presence – immediately.

 

You would do a similar purge of your online presence before applying for a new job, as it is common knowledge that employers absolutely look people up – and there are many, many stories of poorly thought out posts sinking employment opportunities. The same protocol should be in place when you buy a business because you are essentially buying yourself a job. Do the work ahead of time and curate your entire public online presence before it’s too late.

 

Have you considered your online reputation s a business buyer? Would you like to know more about what business sellers are looking for in a prospective buyer? 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

 

No Comments »




What Does The 10% Look Like? Thoughts For Business Buyers

As a business buyer, it is critically important that you stand out from the crowd. Why?

 

Up to 90% of prospective buyers who enter the business market never buy anything.

 

If you consider this statistic from the perspective of a seller or business broker it looks like this – 90% of the buyers who initially contact you will wind up a complete waste of your time.

 

If you are serious about buying a business, you need to make yourself stand out as a part of that all-important 10% of buyers. How do you do that? Think about who someone in that 10% is.

 

 

What does the 10% look like? Well, like everyone. A business buyer ins’t best described by demographic data – a business buyer is simply someone who buys a business.

 

While this statement might initially sound obvious, preconceived notions about what a business owner looks like can perhaps unconsciously hinder those who could truly be successful entrepreneurs from entering the marketplace. If you’ve always been unhappy with your professional life and have always felt like you could do better if you were the one in chargeyou probably could. Running your own business isn’t any harder than going to a job you absolutely hate. The difference is at your own business the buck stops with you. If you have the drive, grit and creativity to push your business into tomorrow you can be just as successful as the person who climbs the corporate ladder for someone else. The difference is when you get to the level of success you were looking to attain – as a business owner that success is yours.

 

Ok, so I hate my job and I want to be my own boss. How do I get myself into that 10%? It’s incredibly simple. Act like a serious buyer.

 

Serious buyers are willing to sign non-disclosure agreements without a fuss. They understand that they are receiving privileged and confidential information about someone’s business and they respect that confidentiality. Serious buyers take the information they receive and put together a fair offer that has justifiable terms. They don’t waste everyone’s time by throwing in a ridiculous low-ball. Serious buyers also know that the best way to find out what they need to know to make an informed decision is by asking great questions.

 

The message here? The world of small business ownership is diverse. Your actions are what make you an entrepreneur, so use those actions to make yourself stand out.

 

Are you a business buyer who would like to know more about the process of buying a business and standing out from the crowd? Please 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

No Comments »




Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202




Search



Recent Posts

Categories

Archives

Tags