Are You A Business Seller? What Are You Going To Do After The Closing Table?

Posted in Buyers Articles, Sellers Articles

Published December 4, 2023

If you own a business, we know you’ve already thought about it. The endgame. Retirement from small business ownership. Travel. New adventures.

 

Sure, we’ve all had the daydreams. If you are seriously considering selling your business, these daydreams are going to need to take on a more concrete form. Have you sincerely thought about what you are going to do when you leave the closing table?

 

 

What do business sellers do when they’ve sold their business? It varies. Some fully retire, some go back to the 9 to 5 game. Others take up volunteer efforts. The most common thread we see, however, is that someone who has owned their own business isn’t very good at sitting around.

 

If you haven’t had the chance to really consider your post-owner life, here’s what we see most business sellers do – they buy a new business.

 

Although it might seem crazy, business sellers do typically end up heading right back into entrepreneurship. Most take a bit of time off to do all those things that owning a business won’t let you do – like going on a three week vacation – but then that entrepreneurial itch starts up again.

 

If this sounds like you, then considering what kind of business you may want for your next venture is something you can do long before you sell the business you have. Maybe you are interested in a different industry, maybe you want to work in the same field but you have another location in mind.

 

Whatever your thoughts on the matter are, it is a good idea to have a conversation with your business broker about your post-sale goals. This will give you first-crack at any great businesses coming up for sale and allow you to decide how much of the proceeds you would make for the sale of your current business that could be used for the purchase of a new one.

 

If selling your current business is something in your future plans, think about your post-sale goals. Perhaps a new business would be the best plan for you!

 

Are you a business seller who is considering buying another business? Are you curious about the businesses that are currently on the market that might be an option for you? Ask us! Please leave us a question or comment here, and we will be happy to assist you on your next entrepreneurial chapter.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

No Comments »



Navigating Negotiations – Why You Should Listen To Your Broker

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

Published November 27, 2023

When you enter the business-for-sale market, you will find that some businesses are listed really, really high – priced no where near what you would be willing to pay. If you are still really interested in the business, you can put in an offer that makes sense to you.

 

If these two numbers are so different, how do buyers and sellers come to an agreement on the difference?

 

 

Negotiations and intermediaries.

 

In business transactions, the buyer and seller are the boss. A business broker has to let a seller set the price of their business, and on the other side, whatever a buyer chooses to offer the broker must present to the seller. Business brokers are known as business intermediaries because they act as a buffer between the parties in a transaction so that the transaction happen.

 

Having someone in the middle allows a buyer or seller to ensure they are getting what they want, but the nature of business transactions means both sides can do or say whatever they want – which sometimes means one side offends the other and kills the deal.

 

If you are a buyer preparing an offer, and your broker is telling you that the offer is only going to offend the seller – it would be wise to listen. You always have the ability to walk away from the deal, but you would be surprised how many buyers and sellers are able to reach a middle ground that works for everyone if both sides are able to stay amicable.

 

The moral of the story? Listen to the advice of your business broker!


Are you a buyer who wants to know how to make offers that will keep both you and a seller happy? Ask us! Leave a comment or question here, and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

No Comments »



Honesty Is The Best Policy: Why Creative Financials Are A Bad Idea

Posted in Buyers Articles, Sellers Articles

Published November 20, 2023

When you put your business up for sale, you obviously want to present the work you’ve done and your assets in the best light. What you don’t want to do is overdue it. It is incredibly important to avoid the mistake of trying to make the business look good by falsifying, leaving out, or misrepresenting your financial information. Not only can these “creative” financials be illegal, it is always incredibly unethical.

 

As a buyer, you obviously don’t want to end up with a business whose numbers are no where near what was described.

 

For both sides of the transaction, the due diligence phase will be the great equalizer. This part of the transaction is where the buyer gets to go over the books. If you are a seller who has tried to tweak your numbers, this is where your tactics will be discovered. When buyers find out that the numbers aren’t true, the deal will more than likely fall apart.

 

 

Here are some common instances of creative number tweaking that sellers should avoid and buyers should look out for:

 

Don’t try to over value any assets in the business. If you bought the kitchen hood five years ago, you are not going to be able to put today’s retail price for the new model on your asset list. Be realistic, and use the help of your business broker and your transaction accountant to put price tags on the business assets. Only use a business transaction CPA for this, as a CPA unfamiliar with the ins and outs of a business transaction will always give you values that don’t jive with the current business market.

 

Don’t undervalue any liabilities, tax debts, etc. This will cause the net worth of the business to appear much larger than it actually is. The buyer will more than likely find out, and then they will be unable to trust anything you say moving forward.

 

As a seller, the temptation might be there to make your business appear more stable or profitable than it already is, but what you need to know is even unprofitable businesses sell. If a buyer is ready, willing and able to make the necessary changes you have been unable to make, your business will be a great buy for them.

 

As a buyer, you need to be vigilant during the transaction process, especially during the due diligence phase. If something seems wrong, it probably is. The same holds true for businesses that appear too good to be true. Use the services of a business broker and a business transaction accountant to help you decide if the numbers really are what the seller claims they are.

 

The conclusion? Be honest and deal-killing issues will not arise later.

 

Are you a buyer who is suspicious of the numbers you were presented with? Are you a seller who is concerned about revealing your true numbers to buyers? Talk to us today! Please feel free to leave us a question or comment here, and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

No Comments »



Great Broker/Bad Broker: How Asking Questions Ensures The Best Help

Posted in Business Broker Why & How, Buyers Articles, Sellers Articles

Published November 13, 2023

Like any industry, there are great business brokers and there are those who shouldn’t even call themselves business brokers.

 

How do you ensure that the broker you choose to list or buy with is one of the great ones?

 

 

Ask questions.

 

What kinds of partnerships do they have with other brokers and with broker’s associations?

 

If a broker is a lone-wolf of sorts with no industry connections, they might have a tough time properly marketing your business or getting access to the listings you are interested in.

 

How many transactions have they closed in the last year?

 

If a broker has only closed one business transaction in the last year (or none at all), they are likely not the broker for you. Results will speak volumes about work ethic and knowledge of the industry.

 

Do they work in a very large office with many brokers, or do they work in a much smaller brokerage?

 

The benefits of choosing a broker that is part of a much larger firm may be the associations with other brokers that they have in-house. This might give you access to more listings and more potential buyers. Just remember to ask about a broker’s individual results. The firm they work for may have sold 50 businesses last year, but they may have only been responsible for one. On the other hand, there are some in the industry (usually those who are part of a very large office) who will tell you that using a one man shop or a small brokerage is a mistake. This is not necessarily the case. Look at results and inquire about the industry associations they have. A one man shop or a small brokerage might be your best bet because they are able to achieve success without the backing of a larger firm – a surefire testimony to how they work.

 

Are they really a business broker?

 

This might sound like a ridiculous question to ask, but it is an important one. Some involved in the real estate industry will try to help clients with buying and selling businesses while they are working on home and property listings. Selling a house and selling a business are two completely different animals. You might have a great realtor, but that doesn’t mean that they will know the first thing about a business transaction. Other types of professionals may try to broker business transactions as a side business. Business brokers are specialists and their field, so use an actual business broker for any business transaction if you want to ensure success.

 

Are past clients happy?

 

Look for a business broker with positive reviews and testimonials from former clients. Ask about whether they have repeat clients, and if they have any references. Also inquire about how they get the majority of their new business. If it comes from referrals, then you know they are good at what they do.

 

As with any major business decision, do your homework. The right choice of business broker can make your buying or selling experience a very positive one.

 

Are you a buyer or seller and want to know more about how to choose a business broker? Would you like to know more about how we help our clients through a business transaction? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

No Comments »



Is It Really Better To Buy An Existing Business?

Posted in Become a Business Owner, Buyers Articles

Published November 6, 2023

 

The first question on any entrepreneurial journey is a big one. Is it better to buy an existing/operating business or should you choose to start one instead? The short answer? Buying an existing business is typically the better path.

 

Why?

 

An existing business has a history that you can examine.

 

If you start a business from the ground up, there is no way to know what the track record will be. If you are fortunate, the record will be good. If you aren’t, you probably won’t be around long. An existing business removes a bit of this risk by having financial records that you can examine closely prior to purchasing the business. An existing business also has a proven location and comes with an already established customer base.

 

Another plus to getting a business with records? As you go through the numbers you may find new business growth ideas, unused niches or overlooked areas that could be streamlined.

 

An existing business has cash flow.

 

New businesses fail when new business owners don’t take into account the period of time, typically 12 to 18 months, between opening the doors and when the business will actually start generating a profit. Many new businesses go under because they have no cash left after getting to the grand opening – they end up running on fumes and having to shut the doors before anyone even knows the business is there.

 

An existing business is already generating income. Even if you will need to find financing for operating expenses, there is no need to guess how much money you will need and how much you will be able to pay back because you already know what cash flow the business currently generates.

 

An existing business comes with someone to show you the ropes.

 

When an existing business is sold, there is usually a training and/or consulting period written into the contract. This ensures that the new owner gets the proper training to keep the business up and running.

 

If you start your own business, you will be going it alone. Although there might be business owners who are willing to give you advice, you won’t have someone to show you exactly what works (and more importantly what doesn’t work) for those critical first few weeks of ownership.

 

It is typically easier to get financing for an existing business.

 

It is fairly common in the sale of small businesses that the owner will offer seller financing. This is great for a new entrepreneur for two reasons. First, it says a lot about a business that the current owner has enough confidence in the business model to take payments over time. By offering seller financing, they will be dependent on the continued success of the business for years to come. Second, traditional sources of financing can be very hard to come by. For a buyer who can’t pay all cash up front, seller financing allows for the purchase of a business with just a sizable down payment.

 

For all the reasons above and more, deciding to buy an existing business will likely put you in a profitable position much sooner and with less risk than creating a business from scratch.

 

Have you ever started a business and wished that you had just bought one that was already established? Do you have questions about the success rates of existing businesses once they change ownership compared with the success rates of start-ups? Ask us! Leave us a comment or question here and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

No Comments »



Buying A Business? Why You Should Observe The Seller

Posted in Become a Business Owner, Buyers Articles

Published October 30, 2023

 

When you are in the market to buy a business, you will likely see a few before you find the one you ultimately purchase. These first visits are important for a number of reasons. You will want to see the physical state of the business, what equipment and furnishings you will be inheriting and perhaps even how the business functions during normal operations.

 

One often overlooked indicator of the health of a business is the actions of the ownership.

 

Whether you are in for a surreptitious visit where no one is aware you are a buyer, or if you are in a meeting with the seller for the first time – watch their actions. The phrase “actions speak louder than words” plays heavily in the small business world.

 

Here’s an example: A restaurant owner who spends an entire dinner service at the bar drinking while the food quality lags will be able to tell you a lot about how the rest of the business probably functions.

 

An owner who is checked-out like this will likely not own a business that is as profitable as it could be. The financial state of the restaurant may not be up to par, but this kind of information is not always bad news for a buyer.

 

Simple fixes that an engaged new owner can implement, like holding staff accountable or changing food suppliers and/or the menu can get you a business for less than you might have thought with a fairly quick opportunity for growth.

 

You can find all of this out just from observing the owner.

 

On the other end of the spectrum, an owner who is punctual to all meetings with a buyer, who is meticulously organized, and whose staff snaps to attention as they enter a room likely runs a tight ship.

 

What you will inherit is a well-oiled machine that is likely in great financial shape, but you will likely have to pay a bit more than for the business in our first example.

 

In the initial stages of the business buying process – pay attention. You can get a general idea of the state of affairs just by carefully noticing the actions of ownership.

 

Are you a buyer who would like to know more about what to watch for when visiting a business? Would you like to know the kinds of questions you should be asking a seller in the first meeting? Ask us! Please feel free to leave a comment or question here and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

No Comments »



Why A Franchise Buyer Needs Their Own Business Broker

Posted in Business Broker Why & How, Buyers Articles

Published October 23, 2023

Are you interested in buying a franchise? Do you already have a franchise in mind that you would like to be a part of?

 

 

If you answered yes to either of these questions, you might think that your first step is to get in touch with the person in charge of new franchises or franchise sales. This should NOT be your first step. Your first step is to find a business broker familiar with franchise sales and hire them to help you.

 

Why? Don’t the franchises themselves have people who can help me?

 

They do, and they don’t. Some franchises do have a business intermediary or business broker of sorts, but what you need to question is where the loyalties of a broker employed by the franchise will be. They most certainly will not be with you.

 

Something else you should know. The commission paid to a business broker at the close of a business sale is paid by the seller of the business. Franchise companies without an in-house broker will essentially use the broker who is the lowest bidder. Is that the kind of person you want helping you? Buying a business is a major personal investment; you will definitely want quality instead of someone else’s bargain.

 

When you are buying a franchise, you want someone on your side who can help you through the ins and out of the process. Using an affiliate of the franchise might not be the best fit for you, so do a bit of homework beforehand and get yourself a broker who is qualified, experienced and above all there to assist YOU.

 

Are you interested in buying a franchise, but you have questions about how to begin? Would you like to know what types of franchise businesses are currently for sale in the areas you’re interested in? Ask us! Please feel free to leave us a comment or question here, and we will be happy to assist you on the road to franchise ownership.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

No Comments »



Business Buyers: Should You Put In A Backup Offer?

Posted in Buyers Articles

Published September 25, 2023

It can be very, very frustrating. You find a business you really like but discover that it is already under contract with another buyer. It can be tempting to give up and move on to the next business on your list, but there’s a savvy strategy that can significantly increase your chances of acquiring that dream business. Put in a backup offer. 

 

 

Why?

 

It secures your position in line.

 

One of the primary reasons for submitting a backup offer is to secure a position in line if the primary contract falls through. In the unpredictable world of business transactions, deals can and do fall apart for various reasons – such as financing issues or disagreements over terms. By having a backup offer in place, you position yourself as the next in line to acquire the business, giving you a valuable advantage.

 

It shows how serious you are about the business.

 

Submitting a backup offer demonstrates your genuine interest and seriousness as a buyer. Sellers often appreciate proactive buyers who are willing to invest time and effort into the deal. This can create a positive impression and potentially influence the seller to consider your offer more favorably in the event that the primary contract fails.

 

It might give you a leg up in future negotiations. 

 

In some cases, the primary contract may fall apart due to negotiation conflicts or disputes over terms. When you have a backup offer ready, it can provide leverage for renegotiating terms with the seller. Knowing that another viable offer is waiting in the wings may encourage the seller to reconsider certain terms, potentially in your favor.

 

An important note: submitting a backup offer typically does not require a financial commitment (like a deposit). You can, however, add a deposit to you backup offer in order to strengthen your position – just ask your business broker to add a fully refundable deposit clause in the event your backup offer is not needed. This means you can pursue other opportunities while keeping your backup offer as a safety net.

 

In the competitive world of business transactions deals fall apart every day. Putting in a backup offer when you really like a business that is already under contract can be a savvy move that pays off in various ways. It positions you as a serious buyer and can provide negotiation leverage. While it may not guarantee success, it significantly increases your chances of getting your hands on the business you really want if the primary deal falls through. Consider the strategic advantage of the backup offer – it just might be the key to unlocking your dream business.

 

Have you been looking at businesses and have only liked those already under contract? Would you like to know more about how to put together a backup offer? Ask us! Leave any questions or comments and we would be happy to help.

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

 

 

 

No Comments »



Balancing Love + Business: How To Buy A Business With Your Spouse

Posted in Buyers Articles

Published September 18, 2023

Buying a business comes with its own set of challenges and rewards. When you add the dynamic of doing it with your spouse, it can become an even more intricate journey. While the idea of working together and building a business as a couple can be enticing, it’s essential to consider everything that will ensure the success of both your professional and personal lives.

 

 

Here’s some thoughts to consider:

 

Before diving into a business venture together, it’s crucial to have a shared vision and clear objectives. Discuss your long-term goals, such as the type of business you want, the level of involvement you both feel comfortable with and your financial expectations. Ensure your aspirations align to avoid potential conflicts down the road.

 

Establishing well-defined roles and responsibilities is vital to prevent confusion and conflicts. Determine who will handle specific aspects of the business – such as finances, operations, marketing, etc. Clear delineation of roles helps streamline decision-making and avoids arguments.

 

Consult with legal and financial professionals to determine the most suitable structure for your business. Options include forming a partnership, LLC or corporation. Each has its own tax and legal implications, and making the right choice can help protect your personal assets outside of the business.

 

Effective communication is essential in any business partnership, but even more so when your spouse is your business partner. Foster open and honest communication channels, and establish a process for resolving conflicts or disagreements. Remember that it’s okay to have differing opinions, but finding compromise is key.

 

Talk about how you’ll pay for the business. Are you using personal savings, seeking investors or taking out loans? Ensure both partners are on the same page regarding financial contributions and expectations. Be realistic about the financial commitment required to purchase a business – such as the extra capital needed to secure a commercial lease, pay for payroll, license/permit fees and the like.

 

Maintaining a healthy work-life balance can be challenging when you’re both deeply involved in the business. Set boundaries for work hours and designate specific areas for discussing business matters. Make time for personal and family activities to prevent burnout and maintain a strong relationship outside of work.

 

It’s essential to plan for the future, including scenarios where you may decide to sell the business or if unforeseen circumstances arise. Discuss and create an exit strategy that outlines how you’ll handle a business sale, succession planning or dissolution – and most importantly ensure it’s legally documented to keep it from becoming a massive issue if your personal relationship falls apart.

 

Buying a business with your spouse can be a rewarding because it allows you to share both professional and personal aspects of your life. However, it comes with its own set of complexities and challenges. Balancing love and business is possible with the right planning, communication and commitment to your shared vision.

 

Are you considering buying a business with your spouse but hadn’t yet considered everything we’ve listed here? Do you have questions about how to set up a well-defined exit strategy? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

No Comments »



Buyer + Seller Beware: Make Sure Your Business Broker Is Really A Broker

Posted in Buyers Articles, Sellers Articles

Published September 11, 2023

Selling or buying a business is a significant decision. It requires careful consideration and expertise. Many entrepreneurs and business owners turn to business brokers to navigate this complex process. However, not all business brokers are created equal, and one critical factor to consider is whether the broker is really a broker.

 

 

What do we mean by that?

 

Many, many “brokers” aren’t business brokers at all. They’re real estate agents, attorneys – even dentists who “help” people buy and sell businesses on the side. You do not want a fly-by-night, part-time broker. You want an experienced and qualified full-time professional. Using someone who isn’t actually a business broker to help you buy or sell a business would be like going to your CPA to fix a toothache.

 

Why?

 

Part-time business brokers, as the name suggests, have other commitments outside of brokering deals. This limited availability can lead to slow response times and delayed communication. When you’re in the midst of a business transaction, time is of the essence and delays can be costly. A full-time broker is more likely to prioritize your deal and provide the attention it deserves.

 

Business transactions involve a multitude of legal, financial and operational complexities. A part-time business broker may not have the same depth of knowledge, experience or industry connections as their full-time counterparts. Selling or buying a business often requires specialized expertise, which a part-time broker may not be able to provide.

 

The business landscape is constantly evolving, and staying updated with industry trends, regulations and market conditions is crucial. Part-time brokers may struggle to keep pace with these changes due to their limited exposure to the market. A full-time broker is more likely to have their finger on the pulse of the industry, giving you a better understanding of current market dynamics.

 

One of the key benefits of working with a business broker is their network of potential buyers or sellers. A full-time broker has more time and resources to build and maintain a broad and diverse network. This extensive network can lead to more opportunities and a higher likelihood of finding the right buyer or seller for your business.

 

Successful business transactions often require substantial resources, including marketing, legal support and financial analysis. Part-time brokers may not have the resources or connections needed to provide these services adequately. In contrast, full-time brokers are more likely to have established relationships with professionals who can support the transaction process.

 

While part-time business brokers may be well-intentioned – their limitations in terms of availability, expertise and resources can pose significant risks when it comes to selling or buying a business. Work with a full-time, experienced and qualified business broker who can provide the dedication and expertise needed to achieve a successful outcome. 

 

Are you looking at buying or selling a business and didn’t know that some “business brokers” aren’t business brokers at all? Would you like to know more about how we (as full time, experienced and qualified brokers) can better assist you through the transaction process? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@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