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

 

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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

 

 

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You Don’t Want Us To Tell You What You Want To Hear: Choosing A Business Broker

Posted in Business Broker Why & How, Sellers Articles

Published September 28, 2023

When it comes to selling your business one of the most critical decisions you’ll make is selecting the right business broker. A trustworthy and experienced broker can be your guiding light through the complex process of selling your business.

 

One of the first things you’ll discuss with potential brokers is a listing price for your business. A caveat here: not all brokers are created equal – and it’s imperative to choose one who tells you the unvarnished truth about what your business is worth.

 

It does you no good to go with a broker who only tells you what you want to hear. 

 

Why would a broker tell you what you want to hear instead of listing your business for a realistic price? Your listing benefits them whether your business sells or not. 

 

 

A business broker who lets you list your business for whatever you want only wants your listing because the listing generates calls from potential buyers. Those potential buyers aren’t going to go for your absurdly priced business, but the broker doesn’t care because they can just offer those buyers a different listing that’s more reasonably priced. This is an important (but ugly) part of the business-for-sale market that’s important for you to understand when you’re deciding on a broker. The broker who pushes back, who is brutally honest and has the rationale to backup their thoughts is far, far better for your success than the guy who tells you yes to anything. 

 

Here’s why:

 

Many business owners understandably have a strong emotional attachment to their business. You’ve likely put in countless hours and your blood, sweat and tears. Consequently, you may overestimate the value of your business based on sentiment rather than a realistic assessment of market conditions, financials and other objective factors. This is where a blunt business broker becomes invaluable.

 

A broker who actually has your success as the primary goal will conduct a thorough and objective business valuation based on market trends, financial data and industry benchmarks. They won’t inflate the value to appease your expectations, but rather provide an accurate assessment, even if it’s less than what you had hoped for.

 

While it’s natural to want a ton of money for your business, a good broker will help you set realistic expectations. Look for someone who backs up their thoughts with real metrics and has your best interest at heart, whether you like what you hear or not.

 

Would you like to know what businesses like yours are currently selling for? Do you have questions about how we help you put together a realistic listing price for your business? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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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

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

Posted in Business Broker Why & How, Buyers Articles

Published April 24, 2023

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.

 

How?

 

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

941.518.7138
Mike@InfinityBusinessBrokers.com

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

Posted in Business Broker Why & How, Sellers Articles

Published April 6, 2023

 

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

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Does Your Broker Care About Qualified And Informed Buyers? They Should

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

Published February 6, 2023

The process of buying and selling businesses can be a bit frustrating. There are rules and procedures in place that ensure the for-sale status and proprietary information of a business on the market only ends up in the hands of the people it should. Those rules and procedures rely on vetting potential buyers and then having buyers who are qualified sign the appropriate nondisclosure agreements (NDAs).

 

 

Here’s how it typically should look. A buyer calls a business broker and has a conversation about their goals for business ownership, the capital they have ready to invest and their past experience. The broker then uses that information to put together a few listings that look like they might match. If a listing or two catches the buyer’s eye, they sign the NDA for that business in order to find out more (like the location, basic financials, etc.). If they like what they see, they will then coordinate a conference call or face to face meeting with the business seller to ask questions. After a few of these meetings/calls a site visit might be scheduled before or after hours when the staff and customers won’t be around. If a buyer is interested they can submit a purchase offer and negotiations can begin.

 

Notice something? The sale of a business is complicated, requires a lot of steps and a lot of time. If the brokers involved are doing their job the buyers who enter this complex and time consuming process are both aware of what they’re looking for and actually able to buy the business in the end.

 

Here’s what you don’t want. A broker who will send you dozens of NDAs to sign without ever speaking to you, meaning you end up wasting your time looking at businesses that would never meet your goals. A broker who will bring a parade buyers through your business for site visits that could never afford to actually buy your business. A broker who will entertain the whims of a buyer who doesn’t have the practical experience necessary to qualify for a SBA loan or that your commercial landlord would immediately reject.

 

A broker who asks the right questions keeps a deal on track and keeps from wasting everyone’s time. You want a broker who actually talks to buyers. You want to be (if you’re a buyer) and want to work with (if you’re a seller) a buyer who understands the process, knows what businesses will actually fit with their goals and has the money necessary to get a deal to closing. 

 

The message here is you need to ask any broker you work with questions and you need to keep an eye out for red flags. If you’re a buyer a broker should be asking you LOTS of questions before they send you any NDA. If you’re a seller your broker should only be bringing you buyers who are qualified and would be successful future owners of your business. 

 

Are you looking at businesses to buy and haven’t had a broker yet who asked you a single question? Are you considering selling your business and want to know what type of buyer would be a good for your business? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

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Is My Business Broker A “Good” One? What You Shouldn’t Pay For

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

Published December 12, 2022

Like any industry, there are good business brokers and there are those who should find another way to make a living. Determining if the broker you’ve chosen falls into the “good” category might seem tough, but one way you can decide is by looking at the things your broker is willing to do without you having to pay extra for that service.

 

 

Most brokers earn a commission at closing, and the amount is based on a percentage of the sale price. If you are a seller, this percentage will be negotiated at the time of listing and will be a part of the listing agreement.

 

Beware the broker who will forgo the listing agreement or who will drastically cut their commission percentage just to get your listing. A great broker will stand firm of their typical percentage because they know how much work they are putting into selling your business. A desperate broker who can’t get and keep regular business will be willing to do anything to get you to sign on the bottom line. Also beware of a broker who charges extra fees for something as basic as your marketing package or advertising costs. These basic elements necessary to sell your business come out of the commission your broker makes at the time of the sale, not before.

 

For buyers, your broker gets a chunk of the money you pay for the business, so technically you are paying them even though you don’t have an agreement. Beware the broker who forces you to pay up front for their services. This shows a lack of confidence in their ability to find you a business and get you all the way through to closing. A great broker is not going to demand a retainer, nor are they going to charge you extra for help with the things every buyer needs – like basic assistance with licensing. If you are getting billed for basic services, then you probably need a different broker.

 

The key here is to watch for those brokers who put the amount of money they make in front of the reason they do what they do for a living. A great broker likes their job. They like helping the small business community grow, and they live for the chase and the thrill of negotiations. They don’t live to nickel and dime their clients. They get the vast majority of their listings through the referrals by former clients and members of their local small business community. They go to bat for their clients and are willing to help.

 

If the things we’ve named for a great broker don’t sound anything like the broker you are currently working with – it might be time for a change. When you initially interview brokers – ask about their referral rate, what kinds of fees they charge (there shouldn’t be any besides the commission) and what kind of percentage they take for commissions. The answers to these questions will speak volumes about the motivations of your broker and give you a good idea of where they fall on the great vs. not-so-great broker divide.

 

Have you had a not-so-great broker experience? Do you have questions about our referral rates and typical commission percentages? Ask us! Leave a comment or question, and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

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Honesty Vs. Telling You What You Want To Hear – Selling Your Business With A Broker

Posted in Sellers Articles

Published November 3, 2022

 

If you really tried to add up all the hours you’ve put in, every penny you’ve spent, all the stress you’ve endured – it would probably mean your business is worth an absolutely insane amount of money. It would be great, right?

 

In reality your business is only worth what someone is willing to pay for it, so pricing your business correctly when you list is extremely important. Price it too low and you’re leaving money on the table. Price it too high and buyers probably won’t attempt to make an offer. You need to be in that sweet spot where you’re price reflects the actual cash flow of the business but isn’t delusional.

 

How do you figure out the sweet spot for your listing price? Talk to an experienced and qualified business broker. They’ll help you consider cash flow, your equipment and inventory, upcoming contracts, debts the business holds, your commercial lease, what comparable businesses have recently sold for, etc. and guide you to a listing price that gives you your best chance for the highest return on your investment.

 

Here’s the most important point. If you’ve chosen the right broker their goal is to help you sell your business successfully. The only way that’s going to happen is if the listing price is right. If you’ve got a broker who will let you list for whatever you want – that’s a problem.

 

Letting a client list their business for whatever they want is a way for some brokers to get listings – listings they know won’t sell. Why would they do this? Any listings they have will generate calls from buyers, so when a buyer inquires about your substantially overpriced listing that broker will use the opportunity to steer your potential buyer to another of their listings they can actually sell. Your business languishes on the market indefinitely and you don’t see the benefit of the listing – the broker does.

 

How do you keep this form happening to you? Hire a broker who tells you the truth. You might not like what you hear, but a broker who actually wants to sell your business isn’t going to let you list for an astronomical price. They’re going to help you hit that sweet spot – even if it’s less than you would ideally want. A good broker bases their listing prices in reality, not with the goal of getting the listing at any cost.

 

Ask lots of questions in your initial conversations with brokers. If you’re requesting a specific listing price and they don’t agree, ask why. If they are willing to let you choose any number you want – remember in that scenario you aren’t the one who benefits.

 

Have you tried to sell your business without any luck and now think it was because you listed it for the wrong price? Do you want to know what businesses like yours have recently sold for? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

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What’s Makes A Great Business Broker? Hiring The Right Help

Posted in Buyers Articles, Sellers Articles

Published September 12, 2022

 

If you are buying or selling a business, you will want a great broker by your side, as it will be instrumental in giving you the best chance for success.

 

How do you know if a broker is good? What should a great broker do? Here are a few of the things we do for our clients that mediocre or bad brokers just don’t do:

 

A great broker should answer the phone and return emails.

We know, this sounds crazy, but we get lots of clients simply because we were the first business brokers who actually answered the phone, returned their call or answered an email.

 

A great broker should talk to their clients.

Again, this might sound ludicrous, but we come across folks all the time (especially buyers) who have never had an actual conversation with their broker. Their communication has been limited to a few emails and non-disclosure agreements sent back and forth. We think it is critically important to talk to our clients. If we can talk to you and find out what you really have in mind, then we can save you time and target a search of businesses that fit with your goals. If you are selling, your broker should make themselves available to answer any questions that you have and should also know what your goals are. The only way a broker can really know this very pertinent information is to have a conversation with their clients.

 

A great broker should not be pushy.

Everyone has had the pushy-salesman experience, and it is never positive. Your broker is there to help you buy or sell your business, but all of the decisions in that process are yours alone. Your broker should never try to force you to make decisions that you are uncomfortable with. Many brokers behave like the quintessential bad used car salesman. They don’t get paid if the deal doesn’t close, so they force the deal at the expense of their clients. We think that’s just bad business. We get many of our new clients from referrals from past clients, and that wouldn’t happen if we didn’t keep our client’s best interest at the forefront of every transaction.

 

A great broker should follow through.

If a client needs information, needs documentation, wants to schedule a meeting or call – then a broker should follow through and make sure that those things are happening in a timely fashion. Business deals don’t close themselves, so a great broker needs to stay on top of what needs to be done, and needs to keep the deal moving.

 

If you are considering buying a business or if you are ready to sell the business you currently own, look for these qualities in the broker you work with. The difference between a great broker and a bad broker can mean success or failure for your transaction.

 

Would you like to know more about what we do for our clients that sets us apart from other brokers in the industry? Ask us! Please leave us a comment or question here, and we would be happy to assist you in any way we can.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202



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