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

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Your Value of Your Business – Is It Realistic?

 

We’ve owned businesses, so we completely understand how much of an investment small business ownership is. Whether you started from scratch or purchased the business from someone else, you had to put a huge amount of capital up to start your life as an owner. You’ve then spent the rest of your time at the helm constantly reinvesting in your business to help it thrive and grow. If you go back and add up all of that financial investment – it’s huge.

 

When the time comes to part ways with this business you’ve invested in there can be an initial urge to put out a price tag that would recoup all of that invested money. The reality is that number is probably well beyond the realm of possibility.

 

 

The harsh truth of the small business market is your business is only really worth what someone else is willing to pay for it.

 

No buyer in their right mind would give you way more than your business is currently (and realistically) worth. Instead you need to price your business based on things like cash flow, your current financial statements, your inventory – you get the idea.

 

To be a successful seller, you need to be smart about your listing price. You want your listing price to generate interest, to be competitive with other businesses like yours that are currently for sale and to be in line with what businesses in your industry have actually sold for. The number you want and the number that makes sense might be very different, but you need to be willing to compromise if you ever hope of reaching a closing table.

 

A quick note here – be wary of a business broker who will let you demand to list the business for whatever you want. A great broker will help you decide on a number that makes sense based on your numbers and the current market. A terrible broker will take your crazy-priced business listing just to get the listing, knowing full well that the business will never sell at that price. The point of listing your business is to sell it, so price it to sell.

 

If your goal is selling, you also have to be prepared for the attitudes of buyers as they relate to the value of your business and the legitimacy of your listing price. Many new buyers don’t consider the vast investment you’ve made or the cash flow the business is currently generating – they incorrectly consider businesses as just four walls and the stuff inside, an asset sale. This misguided attitude means that many initial offers from buyers might seem shockingly low. The important thing to remember when you get a low offer is that it is merely a starting point for negotiations in much the same way your listing price isn’t the bottom number you would like to get out of your business. If your number is realistic and they are a serious buyer you can more than likely reach a middle ground that will make both camps happy.  

 

The message here is to go into the process of selling your business with an open mind – and success will follow.

 

Are you thinking about selling and want to know what businesses like yours are currently selling for? Do you have questions about how the process works? Ask us! 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

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Selling Your Business? Tips For Growth Before You Sell

If you are thinking about selling your business, you should also think about maximizing the potential value of your business to buyers before the business hits the market. Many business owners who start the selling process take their foot off the gas, expecting the business to sell quickly and without much effort. If you are considering this approach, you should know that the typical time it takes to get from listing to closing is 9-12 months, an absolute eternity if you stop caring about running your business and plenty of time for you to sink what you’ve built.

 

Instead of trying to coast to the finish line, you should do everything you can to continue the growth of your business by seeking out new customers to add to your base. Increasing your customer base will add value to your business in the eyes of buyers, and will also show them that your business is a good investment because you as the current owner always have an eye on growth.

 

 

Although it can be difficult to find new customers in a small, local area and that difficulty is now compounded by a global pandemic – there are a few relatively simple things you can try to get your business noticed by both new clientele and buyers.

 

Get and Maintain an Online Presence

 

Hop on any major search engine and type in the name of your business. What pops up? If you have no online presence to speak of you should know that in our ever increasing digital world an online absence will reflect very poorly on your business. Why? Any buyer who sees you have neglected the most important avenue for customers to find you will wonder what other aspects of the business you’ve let slide.

 

It is very easy to make yourself visible online. You first need to make sure your business information is both listed and correct on all of the major search engines. Your listings on these sites should include your address, phone number, an email and a short blurb about what you do. Next, you should set up a business Facebook page and regularly post news about your products and services. Finally, ALL businesses need a website. A business without a website is the equivalent of a store without a sign out front. There are many services available to create a website on your own without any tech-savvy knowledge or you can hire a web designer to create one for you. Make sure your website includes the location of the business, the contact information, the hours of operation and the products or services you provide. Make it incredibly easy for people to find you and your customer base will grow.

 

If at all possible, you should also have on your website a way for customers to purchase your goods and services from the comfort of their home. Use an online appointment setting service so customers can schedule your services whenever they want. If you have a restaurant or other food service business, set up an online ordering platform and offer curbside takeout. If you have a retail store, set up an e-commerce platform so your customers can still shop from their couch.  If it isn’t feasible to offer everything you have in your inventory in a digital store, you an certainly take your top sellers and make them available for digital purchase and offer the option of shipping or curbside pickup. Flexible and innovative businesses are the ones that attract new customers and also have the staying power to survive the times. The digital platform is a great way for you to maximize your profits while also showing potential buyers that your business can make it through.

 

Ask For and Respond To Feedback

 

TripAdvisor, Google Reviews and Yelp are where customers look when deciding on a new business to use, so use rating sites like these to your advantage. Ask customers to rate you, and respond in a positive way to any negative reviews by addressing and then fixing that person’s concerns. Showing that you are an engaged owner will not only help your business reputation with customers, it will help with any potential buyers as well.

 

Taking these fairly easy steps to bring in new customers will both add to your bottom line and impress any potential buyers who come in the door. Don’t take your foot off the gas, especially now!

 

Are you thinking about selling your business and want to know more about growing your business with an eye on selling? Do you have questions about the business selling process? Please feel free to leave any questions or comments here and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Why Walking Away From Your Business Is A Big Mistake

Small business ownership can be tough.

 

We know because we’ve owned businesses ourselves. The long hours, the responsibility – sometimes you feel like just locking the doors. Add to that the current state of affairs. Shut downs, required social distancing and the like. It can be really tempting to just say “forget it” and walk away. 

 

 

Don’t do it! Walking away keeps you from getting a return on all of the investment of time, money and energy you’ve put into your business. Selling your business, no matter what state it’s currently in, gives you a chance at both continuing the legacy of what you’ve built by keeping it open after you’ve left – and walking away with some money in your pocket as well.

 

Yes, it takes patience – but you can see it through. It typically takes somewhere between 9 to 12 months to get a business from listing to closing – but this time frame is entirely dependent on the type of business, the buyers currently in the market, the efforts of the business brokers involved, the efforts of the seller and the characteristics of the business itself. Some businesses sell right away, others take longer than 12 months. The only way to know how long it will take to sell your business is to give selling a try.

 

It also takes flexibility and a good dose of reality. We’ve had clients walk away from decent offers – think hundreds of thousands of dollars – because the offer wasn’t for the full price of the listing or they were too burned out to go on. They locked the doors and left all of that money on the table.

 

Unbelievable, right? Walking away with something is far better than walking away with absolutely nothing. It is also far better to hang in there for a little while longer and walk away check-in-hand.

 

We’ve also known folks who refused to try to sell because they didn’t want to pay a commission to a broker. The amount of work it takes to get a business transaction successfully through to closing makes paying for a broker’s help invaluable and a completely sensible business decision. In fact, using a good broker is typically the difference between selling successfully and not selling at all.

 

Worried about how much the commission would be? Negotiating the broker’s commission rate is something you get to do before you list, so if you don’t like the number you can absolutely walk away. Before you do, however, realize that the chances of a business seller successfully getting to closing on their own is usually slim to none – and if you can’t sell on your own you will more than likely be leaving a lot of money on the table.

 

Don’t lock the doors. Call us instead.

 

Have you considered selling your business and want to know what businesses like yours have recently sold for? Would you like to know more about selling a business that is currently closed? 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

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Selling? Why A Business Broker Is An Absolute Necessity

Are you thinking about selling your business and having these thoughts? 

 

I’ve owned a business for years. I know what I’m doing, why would I need someone to help me sell it?

 

Guess what? You absolutely need someone to help you sell your business – especially now in these uncertain times. That person is a business broker and they will be pivotal to your success in the business-for-sale marketplace.

 

 

Why? 

 

You have put your blood, sweat and tears into your business to make it what it is today. When you sell your business, you want to get as much as possible for all of your hard work, and a business broker has the ability to do that for you.

 

Business owners are smart people, and they are great at what they do. Does that mean that they are qualified to sell their own business? Probably not.

 

A business owner has knowledge and expertise in their own industry, and the success of their business depends on their ability to focus on keeping the business going. A business broker has knowledge and expertise in the world of buying and selling businesses, and as a business seller you will need and appreciate this expertise throughout the selling process.

 

A business broker has the time to focus on selling your business, and the know-how to keep the whole thing confidential. This confidentiality is crucial if you don’t want to risk losing clients, vendors, and employees if the word gets out you’ve put the business up for sale. Brokers also have the ability to reach far more potential buyers than you could on your own. They belong to networks and have access to databases where they can market your business confidentially. Business brokers also know buyers who are on the lookout for specific kinds of businesses, so as soon as yours goes on the market, they will likely have people who may be interested. A business broker has a great deal of business marketing experience, and knows how to put together a marketing package that will bring the right kinds of buyers to you. They are then able to act as an intermediary between you and any potential buyers.

 

Most importantly a broker takes the pressure of the sale off your back so you can focus on doing what you need to do in order to keep the business moving in the right direction. 

 

Don’t take so much on your shoulders by trying to sell on your own. Get the right help.

 

Are you considering selling your business but still don’t think you need a broker? Would you like to know more about how a business broker helps you sell your business? 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

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Why Flexibility Is The Key To Selling Your Business

Wouldn’t we all love to put our business on the market and get a full-price, all-cash offer on day one?

 

As you can probably guess, this isn’t how business deals go in the real world. As a seller you need to be prepared for flexibility if you really want to end up at a closing table.

 

 

The first thing you need to be flexible with? Price. You may have a number in your head, a dream amount that would make all of the personal investment of time, energy and money into your business worth it in the end.

 

Unfortunately, a business is only really worth what someone is willing to pay for it – so your dream number is probably a far-fetched fantasy. When you first talk with your business broker, pricing will be a big part of the discussion. In order to have a successful sale, you need to price your business right from day one. Overpriced businesses will get overlooked by good buyers and languish on listing sites indefinitely.

 

How do you set an appropriate price?

 

The price you set needs to be based on what the current market will support, what comparable businesses have actually sold for recently and the cash flow the business currently generates. The original retail cost of your ten year old equipment, the amount of money you spent on cosmetic improvements last year, how much it cost you to buy the business 15 years ago – these things aren’t going to contribute to a realistic price. The key here is to listen to your broker about what a sell-able listing price would be.

 

The second thing you need to be flexible about is financing. The all-cash deal is extraordinarily rare, and the vast majority of small business sales involve at least a bit of seller financing. The good news is in most seller financing deals the buyer is putting up a substantial down payment, so you won’t be financing the entire purchase price. The other good news is there is no set or absolute way that a seller financed deal needs to look (like there would be with a more traditional loan from a major lending institution), so you can negotiate a creative deal that makes everyone happy.

 

By offering seller financing you will also be opening up your business listing to far more buyers than demanding a full-price all-cash offer would allow. Deals that include seller financing also show buyers that you have enough faith in the future of your business that you would be willing to depend on that future to get paid. 

 

Are you thinking about selling your business and are wondering what an appropriate listing price would be? Do you have questions about what kinds of creative seller financing deals we’ve put together in the past? Ask us! Feel free to leave any comments or questions here.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

 

 

 

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Due Diligence On Yourself – Why Sellers Need To Prep

You might think you are ready to sell your business, but very few small business owners actually are. Do you have all of your books in order? Have you made any necessary repairs?

 

Preparing a business for sale can be a lot like preparing a house for sale. You need to make it look aesthetically pleasing and fix what’s broken.

 

There is, however, one major difference. Due diligence.

 

Once you have accepted an offer from a buyer, the due diligence period begins and you will be opening up your financial records, contracts, leases – everything – for that buyer to inspect.

 

Any problems found during due diligence can lead to one of two outcomes. Either the deal is dead and the buyer walks away, or they come back to you with a lower offer to compensate for the problems they’ve found.

 

No seller wants a perfectly good deal to fall through, and you want to get the best possible price for the business you’ve worked so hard to build – so how do you avoid due diligence issues?

 

Do due diligence on yourself.

 

 

Before a buyer has a chance to peek behind the scenes and go over your books with a fine-tooth comb, you should do this yourself. By performing due diligence on yourself you will see your business through a buyer’s eyes and will be able to address any potential problems long before a buyer finds them.

 

Don’t think you have any issues that will come up in due diligence? Think again. All small businesses have a few skeletons in the closet, and they can’t be hidden. Buyers always find issues, so the best way to deal with this eventuality is to solve the problems before they are found.   

 

How do you do due diligence on yourself? Ask your business broker for guidance and perhaps employ the services of a business transaction CPA. In most cases, you as a business owner know what the problems are. Figuring out the best way to deal with those problems will be where those experts come in handy. Is this an issue you can conceivable solve? How can you solve it? Is it a better tactic to just be upfront with the issues that exist when communicating with a future buyer or try to implement changes that will resolve those issues before the due diligence step in the process? 

 

Performing the due diligence process on yourself will help you and your business to stay ahead of the game during the transaction process and will also help you get the biggest return on your business sale. Ask your business broker for help. 

 

Do you have questions about what buyers will want to see during due diligence? Would you like to know what problems we’ve seen in due diligence in the past? Ask us! Leave any questions or comments and we would be happy to assist you.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com

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Want To Sell Your Business? 3 Must-Haves

In a perfect world, every business seller would list their business and get an all cash, full price offer the next day.

 

In reality, this is rarely the case. Like, it never happens that way.

 

On average, it typically takes nine to twelve months to get a business from listed to sold.

 

As a seller, there are three very basic (but also very simple) things you can do to improve your chances of selling right out of the gate.

 

 

Offer Seller Financing 

Banks and other more traditional lending institutions have always been gun-shy about small business loans – and the 2008 recession didn’t help. There are always a lot of buyers who are looking for new business opportunities, but they typically don’t come with a lot of cash on hand. By offering to finance part of your purchase price, you will be able to attract many more buyers than you would otherwise. Worst case scenario if the new owners fail? You get to to keep the sizable down payment the buyers put up and you get the business back

 

Hire A Business Broker

You might be great at what you do, but what you do isn’t helping people buy and sell businesses. This is what business brokers do for a living. They know the business transaction process inside and out, they have access to buyers you could never find and they are experts in confidential business marketing. Going it alone won’t save you money. It will more than likely mean you either won’t be able to sell at all or will end up having to take far less for the business than if you had hired the right help.

 

List For A Realistic Price 

Your business is only worth what someone is willing to pay for it. When deciding on a listing price many sellers try to set a price that will recoup all of the money they have invested over the years or use the value of new equipment when determining what their 10 year old stuff is worth. We get that you have invested a great deal of your time, money and energy in your business. You can absolutely get a good return on that investment, but you need to be realistic. Your business price should be based on your cash flow, what your equipment and inventory are actually worth and what the market will currently allow. Making a sensible and well-informed decision about listing price is key if you ever want to see a closing table

 

If you think you are ready to sell, go into the process with an open mind. Have realistic expectations, and use the experience of your business broker to help you set realistic goals for your transaction.

 

Do you have questions about how to price your business? Would you like to know what businesses like yours are currently selling for? Ask us! 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

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The Right Advice At The Right Time: The Role Of Attorneys In Your Business Transaction

Let’s start this one off by saying we are absolutely not advocating an attorney-free business deal. A business transaction involves contracts that you will need to sign and a lot of money changing hands – so the assistance of an attorney is absolutely necessary.

 

 

Business transactions, however, are also inherently very complex and businesses themselves involve a decent amount of risk. If buying a business gave you a 100% chance of getting a fabulous return on your investment then that’s what everyone would do. Buying and running a business means a fair share of risk and plenty of hard work.

 

Before you bring your attorney into the mix (which you will definitely need to do), ask yourself this important question – what do they do for a living? They protect you from any and all risk.

 

It is impossible for your attorney to keep you from any and all risk and also give you a thumbs up on a business. It is because of this conflict between what a lawyer does for a living and what you are trying to do (buy or sell a business) that we are suggesting that you keep their advice to only the portions of your deal that they specialize in.

 

What do we mean by this?

 

Your attorney doesn’t need to be giving you advice about price. Determining what a business is worth in the current market isn’t what they do. They don’t know how to derive value from cash flow or how to price a business based on what comparable businesses have actually sold for.

 

Your attorney shouldn’t have a major role in negotiations. At the end of the day, a deal is happening between the buyer and the seller. These two parties will have a tough time coming to a consensus – even when using intermediaries like business brokers who act as buffers. Adding more voices and opinions to the mix by having attorneys intimately entwined in the negotiations might mean no deal will ever be reached. It becomes a “too many cooks in the kitchen” scenario.

 

I get why my attorney might cause problems, so what should I use them for?

 

Again, your attorney will be instrumental in putting together contracts and advising you of your risks in association with these contracts. You should absolutely listen to what they have to say in regards to these parts of a business transaction that are very much their specialty. You should listen to their advice, weigh what they have to say based on the fact that their job is to protect you from risk – and then use common sense to make up your own mind about what you should do.

 

A note here. You should also be using a business transaction attorney for this role. Your family law attorney (for example) isn’t going to understand your business contracts the way a business transaction attorney does. It would be like going to the pediatrician to get plastic surgery – it isn’t what they do. Finding and using a business transaction attorney with some experience in this very unique process will be pivotal to success.

 

Keeping a business transaction as simple as possible is the only way to successfully navigate a process that is inherently complex. Use each advisor for the role where their advice is the most appropriate and you will have a far better chance of transaction success.

 

Are you a buyer or seller who wants to have their attorney involved in everything? Do you have more questions about why this might be a problem? Ask us! Leave any comments or questions here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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All The Way To The Finish Line – Why You Need A Great Broker

 

Both parties have agreed on the purchase contract, you’re finished – right?

 

Not quite, and if you have a business broker who isn’t going to push your deal all the way to the finish line – then your deal could be in trouble. 

 

A contract does not mean the deal is done, it just means one step in the process has been completed. We have a very high closure rate once our deals get to contract – 70-80%, but most business brokers can’t get anywhere near that number.

 

Why?

 

Once the contract piece of the puzzle is done, many brokers walk away and let the deal fend for itself. They let things like licensing, SBA loan issues and follow-thru with details fall by the wayside – and when this happens a minor issue can become a major deal-breaker in no time.

 

A transaction isn’t closed until it’s closed.

 

Why would any broker let this happen? Once the contract is put together, most brokers think that their work is done, but the last few details are often the most important. Our process is different because we do an immense amount of pre-due diligence. We have all of the ducks in a row and have rooted out and dealt with many of the issues that come up at the end long before they become potential deal killers. Then, we don’t stop until the deal is done.

 

Let’s focus on just one of the often-overlooked last-minute details to give you an example of the importance of getting all those final ducks in a row:

 

If you as a buyer have no idea what the licensing requirements are for the business you are about to take over, how can you possibly have all of those requirements complete on the day you get handed the keys? Any business transaction means that at the very least all licensing must be transferred from the old owner to the new, and many of these licenses come with an inspection requirement that needs to be fulfilled before the business can serve customers. What does that mean if you don’t complete the necessary applications and inspections before the day you take over? You can’t open the doors until they are all complete, so having a broker who is on top of issues like licensing will be crucial for a successful transaction.

 

If you are a seller who offered seller financing, then it is in your best interest for the transition to the new owner to go smoothly. An incomplete licensing, permitting or inspection requirement will put the transition and the future of the business in jeopardy (meaning you won’t be able to get paid). Having a broker who is proactive on the licensing front (and all other fronts, for that matter) will mean a more successful transition to the new ownership and a far better chance for the new owner to find success right out of the gate.

 

Ask your broker how many of their deals make it to closing once the contract step has been reached. Their answer to this question will tell you all you need to know about their follow-through and whether or not you’ll be able to make it to the closing table.

 

Are you buying a business and want to know more about the process to transfer licenses? Are you selling your business and would like to know what aspects of your transaction will need to be followed all the way to the end? Please feel free to leave any questions or comments and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

 

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

5111-E Ocean Blvd
Siesta Key, FL 34242




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