You’ve made the decision to sell your business. You found a good broker who spent a lot of time talking to you about the vital nature of confidentiality in business sales, and as such you haven’t told your staff, your clients or your vendors about your plans to sell and move on to the next phase of your life. You’ve been careful not to talk about your business sale in front of your kids or your neighbors. You’ve only allowed buyers with signed NDAs access to your business. There’s a good bit of interest and everything seems to be going well.

Then one afternoon you get a panicked call from one of your staff. The word is out and your manager just quit.

Everyone knows the business is for sale and now you’re trying to keep the rest of the staff from quitting and your biggest client from walking on next year’s contract.

You call your broker, and they look through all of the NDA’s and all of the buyers who have considered your business – but the breach isn’t from them.

What happened? It was you.

You got a haircut.

Barbers, hairdressers and bartenders. What do these people have in common? You probably tell them way more than you would tell any other relative stranger. It seems harmless. They aren’t in your social circle and what you tell them seems like a private and confidential conversation. Guess what? It‘s not.

It is the very nature of their job to have these kinds of conversations with lots and lots of people. People who you didn’t know are friends with your staff. People who are the wife of your biggest client. People you may not have considered as people who could blow the confidentiality of your business sale apart.

These seemingly innocent conversations can have a huge impact on your ability to sell your business – or even your ability to keep the doors open. Confidentiality means everyone, not just those who you consider the most likely to spill the beans. To drive the point home – we’ve even seen a conversation between strangers on an airplane lead to a breach, so talking about selling your business with the guy cutting your hair down the street from said business is probably a colossally bad idea.

If you want to keep your business sale under wraps, the best idea is to keep that information to yourself and to the select few who need to know. Otherwise, a simple haircut can lead to a complete disaster.

Are you thinking about selling your business and want to know more about why confidentiality is so important? Do you have a cautionary tale to share with other sellers? Leave any questions or comments 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

No Comments »

2018 was a banner year in the business-for-sale marketplace, and as the first two quarters of the year are typically stronger than the last two – it may be helpful to use the first half of 2018 to see where 2019 might end up.

BizBuySell’s 2nd Quarter 2018 Insight Report once again showed record highs in the business marketplace, with small business transactions up 6.7% over the previously record-breaking numbers in the same quarter of 2017. The market has been steadily growing since the recovery for small businesses began in 2013, but the second quarter of 2018 marked the largest number of businesses changing hands since data collection began in 2007.

That trend continued for the rest of 2018, rounding out a record-breaking year overall. 2018 saw 10,312 businesses sold – the highest number yet. This was a 4% increase from 2017 and a very large 31% increase over 2016.

Why are so many businesses changing hands?

Baby Boomers. This large demographic group currently owns a whopping 53% of small businesses, but they are very quickly approaching retirement. Close to 60% of Baby Boomer business owners plan to sell in the next two years, so the market is primed for an influx – if not a tidal wave – of businesses for sale.

What does that mean for the market?

It means a large selection of good businesses for buyers to choose from and more competition between listings for the seller’s side of the transaction.

Median revenues in 2018, up 7.4% from 2017, showed small businesses were healthy. Also, the continued growth of the economy meant sellers were reaping the rewards of high sales prices – as the median sale price of the first two quarters of 2018 was up 4.4% over the same quarters of 2017. Numbers this strong will likely continue, if not increase, as we move further into 2019 – but those who survived the meltdown of 2008 may be worried about another bubble.

Other economic factors, like ever-changing immigration policy, tariffs, government shut-downs and trade wars could also drive the small business market – although it remains to be seen what those effects might be.

The smart move?

If you own a business and were planning on selling in the foreseeable future, now is the time. The market is booming, with active listings up 5.1%. This trend may continue to climb or we may be quickly approaching the peak. There are buyers with money and your business is in the black, so the safest bet is to sell while the selling is good. This is also true if you were considering selling so you could reinvest in a different business. The businesses on the market today are healthy, so a serial entrepreneur would be smart to take the large profit from a sale today and jump into a new opportunity now.

Want to know what the market looks like for your industry in particular? Do you have questions about when you should sell? Contact us today.

Michael Monnot

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

www.InfinityBusinessBrokers.com

No Comments »

Small businesses, in particular those in the retail sector, seem under attack. The retail giants – Amazon, Walmart and the like devour market share daily.

What’s a business owner to do?

Evolve with the times.

Sure, you have a successful business and have been doing things the same way for the last 10 or 20 years, but the world around you is shifting quickly – and smart business owners will find a way to ride the tsunami of change instead of holding their ground.

What can you do?

Become a community business.

The global economy has seen push back in recent years from a young and growing demographic of consumers who would rather buy local than from a retail giant. Your business can survive the changing market by embracing this demographic and giving them what only you can. Amazon doesn’t know what your community needs or wants, and they certainly aren’t going to open a stall at the local farmer’s market – but you can. Offer yourself as a business who is focused on building the community. Partner with other small business ventures by offering retail space to artisan products or to those manufactured locally. Join farmer’s markets, get a booth at local festivals, offer donations to local schools and charities. You will not only be forming strong local business partnerships, you will be attracting consumers because money spent with you goes right back into the community.

Embrace the digital world.

You can make the necessary changes to become a community business, but without an effort to market those changes all of your hard work will do you no good. Promote your community business with a great website, complete with some kind of online shopping experience. Let people see what you offer, check out your prices and hear your story. Highlight your local partnerships and how your dedication to the community puts your business in a unique place where shoppers can support the place where they live and work.

Use social media to promote what you offer, to tell the community about the events you’ll be attending and to share how you give back. Use a blog on your website to not only improve your search ranking with continually updated content but to talk about how your business partnerships can help the community grow. If booking appointments is a necessary part of your business, use an appointment booking app that allows potential customers to book appointments with you 24-7 from their mobile devices. Offer cashless payment options and advertise that you do. Ask your clientele to rate and review your business online. Research your options to see what technology is available and continually upgrade to make your business more efficient and user friendly. Do anything and everything you can within the digital world to tell your community about your local business.

What if you’re about ready to sell or retire, should you bother making these types of changes? Absolutely. The new generation of business buyers aren’t looking for the same type of business their parents did. They want a business that is relevant and meaningful to both the local community and the digital world at large.

Have questions about how you can turn your business into a community business to attract both customers and business buyers? Ask us now.

Michael Monnot

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

www.InfinityBusinessBrokers.com

No Comments »

Debt happens, especially in the day to day operation of a small business.

You might owe money to your vendors, you might owe your landlord – small business debt comes in many forms. Here’s the thing:

While most of the time debt is a perfectly acceptable thing to have on the books – the perception of that debt by buyers might hurt your chances of selling.

Why? New business buyers will probably be freaked out by debt. They just will. They don’t yet understand how debt is used to run a business, and they will also be looking at businesses other than yours who have no debt at all.

While it may not be possible to completely eliminate your business debt, if you are considering selling sometime soon you might want to consider paying down as much of it as possible. It will add money back into your books – money you can leverage for a higher sale price.

Another reason to pay off the debt before you try to sell? A buyer might insist you pay off the debt with the proceeds of your sale, so leaving it on the books will only decrease the amount you walk away with.

The message here is while it may leave you a bit strapped on the cash front, paying off any business debt before you list on the market will make your business more appealing to buyers and will help you negotiate for more money at the closing table.

Having to live a bit cash-strapped may also help you tighten up your budget by streamlining your spending. It can motivate you to implement your ideas for growth that bring more cash in the door – all things that will make your business stand out from others on the market.

Are you considering selling your business but have more debt on your books than you’d like? Would you like to know how a deal that involves debt might be structured? 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
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

No Comments »

It can be really, really annoying when you sit across from a business buyer who thinks they know everything.

They have the fresh-faced optimism of someone new to the world of entrepreneurship – an optimism you once had until the grinding reality of business ownership taught you what it’s really like. Owning a business is tough, and growing that business is even tougher. You’ve spent years trying and failing (and trying again) to get your business to where it is today – and now that business is under the scrutiny of someone who knows little to nothing about it.

Most buyers are going to look at your business and see things that they feel are obvious solutions – to growth, to staffing issues, to costs – but for you those “obvious solutions” are non-starters because you’ve already tried them or because the nuances of your business would make them impossible. 

Here’s the thing – buyers are probably going to ask you why you haven’t implemented their “obvious solutions“. It’s going to be very, very annoying when they do. Your job in that moment is to resist the urge to roll your eyes or groan. Don’t be short or snarky either. Blowing off a buyer’s thoughts on your business will almost certainly turn them off. It can also discourage a buyer from considering your business because your terrible reaction just told them there isn’t any room for growth. 

So I’m just supposed to sit there and listen, even if their idea is awful?

Yes. When buyers ask about why you haven’t done one thing or another, you need to respond in a positive way – like this:

Sure, we tried something similar to that, but we didn’t have much success because (fill in the blank). Maybe the timing wasn’t right or perhaps we could have implemented the idea differently. If you try a different approach maybe it will work for you?

See how much better that sounds? Your answers to questions about “obvious solutions” should contain the details of what you tried and why you felt it didn’t work at that time. You should also give buyers who ask this question examples of ideas you’ve had that you were unable to implement because of financial or time constraints that may not be an issue for a new owner. By handling their questions this way, you are showing them that as the owner of the business you were open to new ideas and had an eye on growth – even if those new ideas didn’t pan out the way you’d hoped they would.

The message here is you don’t want your grumpy, negative response to a buyer’s idea to tank your deal. Every business has room for growth, and sometimes it’s the craziest ideas that get the biggest bang for the buck. Keep your answers to questions positive – and don’t roll those eyes.

Are you getting ready to sell your business and are wondering what else buyers might ask you? Would you like to know more about how buyer meetings typically go? Ask us! Leave any questions or comments 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

No Comments »

If you own a business, you know how to sell.

You’ve been getting your products and services to clients for years. You know how to focus on the customer experience to better understand what your customer base wants. When the time comes to sell, however, many business owners think they can get to a closing table by merely supplying a recent P&L and some old tax returns. Would you buy a business with nothing more than that? Probably not.

If you are selling your business, you need to do what you’ve done all along – focus on the customer experience, only now your customer is a buyer. You need to think about what motivates a buyer to choose one business over another.

Here’s how:

Get with the times.

Buyers are typically younger and more tech-savvy than their business seller counterparts, so your business needs to speak to buyers who are looking for technology as an answer to operational needs. Make sure your business has a well-designed and properly attended website and social media presence. Upgrade your POS systems. Use digital marketing avenues to generate new clientele. Using technology to upgrade your business tells buyers you’re focused on the future. 

Be organized.

You have to have your books in order. Buyers want to see proof of the numbers you’re claiming and they want that proof now. Legible financials will always beat out a box of crumpled receipts, so streamline and keep up with your paperwork. Streamlined books speak volumes about how you handle the business as whole – an organized business owner is much more appealing than a disorganized mess. 

Fix what needs it.

You know that freezer with the broken handle you’ve been putting up with for years? Fix it. Leaving even minor, but obvious, aesthetic issues shows a lack of attention to detail – and you’d better believe that there are other businesses like yours that run a tighter ship. A buyer will obviously choose a business in better physical shape than one that isn’t – so get fixing.

Don’t procrastinate.

We know it can be overwhelming when your business is on the market, but you can’t let requests from buyers languish – otherwise those buyers will move on. You need to stay on top of buyer requests, even if you feel like they don’t need what they’ve asked for. Procrastination tells them you aren’t that serious about selling, so they’ll move on.

Buyers have a litany of choices in today’s market, so the competition for business sellers is tough. You need to put a plan in place that will help your business stand out from the crowd. By focusing on the buyer experience your business will be more appealing to buyers in the market, so start making these changes today.

Have you thought about selling your business but hadn’t considered the buyer experince? Do you have more questions about how buyers choose between businesses? Ask us! Please leave any questions or comments 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

No Comments »

You’ve completed all of the steps. You found a good business broker, prepared your last few years of tax returns and recent P&L statements. Now what? Sit back and watch the magic happen?

Well, sort of. Your business broker is going to find buyers who will initially be interested based on the preliminary documents you’ve provided – but what many business sellers fail to consider is buyers will be looking at the current owner of the business as a bellwether of their future at the helm.

That buyer sitting across the negotiating table from you is considering buying your life, so it is critically important that you get a positive message across.

What do we mean by that?

Remember that first impressions really matter. If you show up for your first meeting with a potential buyer 20 minutes late and with a disorganized stack of papers jammed in a briefcase – thought number one on their minds will be how big of a disaster the rest of the business is if this is the first impression you are willing to make. You need to act as though this was a first date, of sorts. You need to be on time because it speaks volumes about how you respect other people’s time. You need to be organized because that shows you are organized in all aspects of your business.

Remember that a bad attitude can absolutely sink a perfectly good sale. Even if you have solid numbers, you behaving like a jerk will only tell buyers that you don’t care enough about your business to put personal issues aside. A seller with a terrible attitude or a seller who acts like time spent with a buyer is a waste of their energy will be hard pressed to get to a closing table. You don’t have to like a buyer, but you do need to keep your attitude in check to show you are business-minded enough to keep personal feelings out of your professional life.

Remember that great, prompt answers to questions are important. A buyer is about to write you an enormous check that is going to completely change their life. You would have a lot of questions too. Sellers who are slow or unwilling to answer buyer questions give the appearance that they’ve got something to hide or that they just don’t care. Don’t be apathetic with questions. Instead, show the buyer that they’ve got nothing to worry about by being forthcoming with the information they need.

Selling your business is a stressful endeavor. Don’t allow that stress to get the better of you – it can hurt a buyer’s impression of you and can kill any chance of a sale. Keep in mind that you are not only selling your business – you are selling you.

Are you considering selling your business and want to know more about how to make a good impression for buyers? Do you want to know what businesses like yours have recently sold for? Please feel free to leave any questions or comments 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

No Comments »