Keys To Business Transaction Success – Don’t Stalk Your Broker

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

Published May 6, 2019

 

We know that buying a business is a very stressful endeavor. Selling a business isn’t any easier.

 

Guess what? The person at the center of that stressful and difficult situation isn’t always in the land of sunshine and rainbows.  They’re there to keep the transaction on track. That person is a business broker. 

 

A business broker’s day is full of sending and receiving emails, conference calls, travel to and from meetings and the meetings themselves. When they aren’t in direct communication with one of their clients they are putting together listing packages, writing purchase contracts, dealing with bureaucratic licensing issues – they’re very busy people.

 

 

A business broker’s job is to act as a buffer during negotiations and get a transaction to closing. They are there to help sellers get their business ready for market and there to help buyers find a business that fits with their goals. A big part of a business broker’s job is talking to everyone involved – keeping the business transaction on track by making sure everyone is getting what they need when they need it.

 

Your transaction is, obviously, a big deal to you. It’s probably the one major thing you’ll have going on in your life. If you’ve got a good broker your deal will absolutely be a priority – but an important caveat to remember is it won’t be their only priority.

 

If you hired an experienced and qualified business broker, then you probably aren’t (and shouldn’t be) their only client. If you call, text or email your broker, you should expect a response in a timely fashion. Timely, however, does not mean instantaneous. If a broker doesn’t answer the phone during business hours, perhaps they’re in a meeting or on a phone call. An unanswered phone call doesn’t mean you should then call them an additional 30 times in a few hours. A constant barrage of requests for contact – be they calls, texts or emails – isn’t going to get a quicker response. All this lightly-stalker behavior will do is complicate the day of the broker who’s trying to help you. Call once, and if you don’t hear from your broker in a realistic amount of time send a quick text or email to follow up. That should be enough.

 

A note here. If they aren’t getting back to you at all, where you go days and days without a response – then perhaps you need a different broker.

 

You should also remember that business brokers have lives outside of work just like you do. If you call at 10 at night on a Friday or at 7 in the morning on a Sunday, you probably shouldn’t expect a broker (or anyone for that matter) to immediately return your call.

 

Calling or texting constantly doesn’t help your broker help you through your transaction, all it does is fill up their inbox and make it impossible to get back to everyone in a reasonable amount of time.

 

Calling over and over again isn’t going to get you an answer any quicker, especially if the information you need is coming from the other side of the table. Sometimes your broker‘s hands are tied if the other side of the transaction isn‘t being cooperative. Business transactions are big and messy, and can sometimes involve buyers, sellers, buyer’s brokers, seller’s brokers, buyer’s attorneys, seller’s attorneys, CPAs – the list goes on. Having to get a single information request through that string of very busy people can sometimes take a few days. If your broker says they’re on it and they’re waiting for a response, calling them 16 times a day isn’t going to get the information any faster.

 

Keeping realistic expectations in terms of response times from your broker, along with a good dose of patience for all of the parties involved, will help immensely in getting your transaction all the way to closing.

 

Are you looking at businesses to buy and want to know more about how a business broker can help you? Have you thought about selling your business but have questions about the selling process? 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

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Buying A Business? The 1st Step

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

Published April 22, 2019

 

Buying a business?  Figuring out what you want is the first step.

 

A dream about owning a bar on the beach might not be realistic if you’re looking to have your evenings free to spend with your kids.

 

What do you want your life to look like? What kind of hours do you want to work? What’s going to get you out of bed every morning? These are the kinds of questions you should be asking.

 

A lot about the buying process is deciding what your goals are and then finding businesses that fit those goals. If you don’t know what your goals are, have a talk with an experienced and qualified business broker about what you want out of business ownership.

 

Some people take the jump into entrepreneurship because they want to be their own boss, have control over their own schedule and work for themselves. While these are some of the benefits of owning your own business, they aren’t really well-defined goals. More well-defined goals might be I want to spend evenings with my family, I don’t want to have a job that requires a lot of manual labor and I want to stay within a defined budget in terms of purchase price.

 

You might be surprised that the industry and business has you had initially wanted won’t fit with your goals at all, and another business you would never have considered would better fit the life that you’re looking to have.

 

It’s important to remember that when you buy a business you are essentially buying yourself a job – so just like with a job search you need to have well-defined characteristics that you’re looking for. For instance, when you look for a job you look for jobs you would be qualified for, hours that would fit with the schedule you’d like to have and a location near where you live. You also might consider the amount of money you need to make to maintain your lifestyle. The same goes for buying a business. These are the type of well-defined goals you should come up with.

 

Another consideration? Your family. Whether you want it to be or not, having a business is a family affair. Owning your own business means the buck stops with you, so sometimes that can mean sacrificing time with your family to keep the business running – or maybe even having to bring your family members in as employees in a pinch. It’s important when you start the business buying process that everyone in your family is on the same page and are also on board with potential sacrifices because you don’t want to have issues down the line. An important note here – if you are expecting your children to work in and eventually take over the business, you need to make sure that they are ready, willing and able to go down this new career path with you.

 

If you are ready to start your business search, sit down with your family, come up with a set of goals and realistic expectations for life as a small business owner. Then talk to a business broker about these goals and they can help steer you towards a business that will fit (and make you and your family happy). 

 

Have you always wanted to own your own business but haven’t yet come up with a list of goals for business ownership? Would you like to know what types of businesses would fit with the life you’d like to have? Please ask us! 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

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Why Your Broker’s Referral Rate Is A BIG Deal

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

Published April 15, 2019

If you are looking at businesses to buy or are thinking about selling the business you own, you should really, really care about referrals.

 

Buying and selling businesses can be a tough and messy thing to do, so there are professionals out there called business brokers who help buyers and sellers reach a closing table.

 

Like any industry, there are business brokers who are fantastic and there are business brokers who are terrible at their job. How can you as a buyer or seller figure out if the broker you are considering working with is at the top of the game? Ask them a very simple question.

 

How much of your business comes from referrals?

 

 

Referrals happen when previous clients or industry professionals like accountants, real estate agents or attorneys find out that someone is looking to buy or sell a business. They refer that person to a business broker they have previously worked with or know on a professional basis.

 

No one is going to give someone the name of a business broker they hate, so if you are working with a broker who gets the bulk of their business from referrals – it can tell you as a potential client a great deal about how this person conducts themselves in a business transaction.

 

We, for instance, get a great deal of our business through the referral process. Like 80% or more. Does this mean that we’ve made every client absolutely happy? Nope. But it does mean that we work very hard to get our clients to their goal. We do more than is expected and our past clients see that – especially when the other broker in the transaction does little to nothing to help the deal along. The difference between what we do and what some other brokers don’t do is the reason people send their friends our way.

 

The same goes for the professionals we work with throughout the transaction process, like attorneys and accountants. They’ve typically worked with other brokers who make big mistakes and expect everyone else to do the work for them – and after working with us they send any potential business our way instead.  

 

If you want the best help on your journey to buy or sell a business, your best bet is to ask any broker about their referral rate. The good ones will be happy to tell you that they get a good chunk of their business from past clients and business associates. The bad ones will probably change the subject – and that’s a big red flag. 

 

Would you like to know more about what business brokers can do to help buyers and sellers in a business transaction? Do you have questions about our referral rate? Ask us! 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

 

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Buying A Business? What You Can Realistically Afford

Posted in Buyers Articles

Published April 8, 2019

Thinking about buying a business? What can you buy with the capital you have available?

 

Although there are several factors to consider when purchasing a business – like finding one in an industry where you have some practical experience or finding one in an area close to where you live – what you can afford will probably be the biggest consideration of them all.

 

When deciding what you can and can’t afford, you may need to adjust your way of thinking about the capital you have. For instance, if you have $100,000 in cash to spend, you absolutely can’t afford a $100,000 business.

 

Why not?

 

Covering the price tag alone isn’t going to be enough. You absolutely need to set aside a decent chuck of money for working capital. You need this extra capital to pay for attorney fees, for licensing and permits, for lease deposits, for first and last month’s rent, for utility deposits, for the first few weeks of payroll, for rent, for new inventory – the list goes on.

 

Wait, aren’t I buying a functioning business? Can’t I just use the money the business is making from day one? Why do I need so much working capital?

 

The short answer is you never know how much you are going to need. What if you lose an important client right out of the gate? What if you discover maintenance issues that immediately need work? What if you are taking over during a slow period of the fiscal year? You need to keep capital on hand to be able to cover the unexpected.

 

Another consideration? You will have a landlord who wants proof you can pay your rent – so not only will you have lease deposits that will need to be paid, you will likely need to prove you have the cash available for a decent amount of rent payments before you will be allowed to sign a lease. No landlord in their right mind is going to let someone sign a long-term commercial lease if they only have enough money to pay rent once in the bank. 

 

The message here is to be smart with the money you have available. Don’t overstretch your financial capacity. Doing so can put your business ownership success in jeopardy. Have an honest and open discussion with your business broker about how much money you really have available and then listen to their advice regarding what businesses you can realistically afford. By leaving yourself a working capital buffer you are far more likely to survive the bumps in the road any new business owner is sure to encounter. 

 

Would you like to know what types of businesses you could afford? Do you have questions about how much working capital you should set aside? Ask us! Leave 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

 

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Cash Flow, Your Opinion And The Listing Price – Thoughts For Business Buyers

Posted in Become a Business Owner, Buyers Articles

Published April 1, 2019

 

Listing prices can seem like they are all over the map, and to be honest, sometimes they are. Some businesses are listed for far too much – where a seller is unsuccessfully trying to recuperate every dollar they’ve ever invested. Some businesses are listed for so little it seems like they’re trying to hide some kind of massive fault. While the wide scope of prices might make all listing prices look like just an arbitrary number – for the vast majority of businesses for sale they aren’t. Sellers who are motivated to sell and who have the right help from a decent business broker will have their business listed for an appropriate price.

 

As a buyer it might initially seem difficult to determine if what you’re looking at is indeed worth what a seller says it is – especially with things like depreciation, add-backs and multiples clouding the waters. While there are many factors that can add or subtract some value from a business, the most important marker to consider is cash flow.

 

Cash flow is king because that’s what a business is.

 

It is a money-generating enterprise. The money a business makes it what gives it value. This is very different than say, a house. It is the features and aesthetics of a house that will determine it’s worth.

 

Here’s the problem. Some buyers get hung up on the aesthetics of a business, like the condition of the furniture or the color of the walls – and base their own perceived value on these physical things while completely missing the point. You need to be looking at cash flow. And you need to understand that how things currently look and the way things are currently done is what is producing that cash flow.

 

Getting hung up on aesthetics can cause other issues as well. It can make a buyer believe that a business price should be discounted based on a difference of opinion. Let’s go back to the house example.

 

If you walk into a house and you hate the design of the brand-new kitchen you can’t go to the seller of the home and say “I’m decreasing my offer by $50,000 because that’s how much it’s going to take to redo the kitchen.” That would be ridiculous, right? When you buy a house, you are buying it as-is. The same goes for businesses. If you don’t like the way a current owner is doing things or the truck they just bought for the business – you don’t get to discount the price because it isn’t something you would have chosen or isn’t a procedure you would have implemented. Again, you need to remember that the way the current owner is doing things is what is generating the cash flow that you’re buying.

 

From the outside looking in, especially with only a cursory glance, you can’t possibly understand the nuances of why a business is generating the cash flow that it does. It can be difficult to look past the aesthetics – but it is critical that you do. You need to look deeper and try to understand what it is about the way the seller does things that works.

 

It’s also a great idea to keep from insulting a seller to the point of no return by trying to get a deep discount on a business for something that is essentially a difference of opinion. Talk to your business broker about any concerns you might have, and they can help you come up with a fair offer that will (hopefully) keep the deal moving forward.

 

Are you in the market to buy a business and have more questions about the importance of cash flow? Would you like to know more about how other factors may play into business pricing? 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

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Buying A Business? 3 Ways To Spot A Good Broker

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

Published March 18, 2019

 

Buying a business is a daunting task, and just like you probably wouldn’t go to court without a lawyer or buy a house without a real estate agent – a smart business buyer needs a good business broker to help them navigate the business buying process.

 

What makes a good broker a good broker?

 

Adherence To Confidentiality

 

When you first inquire about a particular business, you shouldn’t immediately get a seemingly automatic reply with the NDA (non-disclosure agreement) to sign. If you are able to gain access to confidential business information about a business that is for sale without a broker asking you anything about yourself – that broker is not doing their job. One of the most important functions of a business broker is to keep the confidentiality of businesses that are for sale. A breach in confidentiality can be disastrous for a business, and a big part of maintaining confidentiality is determining if the buyers who are inquiring about this business are even buyers at all. You might be a competitor trying to find out if you can steal the best sales staff. You might be someone who can’t possibly afford to buy this business and therefore have no reason to gain access to confidential information. You might be an employee who is trying to find out what your owner is up to so you can warn your fellow employees about the for-sale status of the place you work.

 

The point here is that it can be a bit frustrating as a buyer when you aren’t able to get the information you need immediately. It can seem intrusive that a broker wants to have a conversation with you about your finances and your work experience – but these practices are what you want to see. This diligence where confidentiality is concerned is what separates the good brokers from the bad.

 

Availability And Timely Responses

 

A good broker is busy. They are meeting with sellers, they are assembling comprehensive marketing packages for buyers, they are taking pictures and shooting videos, they are having conversations with other buyers, they are working out commercial leases with landlords and property managers – the list goes on and on. Many new buyers get frustrated when a call (or ten calls in five minutes) goes unanswered. Understand that if your broker is good at their job they won’t always be available. You aren’t their only client – and you shouldn’t be.

 

A good broker will find the time to address your concerns, answer your questions and negotiate with the other parties on your behalf. Just realize that it might not always be an immediate response and that any delay means that your broker is doing their job. 

 

Negotiation And Tied Hands

 

Buying a business is a long and often very frustrating process. Why? There are many personalities and the inherently complicated nature of a small business to contend with. In a transaction there can be buyers, one or more sellers, the buyer’s broker, the seller’s broker, the buyer’s attorney, the seller’s attorney, the transaction attorney, one or more business accountants, the property owner, the property manager and maybe even a few key employees. If you’ve ever tried to get four people to agree on where they should go for lunch, you can guess that trying to get all of the parties involved in a business transaction to agree on a complicated purchase agreement can be a monumental task. Within that task your broker acts as a negotiator and as a buffer between all those involved. This means that when you ask for something from the other side, your broker’s hands are tied if the other side is dragging their feet or refusing to cooperate.

 

The point here is the most successful business buyers are also the most patient, and they also understand how complex their transaction can be.

 

Managing expectations is an important part of the successful purchase of a business – so find a broker who wants to have in depth conversations about your goals for business ownership, your experience and the capital you have available to invest. Look for someone who answers your calls and emails in a timely fashion. Once you have a good broker understand that there are a great many things about a business transaction that they can’t control. Be patient and realistic – it’s the best way to set yourself up for the purchase of the right business for you.

 

Do you have more questions about the business buying process? Would you like to know what information is required for the NDA and why we require that information? 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

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How A Business Seller Can Combat Bad Advice

Posted in Business Broker Why & How, Sellers Articles

Published March 11, 2019

 

If you are selling your business, it isn’t just the opinions of business buyers you need to contend with.

 

Business buyers typically come with an entourage – an entourage with very strong feelings about the sale of small businesses.

 

Who’s in this entourage?

 

There are spouses and in-laws who are very interested in how much money is going to be spent on a new business venture. There is a severely inexperienced real estate agent friend who wants the commission for helping with the purchase of the business – and as this is the friend’s first foray into business transactions they have no idea what they’re doing. There’s an uncle who’s a CPA for a school district who knows absolutely nothing about business transaction accounting – and this uncle will happily advise your buyer that your very fairly priced business should only be listed for a third of what it is. There’s a buddy from the gym who read an article about earn-outs and now thinks every small business sale should be done that way. The list can go on and on, but you get the drift.

 

This well-meaning but ill-informed entourage can play havoc in a business transaction. They can undermine negotiations and cause rewrites of contracts. They can even kill a deal. While they will always be there – there are things you can do as a seller to combat their terrible advice.

 

What can you do? Be prepared.

 

You can hire an experienced and professional business broker who will be your buffer with this entourage. They can keep inexperienced pseudo-brokers out of the deal, help you hire the right professionals to get your business ready to sell and they can use their experience to negotiate on your behalf with whatever entourage member is currently causing issues.

 

The buyer’s inexperienced CPA uncle won’t be necessary if you’ve had a CPA who is familiar with business transactions and valuations set up your books so any buyer can clearly see where the cash flow is coming from.

 

You can have your business records in order, with everything from receipts to contracts neatly organized and all of your financial data inputted to accounting software that will allow any buyer to see the day-to-day, month-to-month and yearly numbers.

 

You can also mentally prepare for this inevitable part of selling your business. If you know that ridiculous advice is inundating the buyer’s side you are less likely to be offended past the point of no return when some of that ridiculous advice starts to mess with your deal. By staying patient and staying the course you are much more likely to have a successful closing.

 

The point here is your best course of action when dealing with a buyer’s entourage is patience and preparedness.

 

Do you have more questions about how to prepare your business for sale? Would you like to know more about what a business broker can help you with? Ask us! 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

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A Fair Price Or Are They Dreaming? Small Business Listing Prices

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

Published January 28, 2019

 

As a business buyer, the number that will be at the center of your attention throughout the business transaction is the purchase price.

 

How much are you willing to pay for the business, and how does the seller arrive at their asking price?

 

These are important considerations, and as you progress through the due diligence phase, you will be deciding if you think the price is fair. What parts of a business will you need to consider when determining the price you are wiling to pay?

 

Cash Flow and Contracts

In order to determine the cash flow of the business you will need to examine financial statements, sales records, and tax returns for the last few years.

This is a great time to enlist the help of your business broker and possibly an accountant who is familiar with analyzing business transactions. Both will have the experience necessary to determine what the records really show in terms of how the business has been doing. It is impossible to gauge the health of a business by simply looking at the bottom line of tax returns – more analysis will be necessary.

You can also have your business broker determine the operating ratios of the business, as these ratios can be a good indicator to compare against industry standards.

Examine any and all contracts and agreements the business currently has. These include purchase agreements, leases, contractor agreements, and any other legal instruments.

 

Inventory

What is the inventory? The inventory includes any materials and products that are used for resale or for client services.

It is very important that you personally and a trusted and qualified representative (like your business broker) are present for and participate in any inventory examination.

You will need to know the inventory status in order to give it a proper evaluation. You should also request the inventory counts from the end of the previous fiscal year.

You may need to have the inventory appraised if you are unable to properly appraise it yourself. The inventory counts as a hard asset, so you will need to know what dollar value to assign to it.

An important point to keep in mind is the value of the inventory is something that can be negotiated. If the inventory is incompatible with your future target market, or in poor condition – these are points to be brought up during negotiations.

 

Equipment and Furnishings

These parts of the business are important in terms of value because they are considered hard assets, so you will need to know what furnishings, equipment (like kitchen appliances in a restaurant), and vehicles are part of the deal.

For any equipment you will need the name and model number for each piece, the present condition, the value when purchased, the current value, and whether the equipment was leased or bought.

You will also need to consider what kinds of changes and improvements to the building will be needed in order to suit your future business plan.  Find out what the seller invested in terms of maintenance and leasehold improvements so you will know what it will take to keep the facility in good condition.

 

 

The price of a business may change based on the economic climate or on the motivation of the seller, but in all reality the price of a business is what a buyer is willing to pay for it. Take a good look at the inventory and other hard assets, along with the cash flow and records of the business before you head to the negotiation table with a number you consider fair.

 

Do you have more questions about how you as a buyer can determine if a price is fair? Would you like to know more about the importance of cash flow? Ask us! Please feel free to leave any questions or comments and we would be happy to help.

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

No Comments »



Buying A Business? 3 Ways To Find A Great Broker

Posted in Business Broker Why & How, Buyers Articles

Published October 29, 2018

If you are considering buying a business, then you’ve probably started looking for a business broker to help you. If you haven’t, you should, as the business transaction process can be dauntingly complex and rarely makes it to a successful closing without some qualified help.

 

If you are broker shopping, you will quickly discover that there are a lot of options.

 

How do you choose the right professional to help you?

 

First, avoid any “part time” brokers. Many, many business professionals like real estate agents, attorneys, accountants – we’ve even come across doctors – “moonlight” as business brokers. Their attempts in our industry are on a part time “dabbling” basis, and as such they rarely know what they are doing. You wouldn’t come to a business broker if someone was threatening you with a lawsuit, so why would you use an attorney to navigate a business deal? Look for business brokers who are only that – full time brokers.

 

Secondly, you want to avoid business brokers who have “proprietary methods”. Some brokers use their so-called proprietary methods as a selling point, but from an industry standpoint there really isn’t anything about what a broker does that could ever really be proprietary. Any broker who gives you the “I am the only one with the special sauce” routine is trying too hard to impress you instead of focusing on what’s important – finding you the right business.

 

Third, you want to avoid business brokers who spend a small fortune on advertising. Brokers who are spending money on multiple television ads, massive full-color mailers and dozens of radio spots are again spending too much of their time focusing on the wrong aspect of their business.

 

What should you use to find a great broker? Referrals. If you find a business broker who gets the vast majority of their business from referrals, then you’ll be in good hands. Referrals come from past buyers, sellers, other industry professionals like attorneys and accountants – and these referrals amount to a great review of that broker’s previous work. Those past clients and professionals trust this broker enough to send the people they know their way. If you are talking to a broker, ask them how much of their business is referral based. A broker with a ton of referrals will be someone who can get the job done and find you a great business.

 

Would you like to know more about how to decide on a business broker? Would you like to know about our referral rate here at IBB? Ask us! 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

 

 

 

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Do You Really Want To Buy A Business? Prove It.

Posted in Become a Business Owner, Buyers Articles

Published September 10, 2018

Why is everyone blowing me off?

 

If you’ve spent any time as a potential business buyer, you likely know what we’re talking about. No one will return your calls. Brokers seem apathetic at best. Sellers act like you are wasting their time. It’s like pulling teeth to get anyone to give you any information.

 

What gives?

 

It’s a numbers issue. The business-for-sale marketplace is full of buyers, but very few of them are serious. The stats show that a mere 10% of potential business buyers actually end up buying a business, so 9 times out of 10 a buyer really is wasting everyone’s time.

 

Ok, but I’m a serious buyer. How do I get everyone to take me seriously?

 

 

Be ready.

 

You need to be serious about buying a business before you start making phone calls. If you’re in the very preliminary stages – think several years before you plan on taking the entrepreneurial plunge, you need to make that clear when you talk to a broker. Explain that you are considering business ownership down the road, but would like their input on what types of businesses would fit your goals. If you are further along in the process and actually ready to buy – make that clear as well.

 

Know what you want.

 

You need to have clear goals for business ownership. What do you want out of owning a business? Do you want a more flexible schedule? Do you need more time with your kids? Are you looking to make as much money as possible and then sell the business in a few years? Your goals will guide what type of business is right for you, so you need to have those goals in place before you start asking for conference calls with sellers.

 

Be honest about your money.

 

Nothing is worse than getting close to a closing table, only to find out the buyer doesn’t have the money they said they did. You need to be 100% honest and upfront with your broker about the actual funds you actually have right now. You also need to listen to your broker when they tell you it’s a terrible idea to look at $100,000 businesses when you only have $100,000 to spend. You need to leave some working capital in your pocket so you don’t bankrupt your business immediately after buying it.

 

Make offers.

 

Once you know what you can afford and what your goals are, actively look for businesses. Once you’ve found one that fits – make an offer. The transaction process can’t begin until you do, and you can walk away from any business up until the moment the closing documents are signed – so making an offer doesn’t mean an absolute commitment to that particular business.

 

The message here is it can be tough to get the industry to take you seriously, and although it isn’t your fault that the numbers aren’t in your favor – there are things you can do to stand out from the crowd.

 

Have you always wanted to buy a business, but you aren’t sure where to start? Are you serious about buying but no one will give you the time of day? Please leave any questions or comments here, and we would be happy to help you on your journey to business ownership.  

 

 

 

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

9040 Town Center Parkway
Lakewood Ranch, FL 34202



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