The End Game: Thinking About Your Exit When Buying A Business

When you’re thinking about buying a business, you’re probably focused on where potential businesses are, on the numbers they generate, on the industries you’re considering – but have you considered your eventual exit from your future business? You should.

 

 

Here’s why:

 

The end-game of your business ownership journey should greatly inform the attributes of the business you buy.

 

Here’s a few examples:

 

If you’re game plan is to be a serial entrepreneur – who buys businesses with lots of room for growth with the end-goal of selling those businesses to buy another – then you probably shouldn’t buy a well-established and successful business for a high premium. It doesn’t make sense to flip something when there’s probably not much room for profit. Smaller businesses, faltering businesses with poor management or businesses without any current marketing plan would be for you.

 

Perhaps you are someone looking for a long term investment, a business you might own for 15 or 20 years. The well-established and successful business mentioned in the last example might be the one for you. If staying around is the plan, a business that has already proven it’s staying power would be a good choice. Look for businesses that are community fixtures, have great numbers and a strong location.

 

If you’re buying a business with an eye on passing that business down to your kids when you retire – then you really should consider the strengths, weaknesses and passions of any successor before you try to force them to take over a business that you alone thought was a good idea. If you’re an accountant, and your adult daughter’s passion is to someday be a professional baker – then buying an accounting firm for her to take over is probably a colossal mistake. You should either buy a business you both could love, or buy your accounting firm with the exit strategy of selling that firm when the time is right so you can help your daughter buy her own bakery.

 

The message here is you really need to consider what the end game is if you want to have a successful business ownership experience. Talk to your business broker about what you are hoping to get out of business ownership so your exit strategy can inform your buying choices.

 

Are you thinking about buying a business and never considered the exit strategy? Does one of the buying scenarios above resonate with your long term goals? Talk to us today and get yourself on the road to successful business ownership.

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

 

No Comments »




Buying A Business? Step 3: Make Some Choices

If you think you might be ready to take the entrepreneurial leap, but don’t have a genius start-up idea you can work on in your garage – you don’t need one! Existing businesses get bought and sold everyday, some 500,000+ a year (a number that is on the rise as baby boomer owners enter retirement and list their businesses for sale). These existing businesses can instantly turn you into an entrepreneur, no start-up required. 

 

If you’ve always wanted to be your own boss and think buying an existing business might be for you – the process is fairly straightforward. 

 

Here’s step three: It’s time to make some choices.

 

Don’t panic. You don’t have to sign your life away – and you don’t even have to make a final decision at this stage. Once you’ve seen the initial packages for the businesses you found in step two you’ll have some time to consider what they’ve sent you. Using the information you have you can decide if you’d like to proceed with exploring a business or two that you are still very interested in.

 

 

This is the point where conference calls between you and the business seller can be extremely helpful. Talking with the current owner can give you insights into the things that don’t necessarily end up on paper. A caveat here. You must prepare questions – good questions – ahead of time. Your business broker will (and should) help you with coming up with great questions to ask. You shouldn’t go into a conference call with a seller blind and ask basic questions that had already been answered by the package you were given. This colossal waste of time for everyone involved might turn a seller off and they could refuse to proceed any further with you. Remember that a business is someone’s baby, so they aren’t likely to hand over the keys to someone who they feel isn’t up to the job.

 

After your initial call with a seller you can ask for more information, but you aren’t likely to get much more than you already have unless there’s an offer on the table. Making an initial offer can seem daunting – but here’s an important point to remember. Absolutely no money changes hands until after you’ve been given ample time to research the business during a process called due diligence. Due diligence starts after an offer has been initially agreed upon by both parties, and a typical due diligence period is a couple of weeks – plenty of time to review things like contracts, tax returns, inventory lists and the like. Once due diligence is over you can buy the business for the price in your accepted offer, renegotiate the price based on things you found or walk away completely.

 

During the due diligence process the business is pulled from the market temporarily so you don’t have to worry about other buyers swooping in and buying the business from under you. There can be, however, better offers or backup offers on a business you are considering – so you’ll need to go into the process ready to make a move and decide in a timely fashion whether or not this business is for you.

 

Don’t forget that you can absolutely walk away at any time if you begin to feel like you wish you hadn’t made your initial offer – so don’t be afraid of this very important step.

 

Ready to take the third step towards business ownership? Do you have questions about what an initial offer looks like? Would you like to know more about the due diligence process? Ask us! Please leave us questions and comments, we would be happy to help.

 

Want to read “Buying A Business? Step 1: What’s Right For You?” (click here!)

Want to read step two? Click here for “Buying A Business? Step 2: Search For Businesses”

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

 

 

No Comments »




Buying A Business? Step 2: Search For Businesses

If you think you might be ready to take the entrepreneurial leap, but don’t have a genius start-up idea you can work on in your garage – you don’t need one! Existing businesses get bought and sold everyday, some 500,000+ a year (a number that is on the rise as baby boomer owners enter retirement and list their businesses for sale). These existing businesses can instantly turn you into an entrepreneur, no start-up required. 

 

If you’ve always wanted to be your own boss and think buying an existing business might be for you – the process is fairly straightforward. 

 

Here’s step two: Find businesses that fit with the goals you established in step one.

 

Once you know what you’re looking for, the search itself becomes relatively easy. You can peruse business listings on your own (click here to do that now) and your business broker will also find you listings to consider that might fit with what you’re looking for.

 

 

Here’s a very important part of your search. You must, must, must give your broker feedback on the listings they’ve sent you. If you love a business, tell them. If you hate one, tell them that too. It’s not going to hurt your broker’s feelings if you don’t love every single listing they share with you. The only way a broker can curate a list of businesses that will get you to your end goal of business ownership is if they know what you want. You should not only give a simple thumbs up or down to a potential business – tell them why as well. Did you like the location but weren’t a fan of the current inventory? Does a business you really don’t like have a couple of features that you would love to see in your future business? The more specific and detailed you can be, the better. Nothing is more counterproductive during a business search than flipping through 10 listings and just saying “no thanks” with no feedback.

 

Once you’ve found a few listings that seem intriguing you can then sign the nondisclosure agreements (NDAs) for those business listings so you can find out exactly where and what they are. If you’re unfamiliar with this type of NDA – here’s the short version. They’re a major part of the business purchase process because an existing business needs its for-sale status to remain confidential. The only people who should know the name and location of a business for sale are the seller, the business brokers involved and any prospective buyers who have signed the NDA. That’s it. This need-to-know list will protect the business from catastrophes like an entire staff quitting en-masse when they find out the business is for sale.

 

A note here. You can’t change the NDA. It’s an industry standard document. If you refuse to sign it, no one is going to work with you. Period. What you provide for the NDA (your legal name, physical address) pales in comparison to the proprietary and confidential information you will be privy to once it’s signed – so it’s a more than fair arrangement.

 

Once the NDA is signed you will be sent some cursory information. Typically that information will include the name and physical location of the business, some cursory financial information and details about things like staff/vehicles/equipment. We need to put a caveat on listing packages here. Like any industry there are great business brokers, terrible business brokers and everything in between. When you first start receiving listing packages it will become blatantly obvious who is doing their job. Some brokers put together comprehensive packages that give you a great understanding of the business you are considering. Some brokers send you two over-copied and blurry images of tax returns. Unfortunately there isn’t much you can do when you are given terrible cursory information other than ask for more. Your broker will be able to help you decipher cryptic tax returns and the like, and will also (hopefully) be able to get more information from the seller’s broker. Know going in that a terrible listing package is not a reflection of the business itself. It’s a reflection of the broker who listed it. 

 

Ready to take the second step towards business ownership? Do you have questions about the NDA? Would you like to see an example of the comprehensive business packages we create for our listings? Ask us! Please leave us questions and comments, we would be happy to help.

 

Want to read “Buying A Business? Step 1: What’s Right For You?” (click here!)

Want to read “Buying A Business? Step 3: Make Some Choices” (click here!)

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

No Comments »




Buying A Business? Step 1: What’s Right For You?

If you think you might be ready to take the entrepreneurial leap, but don’t have a genius start-up idea you can work on in your garage – you don’t need one! Existing businesses get bought and sold everyday, some 500,000+ a year (a number that is on the rise as baby boomer owners enter retirement and list their businesses for sale). These existing businesses can instantly turn you into an entrepreneur, no start-up required. 

 

If you’ve always wanted to be your own boss and think buying an existing business might be for you – the process is fairly straightforward. 

 

Here’s step one: Figure out what type of business would be right for you. 

 

This one might seem obvious, but lots of buyers come to the market without a clear idea of what they want out of owning a business – and then what type of business is going to meet that set of goals. They either have their heart set on a business that will probably meet none of their goals or they don’t really know yet what they’re looking for. Both of these scenarios are going to be counterproductive. In the first, you end up with a nightmare business you hate. In the second scenario you never buy a business at all. 

 

 

Don’t start the process like that. Instead, start by figuring out what your goals are.

 

This one is probably the most important. Sometimes people want to own their own business because they feel like becoming their own boss will solve the problems created by working for someone else. Here’s the thing – business ownership is just as tough as the job you want to leave, it’s just tough for different reasons. Being your own boss isn’t (and shouldn’t be) your only goal. Instead, think about why the idea of business ownership appeals to you. Do you hate your current job because you wish you had more schedule flexibility? Do you wish you could change career paths more frequently because you work hard but get bored easily? Are you hoping to have more time at home to spend with your kids? Would you like to work really hard and make as much money as possible in the shortest amount of time? Are you using the move to entrepreneurship as a way to move to a new area or country? These types of introspective questions will help you come up with well defined goals for business ownership. With goals in hand, you can then look at businesses that will meet those goals – saving yourself a ton of time and effort chasing a daydream business that would end up making you miserable. 

 

Next, pick something you already know

 

If the only thing you’ve done for the last 20 years is work on cars, but you’ve always dreamed about owning your own restaurant – buying a huge waterfront restaurant is probably going to be a colossal mistake. You really need to enter the world of business ownership in an industry where you have some practical experience. The leap to entrepreneurship carries with it a steep learning curve – you absolutely do not want to add learning a whole new industry to that mix. 

 

Third, be open minded about the types of businesses that might work for you when you begin your search.

 

This one can be tough for people because it can be hard to let go of a daydream – even when in reality that daydream would more than likely end up a nightmare. We regularly talk people out of buying certain types of businesses because the goal is successful business ownership – not stressful failure. Talk to an experienced and qualified business broker about what your goals are for business ownership and about your education and experience. You might be surprised by the types of businesses and industries where your goals and experience would help you thrive.

 

Ready to take the first step towards business ownership? Do you have questions about what types of businesses would fit your goals and experience? Ask us! Please leave us questions and comments, we would be happy to help.  

 

Want to read step two? Click here for “Buying A Business? Step 2: Search For Businesses”

Want to read “Buying A Business? Step 3: Make Some Choices” (click here!)

 

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

 

No Comments »




Your Commercial Lease And Landlord: 3 Ways To Ensure Success

You’re all set to buy a business. You have the perfect business picked out. It meets all of your goals for business ownership, it’s within your budget for asking price and working capital, you’ve filed all of the appropriate licensing paperwork, finalized the negotiations over the purchase contract – you’re done, right?

 

 

Not quite. One major hurdle business buyers must overcome is one they don’t often consider. The lease and the landlord.

 

In almost every small business transaction, it is only the business itself that changes hands. Most small businesses exist within commercial rental property, and as such the business buying process includes the negotiation of a new lease.

 

Why can’t you just take over the current lease? If you rent an apartment, you sign a new lease whether or not the person who lived there before you stayed for the entire length of the lease they signed – with very rare exceptions the same goes for commercial leases. A landlord wants a new contract when they get a new tenant, so you need to be prepared for this sometimes difficult part of the business buying process.

 

Here’s three tips to keep you from hitting a leasing snag:

 

You will need to prove your experience and finances.

No landlord in their right mind is going to sign a multi-year, large financial contract with someone who has no possible hope of keeping the business afloat. You will need to put together a resume of some sort that shows you have the practical experience to succeed in your new business venture. You will also have to provide the landlord with proof of financial capacity as well. Landlords won’t give a lease to someone who is using every last cent to their name on the purchase price alone. They want to know you’ve set aside enough working capital to be able to pay your rent even if the business isn’t turning a profit for you right out of the gate.

 

You aren’t going to get an amazing deal on rent.

If the current business owner is paying $5000 a month in rent, there is no way the landlord is going to lease the same space for the same business for $500 a month. You will likely pay the exact same rent, or even a bit more. The landlord has no financial incentive to cut you a huge break, because they can just refuse to lease to you and continue to get the current lease rate from the seller. Be prepared to pay what you need to pay. You will also need to come up with security deposits, perhaps first and last month’s rent, lease fees, etc.

 

Expect the landlord (and their property manager) to be exceedingly difficult.

It’s not fair, but it’s a fact of life in small business transactions. Many landlords and the property managers who sometimes represent them are almost impossible to work with. Looking at a business transaction from their side can be helpful. They have no financial incentive to gamble on a new person to take over a space in their property and pay them rent when they already have a perfectly capable tenant in place. Their perspective aside, the fact of the matter is most landlords and property mangers don’t understand the business transaction process, and often cause major issues in the final days before closing. If you are mentally prepared for this road block you will be able to stay calm. You should also keep your business broker in the middle. No good can come of an angry phone call to a landlord from a business buyer. Your broker has probably dealt with this landlord in particular, or someone just like them, dozens and dozens of times. Leave the lease negotiations in their capable hands and any issues will likely be resolved.

 

Dealing with landlords can be excruciating, and this is often compounded by the fact that the lease can only be negotiated after many of the other parts of the business buying process are complete. Stay calm, come prepared with a realistic mindset and proof that you will be a great tenant – then let your business broker do the rest. 

 

Are you considering buying a business and never considered the commercial lease? Are you thinking about buying a business in an industry where you don’t have any practical experience? Ask us! 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

No Comments »




Want To Stand Out? 3 Ways Buyers Can Get Noticed

 

If you’ve spent any time in the business-for-sale marketplace as a buyer, you may have discovered that it can be incredibly difficult to get anyone (sellers, brokers and the like) to take you seriously. This can be especially frustrating if you are a very serious buyer with money to spend, so what gives?

 

You can thank the non-serious, time-wasting tire-kickers who came before you.

 

The nature of the market means something like 90% of buyers who enter the marketplace never buy anything. This can understandably cause those on the other side of the transaction (think sellers and brokers) to resist expending much energy with a new buyer until they’re sure it’s not a complete and total waste of their time.

 

If you’re in the 10% of actual, serious buyers how do you distinguish yourself from the window shoppers around you?

 

 

Be willing to discuss finances:

 

Sure, no one likes discussions about their personal finances, and it can be really tough to divulge how much money you have to a complete stranger – but if that stranger is your new broker, this is critically important to do. If your broker doesn’t know how much money you are working with, then they can’t show you businesses that would be appropriate, nor will they be able to effectively negotiate on your behalf.

 

Be honest:

 

It is incredibly important to be honest, especially about your financial situation if you really want to get a deal done. Fudging or out-and-out lying about the capital you will have available will always come out, especially when the time comes to write a check that you can’t. Other things you should keep off the dishonesty list? Your past experience. A good broker will always try to talk you out of buying a business you know nothing about. Starting in a new venture is hard enough, you absolutely don’t want to add the steep learning curve of a brand new industry to the mix.

 

Avoid procrastinating:

 

Nothing is more infuriating for a buyer than a seller who takes forever to respond to requests for information, but it goes both ways. You will absolutely be given an appropriate amount of time for due diligence, and within that time frame you should be able to make a decision as to whether or not this business is for you. Continually asking for extensions and prolonging closings for no good reason can very quickly unravel a deal.

 

If you are really ready to buy a business and want to be taken seriously – be forthcoming with your capital, stay honest and make decisions in a timely fashion. It will quickly separate you from the never-going-to-buy-crowd.

 

Are you a buyer who’s been frustrated by the lack of attention you get in the marketplace? Are you ready to make offers and want to stand out from the crowd? Contact us! Leave us a question or comment 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

 

 

 

No Comments »




How Important Is Preparation When Buying A Business?

The short answer? Preparation is everything.

 

Think about buying a house. A home buyer doesn’t just drive up to the first house they see with a for sale sign in the yard and write a check. A home buyer researches the local neighborhoods, school districts and property taxes. They hire a real estate agent to help them with their search. They look at various options online and then schedule times to see homes. They also talk to banks so they can get pre-approved for a mortgage.

 

The process of buying a business is much more complex than the process of buying a house, yet business buyers come to the market overwhelmingly unprepared every day. They want to be driven around town by a business broker to scope out the local business market with no real thought about what they want or need from a business. If you are serious about buying a business, this is not the path to take. Instead, start with these 3 steps:

 

 

1. Have a conversation with an experienced and qualified business broker about your goals for business ownership. For instance, if the reason you are considering buying your own business is so you can spend more time with your kids, then buying a large bar that will require your presence for 12 hours a day 7 days a week is probably not a good choice. A good broker will be able to match your goals with the right types of businesses.

 

2. Talk to your broker about your work history and experience. Your choice of industry will need to take into account what kind of practical experience you have. If you’ve spent the last 20 years as an auto mechanic, then buying a large salon is probably not the best option. Business ownership comes with a steep learning curve so you don’t want to add learning a new industry to the list.

 

3. With your broker’s help, figure out what you can afford. If you’ve got $80,000 of capital to invest – you have no business looking at $80,000 businesses. It may take you several months to begin turning a profit, and during those months you will still need to pay your lease, payroll, pay for new inventory – not to mention the extra cash you will need during the closing process for things like licensing and attorney fees. Your business broker will be able to tell you what your budget for the purchase of a business should be based on how much money you have. An important note here – don’t lie to your broker about the amount of capital you actually have. Your deal will absolutely fall apart when the time comes to provide proof of finances.

 

Once you know what you can afford, know what industries would match with your practical experience and have an idea of what kinds of businesses would meet your goals – you can start the business search process, the right way.

 

Have you thought about buying a business but don’t know where to start? Do you have more questions about the business buying process? 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

No Comments »




How To Sweeten The Deal When You Need Seller Financing

If you are like most small business buyers you don’t have a ton of cash on hand to purchase a business outright, so you’re going to need some financing. While they are some more traditional lending options like bank loans or financing through the Small Business Administration (SBA) – the most common form of financing in the small business world is seller financing

 

Seller financing can be a great option for a buyer for a number of reasons. The most important reason? A seller who is offering to finance their business deal is so confident in the future of the business that they are willing to keep some skin in the game. It’s a win-win for a business buyer. 

 

 

This win-win scenario doesn’t come without a cost, so to speak. You as a buyer have to hold up your end of this sweetened deal. If you want a seller to be comfortable offering you seller financing – here’s a few things you need to do:

 

You need a hefty down payment.

 

No seller in their right mind is going to finance 80%, 90%, 100% of their deal. You are going to have to put a large percentage down payment on the table if you want a seller to help you with the rest. A large down payment shows a seller you are serious and gives them peace of mind that you can afford the business you are about to buy. The amount you’ll need as a down payment will vary from industry to industry and from business to business, so talk to your business broker about what you’ll need to bring to the table.

 

You need to be able to prove you can successfully run this business.

 

If you aren’t in love with sharing proof your financial means, providing a resume, telling a seller your credit score and the like – then seller financing might not be for you. A seller is going to want to know that you know how to run their business, either by past practical experience or by education/licensing. There’s already a steep learning curve when you first take over as a new owner – no one wants you to add learning a whole new industry to the mix. A seller is also going to want to see that you have more than $5 in the bank before they loan you money, as any business owner knows that you need some capital in the bank to be able to run a business successfully. A note here – even if you don’t end up getting seller financing a commercial landlord is absolutely going to want you to prove experience and financial means before they let you sign your lease. 

 

You might have to pay more.

 

If a seller is not only willing to wait to get paid and also taking the risk that they might never get paid, you might have to pay a bit more for your new business than if you were offering all cash up front. Remember that seller financing is an agreement where you benefit, so that benefit might come at a cost. How much it costs will be specific to each deal, so if you find a business you like where a seller is offering financing you can have a discussion with your broker about how taking that seller financing option will affect how much you should offer. In some cases, a seller is offering financing because they are very motivated to sell, and sell fast – and in those circumstances there might not be much difference in all cash offers and seller financed offers.

 

If you want a seller to trust you with their business and their money – you need to come to the table prepared. Have a decent down payment ready, be forthcoming with your information and be ready to make a fair deal.

 

Are you considering buying a business and want to know more about how seller financing works? Do you want to know how much of a down payment you might need for a particular type of business? 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

 

No Comments »




Have A Favorite Real Estate Agent? Why You Shouldn’t Use Them For Your Business Deal

 

This one happens all the time. We get a call from a real estate agent who is inquiring about one of the businesses we have listed on behalf of a buyer, or is looking for potential buyers for a business one of their clients wants to sell. Perhaps they are a trusted agent for a client, and the client asked that they inquire on their behalf. We even have potential buyers and sellers call and request that we use their real estate agent for their part of the transaction. 

 

We tell them how business transactions work. A real estate agent who refers a client to us will get a referral fee when the deal closes, all they have to do is get us the client’s contact info.

 

Sometimes an agent refuses to divulge their client’s information, demanding instead that we work with them on the deal. We refuse, so the agent moves on to a different broker to see if they can talk someone into working with them. Their clients don’t get access to business information or potential buyers, and are likely unaware that any of this is going on.

 

Why won’t business brokers work with real estate agents? Why do they require a referral of the clients instead?

 

It’s very simple. Real estate agents are very good at what they do – they sell property and homes. What they are not good at and likely know little to nothing about is selling businesses. You can liken the difference between a business broker and a real estate agent to the difference between a plastic surgeon and your general family physician. You would probably be very uncomfortable having your family doctor do reconstructive facial surgery – along the same lines a business broker specializes in the buying and selling of businesses. We would never try to help someone buy a house, it’s just not what we do.

 

What can happen if a real estate agent tries to help you buy or sell a business? Since they don’t know the ins and outs of the business transaction process, there is a good chance you will never see a closing table.

 

If you are a seller, a real estate agent will likely treat your business listing like a listing for a house. They will take pictures, gather some cursory financial information and then post this information on the MLS listing system. This is a complete disaster in the making. The most important part of selling an existing business is maintaining confidentiality. Without confidentiality, you stand to lose customers, employees, vendors and money. The only people who should know that your business is for sale are those who have signed the appropriate non-disclosure documents – not anyone with an internet connection who can search the MLS. A business broker knows how to confidentiality market your business, and they are also well-versed in negotiating leases, licensing and permitting concerns and will have relationships with other brokers and buyers who are currently in the market looking for a business like yours.

 

If you are a buyer, a real estate agent isn’t going to have access to any business listing information without talking a broker into letting them have it (which isn’t likely to happen). Many real estate agents also try to fill out the non-disclosure forms themselves, pretending to be the buyer, but all this does is garner mistrust with any sellers who will then feel like they’ve been duped when the truth is later revealed.

 

We understand your loyalty to your real estate agent – we have many friends in the real estate industry and we have used their expertise for not only our home purchases but also the sales and purchases for our family members. You shouldn’t feel like your real estate agent gets the short end of the deal if they refer you to a business broker – they get paid for handing over information and doing nothing more. They are doing you and your future business transaction a great service by putting you in more capable hands.

 

If you are looking to buy or sell a business, feel free to ask your real estate agent if they have a business broker they would recommend. Just be wary if your agent tries to talk you into letting them take the reins.

 

Have you tried to buy or sell a business using a real estate agent and have a story to share? Do you have more questions about the referral process? Ask us! Please feel free to leave any comments or questions.

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

No Comments »




How To Avoid Becoming The Angry Whim Buyer

 

As the world recovers from long lockdowns and regular travel begins, the entrepreneurs who have put their dreams of business ownership on hold can start the process again. Here’s the thing. Buying a business is a process. One that takes planning. Lots and lots of planning. 

 

Why do we point that out? The angry whim buyer.

 

It happens constantly. We get a call or email from a buyer who is in town and wants us to drive them around to see a few businesses while they are here. Oh, and they leave tomorrow to go home so it has to be today. 

 

Guess what? Not going to happen – not because we don’t want to sell you a business, but because seeing a business on whim is utterly impossible. It can not be done. When we tell this buyer no, they inevitably get angry. Angry because they want to see a business and they would be spending a lot of money. Angry because today they have nothing to do and it fits into their schedule so it should also fit into ours. 

 

Here’s the reality. That angry whim buyer obviously planned their trip. They bought plane tickets. They packed bags. They took leave from work. They arranged pet sitters. They reserved a rental car.

 

If this buyer really wanted to see businesses while they were here – they absolutely could have if they had just planned ahead like they did with all the rest of their travel arrangements. 

 

Why can’t I just go see a business when I feel like it? Why do I have to plan ahead?

 

Operating businesses protect themselves while they are for sale by maintaining a shield of confidentiality about that for-sale status. No one except the seller, the broker and buyers who have signed the appropriate non-disclosure agreements know that the business is for sale. This keeps the staff from quitting en masse. It keeps vendors and clients from canceling contracts. Most people think that a business for sale is a business in trouble (hardly ever true), so it is vital that the for-sale status stays need-to-know.

 

What does that mean for a business buyer who wants to see a business? The process usually goes something like this:

 

You talk to a business broker about your goals for business ownership, the amount of capital you’d like to spend and about the types of industries you are interested in. They help you narrow down the list of all potential businesses for sale to just those that would be what you are looking for. You then sign NDAs for those businesses and get a cursory look at some financial information as well as the name and location of the business. That information is used to narrow your list further to just those businesses that you really like. Your broker will then contact the seller’s broker and set up a conference call between you and the seller. If you are still interested in the business after your initial conference call with the seller, you can set up a walk through of the business location. This visit will have to take place when the business is closed so no employees or customers will be around. It will also have to occur when you, your broker, the seller’s broker and the seller themselves are available.  

 

It should be obvious that this process can’t happen in a couple of hours. It just can’t. 

 

Here’s what you can do instead. When you start planning your trip – plan to see some businesses. Talk to a broker. Sign the NDAs. Talk with some sellers. Coordinate a few business visits long before you step on the plane. Using the process to your advantage will keep you from wasting your time looking at businesses that never would have worked for you in the first place. Start planning today

 

Are you thinking about traveling to see businesses and want to know more about the process that’s required? Would you like to know what businesses are for sale in a particular area? 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

 

1 Comment »




Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

5111-E Ocean Blvd
Siesta Key, FL 34242




Search



Recent Posts

Categories

Archives

Tags