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

 

 

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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

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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

 

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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

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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

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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 »




Buyer Discretion: Why You Need To Prevent Catastrophe

When new buyers enter the business market, there’s a common frustration – confidentiality.

 

You are about to spend a very large amount of money – so you will obviously want to know everything about the businesses you are considering, and you want to know it now.

 

The problem here? Business sales don’t quite work that way. There’s a need for discretion and confidentiality.

 

 

Why does everything have to be such a big secret?

 

Confidentiality has to stay in place in order to protect the business. If employees, vendors, clients or the competition find out a business is for sale, it can mean big problems for the bottom line. Employees quit, vendors cancel contracts, clients go elsewhere and the competition can move in for the kill.

 

Why should a buyer care about confidentiality?

 

One of the reasons buyers have an issue with confidentiality is it doesn’t seem like something benefits them – it only seems to be in place to protect a seller and the business itself. It’s not. Think of confidentiality this way, you don’t want the business you buy to be in complete turmoil the day you take over, so keeping a tight lid on the for-sale status will be key.

 

The best way to illustrate why confidentiality is such a massive deal is with an example of what can happen if confidentiality is breached.

 

A buyer is very interested in a listing for a small restaurant in a downtown location. The buyer gets in contact with the listing broker and signs the necessary non-disclosure agreement. The listing broker then reviews the “rules of the road” – the buyer may not speak to employees, share any financial information, or tell anyone that the business is for sale. The buyer agrees. Since he now knows the name and physical location of the business, he goes in for lunch and asks to speak with the manager. He asks the manager why she thinks the business is up for sale and then asks for a tour of the kitchen. The manager, a key employee, had no idea that the business was on the market. She immediately runs into the kitchen to ask the head chef if he knew anything about the business being up for sale, which, of course, he did not. In the panic this buyer has now caused, both the manager and the head chef quit to find more stable work.  Now the business has lost it’s two most important employees and has been left in a seriously vulnerable position.

 

As you can see, the confidentiality of a business sale is extremely important. This buyer seriously damaged the seller’s business, and he didn’t have to do very much to cause all of this upheaval.

 

As a buyer, you will be expected to maintain confidentiality all the way up to the closing table. This is critical to the survival of the business and to the sale. The non-disclosure agreements you sign are there for a reason and are absolutely enforceable. If you disclose the business sale to an inappropriate party, you can face legal repercussions.

 

These rules are in place to protect the businesses you are trying to buy. Do your future business favor and keep confidentiality in place!

 

Are you a business buyer who has questions about confidentiality in the business market? Ask us! Leave a comment or question here, and we will be happy to address any questions you have.

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

 

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Why You Have To Go With The Flow – The Importance Of Transaction Protections

 

If you are in the early stages of buying a business you will notice that the process of buying a business is unlike the process to buy anything else. You have to sign non-disclosure agreements. You have to provide financial statements. You have to disclose your full name and physical home address – all before you can even find out what the name of any business is. If it seems a little intrusive, you aren’t alone in feeling that way. Many first-time business buyers feel that way too. We get it, but your disclosure of a very small amount of information is about to give you access to potentially business-ending information. It’s more than a fair trade off.

 

What’s business ending about finding out the name of a business you might want to buy?

 

Existing businesses depend on the confidentiality of the business transaction process to protect themselves.

 

From what? Damaging misconceptions.

 

When the average person hears that a business is for sale, they automatically assume that said business is for sale because something is catastrophically wrong. Why would anyone sell a great business, right? Now imagine what the staff think. Am I about to be out of a job? Is the place I work going out of business? If we get a new owner will they fire everyone?

 

A business who has their for-sale status disclosed to the wrong people by a breach of confidentiality may face devastating consequences. The entire staff can quit en-masse. Regular clientele can find somewhere else to go. Vendors can cancel key contracts. Competitors can move in for the kill.

 

To protect businesses from these consequences everyone in a business transaction must agree to hold the for-sale status of the business secret for the duration of the business transaction. As a buyer, you will be required to sign non-disclosure agreements (NDAs) that say this, and carry with them legal repercussions if you breach confidentiality. A non-disclosure agreement gets tied to an individual by using that person’s legal name and physical address. There might be 10 guys named John Smith in your town, but there’s only one John Smith who lives at 123 Main Street.

 

After you sign the NDA, you will be given access to not only the name and location of the business – you will also be given access to information like proprietary business practices, tax returns, contracts, employee records and the like. A seller is trusting you with a huge amount of potentially damaging information (if it fell into the wrong hands), so divulging who you are and where you live is more than a fair trade off.

 

In some cases a seller or the commercial landlord will require financial statements as well. These are used to prove that you have the financial means to buy the business and you aren’t just kicking tires. Again, providing proof of financial means pales in comparison to the amount of information your cooperation with the process gives you access to.

 

It can be tempting to fight transaction protections by trying to alter NDAs or by refusing to provide financial disclosures. Don’t. NDAs are standard in this industry and can not be changed. Refusing to sign one or demanding changes before you do will result in business brokers and business sellers refusing to work with you. The same goes for those who want to be cagey about providing financial disclosures. Refusing to cooperate with the process means your business transaction is over. Period. The business transaction process exists to protect the businesses that are changing hands, and every step in that process is a tried and true way to keep everyone in the deal protected. 

 

You wouldn’t want a business you hope to buy destroyed by the careless buyer who came before you, or by a future buyer when you decide to sell – so everyone has to play along in order for the business transaction process to work as intended. Be prepared to cooperate, and the process will work for everyone – including you.

 

Are you looking at businesses and want to know more about the transaction process? Do you have questions about the NDA? 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

No Comments »




The Pre-Closing Panic: How Business Buyers And Sellers Can Avoid Disaster

A business changing hands is a big deal. One side is selling their blood, sweat and tears. The other is writing a very big check and stepping into the unknown. It can be scary. Really scary.

 

What happens more often than not is one or both sides start to panic as the closing date approaches – and when that happens tempers can flare and perfectly good deals can fall apart.

 

 

How do you avoid a pre-closing disaster? Know that it’s coming and mentally prepare.

 

 

Sellers:

If you are selling your business, it can be difficult to remain objective and unoffended when a buyer gets antsy and starts questioning everything about your business. We get that. Repeat questions, constant requests for renegotiation, attempts to lower the offer, demands for new issues that have already been dealt with and the like would make anyone angry – even angry enough to pull out of the deal.

 

What you should know going in is these things are probably going to happen. There are very few buyers who don’t get cold feet as the contract winds towards closing, and those cold feet can cause a buyer to do some pretty weird things. They are going to try to find a way to back out of the deal – not because they really want to, but because their nerves got the better of them.

 

Whatever your buyer is doing or demanding at the end, take a step back and think about where the panic behavior is coming from. Are they just freaking out? Have they really found an insurmountable issue with your business, or are they trying to give themselves a reason to back out because they’re scared? You don’t have to bend to their every demand, but you do need to have some patience and be ready for this inevitable last-minute buyer anxiety. 

 

Buyers:

If you are a buyer, know going in that you are probably going to be really nervous increasingly so as the date for writing that big check approaches.

 

You are absolutely entitled to all of the information you need before you sign on the dotted line and buy a business – that’s what the due diligence period is for. You need to utilize that time for due diligence to go through all of the information you request, ask good questions, discuss any issues you uncover with your business broker, your spouse, your transaction attorney, etc. and make an educated decision based on all of that information. Once you’ve made that decision – don’t second guess yourself.

 

Feeling anxious about a big decision is totally normal – letting that anxiety override an educated decision is far from productive. If you are days away from closing and are feeling like you’re making a mistake – go back and talk to the people you talked to during the due diligence process, like your business broker, your spouse and your transaction attorney. Go over your worries and work through why you are suddenly feeling like you don’t want to go through with the deal. It is nerves, or is it really an insurmountable problem? If you’ve made it all the way through due diligence without finding a deal-killing problem, it’s probably just nerves. Don’t talk yourself out of a great new opportunity.

 

The message? It’s the last minute panic that causes the issues. Big decisions might feel like they require a big leap of faith – but the reality is the decisions you’ve made during your business transaction have been made based on facts, no leap of faith was required. Trust your gut, be patient with the other side and remember that nerves can only cause issues if you let them. 

 

Do you have questions about how to deal with a panicking buyer? Would you like to know more about how due diligence works? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

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Don’t Be Disengaged: Why This Buyer Spells Disaster

Buying a business is a big deal. You are embarking on a whole new life, have a ton to learn and an exciting new road ahead – a road that takes a lot of planning, preparation and hard work.

 

What can sometimes confound business brokers, business sellers and even some buyers is a relatively rare but alarmingly destructive force – the disengaged buyer.

 

 

What’s a disengaged buyer?

 

Someone who waltzes into the business buying process with nonchalance – they don’t take anything seriously.

 

They miss conference calls. They’re chronically late for appointments. They let license applications sit on their desk unfinished. They don’t show up for training with the seller, or they show up and act like they could care less. Sounds frustrating, doesn’t it?

 

Frustration isn’t the only issue. This level of apathy can be destructive as well.

 

It alienates the seller. It angers the commercial landlord. It hampers the ability to run the business because licensing requirements have not been met.

 

Sure, some of the business buying process is tedious. Some of your training will seem unnecessary. Red tape and paperwork are boring. We get it. Guess what? Nonchalance on your part can (and probably will) cause irreparable harm to your business ownership goals.

 

Why?

 

All those conference calls and meetings are crucial to your success. You can’t know if a business is going to be right for you if you haven’t asked the right questions.

 

Licensing requirements are an absolute necessity – and they can take time. Time that is out of your control because the wheels of bureaucracy turn slowly. You need to get going on applications as soon as is feasible and you need to stay on top of all the bureaucratic red tape before it has a chance to strangle your new business venture.

 

Your training period is critical to your success. You need to take every single moment of training seriously and try to gain every bit of knowledge you can from your seller. They’ve already worked through the pitfalls that you will face, and their knowledge will help you avoid them.

 

The relationships you have with your seller and your commercial landlord can make or break your transition to business ownership. If you alienate the seller, they are much less likely to take training you seriously – and you’d better believe they’ll stop taking your calls as soon as the training period is over. An angry landlord can refuse to transfer the lease, raise the rent, etc. Preserving those relationships by being respectful of everyone’s time and effort will go a long way on ensuring your success.

 

Do yourself and your future business a favor – BE ENGAGED.

 

Are you thinking about buying a business and want to know more about how to maintain important relationships throughout the purchase process? Would you like to know more about licensing requirements? Do you have questions about how the training period works? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

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

www.InfinityBusinessBrokers.com

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

5111-E Ocean Blvd
Siesta Key, FL 34242




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