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

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242


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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

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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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.




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. 



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

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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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.




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

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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Dig Deep: Decisions For Business Buyers

If entrepreneurship is your goal, there are more decisions to make than just picking a business off a list of listings. Figuring out the RIGHT business to buy is crucial to success. Here’s how you do it:



Dig deep.


What do we mean by that?


You need to figure out what you want. When you buy a business, you are buying yourself a life-encompassing job – a job where the buck stops with you. What do you want your future life to look like? Figuring out what really means the most to you, as well as what tools you have to help yourself be successful can mean the difference between buying yourself a successful new business and buying yourself a nightmare.


What factors should you consider?


Your background.

Why is your background so important? Owning and operating your own business is tough. It can sometimes mean long hours, tough decisions and navigating lots of issues. Your background matters because the steep learning curve that happens whenever someone buys a new business will become impossibly steep if you add learning an entirely new industry to the mix. Don’t do that to yourself. Pick a business that compliments the practical experience you already have. If you’ve spent the last 15 years in the manufacturing industry, and have never worked a single day of your life in the restaurant industry – buying a huge bar on the beach isn’t going to end well. Talk to your business broker about your experience and strengths – they can help you find business choices that will compliment your background and set you up for success.


Where you want to live vs. what type of business is actually possible in that area.

It should go without saying that some types of businesses can only be successful in certain areas. For instance, service-type industries (think restaurants, landscaping, housekeeping) do really well in places like southwest Florida where people are coming to second homes for vacation – and probably don’t want to be doing a ton of housework or cooking while they’re here. The same type of service business probably isn’t going to be as successful in a very rural part of Montana, for example. Take a look at the area where you’d like to live. What works there? What doesn’t? Talk to your broker about what businesses do better – and worse – in the area you’d like to end up.


What is your ultimate goal for business ownership?

Are you looking for a goal of making a certain amount of money in the next 5 years? Are you looking for a challenge and are willing to push the envelope with a business that will require more work on your part for a potentially bigger return? Or would you prefer a nice, safe and steady shop without a ton of room for growth – where you won’t have to push as hard but returns won’t be as big either? Your ultimate goal for business ownership will obviously have a big impact on your search. Talk to your broker about your income goals as well as about how much of a challenge you are willing to take on. 


Can you realistically get the licenses required?

Red tape can be very strange. There are certain industries in certain states that require a business owner to have prerequisite requirements for an operating license that might be hard to get. Think requirements to have x amount of years doing a specific type of work before you can even apply for a license. Some licenses require background checks, fingerprinting and the like. Ask your business broker about the industries you are interested in. The licensing requirements for an industry might preclude you from owning the business you think you want, so figuring out licensing limitations will be important early on in your search.  


The message here is buying yourself a new life needs more than a cursory search through listings. You need to dig deep and decide what you want your life to look like, then have a discussion with your broker about what type of businesses will fit with those goals.


Are you considering buying a particular type of business and have questions about whether or not it will meet your goals? Do you have questions about licensing requirements? Would you like to know more about the business search process? Ask us! Leave questions or comments and we would be happy to help.




Michael Monnot

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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Are You A No-Offer Business Buyer? How To Be Taken Seriously

If you’ve been looking for a business to buy for a while, you may have run into a problem that some buyers encounter – no one will take you seriously.


Maybe it’s your broker or the seller’s brokers that you have come across, maybe it’s the sellers themselves. Whoever it is, they don’t look at you as someone who is serious about buying a business. What they see is someone who is on an eternal search, and therefore someone who isn’t worth their time and energy.


How can you prove them wrong and show that you are a serious buyer? Make an offer.



“I don’t want to make an offer on every business I look at.”


Of course you don’t, and you shouldn’t. What we mean here is if you are seriously considering a business, the only way to know for sure if the business is going to fit your goals is to get to the due diligence process. In this process, you are allowed an in-depth look at all aspects of the business, from financial statements to contracts – then you can decide if it really is the right business for you.


“If I make an offer, I’m stuck with that business whether I like it or not, right?”


Absolutely not. If, during the due diligence phase you come across a reason why you don’t want the business – you will have the opportunity to back out of the deal before anyone reaches the closing table. The system is designed this way because businesses are inherently complex, so your ability to get a good look at what you’re purchasing is part of the process. Then and only then do you have to make a final decision about buying.


If you’ve been looking at businesses for an extended period of time without even entertaining the idea of making an offer, then don’t be surprised if brokers don’t take you seriously.


There are plenty of “tire-kicker” buyers out there who inquire about countless businesses – over enormous amounts of time – without ever making the move to buy one. On the other hand, serious entrepreneurs come on the scene with goals in mind, do a targeted search of available businesses, then make offers.


If you were working in the business market or trying to sell your own business, who would you take more seriously?


Are you a buyer who has trouble getting sellers to take you seriously? Do you have additional questions about why it is a good idea to put an offer on the table? Please leave us a comment or question here, and we will be happy to help.




Michael Monnot

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242


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Buying A Business? Commercial Lease 101

You’ve found a great business and are excited to start negotiations with the sellers – but here’s a thought you may not have considered. That’s not the only negotiating you’re going to have to do.


When you buy an existing business, you typically are not buying the physical space that the business occupies.


Most businesses come with a lease, and that lease comes with a landlord and/or property manager.



Most landlords accommodate transfers easily, but not all do. Deals can get hung up on the lease when the landlord refuses to grant the transfer or has decided to change the lease terms dramatically. They can also get hung up if you don’t start working on the transfer until the last minute. 


The most important thing you can do as a buyer is get your hands on a copy of the current lease as soon as possible, and then deal with any lease issues long before the day you are supposed to close your deal.


Once you have the lease, the language you would typically want to see is in the section of the lease that has to do with transfers or assignments of the lease. Does it say something along the lines of “any assignment will not be unreasonably withheld”? If it does, you are probably in good shape. This type of language means the landlord would have to come up with a very good reason to keep from transferring the lease to you.


Landlords, for the most part, are concerned with keeping a rental space filled and generating rental income. Some, however, are unwilling to reassign leases (at least initially).


This is a part of the business sale process where your business broker will be an invaluable asset. They can act as a buffer between you and a difficult landlord, and can help to negotiate your new lease or the reassignment of the old lease to keep the lease rates reasonable.


Another way to keep the lease from holding up your closing is to be forthcoming with your financial information when the landlord asks for it. Most landlords are going to want to see some kind of financial statement that proves you have the capital to keep the business open. It would be foolish for them to rent to a tenant who will be forced to close the business doors only a third of the way through the lease. Some landlords also want to see some kind of resume or work history to show you have the experience necessary to keep the business running and profitable.


You should also be aware that in some cases the rental rate will slightly increase from what the seller is currently paying when you get a new lease. You can negotiate a lease extension at the same rate, but eventually your new lease may come with a new rental rate. You will also be responsible for coming up with the deposits necessary for the lease.


The message here is your business won’t be much of a business if you can’t get a lease assigned to you for the space. Deal with lease issues early on and the won’t become a big headache in the end.


Are you a business buyer who has questions about business leases? Have you had a deal fall apart because of a difficult landlord? Please feel free to leave us a comment or question here, and we will be happy to assist you with any lease questions.




Michael Monnot

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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Could Vs. Should – Buying A Business Without The Right Help

If you’ve ever bought a house or have even just rented an apartment, you know the importance of agents in those transactions. Your real estate agent or your rental agent helped you with locating potential properties, let you in to take a look around, assisted with your purchase or lease contract and was there throughout negotiations. While it is possible to buy a house on your own or rent your own apartment, it’s definitely easier with someone who knows what they’re doing by your side. When it comes to the small business market, the same will be true. It’s going to be much easier with help.


Business transactions are inherently very, very complex.


If you’ve never been through a business transaction before you are probably going to have an impossibly difficult time navigating everything that needs to happen. That’s where business brokers come in



A business broker is a transaction agent. Their job is to get a business sale from start to finish. They help buyers by guiding you through from you initial contact all the way past the closing table.


Your broker will talk to you about your goals for business ownership, the amount of capital you are able to invest, the areas where you would like your business to be located and your education/experience. Your broker will then help you with your business search, narrowing down the choices based on your feedback. Once you have found a business or two that interests you, you will sign nondisclosure agreements to gain access to the business name and some cursory financials. If you like these businesses your broker can schedule conference calls with the sellers as well as site visits when there are no employees or clients around. Your business broker will then help you write your offer which, if accepted, will become the purchase contract. The business brokers will act as buffers during negotiations between you and the seller – a very important role. They will also negotiate with your future commercial landlord and property manager to ensure you get a fair lease. Your broker will also help you with the licenses and permits required for you to take over as owner.


This is a big list – and it would be quite an undertaking for someone who has never been through it before. Very few business transactions go through successfully without help. An experienced and qualified business broker has not only been down this road many times before, but they know where the pitfalls are going to be and can help you avoid them. 


The message here? Could you buy a business without a business broker? Maybe. Should you? Definitely not.


Are you considering buying a business but aren’t convinced you need a business broker? Do you have more questions about what a business broker can do to help you throughout the transaction process? Please feel free to leave any comments or questions. We would be happy to help!




Michael Monnot

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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The Justifiable Offer: Why A Low-Ball Is A Bad Idea

You’ve done the searches. You’ve analyzed your options. You’ve done a few conference calls with sellers and you think you’ve found the right business for you. Your next step is a big one, and your decisions here can absolutely make or break your chances of buying this business. It’s time to make an offer.


Your offer is important for a number of reasons. The offer you put together (if accepted) will become the purchase contract. This contract will include not just the final sale price but many other parts of the transaction that will need to be negotiated. Think the length of your training period, the terms of the deal and how existing contracts will be assigned – just to name a few.


This all-important document essentially contains all the parts of your deal that will need to be negotiated. The fluid nature of an initial offer/purchase contract means the first version – your version – is just a place to start those negotiations. It should go without saying that you need to start off on the right foot. 



The relationship you have with the seller, although not a permanent one, will be critical to the success or failure of your transaction. You have to talk to this person, meet with this person, iron out a deal with this person and then most likely work side by side with this person during your training period.


This is not a relationship you want to start with a perceived slap in the face.


What do we mean by that? You do not want to low-ball a seller just to see how desperate they are or how great of a deal you can get. People who intentionally low-ball business sellers aren’t business buyers. They’re tire-kickers. Your initial offer speaks volumes to a seller about how serious you are and what it’s like to work with you. You are making a financial offer for something that seller has invested countless hours in, has spent years building and has made sacrifices to maintain. Yes, business transactions shouldn’t be emotionally driven, but in the small business market it really can’t be helped. No one wants their blood, sweat and tears treated like a cheap car.


What should you do instead?


Make a JUSTIFIABLE offer.


A justifiable offer is a simple concept – it’s something based in reality and backed up by data. You’ve looked at the numbers, you’ve considered the current market and you’ve come up with a number that makes sense – not the lowest, rock-bottom price you’d love but something you feel (based on the data you have) is fair.


Making a fair offer tells a seller that although you may not want to give them their full asking price, you are a person interested in making a deal happen. You are someone who values their business and all they’ve invested. 


How do I make sure my initial offer is fair? Talk to your business broker about what you’d like to offer, and then listen to their advice. They know the market, and can give you insight into whether or not the number you’ve come up with will be a good point to start negotiations.


The message here is simple. If you are serious about buying a business the best way to start your transaction is by making a fair and justifiable offer. 


Have you looked at businesses and want to know more about how sellers come up with their listing price? Do you have questions about what an initial offer/purchase contract entails? Ask us! Leave any questions or comments and we would be happy to help.




Michael Monnot

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

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Unexpected Problems: What To Do When Your New Business Gets Sticky

You’re a brand new business owner and you’ve successfully navigated the path of purchasing a business. You took your time and really delved in during due diligence. You paid close attention during training with the seller and took copious notes. You’re pretty sure you’ve got the hang of this new business, and that you know everything about it.



Until you don’t.


Suddenly there’s an unforeseen problem. Something you didn’t find during due diligence. Something that happened out of the blue.


What can you do?


It depends. If a seller purposefully withheld something like a fatal flaw you will likely have some kind of recourse. If this is the case, call your business broker and discuss what options are available.


What if it’s not a secret fatal flaw? Then what?


Roll up your sleeves and get to work. Business ownership is tough stuff, and sometimes no matter what’s being thrown at you – you just have to find a way to persevere.


For instance, say you just bought a restaurant. Shortly after you take over the whole staff quits because they can no longer get away with things the previous owner allowed. Although a potentially rough situation, it can be solved by working some shifts yourself while you hire new staff or temporarily limiting the restaurant’s hours until you can right the ship.


What’s important to remember when you hit those initial and inevitable bumps in the road is no business is perfect and no business is smooth sailing. You are going to encounter problems – your success or failure as a business owner depends on what you do when faced with those problems.


It is also important to remember that the buck ultimately stops with you. If you aren’t willing to work with a staff who wants to get away with whatever they want – it’s not the previous owner’s fault when that staff quits en masse. It’s yours. Deal with the fallout and do what you need to do to get a new staff in place. Business buyers who sit on their hands and blame everyone but themselves are probably going to have a hard time as entrepreneurs.


The message here is you can research all you want and learn all you can about your new business and still end up with unexpected problems right out of the gate. Just remember that with some thought and hard work you and your new business can overcome anything.


Are you considering buying a business and want to know what recourse you might have if a seller hides issues? Do you want to know more about how you can find and deal with potential issues during due diligence? Ask us! Please leave any questions or comments, we would be happy to help.




Michael Monnot

5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242



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Michael Monnot


5111-E Ocean Blvd
Siesta Key, FL 34242


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