what should i know about buying a business Archives - Page 20 of 29

Published February 6, 2020

It’s a request we get all. the. time. A prospective buyer has made a trip to our area, they’ve already been here a week and they would like an on-site tour of one of the businesses we have listed. Oh, and they fly back home tomorrow morning so the tour has to be now.

Guess what? It’s a hard no.

Why?

Business sales are nothing like home sales where you can make a call and someone can drive you around that day. Everyone knows when a home is for sale, and that knowledge of the home’s for-sale status is a good thing.

The opposite is true for existing businesses.

Business sales work under a tightly controlled layer of confidentiality. This confidentiality covers everything – from the tax returns to the very name and location of the business. A business that reveals it’s for-sale status can be setting itself up for potential ruin. Regular customers will (incorrectly) assume that a business for sale is a business on the brink of failure and take their business elsewhere. Staff can quit en masse to find more stable work. Competitors can move in for the kill. All bad things, right?

The necessity of confidentiality means that potential buyers must sign non-disclosure agreements before even the name and location of a business can be disclosed. They will likely need to arrange several conference calls with the seller and business brokers involved to decide if a business fits with their goals for business ownership. Then (and only then) does it make sense for a potential buyer to see the physical location of the business. This on-site tour will need to take place before or after business hours when no staff or customers will be on site, and will need to be coordinated between the schedules of the buyer, seller, brokers involved and the business itself. Guess what? That 100% can’t be done before your plane leaves tomorrow.

Do yourself and your chance for getting a look at a business a favor – plan ahead. Have the cursory conversations with your broker, the conference calls with sellers and the time and flexibility to arrange on-site meetings – way, way ahead of time.

Are you in the market to buy a business and want to know more about how confidentiality affects the process? Would you like to know what businesses in the area might meet your goals for business ownership? Ask us today! Leave any questions or comments and we would be happy to help.

Michael Monnot

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

http://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors

Benefits Of The E2 Visa – A Primer For Business Buyers And Sellers

Posted in Buyers Articles, Sellers Articles, Visa/Immigration

Published January 27, 2020

This United States is a country of immigrants. Our foundation was built on the backs of the small business owners who came to this country to give their families a chance at a better life. While today’s anti-immigration news climate might seem to impede the path of those living abroad who have a desire to move to the United States – it doesn’t mean you can’t get here. The entrepreneurial American dream is still very much alive and well.

The United States allows several pathways for those who would like to come here and invest in a business – because those businesses help to strengthen the American economy and create jobs.

One of these pathways is by way of the E2 Visa.

An E2 Visa is an option worth considering if you are a foreign buyer because it allows a non-immigrant investor to come to the U.S. with their spouse and children to live and work so long as they invest in a business that qualifies for E2 status. There are rules to consider, such as whether or not the country where you hold citizenship will allow you to qualify for this type of Visa, but those answers can easily be found by checking the Department of Homeland Security U.S. Citizen and Immigration Services website, found here:

or by asking a qualified business broker who has experience with the E2 Visa process (like us!).

If you are a business seller, then this type of Visa could potentially be very important to you as well. If your business qualifies for E2 status, then you will be opening your business listing to a huge market of investor buyers who are looking for a way to come the the United States.

If you haven’t heard of getting your business qualified for the E2, don’t be surprised – there are not many brokers who are experienced in this type of transaction, and many falsely believe that throwing a Visa into the mix will slow a transaction down. While a Visa does add a few more steps (mostly on the buyer side of the table), in most cases the process will only be delayed by a few weeks – and quite frankly we have had more deals held up by the sellers themselves than we ever have by consulates evaluating E2 status.

If you think the E2 might be your path to entrepreneurship in the United States, don’t delay. There are great businesses for sale that currently meet the E2 requirements. If you haven’t asked about qualifying your business for the E2 Visa, please do by contacting us today! The more buyers who see you business as a potential investment opportunity, the better – so why limit yourself to only local and national buyers? Get your small business on the international scene and you will have a great chance of finding the right buyer.

For more information about the E2 Visa process, please also visit our sister site,

http://e2visa.com/

Are you a foreign buyer who is interested in the option to buy a business in the States with the E2? Are you a seller who wants to know if your business would qualify? Please feel free to leave any questions or comments here and we would be happy to help!

Michael Monnot

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

Hate Sharing Personal Information? A Business Buyer Must

Posted in Buyers Articles

Published January 20, 2020

It’s a question we get asked all the time. Why do you need to know my personal information for the NDA (Non-Disclosure Agreement)?

Sharing personal information can be difficult, especially with a person you have likely never met and only know via conversations on the phone.

Guess what? When you begin your foray into the purchase of a business, you will need to come to a level of comfort with sharing your personal information.

For starters, a business broker will need your full legal name, permanent physical address and email (if not more) before they can send you a non-disclosure agreement to sign. The NDA protects the business from disclosure – of its for-sale status, of its proprietary information and its confidential financial documents to name a few.

To gain access to such a large amount of information a prospective business buyer only needs to offer up the paltry pieces of information listed above – like their name, address and email.

Why? It’s simple. The NDA only works if it can be linked to a specific person. There might be hundreds of men named John Smith in a particular city, but there is only one John Smith who lives at a particular address, has a particular phone number and a specific email.

Many first-time buyers balk at providing their personal information for the NDA, but the reality is you are going to have to get used to sharing your personal information if you want business sellers to share possibly proprietary or confidential information about their businesses with you. The NDA is only the first, and the least intrusive, of the documentation that will be required during the process of buying a business. Down the line you will need proof of your finances for both the seller and your new commercial landlord, you may need to pass a background check and get fingerprinted for certain types of business licensing, you will possibly need to supply a history of your education and work experience, etc.

While it might from the outset seem intrusive, consider the view from the other side of the negotiating table. A business seller has to share everything about their business with you, so asking for some identification as to who you are at the outset isn’t that much of a stretch.

The point here is, while uncomfortable, sharing your personal information is going to be a large part of the business buying process – so the sooner you get used to that fact, the better.

Are you considering buying a business, but aren’t sure you want to share your personal information? Would you like to know more about how your information will be used or shared? Ask us! Feel free to leave any questions or comments and we would be happy to help.

Michael Monnot

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

Future Entrepreneur? Why You Should Pretend That Unicorns Are Impossible

Published January 13, 2020

Pop culture mythology is full of entrepreneurial unicorns – these semi-urban myth creatures who start a tech company and 6 months later sell it for millions or billions of dollars. Many hopeful budding entrepreneurs see these news snippets and falsely believe that entrepreneurship, if done the “right” way, can make them fabulously wealthy in no time at all.

If you are considering a career as an entrepreneur, you will essentially doom yourself to failure if you think the world of business ownership is quick or easy. It just isn’t.

Believing you can enter business ownership and suddenly vault yourself into fabulous wealth is a dangerous way to enter a reality where hard work and perseverance are the only keys to success.

Want the cold, hard truth of entrepreneurial unicorn stories?

Owning a business is tough.

If you own a business, the buck stops with you. Even in a larger business with a management structure and many employees – you are ultimately responsible for the success or failure of your business. Business owners work long hours, can have high levels of stress and don’t always make tons of money (especially in the first few years). You need to accept that becoming the master of your own destiny by working for yourself means you need to have the drive and grit to get the job done.

You probably won’t get fabulously wealthy.

We all know the names of the entrepreneurial NFL quarterbacks like Zuckerberg and Jobs – but just like the chances of any high school football player making it to the starting lineup on Super Bowl Sunday, most entrepreneurs don’t become billionaires. This is not to say, however, that you wouldn’t make a good living owning your own business. If you work hard you can absolutely make a decent amount of money and have a good quality of life. Keeping yourself grounded in financial reality will keep you eye on the right goal – growing your business – instead of chasing an impossible scenario.

Owning a business can be very, very rewarding.

Even though entrepreneurship is tough and probably won’t make you a multimillionaire, the benefits and rewards of owning your own business make the journey completely worth the effort. Owning your own business means you get to be your own boss. It means every dollar you make, you’ve made for yourself and not someone else. It means you have the flexibility to set your own schedule. It means you get to be the master of your own destiny. It means you get to wake up every morning and do something your love to do. The benefits far outweigh the effort it takes. Just head into the world of business ownership firmly grounded with realistic (and non-unicorn) expectations and you have a far better chance of success.

Are you thinking about becoming a business owner and have questions about how much money you can make when you own a business? Would you like to know what types of businesses are currently for sale in your area? Ask us! Please feel free to leave us any comments or questions and we would be happy to help.

Michael Monnot

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

Big Mistakes: Don’t Sink Your New Business

Published January 6, 2020

Although unfortunate, it does happen. Business buyers get their hands on a profitable business and within six months they are calling us to sell because they are literally days away from complete and utter failure – like having to lock the doors and walk away.

How does this happen?

There are four big mistakes that can cause you to pull the rug right out from under your own feet, but they can easily be avoided if you know what they are and apply some common sense to your new venture.

Spending All Of Your Cash

You might have $100,000 to spend on a business, but that doesn’t mean that you should be shopping for businesses that are listed for $100,000. Buying a business and launching yourself into business ownership is an expensive adventure, and you will need to reserve enough of your capital to keep yourself in the black long enough to get the business generating a profit with you at the helm. You will need cash for licensing fees, for your new commercial lease, for inventory and payroll in your first few weeks as owner – only to name a few. When deciding what you can and can’t afford, be honest with your business broker about the money you have available and they can better assist you with finding a business that will reserve some of your cash.

Ignoring Red Tape

Yes, bureaucracy is annoying. Licensing requirements are confusing, expensive and time-consuming – but that doesn’t mean that you can skate around the requirements. You need to be sure that you are operating your business in accordance with the licensing requirements of your industry, state, county and city. If you aren’t, it is only a matter of time before you are caught – and the consequences can be devastating (think the loss of a liquor license or major fines and penalties, for example). Pay attention to the red tape.

Coasting Too Early (Or Ever)

You found a great little business, and from day one you were lucky enough to be pulling a profit, so you take your foot off the gas and let the business essentially run itself. This always ends in disaster. Think about why this business was great in the first place. The former owner worked incredibly hard to maintain what worked and continually focused on the future growth of the business. That simple formula, always maintaining and growing your business, is the key to success. Owners that stop trying always stop succeeding.

Changing Everything

You bought a profitable restaurant, but you hate everything about it. The decor is dated, the equipment isn’t the top of the line and the menu doesn’t appeal to your vision of restaurant ownership. You spend your first six months of ownership completely gutting the kitchen and dining room, a massively expensive renovation. Then you come up with an entirely new menu that is a huge divergence from what the restaurant used to serve. While you are at it, you also change vendors and essentially every operating procedure. After all of this massive upheaval, you are shocked that you can’t get customers in the door and that all of your staff jumped ship. Where did everybody go? The old phrase “if it ain’t broke, don’t fix it” goes a long way in explaining this most expensive of mistakes. The restaurant in this example was successful because it had a regular clientele who loved the menu and quaint decor and a happy staff who were good at their jobs. New owners who change things before they give themselves the time to understand why certain aspects of the business work (or why they don’t work) are setting themselves up for failure. A new owner is far better off following in the footsteps of the prior owner until they are sure the changes they want to make are changes that will actually improve the business, not hurt it.

If you are looking at businesses to buy – be aware that you need to be careful of too many changes, you need to keep the business growing, you need to stay on top of red-tape issues and you need to be careful with your cash if you want to be successful.

Are you in the business market and are curious about what businesses you could afford with the cash you have available? Do you have more questions about how to avoid the pitfalls we talked about here? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

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

4 Considerations – Buying A Franchise Vs. Buying Independent

Published December 30, 2019

If you are thinking about buying a business, then one of the many early decisions you will have to make is whether you should buy an independently owned small business or a franchise.

Both routes to business ownership can bring a buyer success, but it will be a matter of personal choice as to which path will be better suited for you.

Let’s take a look at the four major differences between an independent small business and a franchise to help you decide which camp will suit you best.

Branding

If you decide to go it alone and opt for an independently owned small business, you will most likely be going without the large-scale name recognition and branding that are associated with a large franchise. This can be detrimental in that a strong brand will automatically bring you customers loyal to the parent brand without having to try very hard. On the flip side of the branding coin, however, are the problems that can arise if the parent company or another franchisee makes a big negative splash in the media. Any of that bad press will automatically fall onto anyone within the franchise group.

If you are a marketing machine and love to create buzz about your business, then perhaps an independent business is for you. If you would rather focus your energy elsewhere and leave the branding to the parent company professionals, then a franchise would be a good choice.

Ownership

Yes, a franchisee owns their business in the same way that an independent owner does – the difference lies in the decision making abilities of these two owners. If you are part of a franchise then decisions on product choices, renovation decisions and operating procedures may be made for you.

If you are a first-time business buyer, this might be a good bet because you don’t have to make every decision right away. If you are a complete control freak by nature, you might have issues with having the parent company tell you what to do.

Total Cost

Although debatable and entirely dependent on each individual business and each individual franchise, there are a few generalizations about cost that you can use to help with your decision about becoming a franchisee.

In general, the upfront costs for buying a franchise can be a bit lower than buying an independently owned business, but in return the independent business owner has more control over their cash flow than a franchisee would. For instance, a franchise can require a renovation and you would have to comply where an independent owner can delay renovations until the cash is more readily available.

Operations

This one is also helpful for a first-time business buyer. If you opt for the franchise route, then the day-to-day operations of your business will be established and tested. You will not, however, be able to make major changes to the standard operating procedures if one or more parts don’t suit the way you like to run your business.

Buying an existing independent small business also means that you inherit a set of operating procedures – the difference is that these procedures are not so set in stone. As you learn the ins and outs of running your new business, you can make any changes you see as necessary.

If you are considering a franchise over an independent business or vice versa – the best thing to do is have a chat with a business broker experienced with both franchise and independently owned businesses. Using your experience and your goals for business ownership you and your broker will be able to sort out which option would be best for you.

Are you considering a franchise and have more questions about what it would mean to be a franchisee? Do you think an independently owned small business would be better for you and want to know what businesses are currently available? Please feel free to leave any questions or comments and we will be happy to help.

Michael Monnot

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

Myths And Curves – The Reality Of Buying A Business

Posted in Buyers Articles

Published December 23, 2019

You’ve made the plunge, you’re buying a business – welcome to the fantastically tough but fantastically rewarding world of entrepreneurship. You may just be starting your search, or the closing table is next week – but wherever you are in the process of buying a business there is a very big change in your life that is approaching at light speed. Life as a small business owner.

Many new buyers (and sometimes veteran buyers too) have a roads-paved-with-gold attitude when it comes to what happens after the closing table. They have visions of happiness in their newfound investment, visions of getting the keys and starting in a brand-new and wonderful life.

Life as a business owner can be very wonderful, but it’s also very hard – especially in the first few weeks.

A buyer who wants the smoothest transition possible into entrepreneurship needs to remember two all-important things.

There will be an extremely steep learning curve.

Regardless of your experience in the industry, any new business is going to come with a very steep learning curve. Why? Unlike an employee at a new job who only really needs to learn their own responsibilities when they get hired, a new owner has to learn EVERYTHING. Not only do you have to learn the day-to-day logistics and operational procedures, you need to learn how to do payroll, how to pay taxes, how to make a schedule that won’t cause a mutiny, how to order new inventory, how to get licenses and permits, how to acquire new customers, how to keep your customer base happy through the transition of ownership, how to pay the rent and deal with your new landlord – the list goes on and on.

This steep learning curve should in no way freak you out or dissuade you from small business ownership, instead it should help you mentally prepare for a tough few weeks ahead. Once you get the hang of things it will obviously get a lot easier. Just don’t set yourself up for failure by thinking it will be a walk in the park.

Your new business isn’t perfect.

You may come out of the due diligence phase thinking your new business is perfect every way. Reality, however, will rear her ugly head in the first few weeks or months of ownership and turn your perfect little business into what it really is – a business. There is no such thing as a perfect business. They all have flaws. They all have skeletons in the closet. The only thing you can know for sure as a new small business owner is you are going to find something (or many things) that make you unhappy. There are two ways to react to imperfections. One is to completely freak out and try to sue everyone who was a part of the business sale, then lock the doors and walk away. That is not, of course, the productive solution.

The other, and far better way to react is to take a deep breath and figure out a way to solve your problem. Owning a small business means having to constantly be ready to deal with issues – so treat the unearthing of skeletons as the first real test of your entrepreneurial grit.

Entrepreneurship is hard, but it is also a great way to earn a living. Think of the transitional time ahead of you as a challenge to be conquered and not a mythical field of roses.

Have more questions about the path to business ownership? Are you curious about what businesses would meet your goals for life as an entrepreneur? Ask us! Please leave questions or comments here and we would be happy to help.

Michael Monnot

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

Buying? How You Should Look At A Business

Posted in Buyers Articles

Published December 16, 2019

When most first-time business buyers first call us, they have only one request – they want to go see some businesses. They want to drive by, pop in and take a tour.

This is exactly the opposite of what a new buyer should ask for. You are buying a business, not a house – and the differences between the two are huge.

A house is four walls and the stuff inside. To make a judgement about whether or not a particular house is a good investment, you need to walk around and have a look at those four walls and the stuff inside.

An operating business is not four walls and the stuff inside.

The four walls are usually leased from someone else and the equipment and furnishings are the assets of the business – not the business itself. Yes, when you buy a business you also buy the assets, but that isn’t all you are getting. You are getting cash flow.

You can’t drive by, pop in or take a tour of cash flow. You learn whether or not a business is a good investment by looking at the numbers, by talking to the seller, by going over inventory lists and by examining contracts.

The depreciated value of the equipment, the furnishings, the vehicles, even the color of the paint have very little to do with how a business is priced and should have very little to do with how you judge the price of a business. As such, tours are really not that important. Aesthetics can be easily changed once you take over – so focus on how the business makes money instead.

A better way to look at businesses starts with a conversation with an experienced and qualified business broker. In this initial conversation you and your broker will talk about what your goals are for business ownership and then search for businesses based on those goals. Once you have a few businesses in mind your broker can help you decide if the price is fair based on the numbers and also help you decide if you want to pursue more information.

Want to take a quick peek at what types of business are currently for sale? Use our Business Search Tool by clicking here.

Have more questions about buying a business? Ask us! Please leave any questions or comments here and we would be happy to help.

Michael Monnot

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

Buying A Business? Patience Is A Must

Posted in Buyers Articles

Published December 9, 2019

We’ve talked about this issue a handful of times, but it is so prevalent in the day-to-day of buying and selling businesses it merits revisiting from time to time. A great business broker spends their work day keeping business deals on track and moving towards a closing table, but they are only one part of a very complicated process.

As such, you as a buyer may get frustrated by the pace of your transaction – but in many cases there is absolutely nothing your broker can do.

What you need to remember is the only cure for tied hands is patience.

Here’s an example:

You are a motivated buyer who is very interested in a particular business and have put a decent offer on the table. You request through the seller’s business broker that the seller send over the information required for due diligence, like financial records, tax returns, etc.

Then you wait. And you wait.

Then the seller sends over partial records, which get forwarded to you from your broker, but the rest of the information you requested has yet to be produced. So you wait.

You constantly call and email your broker, and all they can tell you is they haven’t received the information from the seller so their hands are tied.

Why does this happen?

Some sellers go on the market with the initial intention of reaching a closing table, but once they are in the process they realize that selling their business requires a ton of work on top of what is already required for the day-to-day operation of their business (producing information and being available for questions/meetings). Then they completely panic because are shortly going to be out of a job.

These realizations can cause some sellers to develop a decent case of cold feet. It can also cause a seller to be defensive, as constant requests for more financial information can give the impression that the buyer is trying to dig up dirt on the business.

This, of course, is not the case. Buying a business is a huge decision, and most buyers are going to want a thorough look at any business before they pull the trigger.

So how do you figure out if the problem is your broker or the seller?

If your broker is really good about answering your questions, is prompt with returning phone calls and emails and has been forthcoming about the issues they may be having with the other side – then their hands are probably are tied. If it takes your broker ten days to return your phone calls, then the problem is probably the broker.

As with everything in a business transaction, a good dose of patience will go a long way. This does not mean, however, that you have to sit around and wait for a seller to deliver information they have no intention of ever giving you. Talk to your broker if you have concerns about time frame issues, and understand that sometimes there really isn’t anything a broker can do to speed up the process.

Are you a buyer who is having a hard time getting information out of sellers? Are you concerned that the issue may be with your current broker and not with the seller? Please feel free to leave us a comment or question here, and we will be happy to assist you.

Michael Monnot

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

Are You Compulsive With NDAs? The Wrong Approach

Published November 25, 2019

Are you a buyer like this? Have you requested information on dozens of businesses and then when asked a question about one of these listings – you can’t remember which one we’re talking about?

Are you requesting and then signing Non-Disclosure Agreements (NDAs) like it’s going out of style? Guess what? You are probably NEVER going to buy a business. Never. Not going to happen. Why?

Dozens and dozens of NDAs is not the way a successful buyer finds and then buys a business.

Buying a business requires that you keep your eye on the goal – successful business ownership.

What do we mean by that?

First and foremost, signing the NDA should come after you’ve already made some decisions about whether of not a particular business is really what you’re looking for. You shouldn’t buy a business based on where it is, how it looks, or what the tax returns say. This is the information you will be able to access after you’ve signed the NDA. Sure, these are all important parts of a business, but as a buyer you need to be focused on whether a particular business is going to meet your goals for business ownership. The major mistake that unsuccessful business buyers and unsuccessful business owners make is they never considered what they want out of business ownership.

If your goal for business ownership is to have more time to spend with your family and the ability to do things like coach your kid’s soccer team – then buying the bar you think you’ve always wanted isn’t going to work – you’ll have to work seven nights a week. If your goal for business ownership is to make more money than you do at your current job, then buying a huge restaurant with zero restaurant industry experience isn’t going to work – you’ll be bankrupt in six months.

The path to a successful business purchase starts with a conversation. You and your business broker should have a talk about what your goals for business ownership are, about your prior work experience and about the amount of money you are looking to invest in a business. Then, and only then, should you sign NDAs for the businesses that will actually meet those goals. You might be surprised that a business you never would have considered on your own could be the perfect fit.

Narrow down your search, then request the information you need. This will help you keep your eye on the goal of business ownership.

Are you looking for businesses to buy but haven’t had a conversation about what your goals for business ownership are? Do you want to know more about how to successfully buy a business? Ask us! Please feel free to leave any questions or comments here and we would be happy to help.

Michael Monnot

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