what should i know about buying a business Archives - Page 27 of 29

Published April 2, 2018

What’s the best path to entrepreneurship?

Most think of the startup in some suburban garage – but is that really the smart way to go? The short answer? Probably not. Buying an existing business, however, is typically the better route to business ownership. Here’s why:

1. Starting a business is a risky and expensive venture.

Startup businesses are tricky. You are testing new waters – with your concept, with your location, with your operating procedures, with a brand-new staff. In the unlikely event that all goes as planned and everything works in your favor, you will still need an enormous amount of capital to lease a new location, renovate that location to suit your needs, equip your location, buy inventory, pay for permitting and licensing – the list goes on. Then you will also need to have enough capital to sustain your business, your staff and yourself for the time frame it takes to start turning a profit, which can be several months or more.

If you buy an existing business, many of the risks and financial challenges of a startup have been removed. With an existing business, you are buying a proven concept, location, operating procedures, a trained staff – and in most cases a training period with the existing owner to get you on your feet. The amount of capital you need might seem substantial, but remember that it would be far more expensive in the long run to find, furnish, equip, stock and run a business with no history of success than to just buy one with that laundry list already complete.

2. There’s no such thing as a “startup business broker”.

One of the best parts of buying an existing business, especially if this is your first foray into business ownership, is you can have expert help along the way. By having an experienced and qualified business broker by your side you have expert advice to guide you through your business search and help you find a business that fits with both your goals and available capital.

Don’t see any businesses on the market that appeal to your entrepreneurial dream? Sometimes buyers have a specific type of business in mind, but the goals they have for business ownership would require that they end up in an entirely different industry. A conversation with a good broker will help you decide if the business you think you want to have is really the business you should have to get the kind of life you are looking for. If you are starting a business, you can seek advice from anywhere and everywhere, but there won’t be anyone to guide you in the same way a broker can if you buy.

3. A business you buy comes with everything you need.

Like we discussed before, starting a business means having to hire and train a brand-new staff, finding then leasing a new location, buying all the equipment and furniture, finding and purchasing inventory, and setting up licenses and permits – if you can even get them. An existing business comes with everything, including in most cases the former owner for a while (for a training period to help you learn the ropes). This will take an enormous amount of pressure off of you as a new business owner, allowing you to focus on learning your new business without all of the additional headaches that a brand new business would require.

If your goals for the future include business ownership, seriously consider buying an existing business instead of starting from scratch.

Have more questions about the differences between buying an existing business and starting one from scratch? Are you curious about what types of businesses could be right for you? Ask us! Please feel free to leave us a comment or question 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

How Do You Find A Good Business Broker? 2 Questions To Ask

Published March 26, 2018

Whether you are a business buyer or a business seller, the best way to navigate the business transaction process is with the help of an experienced and qualified business broker.

How can you tell if the broker you’ve been talking to is experienced and qualified? Let’s start by finding out how a person becomes a business broker in the first place.

To become a business broker, someone first needs to have an interest in helping people buy and sell businesses. Business brokers come from all kinds of backgrounds – they are former entrepreneurs, former finance professionals, former real estate brokers, etc. The experience of business ownership and a background in finance are obviously helpful, but aren’t necessary.

When a business broker first starts out, they must obtain the same license a real estate agent needs (there is not a special license for just business brokers, so they get lumped into the real estate industry). Once they have this license they need to work as a business broker/agent for someone who is a licensed broker (just like a real estate agent works for a real estate broker) for two years and then they are eligible to become a licensed broker on their own.

It is not necessary, however, for a broker to ever get the “broker” license if they continue to work with someone who is already licensed this way. As such, if the business broker you are working with doesn’t have the “broker” license this is not a bad thing. In fact in many instances broker/agents work within business brokerage firms for many years with great success without ever getting a “broker” license.

When you first begin speaking with a business broker, you can ask them about what kind of license they hold, but the answer to this question is not as important as you might initially think.

Lots of people have a real estate license but never actually sell a house – and, unfortunately, lots of people also try to dabble in the business market. We come across realtors, lawyers and even doctors who try to be business brokers “on the side”.

As a buyer or a seller, you want to stay well away from these part time brokers. Buying and selling businesses is a complicated process, and you are going to want someone who actually knows what they are doing helping you through your transaction.

You wouldn’t let your family practitioner perform plastic surgery on you – so don’t let a real estate agent or your dentist try to help you buy or sell a business.

Now that you know how a person becomes a broker, what are the questions you should be asking to find the right one? There’s two that can tell you a lot:

1. How many deals have you closed in the last year?

A broker who regularly closes deals is probably well established and clearly knows what they are doing. They have connections within the industry, they know how to successfully negotiate business transaction contracts and they are able to work with commercial property owners to get their clients a lease.

2. How many clients have referred you to a friend or have used you more than once?

A broker with repeat or referral clientele is someone that others have enjoyed working with. The experience was so positive they would trust that broker with their personal connections. Like a great review of a business, referrals and repeat transactions speak volumes about what your experience with that broker will probably be.

The message here? Ask the right questions and you will quickly find out whether the broker you have been speaking to is the right person to help you with your transaction.

Are you looking for a business broker and have more questions about how to find the right one? Want to ask us about how many deals we have closed or how many referrals/repeat clients we have? Please feel to leave us a comment or question here and we will be happy to get your questions answered.

Michael Monnot

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

Buying A Florida Business – We’ve Got More Than Beach Bars

Published March 12, 2018

Florida is the sunshine state. We’re the home of palm trees, plastic pink flamingos, alligators and white sand beaches. We’re the place where anyone who spent their life in the cold north comes to retire.

We’re also the place where many inspired entrepreneurs dream of coming to buy a beach bar and spend their days absentmindedly running said bar from the comfort of a nearby hammock.

We totally get that dream. It sounds amazing, and it is amazing because it’s completely impossible. For starters, absentmindedly running a business is really just running that business into the ground.

You can, however, still have a piece of that Florida dream without having to buy a tiki bar that plays only Jimmy Buffett music.

You can have the nice weather and a plastic flamingo in your yard by buying a business that will actually help you achieve your goals. Goals like having more free time. Like making more money. Like following a passion. Like getting to spend more time with your family. You can achieve these goals because here in Florida we have far more than white sand and alligators. We have real people who lead real lives.

Do you know what real people need? Real businesses that don’t all sell margaritas. They need grocery stores, daycare centers, car washes, plumbers and roofers. They need pizza places and auto mechanics. They need all the goods and services that any community has to have in order to function – and you can be a business owner who meets those needs.

And you don’t have to start from scratch. At any given time there are a multitude of businesses for sale – businesses that have great numbers and can be your ticket to the life you’ve been dreaming of. Want to see a few? Try our business search here.

What type of Florida business would be right for you? It depends on a few key factors – factors you should discuss with and experienced and qualified broker so they can help you find the right business for you. For instance, what are your goals for business ownership? Do you want to make the most money possible in the shortest amount of time? Are you looking for a specific industry that is your passion? Do you want to have a more flexible schedule than your current job allows so you can spend more time with your kids?

You ultimate goal for business ownership coupled with the amount of working capital you have available and your prior work experience will help you determine what types of businesses might be right for you. You and your business broker can work together to look for businesses that meet your goals – and you might be surprised by what you find.

For instance, if your goal is to spend more time with your kids and you think you want a tiki bar – think again. The restaurant industry has notoriously long hours, especially in the evenings and at night. You might find that a small service company (like a pest control or home-watch business) where you set your own schedule will be far better for your work/life balance.

Talk to a business broker today about your goals and take a peek at what’s currently available. You can have the Florida dream – and the pink flamingo – without buying a bar on the beach.

Have you always wanted to buy a business in Florida and want to know what types of businesses would meet your goals? Would you like to know what industries are doing well in the areas where you’d like to live? 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

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Buying Or Selling A Business? What A Government Shutdown Means For You

Published January 22, 2018

The government is shut down, again.

It’s happened more times than it should in recent years, to the point that most people feel like it’s so old hat that it really doesn’t have much impact on their lives.

However, if you’re in the market to buy a business or are currently trying to sell your business, the government shutdown could have a major impact on your transaction.

Why? The Small Business Administration, or SBA for short.

Traditional lending institutions like banks are typically gun-shy about financing small business transactions, especially with the financial crisis of 2008 relatively fresh in everyone’s mind – so many buyers turn to the SBA in order to finance the purchase a business when a full cash offer is not an option. Many sellers also take steps to ensure that their business would qualify for SBA loans when they are preparing to list, as the possibility of SBA financing can be a draw for potential buyers.

SBA financing is very common in the small business world and can be a very useful tool to get a deal to the closing table, but since the SBA is a government entity it requires the government to be up and running to be able to use it. A government shut down means the activities of the SBA are suspended – so no financing can go through.

If you are looking to buy a business, the government shutdown and suspension of SBA means you may have to put your buying plans on hold until the government is back up and running. If you are a business buyer or seller with a deal in the works, it may mean a pause in your transaction until the funding can go through.

What should you do if you are a buyer or seller and are concerned about the impact of the shutdown? Talk to your business broker. We have, unfortunately, been through this before, so we can talk through any and all potential options and decide on the best course of action for your particular circumstance. Overall, the best advice would be to stay patient and understand that this political tool doesn’t last forever. SBA will be back up and running soon.

A note to sellers – you should be patient with the other side of your transaction because it isn’t their fault the financing has been put on hold. A buyer who needs the SBA to buy your business can’t do anything if the SBA isn’t open.

Will the shut down last forever? No, it won’t. Will this kind of thing happen again? Unfortunately, it probably will. Stay calm, try to be patient and discuss options with your broker.

Are you looking for businesses to buy and want to know about funding options besides the SBA? Are you a seller who wants to know more about finding out if your business would qualify for SBA financing? 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

3 Misconceptions About Business Ownership & Why 2018 Is Your Year To Make The Entrepreneurial Leap

Published December 28, 2017

2018 is your year.

It’s New Year’s resolution time again, and although you might be thinking that 2018 is the year when you will finally lose that weight, get organized or spend less time staring at your phone – we all know that our resolutions have a way of dissolving before February rolls around.

If you really want to change your life, here’s a different approach. Buy your own business.

Business ownership can be tough, but so is dragging yourself out of bed everyday to go to a job you hate. Entrepreneurship, despite all of the challenges, is very rewarding. All of your effort benefits you directly. You get to do something you actually want to do for a living. You can, more or less, make your own schedule. Your destiny is in your own hands.

If it’s so great, why doesn’t everyone own their own business? Many people are deterred from the entrepreneurial path by some pretty powerful and pretty false misconceptions.

Misconception #1: You need to be a multi-millionaire to own a business.

Small businesses come in all shapes and sizes, so while there are businesses that only a multi-millionaire could afford, there are also lots of small businesses on the other end of the spectrum that won’t cost you more than you have while having real potential for growth with the right leadership.

Misconception #2: Business owners never get a day off.

Ok, so this one isn’t completely untrue, but while as a business owner you are always technically on the clock – it’s your clock. Need to go take care of a relative for three weeks? Need a day off to chaperone your kid’s field trip? You can. Smart small business owners put the right people in place so their presence isn’t necessary 100% of the time. They also utilize the digital world so they can work remotely whenever necessary.

Misconception #3: You need to be a business ownership expert.

We hear this one a lot. “I don’t know anything about owning a business.” Sure you do. How many times have you muttered under your breath because your boss was making a terrible decision? How often do you look at the way a company is run and say to yourself “if I was in charge…”. The only difference between someone who works in a particular industry and a person who owns a business in that industry is one took the entrepreneurial leap. You can too.

There was a time when small businesses were the only kind of businesses. Every major corporation started small. The entrepreneurial plunge shouldn’t be feared – it should be embraced. Make 2018 the year you changed your life. Buy a business!

Have you always wanted to buy a business but you don’t know where to start? Would you like to know how the business buying process works? Ask us! Please leave 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

Looking Good: A Record Breaking 2017 – BizBuySell’s Third Quarter 2017 Insight Report

Published December 26, 2017

The small business market is booming, record setting booming, with this year on pace to see the highest number of small businesses bought and sold in the last decade.

Closed transactions are up 24% from the same time last year and small businesses are performing well, which may be a contributing factor to the increased numbers of sales and the higher sales prices. Median revenue of sold businesses is up 11.2 percent from the third quarter of last year, and the number of active listings is up 6.7% over last year. This increase of options means better choices for buyers looking to enter the world of business ownership.

Not only are businesses selling for higher prices, they’re selling faster too. The median time to closing fell 14.6% from last year – an average of only 146 days. This might mean that the confidence of buyers in the small business market and the motivation of sellers to sell while the market is good are coming together over the negotiating table.

The hottest industry sector? Service. Restaurants, in particular, saw a 22.2% increase in median revenue for those businesses that sold in the third quarter. The number of service industry transactions was also up – 26% when compared to last year.

What could be driving these impressive market gains? The economy is doing well in general, so small businesses are seeing good numbers. This coupled with the possibility of fewer regulations and a decrease in taxes could be giving the market a push.

What does this mean for you? Sell while the selling is good. The factors contributing to this booming small business market – like the possibility of tax reforms and the raging economy – may falter and affect what you can get for your business if you wait to list. A boom is always followed by a bust, so get the biggest return on your business investment by riding the wave at the top – not the bottom.

Want to know what businesses like yours are currently selling for? Contact us today.

Michael Monnot

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

Don’t Be That Guy – Why Confidentiality Is Important To Business Buyers Too

https://infinitybusinessbrokers.com

Published September 25, 2017

New buyers hate confidentiality.

We tell new buyers why confidentiality is important, but they are still frustrated by having to sign non-disclosure forms, having to wait to find out the physical location of a business and by having to visit businesses by appointment and then only after hours. We get it, it is tedious, but it is also extremely important.

Invariably we come across a buyer who deals with their frustration by breaking all the rules – by waltzing into a business during business hours and demanding the employees produce the owner so they can talk about the listing price, by telling their neighbors and friends what businesses they have toured – and confidentiality is suddenly out the window.

When you first enter the business marketplace as a buyer, the process by which you gain access to information about the businesses that are on the market might seem ridiculous at first, but those protections benefit you too.

When a business goes up for sale, confidentiality needs to stay in place.

What do we mean by that? We mean that the only people who should know that the business is for sale are the seller, the business brokers and attorneys involved and vetted buyers who have signed the appropriate non-disclosure documents. No one else should have access to that information.

“Why? I’m trying to make a major decision here, I need access to the business to see if I want to buy it or not.”

Yes, you do need access to information, and you absolutely will gain that access – but it needs to be done carefully to maintain confidentiality.

What can happen if confidentiality is breached? Clients go to a competitor, employees quit and take their regular customers with them, vendors cancel contracts and the community assumes that the business is for sale because they are moments away from having to close the doors. If you are trying to buy a business, you don’t want to take the reins in the middle of this confidentiality crisis. You want the business to be in good shape and in good standing with the community the day you take over as owner.

An important note here – the impacts of a confidentiality breach aren’t for the business and the seller alone. If you caused the breach, you can be sure that the legal repercussions included in your non-disclosure agreements will absolutely be enforced.

How can a buyer ensure the health of the business they are trying to buy? Be patient, and keep the information you learn about businesses currently for sale to yourself. Don’t be “that guy” who causes severe upheaval in someone else’s business. If everyone plays by the rules, businesses stay protected and buyers end up with businesses in great shape.

Are you a buyer who is frustrated by confidentiality? Do you have questions about why confidentiality is so important? Please feel free to leave a comment or question here, and we would be happy to assist you with your business buying questions.

Michael Monnot

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

The Latest Immigration News And What It Means For You

https://infinitybusinessbrokers.com

Published July 24, 2017

Both the 4th and 9th Circuit Courts of the United States upheld the hold placed on the travel ban earlier this year, but for different reasons. The Fourth Circuit Court ruled that the reworked ban violated the First Amendment – the amendment that prohibits the establishment of religion. The Ninth Court ruled that President Trump overstepped his authority because he made a decision about national security without adequate justification. The ban now heads to the Supreme Court where justices may decide to hear the case or may decide to delay it until the next session in several months.

If you are someone who is considering a move to the United States as a business investor – then it’s great news that yet another court upheld the ban. It shows that the incredibly restrictive nature of the new administration’s immigration policies will meet legal challenges on every front.

If you are looking to sell your business in the near future a continuation of the hold is good news for you too.

First of all, if your business is sensitive to the ebb and flow of the tourism industry, the legal pushback in the news tells the rest of the world that the U.S. isn’t such an intolerant place after all. Foreign tourism dropped off after the initial travel ban was announced, and this newest development might help to turn that trend around.

On the second front this hold might keep the administration’s attention away from such immigration programs as the EB-5 and the E2 – which many fear could be changed and restrict the amount of foreign-born entrepreneurs coming to the US. The backlash and legal maneuvering might also slow the administration’s push to limit immigration on other fronts that might effect the small business community for fear of further legal fights.

Resistance to the new immigration policies shows that the United States is not as intolerant of immigrants as the initial moves by the administration may have portrayed us. Continual resistance shows that no matter what the political climate we are unlikely to completely change our national identity as a country of immigrants based on one administration’s plans.

As to what the future holds – no one can be sure how the Supreme Court will handle the decisions of the lower courts. The fact that the lower courts upheld the bans for different reasons may make it more complex for the Supreme Court to hear and/or decide. For now, the best bet is to wait and see.

Michael Monnot

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

Great News All Around: The Newest BizBuySell Insight Report

https://infinitybusinessbrokers.com

Published July 19, 2017

The newest BizBuySell Insight report is out – and the news is better than good.

The first quarter of 2017 saw record numbers, where closed transactions were up 29% from the same quarter of 2016. This jump has a lot to do with the booming economy, access to financing options and strong numbers within the small business community itself.

Both median revenue and median cash flow are at the highest levels since BizBuySell started tracking data back in 2007 and median asking and selling prices moved closer together – showing a stabilization of the market.

What does this mean for you? It means that the small business market is healthy and growing, although stabilizing forces will probably curb the record setting numbers of the 1st quarter and leave us with a year very similar to 2016 (which was a great year on it’s own).

If you’re thinking about selling or buying a business, now is the time to do so because the market is healthy, business financials are up and prices are fair.

Do you have questions about the health of the market in your industry or in the industries you are considering? Contact us today.

Michael Monnot

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

Business Buyers Beware: How Your Actions Can Keep You From The Closing Table