what should i know about selling my business Archives - Page 12 of 16

Preparation And Selling Your Business – 3 Steps You Should Take

Posted in Business Broker Why & How, Sellers Articles

Published January 29, 2018

How important is preparation when selling a business?

The short answer? Preparation is everything.

Let’s pretend that you are buying a car. You find two nearly identical cars – same price, make, model, year and color. One seller has the title ready to go, the car had been recently detailed and the interior smells nice. The other seller isn’t sure where the title is, the car is full of junk and doesn’t look or smell like it’s been cleaned in this century. Which one are you going to buy? The answer may seem obvious, but in many cases business sellers try to pass off their wildly unprepared business as one ready for buyers. This is a big mistake. First impressions are extremely important, so your business needs to be ready for buyers before buyers ever come through the door.

How do you prepare a business for the market?

Organize Your Books

Business buyers aren’t typically buying the building associated with your business, and the value of a business isn’t based solely on tangible assets like furnishings, inventory and equipment – your listing price is, for the most part, based on your cash flow. How can you prove that it’s worth what you say it is? A big box of crumpled paper isn’t going to cut it. Neither is a poorly photocopied P&L and the last page of a tax return. You need to get your books in order, and you need to do it now. If you don’t know where to start, ask your business broker for advice or use the services of a CPA who is familiar with the accounting needs of a business that will be for sale.

Clean It Up

Back to the idea of first impressions – if you own a bar with carpet on the floors that have never been cleaned and rafters full of cobwebs you’d better believe no buyer in their right mind is going to pay you top dollar. The mess and smell aside, a filthy location or one in considerable disrepair tells a buyer that you haven’t taken care of your business the way that you should – meaning there are probably many more skeletons in the closet that they won’t be willing to pay for. Give your business a thorough once-over and fix what’s broken so you don’t squander that all-important first-impression.

Decide On Answers To Buyer Questions

When you are selling your business you are making a sale – and like any good salesman you should both know and be able to communicate your product (your business) to buyers. Talk to your business broker about what types of questions a buyer might ask and then think through how you might answer those questions. You want to look professional and polished in your first meeting or conference call with a buyer, not like a deer in headlights.

If you are considering selling your business and aren’t even close to a point where buyers can come in the door – don’t worry. Your job has been running your business, not selling it, so you will need to adjust your focus a bit in the weeks and months before your listing goes live. Use your business broker to help you prepare and you will be ready for those first looks.

Do you own a business with the proverbial big box of crumpled paper and would like some tips on how to start organizing your books? Would you like to know more about what buyers are typically looking for? Ask us! 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

www.InfinityBusinessBrokers.com

No Comments »

Own A Small Business? 4 Big Website Mistakes To Avoid

Posted in Sellers Articles

Published January 25, 2018

Every business must have a website in the digital age, from a small food truck operation to a multinational corporation. Your website is how people find you, find out about what you do and decide if your business is the right business for their needs.

If you are a small business owner who doesn’t have a website – getting one is priority number one. Not having a web presence is like having a store without a sign out front or anything in the windows to tell those passing by what’s inside. If you do have a website, there are some very basic rules that separate a good website from a terrible one. Where does your current website fall? Here’s how to tell:

What makes for a great business website?

A good hosting plan.

Sure, you can find a litany of free or absurdly cheap web hosting services that will let you toss together a stock-layout website in 5 minutes – but is that what you really want the face of your business to be? Cheap and stock? Probably not. Services that offer more customization and a way to remove ads are essential if you want to look professional, and a good hosting service will also offer more speed for your users. The responsiveness and speed of your website will not only keep users happy, it can help boost your rankings with Google.

A good blog.

Blogs aren’t just for fashionistas or for your teenage kids – blogs are an essential part of any business website. Why? Having a blog ensures you are getting good information about your goods and services out to the people who visit your website. It also is a major factor in your rankings with Google. A well-kept blog means your website is constantly publishing new content – therefore constantly marching it’s way up the search rankings.

White space.

Do you know why newspaper stories have all of the pertinent information in the first paragraph? Very few people ever read the whole article. Online attention spans are even shorter – so if you are writing endless paragraphs that force people to scroll and scroll to find the information they need, you won’t keep their attention long enough to be useful to your business. Keep informative blurbs short and concise. Don’t clutter up your pages with too much information in one place. Your website needs to be aesthetically pleasing (lots of white space) if your want people to stay.

Your contact information.

This one might seem obvious, but you would be shocked at how many small business websites don’t include any contact information. One of the major purposes of your website is to tell people where you are and how to contact you. You should absolutely include your address, phone numbers, email addresses/a contact form and some kind of map.

A great business website can be the difference between success and failure, so invest the time, money and effort to make the online face of your business as great as your physical one. A well-maintained and beautiful website will also make a great selling point when the time comes to put your business on the market.

Do you own a business but don’t have a website? Would you like to know more about how a great website can help you when the time comes to sell? 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

www.InfinityBusinessBrokers.com

No Comments »

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

Posted in Buyers Articles, Sellers Articles

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

www.InfinityBusinessBrokers.com

No Comments »

Business Owner? Why An Accountant Is A Great Idea

Posted in Sellers Articles

Published January 15, 2018

Running a small business can be very challenging. You get pulled in 16 different directions every day and have the fate of your business and your employees on your shoulders. While it might seem like you should be able to be all things at all times for your business, there is one very important part of your business you shouldn’t try to handle all on your own.

Your accounting.

Keeping track of the finances of your business needs a great deal of time and energy – time and energy you as a business owner should really be spending growing your business and your customer base. It may seem like an unnecessary expense, but by handing over the incredibly important task of managing the financial record keeping of your company to someone who specializes in that work – the time that delegating your accounting gives you will pay for itself with the growth you can create.

Your numbers are also critically important when the time comes to sell your business, as your financial records are the only way you can justify your asking price to a potential buyer. You don’t want a box of crumpled receipts to be the face you put on your business when the first buyer wants to see documentation. A properly curated account of your business will not only make your numbers clear, it will show potential buyers that you had the foresight to keep this very important responsibility in the proper hands.

If your business is so small that you can’t afford an accountant yet – there are options like QuickBooks, Xero and Wave, just as examples, that will give you a guided approach to keeping your financial records on track.

The point here? When it comes to the accounting part of your business, don’t try to go it alone. Get the help that will pay off with the growth and the future sale of your business.

Do you own a business and do all of your own accounting? Would you like to know more about how professional accounting help will make your business more desirable to buyers? Ask us! 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

www.InfinityBusinessBrokers.com

No Comments »

To Train Or Not To Train – How Long Should A Seller Stay?

Posted in Sellers Articles

Published January 4, 2018

You’re in the final stages of selling your business and are more than ready to start the next phase of your life. You and a buyer have agreed on a sale price and are in the final days of due diligence. As the final sale contract begins to come together one very important part of the agreement needs to be discussed – training.

No one in their right mind is going to take over a new business without having someone show them the ropes, and if you care at all about the future of your business, the jobs of your employees and your financial return from selling – you need to take the training part of your transaction very seriously. This is even more crucial if you have seller financing as part of your deal, because if the business falters after you leave – you won’t get paid.

So, what does a typical training period look like?

For the typical small business sale, the training period is two weeks.

If you and the buyer don’t think two weeks is enough time, there are a litany of options. You can agree to stay on to train in a full-time capacity for one period of time and then a part-time capacity for a period after that. You can also agree to the two full weeks and then agree to be available on a consulting basis for several weeks or months.

You don’t want to stay on any longer than necessary, but you do need to show a new owner EVERYTHING you do – from how you unlock doors to payroll. You need to introduce the new owner to your clients, your vendors and your staff. All of these things take time.

They don’t, however, take forever. A buyer’s cold feet and nervousness about taking the reins shouldn’t dictate the amount of time you spend training. If you can teach them what they need to know in two weeks, then that’s it.

Here’s a very important caveat that you may not have considered. Once you hand over the keys, even if you are staying on in a training capacity, you are no longer the owner and no longer the boss. The new owner is in charge, and everyone needs to answer to them, not you. This dramatic shift in the power structure at a business you very recently owned can be emotionally difficult for some sellers, especially if the new owner makes changes you don’t agree with – another reason you should keep the training period as brief as possible.

Talk to your business broker about what they would suggest for a training period in your case. Then remember to keep your cool when dealing with the new owner.

Are you thinking about selling your business and hadn’t considered a training period after the sale? Would you like to know what we would suggest as an acceptable training period for your business? 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

www.InfinityBusinessBrokers.com

No Comments »

The Current Immigration News Round-Up

Posted in Sellers Articles, Visa/Immigration

Published December 27, 2017

Immigration.

Immigration has become a buzz word in our new cycle lately, and as such it might feel like for every five seconds that passes the immigration policy of our nation changes six times. While this is obviously an exaggeration, immigration news has become an every-evolving story, and recently there have been some very big news events in the immigration world.

Chief among them? The third iteration of Trumps travel ban is now out, and this newest version has kept the six countries on the second version plus three more, Chad, Venezuela and North Korea. The inclusion of North Korea is not surprising considering our current tensions with that country, and Venezuela’s inclusion isn’t surprising when you note that this only includes Venezuelan government officials. Chad’s inclusion on the list, however, is leaving some scratching their heads. The United States has a good relationship with the country of Chad and their military has recently worked to fight terrorist groups hand in hand with United States. The administration has been rather quiet on their reasoning for the inclusion of Chad, only saying that the countries listed are those who do not meet the requirements for information sharing and vetting of citizens before they are granted Visas to enter the United States.

This travel ban, like the two before it, has been partially blocked by two courts in the United States – one in Hawaii and another in Maryland. How these newest legal challenges play out and whether or not this issue will again have a chance of coming before the Supreme Court remains to be seen, but the legal challenges are again based on the notion that the travel ban is a Muslim ban – something the administration denies.

In other immigration news, USCIS (U.S. Citizenship and Immigration Services) has resumed premium processing for those H-1B Visa petitioners who got their 2018 applications in before the cap of 65,000 was met in April. Premium processing of physician’s applications under the Conrad 30 program were also resumed. Premium processing was abruptly halted in April as the administration sought to begin an overhaul of the H-1B Visa program, which like the travel bans brought about protest from industry leaders who need the H-1B Visa in order to thrive.

What does all of this immigration news mean to current business owners within the United States? The pool of potential buyers for your business may shrink as investor Visas and the H-1B continue to remain under attack. If you are a foreign national looking to come to the United States, you should keep an eye on immigration changes, but you should not let the constantly negative news feed discourage you from keeping the U.S. as an option for your business investment. Every attempted change to immigration policy has been met with both legal challenges and swift, vocal disagreement from industry leaders.

It is important to remember amidst all of the immigration fury that our nation is a nation of immigrants. Our innovation and our success have been driven by immigrant ingenuity and the ingenuity of the children of those immigrants. Our strength comes from our heritage as a place friendly to those seeking the American dream. If we ignore that heritage we simply cannot continue to retain our national strength. Positive immigration reform is the only viable path forward.

Are you a foreign national who is considering a move to the United States, but have questions about what the current political climate means for you? Are you a business owner who would like more information on the pool of foreign national business buyers? Ask us! Please contact us today 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

www.InfinityBusinessBrokers.com

No Comments »

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

Posted in Buyers Articles, Sellers Articles

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

www.InfinityBusinessBrokers.com

No Comments »

Don’t Hate Investor Visas: How Misinformation Hurts The Small Business Community

Posted in Sellers Articles, Visa/Immigration

Published December 21, 2017

Investor Visas have been in the news, and it isn’t pretty.

They’ve been described in numerous ways, the least flattering of which is as a way for the corrupt and evil to write a check and waltz across our borders. Nothing could be further from the truth. This aspect of our immigration system might soon be facing a major rewrite – one that could effectively end the path for foreign entrepreneurs looking to come to the United States.

I own a small business and none of my employees are immigrants. Why should I care?

If you are a small business owner who doesn’t feel like they have a dog in the immigration race, it might be tempting to just tune all of the noise out. It might also be tempting to believe all of the media hype concerning our Visa system and the apparent ease with which a foreign national with terrible intentions can just buy their way into the country. Sticking your head in the sand or taking at face value everything that streams across a news feed are both enormous mistakes when it comes to the future of your business and the future of the U.S. small business economy.

The truth about investor Visas? They are a continuation of our proud national heritage. With very few exceptions, everyone who is a United States citizen can look back into their own lineage and find an immigrant who came to this country and worked hard to build a better life for their family. They created the main street businesses that kept communities strong, drove the industrial revolution and brought the prosperity that made us into a world power. In more recent generations immigrant entrepreneurs have been innovators, creating the tech-based businesses we all know and use. Cutting off the ability for the next generation of foreign born entrepreneurs to come to the United States will kill the vital legacy that made us great in the first place. Eliminating foreign born entrepreneurs also removes from the pool a large number of future business buyers – buyers today’s business owners will need when the time comes to sell.

What about immigrants who just buy their way into the country? How do we know they aren’t “bad actors”?

Investor Visas used by foreign entrepreneurs come with an enormous amount of vetting and red tape. There are applications that require an immigration attorney’s help, one-on-one interviews at American consulates, seemingly limitless disqualifiers that can end the process for a foreign investor before it even begins. In most cases you have to have a large amount of capital to invest and your status within the United States could remain in perpetual limbo as you must reapply for some investor Visas every few years. In some cases you also have to prove that you are creating specific numbers of jobs for U.S. citizens. This wouldn’t be an easy or sensible road for any “bad actors” to take, especially considering that a tourist/business visitor Visa (of which this country issued 1,106,723 in 2016) is so much easier to obtain.

Investor Visas are a good thing. They bring us the people we want and need – driven entrepreneurs and innovators. Small business owners who want the small business economy to continue to thrive should encourage, not resent, the investor Visa process.

Have questions about the process by which foreign-born entrepreneurs can buy a business in the United States? Want to know if your business would be open to this pool of buyers? Contact us today.

Michael Monnot

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

www.InfinityBusinessBrokers.com

No Comments »

Selling A Seasonal Business? How To Make Your Books Look Good

Posted in Sellers Articles

Published December 7, 2017

If you live in a seasonal area, then you understand the flow of money in your business community.

For instance, the many beach communities of southwest Florida are completely dead in the summer when the heat soars – but come October when the weather up north starts to turn cold – it feels like the population multiplies by a factor of five. Restaurants that had four tables total on a July Saturday night now have a two hour wait on a December Tuesday.

Businesses in seasonal communities understand the ebb and flow throughout the year – working incredibly hard during the peak months in order to survive the bleak off-season.

When the time comes to sell a business like this, it can be challenging to show a potential buyer who isn’t from a seasonal community how well your business is doing when it looks like you teeter on the brink of bankruptcy for half of the year. How do you communicate your seasonal books without scaring buyers away, especially buyers from an area very different from yours?

For starters, you need to have legible books they can look at. A huge box of crumpled receipts shoved under your desk is not going to communicate your seasonal business success. Putting your books in order will help immensely in showing your business in the best light possible. Decent financial records will also help you demonstrate that while your business does terribly in the off-season, the other half of the year more than makes up for the slow times. The ability to show this seasonal fluctuation year-over-year, and the ability to show the business continued to grow year-over-year amid those seasonal fluctuations will put a buyer’s mind at ease.

Another valuable tool for properly communicating seasonal fluctuations is an experienced business broker who knows seasonal businesses. They will be instrumental in getting buyers from a non-seasonal area to understand your business and the numbers you generate throughout the year.

The important message here is you can absolutely show the strength of your seasonal business, you just need good books and some experienced help.

Are you the owner of a seasonal business who needs help making their books look good to an out-of-town buyer? Do you want to know how to impress upon buyers the actual health of your business when they’re looking at it in the slow season? 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

www.InfinityBusinessBrokers.com

No Comments »

Selling Your Business? How To Survive The Low-Ball Offer

Posted in Sellers Articles

Published November 29, 2017

If you are trying to sell your business, you may already realize what a stressful process this can be. You have to assemble all of your records, answer a constant stream of questions, deal with new requests from prospective buyers – all while trying to maintain your business in good working order.

You’ve worked hard at your business – invested time, money and energy. To you, the value is more than money. The business is an extension of your life.

The problem is, to any buyer walking through the door your business is just one of many, and the numbers on the bottom line mean more than anything else.

What happens when these vastly different views of a business collide? In some instances the result is a low-ball offer, where a buyer makes an offer so low a seller won’t even consider it, and oftentimes makes a seller unwilling to even negotiate with that buyer.

The low-ball offer is just a reality of having your business on the market, so if you are trying to sell your business, you’d better be ready to get one – and also be ready to keep your composure if it happens.

Many sellers see a low offer as a personal offense, but you have to remember that the only person who sees your business the way you do – is you.

You really shouldn’t be insulted by low-ball offers. Be happy you got an offer at all. The reality of the business market is your final selling price will be somewhere between your initial listing price and the first offer from a buyer. If you listed your business at the absolute rock-bottom price you are willing to take, that is a mistake, as is demanding that you get a full-asking price or there’s no deal. You need to be realistic and you also need to have thick skin.

Any offer, even a ridiculously low one, can be a starting point for negotiations.

Low-ball offers are typically from two kinds of buyers. The first are tire-kickers who low-ball sellers just to see if they can get a business for a steal. Most of the time this type of buyer never actually buys a business, they just shop around indefinitely. You will know if a low-ball offer is from this kind of buyer if the number is obscenely low, if the reason for the low offer is from way out in left field or if they have no explanation for the low offer at all.

The second type of buyer who makes a very low offer is a buyer who is looking for a deal. They low-balled you on the value of your business because they feel that you need to prove your asking price, but they want to get the deal rolling. For this type of buyer it is important to remember that your listing price is a jumping off point, not a non-negotiable price tag.

No matter what kind of offer comes in, consider it a step in the right direction. You will quickly be able to figure out if a buyer is serious or is just shopping around.

Are you a seller who wants to know how to handle a low-ball offer? Do you have questions about what makes an offer reasonable or how to begin negotiations? Ask us! Please leave us a comment or question here.

Michael Monnot

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

http://www.InfinityBusinessBrokers.com

2 Comments »

Preparation And Selling Your Business – 3 Steps You Should Take

How important is preparation when selling a business?

Own A Small Business? 4 Big Website Mistakes To Avoid

What makes for a great business website?

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

The government is shut down, again.

Business Owner? Why An Accountant Is A Great Idea

Your accounting.

To Train Or Not To Train – How Long Should A Seller Stay?

For the typical small business sale, the training period is two weeks.

The Current Immigration News Round-Up

Immigration.

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

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.

Don’t Hate Investor Visas: How Misinformation Hurts The Small Business Community

Investor Visas have been in the news, and it isn’t pretty.

Selling A Seasonal Business? How To Make Your Books Look Good

If you live in a seasonal area, then you understand the flow of money in your business community.

Selling Your Business? How To Survive The Low-Ball Offer

The low-ball offer is just a reality of having your business on the market, so if you are trying to sell your business, you’d better be ready to get one – and also be ready to keep your composure if it happens.

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