what you should know Archives - Page 28 of 60

Published June 17, 2019

You’ve decided to break out on your own, to become your own boss.

It’s time for the business search stage of your journey to entrepreneurship.

Here’s how to start:

Think about what industry you would like to work in.

Do some general research in the fields where you have some practical experience. Having a background in the field you are entering will be critical to your success as a new business owner. Practical experience can be work experience, education or time spent on a particular type of work. For instance, if you are someone who has spent the last few decades restoring old cars for fun – an automotive business might work for you. Experience in one industry might also translate well to another, so keep an open mind when you first start your search. You might be surprised by the businesses that meet your goals for business ownership. Once you have an industry or two in mind, do a cursory search of the business listings within those industries to get a general idea of what’s available. You can start your search by clicking here.

Hire a business broker.

Business brokers act as intermediaries in a business transaction. They can talk to you about your goals for business ownership, your background and the funds you have available – then make suggestions for the businesses currently on the market that fit within those criteria. As we said before, keep an open mind when it comes to your initial business search – there are many, many options out there. It is also important to use a business broker because they have access to business search sites that you may not be able to use on your own, they know of businesses that are not yet on the market and they can market you as a buyer to the business sellers they know.

Try to find out as much as you can about your desired industry.

In every sector, there are positives and negatives to business ownership. It is important during the business search process to try and discover what these positives and negatives are. Check industry organization websites, articles written by those who already work in the industry, blogs created by industry insiders – you get the idea.

No matter what industry you end up in, it is important to think about your goals when beginning your business search. You and your business broker should work together to determine what businesses might be right for you – then you can follow up by finding out everything you can about that industry. By starting your search this way, you are sure to end up with a business you love.

Have you always thought about owning your own business, but don’t know what type of industry would be right for you? Do you have questions about the business search process? Please feel free to leave 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

The Reality Of A Dream – What Business Would Be Right For You?

Published June 10, 2019

Can your dream business actually make you happy?

Daydreams are fun, but daydreams about business ownership can turn into a nightmare when first-time business buyers try to force an unrealistic dream into reality.

What’s the most common daydream turned nightmare? Food service. Sure, you may have always thought it would be fun to run your own cafe or sit at the end of your own bar – but if you’ve ever watched the plethora of reality TV shows about restaurants or bars on the brink of failure – you may have noticed a common theme. The food service businesses in the most trouble were bought by people who had no idea what they were doing because they had never worked a day in the industry.

This is where it is important to confront your daydream with reality. Would you know what you were doing if you took over a bar tomorrow? What are you hoping to get from owning a cafe?

More financial freedom? A break from the 9 to 5 work schedule? The ability to love what you do for work? Probably, but here’s what you may not have considered.

Financial freedom is only going to come from a good deal of success in any industry, and that good deal of success is going to more than likely mean (at least initially) long hours for you as the owner. You will probably have to be at your bar or restaurant every day, and the hours will be long and likely run late into the night. These long hours and inconsistent (if any) days off can make even the most dedicated new owner burn out, meaning you will once again hate what you do for work.

How can you avoid having your dream turn into a nightmare? Be realistic and focus on your goals instead.

If you’ve never worked a single day in the industry you’re considering, then it’s probably a bad idea to buy into that industry. Business ownership has a sharp learning curve on it’s own, you don’t want to turn that learning curve into a cliff by trying an industry where you have no practical experience to fall back on.

You should choose a business based on the goals you have for owning a business. Do you need nights and weekends off because spending time with your kids is important? What would your ideal work schedule be? How much money will you need to make in order to sustain your lifestyle? What is a realistic amount of money you could invest in a business right now? Are you looking at owning a business for the long-haul or are you thinking more along the lines of serial entrepreneurship? These types of questions are going to very quickly narrow your focus to just those businesses that will fit with the life you’d like to have.

We aren’t saying no one should by a food service business. Perhaps the life you’d like to have totally matches with the life of a bar owner – what we are saying it’s incredibly important to figure that out long before you write a big check and someone hands you the keys.

Need help figuring out what businesses would fit with your entrepreneurial goals? Ask an experienced and qualified business broker. A discussion about what you’d like to get out of owning your own business is an all-important first step.

Have you always wanted to buy your own bar or restaurant, but now aren’t sure if that’s the right business for you? Would you like to know what types of businesses would fit your goals? Please ask us! Leave any questions or comments, 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 Reasons Why A Business Buyer Needs Their Own Broker

Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Published June 3, 2019

In the world of business transactions, it is the seller’s side that pays the commission of the broker (or brokers) involved – so why would a buyer need their own relationship with a broker since they don’t have a business to list?

There are many reasons why it’s a good idea to have a relationship with your own broker, here’s a few:

Someone Who Actually Knows You

Entering a transaction with only the seller’s broker (who you haven’t spent any time talking to other than signing an NDA on a specific listing) means that the broker probably knows little to nothing about your goals, your situation and what you are hoping to get out of business ownership. If a broker doesn’t know any of these things about you, how can they properly advise you on a business? The short answer is they can’t. You need to have a relationship with a broker before you are sitting at a negotiating table, hopefully long before. A good broker is going to ask you questions, lots of them. They should find out how much capital you have available, what your past work and educational experiences have been, your goals for business ownership, what you hope your work day will look like, what your dream business would be, how long you hope to own any business you purchase, what industries you are qualified to work in, what industries interest you – just to name a few. Buying a business is a huge decision, and having an expert involved who already knows all of these details about you as a buyer will be instrumental in successfully finding you the right business to buy.

A Buffer And A Negotiator

You are about to write a very big check to a complete stranger so you can buy their business – a business that has been their life and probably their baby for some time. Both sides will have serious emotional and financial attachments (you to your money and the seller to the business) so it can be tough to get through negotiations without one side or both ending up offended (and killing the deal). A business brokers acts as a buffer between the two sides, allowing forward progress while keeping the two sides away from each other. This role as a buffer during negotiations can be pivotal to the success or failure of a transaction.

Help For A New Owner

If you’ve never owned a business before (and even if you have) the lease, property managers, laws, red tape, licensing, permitting, etc. can be daunting and overwhelming if you don’t have help. Having your own broker ensures that you both know what needs to be done and have assistance with making it happen.

What if you already know the broker involved? Can you make a transaction happen with only one broker?

Yes. If your broker has a listing that fits your goals, then it can definitely be appropriate to only have one intermediary. The key to success in this situation is the broker needs to know both you and the seller.

If you are on the road to business ownership, don’t try to go it alone. Having an experienced and knowledgeable broker who knows you can make the transaction process go more smoothly and will greatly improve your chances of finding the right business for you.

Are you new in the market and are wondering what you should look for in a buyer’s broker? Have you already tried to shop the market on your own and have a story to share with other prospective buyers? Please feel free to leave comments or questions below, we would be happy to help.

Michael Monnot

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

Problems Later: What To Do When Due Diligence Wasn’t Enough

Published May 27, 2019

Buying a business can be a scary, scary thing. You’ve been over the numbers, you’ve sought expert advice and you’ve spent the entire due diligence period going over everything with a fine-toothed comb. Surely if there was some underlying issue or skeleton in the closet you’d have found it by now, right?

Well, maybe.

Businesses are complex, messy creatures. Taking the step into entrepreneurship by buying a business will require a bit of a leap of faith on your part.

Even if you go over everything line-by-line there’s a good chance there’s something you missed or something that couldn’t be foreseen.

Wait, what? I don’t want to buy a disaster!

If you’ve asked the right questions and spent your due diligence period actually doing your due diligence you probably won’t be walking into a mess. You will, however, be walking into a small business that will have it’s issues and ups and downs – it’s the nature of business ownership. There are going to be things that are completely out of your control, and you need to be mentally prepared for the things you will have to face.

Going into the process of buying a business already knowing that there will more than likely be problems somewhere down the line will better equip you when those issues come up. It’s far easier to deal with a problem you were expecting than to be blindsided.

This isn’t to say that you should be paralyzed by fear that the business you are buying has some hidden fatal flaw. You just need to remember that business ownership is inherently risky, so mentally prepare yourself for those risks and you will be ready to handle them when they happen.

Are you thinking about buying a business but are worried about hidden issues? Would you like to know more about the due diligence process? Please 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

Neat Paperwork Is Vital – Prepping Your Business For Sale

Posted in Sellers Articles

Published May 23, 2019

With tax day recently come and gone, as a small business owner you might think your your bookkeeping responsibilities can take a back seat for a while. They shouldn’t, and if you’re considering selling your business anytime in the near future they definitely should be kept front and center.

Why?

Selling your business is a big responsibility that takes a great deal of time and energy. You don’t want to be in the midst of the selling process and realize that your books won’t hold up to careful scrutiny by a buyer. The value of the business and the validity of your listing price are dependent on withstanding that scrutiny. A jumbled stack of paperwork isn’t going to cut it.

Boxes of receipts need to be sorted, scanned and accounted for. Contracts should be kept in one place and kept sorted. Employee documentation should be organized in some fashion. Tax documentation should be legible and organized as well. Current P&L statements should be kept with frequently pulled P&L statements that show your business as it fluctuates month to month and year over year. You get the idea.

Imagine the stress of trying to compile and organize all of this documentation while in the midst of the sales process, particularity if some sort of personal crisis is forcing you to sell quickly. Losing the all-important first impression with a prospective buyer because your ducks weren’t in a row is 100% preventable. So is keeping your stress level to a minimum during the selling process.

You can avoid this particular pitfall if you get your books in order now and keep them that way. If you haven’t been keeping track of your business accounting, then buying accounting software or enlisting the help of a business account can be extremely important in helping your business put it’s best foot forward when you decide to (or need to) sell. Showing up to the first meeting with buyers with neatly collated binders and files will show that not only do you care about your business, you’ve been keeping up with everything that’s important. Prioritizing your books will speak volumes about what kind of business owner you’ve been – and the health and potential longevity of the business overall.

Another note: Use a business CPA or a business transaction accountant when you are going through your books. Someone who has never assembled the paperwork of a small business is not going to understand the nuances of getting your business books in order. If you need help finding someone, your business broker will be able to point you in the right direction.

No one likes to do paperwork, but if you own a business and want to sell it someday – you’re going to need to get that paperwork in order. If you need help, talk to a business broker about what you would need to do to get your business paperwork ready for buyer’s eyes.

Did this article resonate with you because you have a huge box of unorganized paperwork under your desk? Would you like to know more about what documentation buyers are going to want to see? Do you need help getting your business ready to sell? Please contact us today or leave any questions or comments here, we would be happy to help.

Michael Monnot

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

Face-To-Face? Nope. Why Conference Calls Are Important.

Published May 20, 2019

Some people just like to have meetings. We get that, and it’s a request we get a lot. In a few cases meeting face-to-face with the business seller so you can watch their mannerisms and facial expressions might help you learn a lot about how that person conducts themselves.

However, in today’s small business marketplace it’s much more likely that you will do the majority of your meetings via conference call.

Why?

Business transactions require a lot of moving parts. The schedules of the sellers, the buyers, the brokers involved and the attorneys involved all need to be considered when trying to figure out when a meeting could take place. If this meeting is to take place at the business that is for sale, it will also have to be scheduled when employees are not present for confidentiality reasons.

If you’ve every tried to get 6 or 7 people together for anything at the same time you can imagine how tough that can be. As such, if you are serious about buying a business you are going to have to concede that the majority of initial meetings are going to have to be held over the phone.

Conference calls can be taken in a car in the parking lot while the seller is away from their staff. They can happen while the seller is at home. They can happen over lunch breaks or even behind a closed office door.

Asking for physical meetings may seem important – but in business transactions they really don’t matter. When you are buying a business you aren’t buying a physical space. You are buying cash flow, so the aesthetics of said space are far less important than the numbers the business generates. Those numbers can be communicated to you via email or share files online and then discussed via conference call, so there is no need to spread paper out on a table and stare at each other in the face.

Heading into the business buying process with the understanding that most of your communication with brokers and sellers will be through conference calls will help you to navigate the process more successfully.

Wait, does this mean we never meet face-to-face?

Absolutely not. Face-to-face meetings are an important part of the business buying process – they are just far more useful much further along in the transaction process. Any initial questions can be answered over the phone and don’t require the scheduling nightmare that meetings sometimes are.

Another note – demanding everyone constantly travel to meetings will probably only aggravate the seller and other professionals involved to the point where they might refuse to work with you in the future. If you do make appointments for meetings, do not cancel unless absolutely necessary. Making everyone bend and adjust their schedule and then casually canceling last minute for something other than a dire emergency only shows your lack of respect for others in the transaction and your lack of commitment to seeing the sale through.

The point here is you need to be sensible and realistic when asking for meetings versus conference calls. Listen to the advice of your business broker when they tell you one would be better over the other in your current situation. Most things can be accomplished in a phone call that doesn’t require schedule juggling and travel time for everyone involved.

Are you thinking about buying a business and would rather have face-to-face meetings? Would you like to know more about how most things can be accomplished via conference call? Ask us! Leave any questions or comments here.

Michael Monnot

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

A Deal Between Friends Or The End Of A Friendship – Why You Need A Business Broker

Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Published May 13, 2019

You’ve been going to your friend’s bar for years. You even helped him paint the bar top when he first opened. Now he’s ready to sell and you think you’d like to buy.

Buying a business usually requires the assistance of an experienced and qualified business broker because business transactions are inherently tough. The process of buying and selling a business is complicated. Lengthy and detailed purchase contracts need to be negotiated, commercial landlords and property managers need to be negotiated with, licenses and permits need to be obtained – the list goes on and on.

Owning your buddy’s bar might fit with your goals for business ownership and you might be able to afford his reasonable asking price – so you might think that there’s no need to enlist professional help to get the deal done. Just a handshake between friends should suffice, right?

While going it alone might seem like a good idea because it’s just a transaction between friends – you don‘t want to end up in a situation where your friendship is lost over the complications that always arise in a business sale. Complications will absolutely, positively happen. You can not avoid them. Using a business broker for your transaction will give the two of you as friends a buffer when those complications come up and will allow both sides to get what they need when they need it.

Many first-time business buyers and sellers don’t understand all of the nuances and important details that need to be addressed in the purchase of a business. For example, you don’t want to write your friend a huge check only to find out too late that the landlord of the commercial space refuses to transfer the bar’s lease to you as a new tenant. There are a million things that can (and maybe will) go wrong. Having someone involved who has been through the process many times will be essential for success.

You also should include a business broker if any seller financing is going to be involved. Seller financing is essentially a loan, and in this case a substantial loan from a friend. Friendships have been lost over far less – so using a business broker to help with the seller financing portion of your purchase contract will ensure everyone knows upfront what is expected and what the ramifications are for reneging on the deal.

Money and business shouldn’t come between friends, so enlisting the help of an experienced and qualified business broker will ensure that the friendship can outlast the business transaction. Mixing your personal and business life requires everyone to be upfront, honest and on the same page. It also helps to have a buffer should anything go sideways. A business broker can fulfill both of these needs. Protect yourself, your friendship and your future as a business owner by hiring a broker to help you with your transaction.

Are you considering buying a business from a friend but aren’t convinced you need the help of a broker? Do you have questions about what a purchase contract entails? 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

Keys To Business Transaction Success – Don’t Stalk Your Broker

Posted in Business Broker Why & How, Buyers Articles, Sellers Articles

Published May 6, 2019

We know that buying a business is a very stressful endeavor. Selling a business isn’t any easier.

Guess what? The person at the center of that stressful and difficult situation isn’t always in the land of sunshine and rainbows. They’re there to keep the transaction on track. That person is a business broker.

A business broker’s day is full of sending and receiving emails, conference calls, travel to and from meetings and the meetings themselves. When they aren’t in direct communication with one of their clients they are putting together listing packages, writing purchase contracts, dealing with bureaucratic licensing issues – they’re very busy people.

A business broker’s job is to act as a buffer during negotiations and get a transaction to closing. They are there to help sellers get their business ready for market and there to help buyers find a business that fits with their goals. A big part of a business broker’s job is talking to everyone involved – keeping the business transaction on track by making sure everyone is getting what they need when they need it.

Your transaction is, obviously, a big deal to you. It’s probably the one major thing you’ll have going on in your life. If you’ve got a good broker your deal will absolutely be a priority – but an important caveat to remember is it won’t be their only priority.

If you hired an experienced and qualified business broker, then you probably aren’t (and shouldn’t be) their only client. If you call, text or email your broker, you should expect a response in a timely fashion. Timely, however, does not mean instantaneous. If a broker doesn’t answer the phone during business hours, perhaps they’re in a meeting or on a phone call. An unanswered phone call doesn’t mean you should then call them an additional 30 times in a few hours. A constant barrage of requests for contact – be they calls, texts or emails – isn’t going to get a quicker response. All this lightly-stalker behavior will do is complicate the day of the broker who’s trying to help you. Call once, and if you don’t hear from your broker in a realistic amount of time send a quick text or email to follow up. That should be enough.

A note here. If they aren’t getting back to you at all, where you go days and days without a response – then perhaps you need a different broker.

You should also remember that business brokers have lives outside of work just like you do. If you call at 10 at night on a Friday or at 7 in the morning on a Sunday, you probably shouldn’t expect a broker (or anyone for that matter) to immediately return your call.

Calling or texting constantly doesn’t help your broker help you through your transaction, all it does is fill up their inbox and make it impossible to get back to everyone in a reasonable amount of time.

Calling over and over again isn’t going to get you an answer any quicker, especially if the information you need is coming from the other side of the table. Sometimes your broker‘s hands are tied if the other side of the transaction isn‘t being cooperative. Business transactions are big and messy, and can sometimes involve buyers, sellers, buyer’s brokers, seller’s brokers, buyer’s attorneys, seller’s attorneys, CPAs – the list goes on. Having to get a single information request through that string of very busy people can sometimes take a few days. If your broker says they’re on it and they’re waiting for a response, calling them 16 times a day isn’t going to get the information any faster.

Keeping realistic expectations in terms of response times from your broker, along with a good dose of patience for all of the parties involved, will help immensely in getting your transaction all the way to closing.

Are you looking at businesses to buy and want to know more about how a business broker can help you? Have you thought about selling your business but have questions about the selling process? Please 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

Don’t Drag Your Feet – It’s Costing You Money

Published April 29, 2019

Buying a business is a huge decision. You are deciding on a whole new life and are about to write a very big check.

We get that.

A minor case of cold feet is absolutely to be expected with a decision this big, but the mistake many business buyers make is they allow their cold feet to become a major problem. They let their hesitation overshadow their rational side – and they slow the buying process to a near halt.

This will always cost you money.

We aren’t saying that you should immediately buy the very first business you look at. You should absolutely take a reasonable amount of time to make decisions about the business you ultimately buy.

What we are saying is you shouldn’t procrastinate indefinitely. If you’ve found a good business – put in an offer. If you don’t, you risk several scenarios that will mean more money out of your pocket.

The sellers could decide to raise the price. Many new buyers think that this move is unfair, but a seller is completely within their rights to raise the price of their business if no written offers are currently on the table. If the business is experiencing a period of tremendous growth or if the sellers are seeing a lot of interest in their business and are hoping to cash in on the popularity of their listing – they might decide to get more bang for their buck and jack up the price. If you haven’t put in an offer, your only choice will be to pay the new price or move on.

You risk taking over the business out of season. If the business you are considering is in a seasonal market where businesses do well for part of the year and then have to survive the lean off-season (common in areas where tourism is big) dragging your feet could mean you get handed the keys right as the slow season starts. This could force you to eat up your working capital surviving until the busy season starts again instead of using that working capital to grow the business during the period of the year when customers are flocking in your door. Help yourself by using the timing of the sale to your favor. Don’t procrastinate yourself into a rough six months.

Another buyer might buy the business out from under you. Time is money, so if you are constantly losing out on good businesses because you are waiting too long and other buyers are pulling the trigger before you do – you will be perpetually stuck in the search phase of buying a business. It takes a fair amount of research time, search time, conversations, meetings, conference calls and the like to narrow down your business choices. Don’t waste all of that time (and therefore money) by prolonging your decision and losing out to a more decisive buyer.

You have every right to be nervous about your decision to buy a business, but the most successful small business owners are those who can be rational and decisive when it counts. Do yourself a favor and don’t wait.

Are you thinking about buying a business but are nervous about taking the plunge? Would you like to know more about the process to buy a business? Please 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

Buying A Business? The 1st Step

Posted in Become a Business Owner, Business Broker Why & How, Buyers Articles

Published April 22, 2019

Buying a business? Figuring out what you want is the first step.

A dream about owning a bar on the beach might not be realistic if you’re looking to have your evenings free to spend with your kids.

What do you want your life to look like? What kind of hours do you want to work? What’s going to get you out of bed every morning? These are the kinds of questions you should be asking.

A lot about the buying process is deciding what your goals are and then finding businesses that fit those goals. If you don’t know what your goals are, have a talk with an experienced and qualified business broker about what you want out of business ownership.

Some people take the jump into entrepreneurship because they want to be their own boss, have control over their own schedule and work for themselves. While these are some of the benefits of owning your own business, they aren’t really well-defined goals. More well-defined goals might be I want to spend evenings with my family, I don’t want to have a job that requires a lot of manual labor and I want to stay within a defined budget in terms of purchase price.

You might be surprised that the industry and business has you had initially wanted won’t fit with your goals at all, and another business you would never have considered would better fit the life that you’re looking to have.

It’s important to remember that when you buy a business you are essentially buying yourself a job – so just like with a job search you need to have well-defined characteristics that you’re looking for. For instance, when you look for a job you look for jobs you would be qualified for, hours that would fit with the schedule you’d like to have and a location near where you live. You also might consider the amount of money you need to make to maintain your lifestyle. The same goes for buying a business. These are the type of well-defined goals you should come up with.

Another consideration? Your family. Whether you want it to be or not, having a business is a family affair. Owning your own business means the buck stops with you, so sometimes that can mean sacrificing time with your family to keep the business running – or maybe even having to bring your family members in as employees in a pinch. It’s important when you start the business buying process that everyone in your family is on the same page and are also on board with potential sacrifices because you don’t want to have issues down the line. An important note here – if you are expecting your children to work in and eventually take over the business, you need to make sure that they are ready, willing and able to go down this new career path with you.

If you are ready to start your business search, sit down with your family, come up with a set of goals and realistic expectations for life as a small business owner. Then talk to a business broker about these goals and they can help steer you towards a business that will fit (and make you and your family happy).

Have you always wanted to own your own business but haven’t yet come up with a list of goals for business ownership? Would you like to know what types of businesses would fit with the life you’d like to have? Please 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