As a business owner, you are your own Board of Directors, as all major business decisions are made by you alone. This can be a big job, especially because you may be an expert at running your own business, but you are not an expert at everything.

Who do you turn to when you need an expert’s advice?

For many small business owners, the answer is simple; you turn to your accountant or your attorney for help. Is this a good idea? It absolutely is in some circumstances, but there are important caveats for using this advice.

What about my attorney?

Your attorney is probably very specialized as almost all attorneys are. This specialization in the legal field is only going to help your business if you are using the appropriate attorney for the appropriate reason. You should have a business law attorney as your primary counsel, and then employ a more specific attorney if necessary, like a business litigation attorney if you are party to a lawsuit or an attorney who specializes in labor laws for a labor dispute.

What if you want to sell your business?

If you are looking to sell your business, then you will need an attorney who specializes in business transactions.

Why not just use your primary business attorney?

There are a few reasons. First, business transactions require specific knowledge just like any other area of the law, so a business transaction attorney is going to be the most knowledgeable.

Second, selling a business, like all other business related decisions, comes with a bit of risk. The job of your primary attorney is to protect you from any and all risk, so they are likely to advise you against your own business sale because of the inherent risk. Non-transaction attorneys kill business deals every day, deals that would have been fine had the appropriate counsel been sought.

Third, transaction attorneys are more efficient at negotiating and closing business deals than an attorney who has never closed a business deal before. It will mean less billable hours and more money in your pocket if you use a transaction attorney instead.

What about your accountant?

Accountants are different from attorneys because they are typically not as specialized, although you should really use as your primary accountant a CPA who has experience in your particular industry. Your primary accountant should be able to help you organize your financials and prepare your tax returns.

What your primary accountant should not do is give you a valuation for your business, or give you a valuation for any business you are looking to purchase.

Why? Business valuations are complex, and there are accepted methods for preparing a business valuation that an accountant who does not specialize in this field will not know. Typical valuations done by an unqualified accountant leave business owners with unrealistic expectations in the business market. Avoid this pitfall by hiring an accountant who specializes in business valuations.

The message here is you should absolutely listen to the advice of your attorney and accountant, but only if they are giving you advice within their realm of expertise. Hire a team of experienced professionals, and then only use each for what they specialize in. In the long run, it will save you from suffering the consequences of uninformed advice.

Are you a small business owner who has dealt with the consequences of uninformed advice? Leave us a comment or question here, and we will be happy to assist with getting you more informed answers.

Michael Monnot

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

http://www.InfinityBusinessBrokers.com

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Thinking about selling your business? The time is now. Here’s why:

● The economy is still in an upward trend, which means prospective buyers have access to the capital they need to purchase a business. The small business market is also booming, back up to levels we haven’t seen since the beginning of 2008. If you are a small business owner who survived the recent recession, you might remember how wonderful everything seemed in early 2008, right before the bubble popped. We might not be on the brink of another recession, but market fluctuations are difficult if not impossible to predict.

● We will also have a wave of Baby Boomer owned businesses hitting the market in the next few years, and as with anything else, oversupply will mean lower selling prices than you would get today.

● You also need to consider that it takes somewhere in the neighborhood of 9 to 12 months to sell the average business. Timing is everything, so if you start the process now you may not have your business sold until 2018. There’s no way to know that the next year or two might bring, so be preemptive instead of reactive and get your business listed in a positive market.

Would you like to know what businesses like yours have recently sold for? Do you have questions about the selling process? Please feel free to leave us any questions or comments and we would be happy to help.

Michael Monnot

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

http://www.InfinityBusinessBrokers.com

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When you are thinking about putting your business on the market, or have already done so, you may think you have considered all of the elements involved in a business sale, like finding a good business broker and making sure your financial records are in order. While a good business broker and complete financials are important, they aren’t the most important element of a business sale.

So, what is the most important element in a business sale? The answer to that question is simple.

Is someone willing to buy my business?

Have you thought about what a buyer is looking for when they are considering purchasing your business? Looking at your business from a buyer’s perspective is critical if you want to have a successful sale. Here are some points to consider:

First and foremost business buyers are going to consider price. The best way to attract good buyers is to price your business fairly right out of the gate. Negotiation games will drive potential buyers away, so talk with your business broker about how to price your business appropriately. A fair price is one that you can justify, either through your financial records or by other means specific to your industry.

The next major consideration? Will your business fit the life your buyer wants to have? Be ready to answer questions about the hours you put in, what kind of pay you take home, and what kinds of regular responsibilities they will need to accomplish on a daily basis.

Why are you selling your business? Buyers who ask why the business is for sale are looking for potential problems. Are you selling because you are ready to retire, or because you are trying to get off of a sinking ship? If you are trying to sell your business for health reasons (a subject that is obviously a private one) you may need to be prepared to disclose this detail if a buyer asks in order to dispel any doubts they may have about the business.

A buyer will also want to know what is included in the business sale, so this information should be ready as soon as you list your business. Are they buying a name, a customer list, inventory, equipment, etc.? The relationships you have built with your clientele and your suppliers are likely crucial to the success of your business, so a buyer will want to know that they can retain these relationships when they take over.

Lastly, a potential buyer will want to know if you are willing to help them get started. You are the person with the most expertise in your particular business, so a new owner will want to know that they have your support in making a successful transition. Are you willing to stay on for training? How long of a training period are you willing to do, or do you think the new owner will need? Would you be available on a consulting basis longer term and after the training period has ended?

What are potential buyers looking for? They are looking for a chance to own their own business, one they are confident about and that they were able to purchase at a reasonable price. If you as a seller can put yourself in the shoes of a buyer, you will have a much better vision of how your business needs to come across to potential buyers.

Are you a business seller who would like to know more about how to make your business appealing to potential buyers? Leave us a comment or question here, and we will be happy to assist you.

Michael Monnot

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

https://infinitybusinessbrokers.com

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The negotiation table in a business deal can be tough, especially if you are a business owner who is deeply passionate about the business you have worked so hard to create.

The key to surviving the negotiation part of your business transaction is to be objective and employ the following strategies:

• Negotiate with your head, not your heart. Typically the first offer from a prospective buyer is low, but what you need to remember is this number is not the final price your business is going to sell for. The first offer is purely a starting point. A low-ball offer can send you over the edge, but you will need to restrain your emotions and try to see the offer in a positive light. Offers of any kind start the negotiation process.

• Let your broker do the talking. A business broker is a huge asset during the negotiation stage of your transaction. They are an objective third party, and will therefore be able to help you navigate your negotiation in an objective way.

• Always remember that you can walk away, and remember to use that fact to your advantage. If a buyer really wants to buy your business, then eventually you should be able to meet in the middle on price. If they are really low-balling you and refuse to budge, then it is always your call to walk away from the deal. Sometimes this works to motivate a buyer to come up on an offer, and sometimes it just means the deal is dead. Discuss these options with your broker to be sure you are making the decision to walk away based on an objective business decision, not because you were emotionally offended.

The most important pointer for a business seller in the midst of negotiations is this: Buying a business is an emotionless process. Your ability to understand this about the buyer will be the key to getting your business to the closing table.

Are you a business seller who has lost a deal during the negotiation phase because your emotions got the best of you? Would you like to know more about strategies that can help prevent the same circumstance in the future? Leave us a comment or question here, and we will be happy to assist you.

Michael Monnot

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

https://infinitybusinessbrokers.com

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When you first became a business owner, the thought that was probably farthest from your mind was “How am I going to get out of this business?” While no one tries to have a pessimistic outlook on their livelihood, it is a reality that someday your position as the business owner is going to end.

How it ends and what you get out of the deal are entirely up to you.

There are typically four ways that business owners relinquish their position within the company. The first, and worst, is to simply lock the doors and walk away. This is never a good decision, as with proper planning all of your hard work and personal investment will not end up going to waste.

The second way to change ownership is to give the business to a member of the family. This can be successful, but only if that family member is ready to take over the business.

The third type of business transfer occurs when an owner gives or sells the business to an employee. This has benefits as an employee already knows the business, but rarely do employees have the cash to buy the business outright.

The fourth and most common way to transfer ownership is to sell the business on the open market. With this method a business owner typically gets a much better return than with any of the other methods.

There is a caveat, however. If you are suddenly faced with the need to sell your business, it needs to be in good shape.

The biggest secret in small business ownership is to plan your exit strategy from day one.

If you don’t currently have a pre-exit strategy, now is a great time to start. By preparing your business for sale today, you can be ready if the occasion should suddenly arise where you need to sell.  Some pointers to keeping your business sell-ready? Think like a buyer.

1. Buyers like businesses with cash flow that will give them the ability to make a living starting day one. Consult with a business broker to find out how to make cash flow a major selling point.
2. Buyers like businesses that are aesthetically pleasing. Keep the business in good shape by repairing and restoring what is needed on a regular basis.
3. Buyers hate surprises. Take care of any legal issues, government issues, and financial issues as quickly as possible.

When the time comes to sell your business, you will be glad you planned and prepared ahead of time. It will mean a less stressful transition in the end. Use the services of your business broker to get your business pre-exit ready, even if you are not ready to sell today.

Are you a business owner who doesn’t have an exit strategy of any kind? Would you like to know how to get your business in pre-sale shape? 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

https://infinitybusinessbrokers.com

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