what you should know Archives - Page 38 of 60

Published April 24, 2017

It is unfortunate that so few of us jump out of bed every morning looking forward to our work day ahead.

If you are considering becoming an entrepreneur, this happy morning might be in your future. They key to achieving happiness as a business owner is to know what you want from the start. By taking the time to do some real soul searching before you begin the business search process, you can ensure you will end up with a business you can love. What follows are some ideas to consider:

If you already have a dream business in mind, are there aspects of running that business that you might not enjoy? Are these tasks that can be delegated to an employee or perhaps a business partner that has that interest? If your dream is to be a florist, and accounting is possibly your least favorite thing to do, then delegating this responsibility will let you focus on the portions of your business you are passionate about.

If you haven’t decided on a specific industry, what do you really love to do? A caveat here; if you have absolutely zero experience in an industry, it is probably not a good idea to enter that industry as a brand new business owner. If you have always wanted to own your own bar, but have never worked in any part of the restaurant industry, buying a bar will be a mistake.

What are your goals for business ownership? If you are looking to be able to spend more time with your family, buying a small pizza restaurant where you would be the only chef (and therefore have to work 7 days a week) this particular business is not going to get you that extra free time.

Don’t think that owning your business is always going to be fun, or that business ownership is easy. The benefit of entrepreneurship is that your efforts come directly back to you. Before you begin a serious business search, take the time to figure out what you really want out of this new journey and you will end up loving your work.

Are you considering taking the entrepreneurial plunge and are curious about the business opportunities out there? Would you like to know what types of businesses would fit with your goals for business ownership? Please 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

Going to Market: What Business Sellers Should Know

Posted in Business Broker Why & How, Sellers Articles

Published April 19, 2017

“I’m ready to put my business on the market, how should it look?”

Is your business in the kind of shape it needs to be in order to sell? Most owners think that the business is fine as-is. This is typically not the case. If you would like to get top dollar for your business, it needs to be appealing to a potential buyer. While the aesthetics, like cleanliness and fresh paint do a lot for a first impression, the “guts” of your business are what really need to be appealing to a buyer.

How do you make the “guts” of your business more appealing?

First, get everything in order. If your financials are a mess or are nothing more than a few boxes stuffed with papers, you will need to sit down with your business broker or business transaction accountant and get them worked out. A buyer will need to be able to understand your numbers if you want them to make a fair offer for the business.

Once you have an offer on the table, the examination of your numbers hasn’t ended, it has just begun. What happens after an offer is made is a process called “due diligence”. In this stage the buyer will get a chance to comb over all aspects of the business, and then they have the opportunity to decide if they would like to proceed to the closing table. If your business has any issues that are unresolved, they will most likely come to light during this time, and will drive a buyer away. Solve potential problems before a buyer finds them. This will help keep buyers from walking away.

Another way to make your business look like a great opportunity to potential buyers is to use the services of a business broker. There are multitudes of issues that can kill a deal, and in order to be aware of what those are, you need the help of someone who has been through the process many times before. The experience of your broker during the marketing and due diligence aspects of a business sale will be instrumental in securing the very best price and a successful closing.

Have any questions about how we would help get your business into “sale shape”? Have you tried to sell a business and lost a deal because of unresolved issues? Please feel free to share your experiences or questions here. We look forward to speaking with you.

Michael Monnot

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

Selling Your Business: What Records Do You Need to Have Ready?

Posted in Sellers Articles

Published April 12, 2017

I’m ready to sell my business, what records will I need to provide to my business broker and to potential buyers?

Think of the records needed for a business transaction this way. You would like a potential buyer to pay top dollar for your business, and the quality and completeness of your records will be what makes this happen. You will have to be able to prove to the buyer that the numbers you are claiming are the real numbers.

You don’t have to be ready to sell tomorrow to begin getting your financial record ducks in a row. The sooner you start getting your numbers together, the better. Do your best to keep meticulous records. The better your records, the better a buyer will feel about paying the price you are asking for. Keep accurate financial records and statements, receipts from a cash register, and any records that can help you to prove your income and expenses. Current and past tax returns will also be needed, so be sure you are caught up with your taxes.

When you begin working with your business broker, they will want to see your numbers in order to assist you in creating an accurate evaluation of the business, and therefore a realistic asking price. Your listing price will be based on a number of factors, but a big part will be provable cash flow – because that is what buyers are after.

Is it impossible to sell my business if my records are a mess?

No, it will just take a little more work to get the records in order. You will not be the first (or the last) client with less than adequate business records that your business broker has come across. Give what you have to your broker, and by working together you can get the records in shape. You may also need the services of a business transaction accountant, so ask your broker if they think you will need additional help.

What if I have taken cash out of my business without recording it? How do I prove that income?

It can be difficult to prove unreported income, so the best advice is to start reporting all income right now. Including all of your income is crucial if you want to get the best price for your business, although some businesses do sell even without all income reported.

The message here is an ounce of preparation will make getting your business on the market much easier – but all is not lost if your record keeping has been sub-par.

Are you thinking about selling your business but are worried about the state of your records (or lack of records at all)? Do you have more questions about what business buyers will want to see? 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

Did She Sing? Planning Your Business Ownership Exit

Posted in Sellers Articles

Published March 30, 2017

It’s not over till…

We all know the phrase. As the owner of a small business you may not want to think about it – but you will eventually have to face the reality that your role as owner will end.

When facing this reality business owners typically think of a few broad categories. Will you meet an untimely end and leave the business in the hands of ill-prepared heirs? Will you lock the doors and walk away? Will you hand it over to a successor?

Don’t like the sound of some (or all) of those options? Here’s why they aren’t what’s best for you or your business.

If you own a family business, you may just think your children will take over when you decide to retire or if something happens to you. Perhaps they’ve even worked in the place since they were kids. The problem here? Have you asked them if they want your business? Are they capable of sustaining the business like you do? Do they have the same level of commitment and drive that has helped you grown the business to what it is today? Many, many family businesses fail when they get handed down to the next generation because the drive and passion does not transfer when mom or dad hands over the keys.

If you are thinking about liquidating your business assets and locking the doors come retirement time, you are potentially leaving an enormous amount of money on the table. An operating business is worth more than the value of the assets alone. You also need to consider your employees. If you lock the doors and walk away you will be taking away the income of your staff, income they rely on.

What to do instead? Sell.

One of the best ways you can leave a business is by selling. Selling your business means the business gets to live on and remain a place for your employees to work. It also means you will get a financial return on your investment of time, energy and money. You can then use that return for your retirement or to invest in another venture – like a business your kids actually want.

We know that owning a business is life-encompassing, but you can’t let that stand in the way of planning an exit strategy. Having a plan in place, like reaching a certain age or financial milestone before selling, will greatly improve your chances for getting a big return on the investment you’ve made in your business. Don’t leave it up to the large female singer.

Do you own a business but don’t currently have an exit strategy in place? Would you like to know what businesses like yours have recently sold for? 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

Ask Good Questions: A Business Buyer Must – If You Weren’t Selling, How Would You Grow The Business?

Ask Good Questions: A Business Buyer Must – What Does The Seller Want Out Of The Deal?

Published March 29, 2017

If you are buying a business, you will have many questions – for yourself, for your business broker and finally for the business seller themselves.

Many business buyers go into the first meeting with the current business owner with a fairly lengthy and standard set of questions. Big lists like these might get you some of the information you need, but they typically cause more harm than good because no seller wants to be endlessly grilled with questions that could easily be answered by looking at the numbers or by reading the current lease. If you irritate a seller on day one, it will make the journey to a closing table that much harder.

Instead, you should go into that first meeting having done your homework. Go over the information you’ve been provided, do a little research on your own and come up with a few really good questions. Think quality over quantity. Many good questions can even serve multiple purposes. Here’s one:

If You Weren’t Selling, How Would You Grow The Business?

This is one of the best questions a business buyer can ask if they want insight into how their new business might be able to grow as well as key them in on any potential problems that have been ignored. Why? No one knows the guts of a business better than the current owner – and growth should be at the top of the priority list for any business.

If you want to make this question even more powerful, add a caveat. The caveat “if you had unlimited funds, time and resources” added to the question of business growth can reveal a wish list of possibly great ideas that the current owner, for whatever reason, wasn’t able to make happen. Here’s an example:

If you are looking at buying a successful, but small, ice cream shop – the current owner might tell you that they would have loved to open another location in a busy downtown area nearby, but they were never able to come up with the funds for a second location build-out because they spent the majority of their profits on a personal medical issue. This lets you know that there might be an immediate opportunity to grow the business once you take over. It also lets you know that the current owners had their eye on growth – they just couldn’t make it happen.

Answers to this question can also reveal potential problems brought about by owner neglect. If the current owner was capable of making a change to grow the business, why didn’t they? And what other aspects of the business have been left to slide?

If we revisit the ice cream shop scenario – say the current owner of a different ice cream shop says they probably could have done more marketing but they didn’t have time. Further investigation in to why there was no time for marketing reveals the owner spends very little time at their business and essentially leaves it (and the employees) to run on it’s own.

The point here is an owner who cares about the growth of their business has probably done a better job of running their business than someone who lets things slide. Asking this question will give you a good deal of insight into the health of the business you are considering. Do your homework – ask good questions.

Are you thinking about buying a business and are curious about how you can grow your new purchase right out of the gate? Would you like to now what other types of questions would be good to ask? Please leave any questions or comments and we would be happy to help.

Want to read about additional good questions? Click here:

Ask Good Questions: A Business Buyer Must – How’d You Come Up With That Price?

Michael Monnot

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

What The People Want: Why Business Sellers Need To Pay Attention To Positive Feedback Too

Posted in Sellers Articles

Published March 27, 2017

Positive feedback? Leave what they love alone.

When you are trying to sell your business, a good deal of your focus should be on boosting your bottom line to make the most money possible in your sale. There are a myriad of ways you can boost your numbers in that critical time between listing and selling, like cutting costs and ramping up marketing – but many small business owners overlook a simple way to utilize something every business has, customer feedback.

Customer feedback, including the positive feedback, is a way for your customer base to let you know how they feel about the goods and services you offer. The amount of positive feedback you receive is also a good barometer of how happy your customer base is with you. This is important because if your customer base isn’t happy, then they aren’t spending their money with you.

If selling your business is your ultimate goal, then paying attention to your positive feedback will be critical to the growth of your business and critical to it’s appeal to prospective buyers.

Why?

When business owners get ready to sell, they sometimes think about making changes that will appeal to prospective buyers. Changes that appeal to buyers can be a good thing, but a seller has to be careful that any changes they make don’t upset their customer base. Here’s an example of what we mean:

You have a small cafe that is popular with the local clientele. The decor is a bit old, but if you read the reviews of your business you find that the vast majority of your customer base regards the decor as part of your cafe’s charm. In a move to impress buyers who would be coming to your area buy a more modern cafe or restaurant, you undergo a major renovation to update your space. Buyers might like the new look, but your local customers will hate it and stop frequenting the business. This sharp hit to your bottom line, in addition to the added expense of the renovation will ultimately mean you get less for your business in the end.

The message here is you need to pay attention to the things your patrons like about your business, and then leave those things alone. Don’t make major changes to impress a buyer because the right buyer will understand why you’ve left the popular parts of your business untouched.

Making changes to keep your customers happy and coming back will add value to your business. Making changes will also show prospective buyers that you care about the growth and future of your business – just be careful that the changes you make appeal to your customers first.

Are you thinking about selling and are wondering what buyers will be looking for? Do you have questions about what types of changes would be appropriate? Ask us! Leave questions or comments here and we will be happy to help.

Ready to read What The People Want: Why Business Sellers Need To Pay Attention To Negative Feedback? Click here.

Michael Monnot

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

What The People Want: Why Business Sellers Need To Pay Attention To Negative Feedback

Posted in Sellers Articles

Published March 16, 2017

Negative feedback can be positive for your business.

Customer feedback, especially the negative feedback, is a way for your customer base to let you know how they feel about the goods and services you offer. The amount of negative feedback you receive is also a good barometer of how happy your customer base is with you, and this is important because if your customer base isn’t happy, then they aren’t spending their money with you.

Negative feedback can be unpleasant, and it’s much easier to ignore than it is to face, but a smart business owner will take the negative feedback they get and use that information to make positive changes within their business – especially when selling that business is the ultimate goal.

How should you deal with negative feedback?

Have more than a handful of your customers complained about the customer service skills of your staff? Maybe some staff retraining or a staffing change would keep clients you might otherwise lose coming back. Have people complained about your prices? Perhaps re-running the numbers and making a few price adjustments will better cater to your customer base – and keep them spending money.

A caveat here – don’t respond to negative feedback with anger. Even if the feedback is inaccurate, throwing a tantrum and blasting back will cause way more harm than good to the image of your business. Remember that anything you post online is there forever, and not only your current and future customers will be reading it. Prospective buyers will as well.

Making changes to keep your customers happy and coming back will add value to your business. Making changes will also show prospective buyers that you care about the growth and future of your business. No matter how unpleasant, face the complaints head on – then use that information to boost your bottom line.

Are you considering selling your business and are worried that bad customer reviews might hurt your chances of selling? Do you have questions about the types of things buyers look for? Ask us! Please feel free to leave comments or questions and we would be happy to help.

Ready to read What The People Want: Why Business Sellers Need To Pay Attention To Positive Feedback Too? Click here.

Michael Monnot

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

Make More Money When You Sell Your Business: 2 Surprising Ways To Improve Your Bottom Line

Posted in Sellers Articles

Published March 15, 2017

Anyone who owns a business wants to make more money than they already do, but adding to your bottom line becomes crucial when you are considering putting your business on the market – now or in the future.

A growing business will always be more appealing to a buyer than a business that isn’t, and surprisingly simple changes can help boost your numbers in this critical time.

It might seem obvious that one of the easiest ways you can boost your numbers is by cutting costs, but some costs happen so routinely that they may not even occur to you as an owner. For instance, what do you pay for your merchant services? These subscription-type services are something your business needs, but if you take a closer look you might find you are paying far too much. Services like these often contain hidden and unnecessary fees – and if you signed a contract for service you could be hit with a hefty cancellation fee if you find something better and want to switch. Do a bit of research to see if all of your recurring expenses are giving you the most for your money.

A second surprising way you can improve your bottom line is by keeping your inventory in check. How much inventory do you have on hand? What inventory control mechanisms do you have in place? Many small businesses don’t think they need inventory management, they just order new inventory when something runs low. Neglecting your inventory can have disastrous effects on your bottom line, however, because excess inventory eats up your cash. Excess inventory, especially inventory that probably won’t sell, can even decrease the amount of money you are able to get for your business. Keeping proper tabs on what you’re buying will keep you from ending up in a situation where you are sitting on a pile of inventory that won’t ever sell – and business buyers won’t want.

Cutting costs by minimizing unnecessary expenses and streamlining your inventory process can all add value to your business in the critical time before you sell.

Have you thought about selling in the near future and have questions about the process? Would you like to know more about boosting your bottom line in the run up to a business sale? Please 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

Ask Good Questions: A Business Buyer Must – How’d You Come Up With That Price?

Ask Good Questions: A Business Buyer Must – What Does The Seller Want Out Of The Deal?

Published March 13, 2017

If you are buying a business, you will have many questions – for yourself, for your business broker and finally for the business seller themselves.

How’d you come up with that price?

As long as a listing price isn’t crazy, most buyers don’t tend to care how a seller came up with their price because a buyer will do their own valuation of the business during the due diligence period. While it is true that you as a buyer will be judging the value of the business on your own, you should consider why the current owner priced the business the way they did.

Why? The method used to come up with a listing price can vary. Sometimes multiples of earnings are used, sometimes the value of the business is based more on the assets – but there are many others as well. A typical seller will have an idea in their head of what they think they would like to get out of the sale of their business, then that number is tweaked to match the current cash flow of the business, the assets and inventory, the current market, etc.

While most valuation methods are pretty straight forward, like multiples of earnings, the method a seller used can tell you a lot about what parts of the business they find important and can help you understand where the sticking points of negotiations might be. For example, did they put a lot of value on the assets? Be prepared to give a little if you disagree with the seller on what those assets are worth.

The point here is although the question “What’s it listed for?” is important, the “Why?” is important too. It will tell you what parts of a business an owner focused on and it will better prepare you to sit down at a negotiation table.

Are you searching for a business to buy and are wondering how a seller came up with a price? Do you have more questions about the negotiation process? Ask us! Please feel free to leave comments or questions here and we would be happy to help.

Want to read about additional good questions? Click here:

Ask Good Questions: A Business Buyer Must – If You Weren’t Selling, How Would You Grow The Business?

Michael Monnot

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

Ask Good Questions: A Business Buyer Must – What Does The Seller Want Out Of The Deal?

Ask Good Questions: A Business Buyer Must – How’d You Come Up With That Price?

Published March 6, 2017

If you are buying a business, you will have many questions – for yourself, for your business broker and finally for the business seller themselves.

What does the seller want out of the deal?

The answer to this question will not only tell you the base from which negotiations will begin, it can tell you volumes about how an owner really feels about their business and it’s future.

A committed owner who cares about the future of their business will not only want a check from a buyer. They will also be concerned that their business continues to thrive and continues to be a good place to work for their employees. Owners that care about the legacy of their business have likely been very attentive to the business and it’s growth. They will be more willing to keep skin in the game by offering seller financing and will probably stay on for a time and train a new owner too.

If the answer to this question is “as much money as possible as soon as possible”, then you need to take a good, hard look at the business. Determine why the owner is trying to abandon ship. Is the business a house of cards with well-concealed debts? Did a big competitor just move in down the street and they’re hoping you don’t figure that out until after they hand you the keys?

The point here is an owner who cares about more than just the financial value of their business has probably done a better job of running their business than someone on a mission to get out. Asking this question will give you a good deal of insight into the health of the business you are considering. Do your homework – ask good questions.

Are you thinking about buying a business and want to know more about how to come up with good questions? Do you want to know what to look out for in those first conversations so you don’t end up with a problem business? Ask us! Please feel free to leave questions or comments and we would be happy to help.

Want to read about additional good questions? Click here:

Ask Good Questions: A Business Buyer Must – If You Weren’t Selling, How Would You Grow The Business?

Michael Monnot

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