Bad Advice From Strangers: Why You Really Need A Business Broker

We all do it. We have a question about something, so we pick up our phone and ask Google. Or Reddit. Or Facebook Groups. While some of the information you can glean from online sources can be useful, it is a terrible idea to take online advice as absolute fact if you don’t know the qualifications of the person giving you that advice. The chances of the anonymous person commenting on your post being an expert in their field is probably pretty slim.

 

 

This is particularly important in the sphere of the purchase and sale of small businesses.

 

Why? The small business marketplace is a small world, and as such there really aren’t that many professionals overall who specialize in the sale and purchase of small businesses – and there’s even fewer who actually know what they’re doing.

 

Aside from the fact that the professionals who help people buy or sell businesses, known as business brokers, are relatively few in number there is an entire cohort of part-time or fly-by-night imposters who don’t think they need special expertise to help someone with a business transaction. We’ve encountered real estate agents, attorneys, accountants – even dentists pretending they are business brokers that can help you sell or buy a business as their side gig.

 

What this means is the people (well meaning or not) who are giving you advice on how to use EBITA to value a business or how to properly market your business for sale via a Reddit thread are unlikely to have any idea what they’re talking about.

 

Business transactions are inherently delicate for a number of reasons. There’s a lot of money changing hands. One person is selling their blood, sweat and tears while another is buying themselves the job they’ll be doing for the foreseeable future. Complex contracts are involved. Everything needs to be done under a veil of confidentiality so the business can stay in one piece.

 

A transaction involving so many moving pieces needs a careful hand to guide it. Someone who is experienced, qualified, has the industry connections and know-how, understands the possible pitfalls and has the integrity to keep everything above board. That person is a business broker, and probably not the person commenting in your Facebook Group.

 

What you need in the place of anonymous online advice is a conversation with a practicing, experienced and qualified business broker. Talking with a real person who knows what they’re doing will be exponentially better for you path to business ownership or your business sale than taking terrible advice from people who have no clue what they’re talking about. Calling a business broker can save you from untold amounts of agony by going into the business transaction process with real, factual information.

 

Do yourself and your future a favor. Don’t take advice from anonymous groups and call a business broker instead.

 

Have you fallen into the rabbit hole of online advice about buying or selling a business and can’t tell the good advice from the bad? Do you have questions about how a business broker can help you through the transaction process? Ask us! Please leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Don’t Communicate Without An Intermediary: Why You Should Keep Your Broker In The Middle

 

If you’re in the middle of the process to buy or sell a business, it can be tempting to contact the other side without using your business broker.

 

Why?

 

Say you just have one simple question, and to get that question answered you would have to call your broker, your broker calls the other broker, they ask their clients and then the answer gets passed back to you in reverse order.

 

This might seem incredibly inefficient, but the system is in place for a reason.

 

Let’s use the same example. You only have the one question, so you skip the intermediaries and call the other side. The conversation starts out innocently enough, but then your one question turns into five more, and as you continue asking the person on the other side becomes very offended by your questions, gets angry, hangs up and then decides not to move forward with the deal. Your one question just cost the whole transaction.

 

Business brokers, also known as business intermediaries are there for one reason, to protect the transaction. This is an incredibly important role, as without an intermediary most deals wouldn’t make it to closing.

 

Business transactions are inherently complicated, as someone’s hard work and someone else’s money are about to be exchanged. Like it or not, both buyers and sellers in business transactions have a lot to lose, and many seemingly innocent questions and statements can be misconstrued as offensive and can cause deals to fall apart and both sides to lose money.

 

Another major pitfall of going around the intermediaries? In almost all business transactions, there is a training period that occurs shortly after closing. Want to know what’s not fun and is seriously unproductive? When a buyer and seller hate each other and then have to work together.

 

Don’t make the mistake of trying to go around the intermediaries in the process. Your broker is there to act as a buffer and is there to help you, so keep them in the middle and you will have a far better chance at transaction success.

 

Are you a buyer or seller who has questions about the role of a business broker in your transaction? Ask us! Please leave a comment or question here, and we will be happy to assist you.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Navigating Negotiations – Why You Should Listen To Your Broker

When you enter the business-for-sale market, you will find that some businesses are listed really, really high – priced no where near what you would be willing to pay. If you are still really interested in the business, you can put in an offer that makes sense to you.

 

If these two numbers are so different, how do buyers and sellers come to an agreement on the difference?

 

 

Negotiations and intermediaries.

 

In business transactions, the buyer and seller are the boss. A business broker has to let a seller set the price of their business, and on the other side, whatever a buyer chooses to offer the broker must present to the seller. Business brokers are known as business intermediaries because they act as a buffer between the parties in a transaction so that the transaction happen.

 

Having someone in the middle allows a buyer or seller to ensure they are getting what they want, but the nature of business transactions means both sides can do or say whatever they want – which sometimes means one side offends the other and kills the deal.

 

If you are a buyer preparing an offer, and your broker is telling you that the offer is only going to offend the seller – it would be wise to listen. You always have the ability to walk away from the deal, but you would be surprised how many buyers and sellers are able to reach a middle ground that works for everyone if both sides are able to stay amicable.

 

The moral of the story? Listen to the advice of your business broker!


Are you a buyer who wants to know how to make offers that will keep both you and a seller happy? Ask us! Leave a comment or question here, and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Great Broker/Bad Broker: How Asking Questions Ensures The Best Help

Like any industry, there are great business brokers and there are those who shouldn’t even call themselves business brokers.

 

How do you ensure that the broker you choose to list or buy with is one of the great ones?

 

 

Ask questions.

 

What kinds of partnerships do they have with other brokers and with broker’s associations?

 

If a broker is a lone-wolf of sorts with no industry connections, they might have a tough time properly marketing your business or getting access to the listings you are interested in.

 

How many transactions have they closed in the last year?

 

If a broker has only closed one business transaction in the last year (or none at all), they are likely not the broker for you. Results will speak volumes about work ethic and knowledge of the industry.

 

Do they work in a very large office with many brokers, or do they work in a much smaller brokerage?

 

The benefits of choosing a broker that is part of a much larger firm may be the associations with other brokers that they have in-house. This might give you access to more listings and more potential buyers. Just remember to ask about a broker’s individual results. The firm they work for may have sold 50 businesses last year, but they may have only been responsible for one. On the other hand, there are some in the industry (usually those who are part of a very large office) who will tell you that using a one man shop or a small brokerage is a mistake. This is not necessarily the case. Look at results and inquire about the industry associations they have. A one man shop or a small brokerage might be your best bet because they are able to achieve success without the backing of a larger firm – a surefire testimony to how they work.

 

Are they really a business broker?

 

This might sound like a ridiculous question to ask, but it is an important one. Some involved in the real estate industry will try to help clients with buying and selling businesses while they are working on home and property listings. Selling a house and selling a business are two completely different animals. You might have a great realtor, but that doesn’t mean that they will know the first thing about a business transaction. Other types of professionals may try to broker business transactions as a side business. Business brokers are specialists and their field, so use an actual business broker for any business transaction if you want to ensure success.

 

Are past clients happy?

 

Look for a business broker with positive reviews and testimonials from former clients. Ask about whether they have repeat clients, and if they have any references. Also inquire about how they get the majority of their new business. If it comes from referrals, then you know they are good at what they do.

 

As with any major business decision, do your homework. The right choice of business broker can make your buying or selling experience a very positive one.

 

Are you a buyer or seller and want to know more about how to choose a business broker? Would you like to know more about how we help our clients through a business transaction? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

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Don’t Tell ANYONE: Why Business Sellers Need To Keep Confidentiality In Place

If you’ve ever bought or sold a home, you know that the key to getting a property to the closing table is getting the word out that the property is for sale. As the seller of a home, you want people looking at your listing, perusing the pictures of the home inside and out, finding the home on a map and taking a drive by to check it out.

 

Isn’t the same true when you want to sell your business?

 

ABSOLUTELY NOT.

 

 

Business sales and real estate sales are two completely different animals. If you tell just a few people that your business is for sale the consequences can be devastating. People love a rumor and a bit of gossip, so if a few people know about your for-sale status it won’t take long for everyone to know your business is on the market.

 

Why is it a bad thing?

 

It will hurt your bottom line.

 

The time period from when you list your business to the day you reach the closing table should be a time period when you really push your numbers in a positive direction. Businesses with healthy numbers, with a good and stable list of clients and businesses with projected numbers on the rise are typically going to sell faster and for more money than those on a down-slide. It is imperative that you protect your business from anything that could cause problems with your bottom line – the major culprit in this sensitive time being a breach in confidentiality.

 

What could happen if confidentiality is breached?

 

Employees, nervous about the future under new ownership can leave and take their regular clientele with them. Vendors can decide to revoke perks you’ve had or cancel contracts. Customers may look elsewhere for their services because they worry about whether the quality they have come to expect from you will be the same under new management.

 

How can I keep my business sale under wraps?

 

Don’t tell anyone the business is for sale. Period. The only way that someone should be able to find out your business is on the market is if they get in touch with your business broker and sign the appropriate non-disclosure agreements. You shouldn’t talk about your business sale with your child’s elementary school teacher, the mailman or anyone else who is not your broker, transaction accountant, or transaction attorney.

 

Keep your business sale out of the rumor-mill by using the services of an experienced and qualified business broker – and don’t tell ANYONE. 

 

Are you thinking about selling and are concerned about confidentiality? Do you have questions about how your business broker can both market your business to potential buyers and also maintain confidentiality? Ask us! Please leave us a comment or question here and we can address any concerns you might have.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Why A Franchise Buyer Needs Their Own Business Broker

Are you interested in buying a franchise? Do you already have a franchise in mind that you would like to be a part of?

 

 

If you answered yes to either of these questions, you might think that your first step is to get in touch with the person in charge of new franchises or franchise sales. This should NOT be your first step. Your first step is to find a business broker familiar with franchise sales and hire them to help you.

 

Why? Don’t the franchises themselves have people who can help me?

 

They do, and they don’t. Some franchises do have a business intermediary or business broker of sorts, but what you need to question is where the loyalties of a broker employed by the franchise will be. They most certainly will not be with you.

 

Something else you should know. The commission paid to a business broker at the close of a business sale is paid by the seller of the business. Franchise companies without an in-house broker will essentially use the broker who is the lowest bidder. Is that the kind of person you want helping you? Buying a business is a major personal investment; you will definitely want quality instead of someone else’s bargain.

 

When you are buying a franchise, you want someone on your side who can help you through the ins and out of the process. Using an affiliate of the franchise might not be the best fit for you, so do a bit of homework beforehand and get yourself a broker who is qualified, experienced and above all there to assist YOU.

 

Are you interested in buying a franchise, but you have questions about how to begin? Would you like to know what types of franchise businesses are currently for sale in the areas you’re interested in? Ask us! Please feel free to leave us a comment or question here, and we will be happy to assist you on the road to franchise ownership.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

 

 

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You Don’t Want Us To Tell You What You Want To Hear: Choosing A Business Broker

When it comes to selling your business one of the most critical decisions you’ll make is selecting the right business broker. A trustworthy and experienced broker can be your guiding light through the complex process of selling your business.

 

One of the first things you’ll discuss with potential brokers is a listing price for your business. A caveat here: not all brokers are created equal – and it’s imperative to choose one who tells you the unvarnished truth about what your business is worth.

 

It does you no good to go with a broker who only tells you what you want to hear. 

 

Why would a broker tell you what you want to hear instead of listing your business for a realistic price? Your listing benefits them whether your business sells or not. 

 

 

A business broker who lets you list your business for whatever you want only wants your listing because the listing generates calls from potential buyers. Those potential buyers aren’t going to go for your absurdly priced business, but the broker doesn’t care because they can just offer those buyers a different listing that’s more reasonably priced. This is an important (but ugly) part of the business-for-sale market that’s important for you to understand when you’re deciding on a broker. The broker who pushes back, who is brutally honest and has the rationale to backup their thoughts is far, far better for your success than the guy who tells you yes to anything. 

 

Here’s why:

 

Many business owners understandably have a strong emotional attachment to their business. You’ve likely put in countless hours and your blood, sweat and tears. Consequently, you may overestimate the value of your business based on sentiment rather than a realistic assessment of market conditions, financials and other objective factors. This is where a blunt business broker becomes invaluable.

 

A broker who actually has your success as the primary goal will conduct a thorough and objective business valuation based on market trends, financial data and industry benchmarks. They won’t inflate the value to appease your expectations, but rather provide an accurate assessment, even if it’s less than what you had hoped for.

 

While it’s natural to want a ton of money for your business, a good broker will help you set realistic expectations. Look for someone who backs up their thoughts with real metrics and has your best interest at heart, whether you like what you hear or not.

 

Would you like to know what businesses like yours are currently selling for? Do you have questions about how we help you put together a realistic listing price for your business? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Buyer + Seller Beware: Make Sure Your Business Broker Is Really A Broker

Selling or buying a business is a significant decision. It requires careful consideration and expertise. Many entrepreneurs and business owners turn to business brokers to navigate this complex process. However, not all business brokers are created equal, and one critical factor to consider is whether the broker is really a broker.

 

 

What do we mean by that?

 

Many, many “brokers” aren’t business brokers at all. They’re real estate agents, attorneys – even dentists who “help” people buy and sell businesses on the side. You do not want a fly-by-night, part-time broker. You want an experienced and qualified full-time professional. Using someone who isn’t actually a business broker to help you buy or sell a business would be like going to your CPA to fix a toothache.

 

Why?

 

Part-time business brokers, as the name suggests, have other commitments outside of brokering deals. This limited availability can lead to slow response times and delayed communication. When you’re in the midst of a business transaction, time is of the essence and delays can be costly. A full-time broker is more likely to prioritize your deal and provide the attention it deserves.

 

Business transactions involve a multitude of legal, financial and operational complexities. A part-time business broker may not have the same depth of knowledge, experience or industry connections as their full-time counterparts. Selling or buying a business often requires specialized expertise, which a part-time broker may not be able to provide.

 

The business landscape is constantly evolving, and staying updated with industry trends, regulations and market conditions is crucial. Part-time brokers may struggle to keep pace with these changes due to their limited exposure to the market. A full-time broker is more likely to have their finger on the pulse of the industry, giving you a better understanding of current market dynamics.

 

One of the key benefits of working with a business broker is their network of potential buyers or sellers. A full-time broker has more time and resources to build and maintain a broad and diverse network. This extensive network can lead to more opportunities and a higher likelihood of finding the right buyer or seller for your business.

 

Successful business transactions often require substantial resources, including marketing, legal support and financial analysis. Part-time brokers may not have the resources or connections needed to provide these services adequately. In contrast, full-time brokers are more likely to have established relationships with professionals who can support the transaction process.

 

While part-time business brokers may be well-intentioned – their limitations in terms of availability, expertise and resources can pose significant risks when it comes to selling or buying a business. Work with a full-time, experienced and qualified business broker who can provide the dedication and expertise needed to achieve a successful outcome. 

 

Are you looking at buying or selling a business and didn’t know that some “business brokers” aren’t business brokers at all? Would you like to know more about how we (as full time, experienced and qualified brokers) can better assist you through the transaction process? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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4 Ways: How To Finance The Purchase Of A Business

Coming up with a brand new business idea is a big challenge. You have to figure out a concept, find a location, come up with operating procedures, hire and train a staff, build out your space – the list is a long one.

 

If you’ve ever wanted to own your own business there’s a way to do so without having to start at ground level. You can buy an existing business instead – one that has a proven location, concept and track record. 

 

If this sounds like it might be the right path for you, here’s your next question.

 

How are you going to pay for it? 

 

 

In the small business world there are essentially 4 ways to finance the purchase of a business. Let’s take a look at your options:

 

Seller Financing

This one is probably the most common. A buyer comes up with a substantial down payment and then the seller of the business finances the rest. This option is popular because small business funding can be difficult to get from a traditional lending institutions like a bank, so sellers will offer creative financing to open up the pool of buyers for their business. This is also popular among buyers because a seller who is willing to keep some skin in the game tells you volumes about how they view the future profitability of their business. They don’t get paid unless you succeed. A few caveats for this financing option. You will need to bring a large down payment, 10 or 15% isn’t going to cut it. Also, if you do end up defaulting on this loan the seller will get the business back.

 

SBA Loan

The Small Business Association (SBA) does offer loans in the right situation to people buying a small business. There will be a fair share of bureaucracy with this financing option, as well as certain metrics both the buyer and the business itself will have to meet in order for the loan to happen.

 

Investor/Family Funds

In some situations a buyer is able to procure funds from loans made by family, friends or investors. This option should include a contract or written agreement by all parties that spells out every aspect of the loan – how it will be paid back, what metrics are necessary, how one or more parties can be bought out of the agreement should the need arise, etc.

 

Your Own Cash

Lastly, you can always use your own cash to fund the purchase of a business. Perhaps you have a decent amount of money in savings, maybe you’re considering refinancing your home or pulling funds out of investment accounts. This option will alleviate you from owing money to others but must be considered carefully if you are going to be investing all of your available cash into the purchase of a business.

 

If one or more of these financing options seem doable for you, the next step you should take is to have a conversation with an experienced and qualified business broker. They will be able to talk you through the options available to you and help you decide which option will best meet your goals for business ownership.

 

Have you always wanted to own your own business but weren’t sure how you would fund such an endeavor? Would you like to know more about how seller financing works? Do you have questions about the process required for a loan from the SBA? Ask us! Leave any questions or comments here, we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Buying Businesses: Why You Shouldn’t Sign A Million NDAs

A million NDAs? Yes, that’s a profound exaggeration. It would be nearly impossible and ridiculous to sign a million of anything. The point we’re trying to make is your approach to buying a business will greatly impact your ability to get to a closing table.

 

How?

 

The NDA (non-disclosure agreement) is a document you sign before the name, location and any sensitive information about a business for sale can be revealed to you. It is a critical step in the business buying process, so if you’re in the market to buy a business – you’ll be signing NDAs.

 

 

What you shouldn’t do is sign a ton of them. Why? It’s an enormous waste of you time and energy.

 

The NDA should only be signed after you have completed a few other steps. First and foremost you need to figure out your goals for business ownership (a more flexible schedule or greater income potential, for example) and then decide how much money you have to invest in your new venture. The second step would be to have a conversation with an experienced and qualified business broker about your goals, the industries where you have interest/practical experience and your available capital. Your broker should then find you some cursory listings to review. If any of those listings look promising, then and only then would you sign the NDA for that particular listing.

 

If a business broker is doing their job the only people who are allowed to sign the NDA are people who would not only be a successful buyer of the business (they have enough capital) but also a successful owner of the business (they have the practical experience and passion to keep the business in the red). It serves absolutely no one to randomly send NDAs to people who can’t successfully buy and run that business. All it does is put the business at risk for disclosure of the for-sale status to the wrong person (read why that is bad here).

 

There are brokers out there who will automatically send NDAs to anyone who shoots them an email, no questions asked – so as a buyer it’s possible to ask for, receive and sign a ton of NDAs. The issue is those NDAs are likely for businesses that you either would be unable to buy or wouldn’t suit the life you’d like to have – so why waste your time?

 

Talk to the right broker – someone who asks you questions and helps you narrow down business listings. Then sign.

 

Are you interested in buying a business and have questions about the NDA? Have you signed a ton of NDAs without much success and are looking to try a different approach? Talk to us! Feel free to leave any comments or questions and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

9040 Town Center Parkway
Lakewood Ranch, FL 34202




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