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Selling Your Business How to Find a Buyer

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Selling your Business How to Find a  Buyer

Looking For a Business Buyer

You have decided you want to sell your business.  How do you find a buyer for your business?

When a business has been in existence for many years, 10-20-30-40+ years it is not uncommon for the business owner to be approached about selling his/hers business. Or it is not uncommon to “hear about someone interested in buying the business” or have someone express “interest in buying the business”.    I have seen and experienced this as a business owner and as a business broker. So one may think  “if these  people are interested in buying the business and I’m not even trying to sell it, I think it may be very doable to find a buyer when I am ready to sell my business.” But like a lot of other complex processes, “the devil is in the detail.”  Often  , when ready to sell your  business,  it turns out the person  or competitor, or strategic buyer prospect that was interested in the business 1,2, 3 years ago, is no longer interested- their situation has changed.  Or the guy that said he knew someone  that was interested in the business, doesn’t have the resources to consummate a deal. So how does a business owner find a buyer for the business. 1. Try to find a buyer on his/her own. 2. Hire a Business Broker to find a buyer.   Neither options are guaranteed. What is generally not known by one trying to sell a business is that MANY  businesses that actively try to sell their business DO NOT SELL.  Industry statistics show that well over 1/2 of all businesses that actively try to sell actually do NOT  transition the business to a new buyer. But it is with little doubt that hiring a qualified business broker greatly increases ones odds of finding a buyer.  It is my opinion that a significant reason why utilizing a business broker is the simple fact that most business owners already have their hands full running their business.  And then to add  the components of selling a business to their day is barely doable at best. Marketing the business, vetting out buyer prospects, tire kickers, not disclosing the confidential component of the sale are just a few responsibilities that are easy to do  while continuing to run their business.   Often there is not enough hours in the day to get all that done and run the business. A business broker is able to have “generic dialogue” with competitors and strategic buyers without disclosing the name of the business.  If  Mike from Mikes Towing approaches ABC towing about buying their business, then ABC business knows Mikes Towing is for Sale. If Scott from XYZ  Business Brokerage approaches ABC Towing about a Towing business in the Jacksonville Florida area- confidentiality is maintained. But as a Business Broker we market  looking for business buyers across many different platforms, often searching locally, regionally, nationally and internationally.    So often business buyers are from “Somewhere else”.   Also a business buyer is someone that buys a business.  About 9 out of 10 people that approach about an interest in buying a business don’t buy a business.  They may one day, but that may not be this year or next year.  They are prospective business buyers.- As a business Seller you are looking for a Business Buyer. I personally have bought  several business over the last 25 years. I have made the decision to buy a business- found a business that met my goals and then concern myself greatly if I cannot effectively acquire the business   Many “Business Buyers” looking for a business do not ever make an offer on a business , or buy a business.  They may be a perpetual business buyer prospect, or they may truly be ready to take the next step and be a business buyer. Knowing the difference between a prospective business buyer and actual business buyer can be the difference between an effective sale or a frustrating  time demanding process . For More information on Selling a Business or Buying a Business  Scott M Messinger (239) 770-2421

Selling a Business to a Soldier

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Selling a Business to a Soldier

I am a Businwww.SellaBusinessFlorida.comess Broker based in the Jacksonville Florida area. Most of the business I represent to Sell are in the state of Florida and many businesses I represent for Sale are in the Jacksonville Florida area.

Buyers of businesses come from everywhere.  Prospective business buyers    come from right down the street and  from elsewhere in the State.   Very often business buyers buying a Florida business come from another state.  Currently I am working with a business buyer from Ukraine.  I am also working with a soldier stationed in Afghanistan that contacted me regarding a Meat Shoppe I have for sale in Jacksonville.  This 12 plus year military vet, while still serving, has extended an offer to buy this business I represent for sale.  The Seller has accepted the offer and potentially this person that has spent the last 12+  years serving the USA military,  will be a small business owner after his final discharge date.  It is potentially a life changing event for him and his family

Every business sale I see as unique  with its own unique set of issues, challenges, and obstacles.  Some business sales have less obstacles than others, but they all have obstacles.  Selling a business to a Solider that is currently serving overseas brings on its own unique set of challenges.

Observations about Selling a Business to a Soldier-

  • This prospective business buyer is seeking an SBA loan we think we do have a good lending source lined up that is working hard on behalf of this veteran,- I have yet to locate any special lending programs for military veterans, and find that surprising.
  • As many know prior experience  in the industry is a standard requirement of SBA lending.  again I was surprised that the experiences in the military do not carry more weight in the lending community.
  • Obviously the logistics of calls, emails, faxes, signatures,  along with the big time zone difference and  are just not as easy as me working with a prospective buyer in Chicago Il.
  • Business sales that are contingent on appraisals, loans, and standard due diligence are the norm.  Drafting an offer that is contingent upon “not becoming another statistic before being  scheduled to leave theater “(Afghanistan) brings a new and sobering  element to the process.

On a somewhat related note, yesterday I volunteered at an event in Jacksonville Florida  called Hired Our Heroes.  (sponsored by the US Chamber of Commerce Foundation).  It was a job fair and workshop geared towards transitioning  Military veterans.   My role was to help military veterans that are preparing their transition to “civilian life”.  I also assisted with resume reviews and providing a “civilian business owner perspective”. During my 20 years as a business owner I interviewed and hired 100’s of employees and prospective employees.  At this event I had the chance to spend time with what turned out to be very qualified individuals.  One individual had a very lengthy resume.  We spent a lot of time  trying to simplify it and cut it back.  Problem was that during his 21 years in the military he had  managed  and coordinated so many impressive feats that his resume was long because he has accomplished so much.  Another I spoke to inferred not wanting to point out his involvement in “hostile environments” as he thought this may dissuade a prospective employer from hiring him.  He had been advised that this may be viewed as a negative from a prospective employer.

Our military is and has been producing so many impressive individuals.   Buying a business as a soldier should be a plausible and viable transition.  But pursuing buying a business   as a soldier has its own special challenges.  I think more could be done to assist a soldier  that desires to own a business after their time serving our country is completed.  In this case am I, the lender, and the Seller working a little harder because this prospective business buyer is currently serving our country?- yes.  But after working on this business sale I think  pursuing  the dream of owning a business after serving our country should be easier and more common place.

Florida Businesses Sold in Florida 2013 Year End Summary

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Florida Businesses Sold in Florida 2013 Year End Summary

 

SellaBusinessFlorida.com

Florida Business Sales and Business Sold in 2013

 

I am a Florida Business broker based out of Ponte Vedra Beach (near Jacksonville)  working with business owners selling their Florida  businesses, and individuals and business owners looking for acquisitions.  Prospective business buyers I work with are located in Florida, US., and Business buyers in Europe and throughout the world.

As a  member of Business Brokers of Florida, which is the largest state Association of Business Brokers in the United States we have access to significant data regarding businesses being bought and sold .   Thousands of businesses for sale are represented by over 1000 Business Professionals involved with business acquisition and sales that are members of this Association.  Business brokers in this association  list their respective businesses for sale and prospective business buyers on a centralized listing site and buyers and sellers of businesses are brought together.

Several thousand businesses for sale are listed, modified, and advertised thru this Association.  They can also be viewed on my website here at Florida Businesses For Sale.  To further my knowledge,  I believe understanding the marketplace in which Florida  business may be sold is furthered by a review of the data surrounding businesses being bought and sold in Florida. The below are a few statistics, totals, and items of note surrounding the business acquisition and sales market in the State of Florida. Other businesses are bought and sold without the assistance of members Business Brokers of Florida, and that info is not included in this analysis.

Businesses Sold in Florida through Business Brokers of Florida  in  2013 – 909

  • Businesses Sold in 2012- 950
  • Businesses Sold in 2011- 859
  • Businesses Sold in 2010- 931

Averages of all businesses sold in 2013:

  • Average Sales – $572,000   Average Price Sold For- $286,000   Average Adjusted Net Cash Flow- $114,000  
  • Days on Market  225 (note all DOM (days on market) numbers DO NOT include those taken off the for sale market)
  •   Florida Business Sold in 2013 for $1M or more-30
  •   Florida Business Sold in Florida that included Real Estate- 47 (only about 5%)
  •   Category with most Businesses Sold- Restaurants- 199 sold in 2013  currently there are 3209 Florida Businesses For Sale and of those for sale  717 are Restaurants. (22% of all businesses for sale are Restaurants)
  •   Florida is a highly Service based economy, the other categories with highest number of Sold Businesses in 2013 in Florida  are in the service sector and include Hair Salon, Dry Cleaners, Lawn Service, Pools Service Businesses.
  •   Florida Businesses for sale requiring Down Payment of $50,000 or less – 480
  •   Florida Businesses For Sale with Net Income of $100,000 or more- 1264
  •   Florida Businesses For Sale with Net Income of $300,000 or more- 239

I am a Business Broker based in the Jacksonville Florida area ( main office is in Fort Myers Florida area).  Below is some 2013 information about Business Sold in the Jacksonville Florida area and Businesses For Sale in the Jacksonville Florida area.

  • Jacksonville Florida area Businesses Sold in 2013- 53
  • Averages for the 53 Jacksonville Florida Businesses Sold in 2013:
  • SALES- $558,000      Average Sold Price- $226,000   Average Adjusted Net Income- $142,000    Average Days on Market*- 218 Days  
  •   Total Businesses For Sale in Jacksonville Florida area as of Jan.1 2014. -227
  •   Jacksonville Florida area Businesses For Sale with Net Income of $100k or more- 99
  •   Jacksonville Florida area Businesses For Sale that require Down Payment of $50k or less- 33
  •   Jacksonville Florida area Businesses For Sale that have Net Income of $250k or more- 26
  •   Averages for the 53 Jacksonville Florida Businesses Sold in 2013:

I have been following  Florida Business Sales over the last 4-5 years and the above numbers have been somewhat consistent.  I believe there remains a pent up demand in both the Buyers and Sellers side.  The buyers still are slowed down by financing options and some potential Sellers are still delaying putting their business up for Sale due to uncertainty.  As a former long term business owner, I realize the thought and contemplation that goes into the decision to sell ones business.  The only real certainty is that another year will come and go, time marches on, at this time next year will your activities be included in the 2014 year end summary?

*All above info compiled from data available via the bbfmls website. And addresses information about businesses being bought and sold and reported thru this Professional organization of Business Brokers of Florida.

For more info or questions regarding the Florida Business Acquisition Market or Florida Businesses for sale please contact

Scott M Messinger

Scott@Sellabusinessflorida.com

239.770.2421

 

Selling Your Business and Dying

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When are you thinking about selling your business?  10 years before you die or 1 year after you die.

I don’t like thinking about death, I dont like talking about it, I dont like writing about it.   My Mom just passed away a few short weeks ago. I am a business broker based in Florida   helping people  buy and sell businesses.  I started and ran and owned a business of 20 years and successfully sold it.  I know my Mom was proud of me.  I know it.  Is that an even exchange?.  Mom you give all of yourself for me your whole life and in exchange, I will try to make your proud of me

I have so many discussions with people about significant life decision.  Business owners want to sell “so they can enjoy life”.  Prospective business buyers want to buy a business because the opportunity to do so wont be there forever.  Life is short.  I Currently have a client that the  owners (husband and  wife)  wanted me to help sell their business.  It took a long time.  We have it under contract,  But several months ago, the wife got sick, and then sicker and then a few months ago, she passed away, at a relatively young age.  They wanted to sell their business so they were not so tied to their business and they could enjoy “those other things in life” together.  As she got sick, they anticipated having x years to enjoy life together, without the business.  Those years became months and then became days and now the surviving husband is trying to piece together plans of how he can enjoy his days without the woman he had made those prior plans with.

“I am going to wait to sell my business next year”.  Sometimes there is no next year.

I sold my successful business of 20 years at a relatively young age because I wanted to do something else.  I had some health issues that afforded me a different perspective on life.  I am now a business broker and I truely  enjoy and embrace the magnitude of what I am part of.  Buying and selling a business is a life changing event. Yet being a business broker is also a very challenging and difficult business.

So many business article exist on the internet  about how to “Buy the Best Business” or “How to Sell your Florida Business”, or “5 Best ways to find the best Business Broker” .   I’ve even written some myself.  This is not one of them.  How much do you let life get in the way of your business?  How much do you let business get in the way of your life?

 I got back from doing my Moms eulogy to meet with a 71 year old business owner that wants to sell his business “so he can enjoy life fully with his wife”.  Isn’t that a good reason to sell your business?.  I not only think so- I know so.

Is Selling Your Business The Right Choice For You?

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Is Selling Your Business The Right Choice For You?

Is Selling You Business the right choice for you ?

When a small business owner is considering the sale of his or hers business there can be an extensive search to find answers regarding the process.  Before one finds the answers or proper information as it relates to the sale of a business, you must know the questions to ask.  Most small business owners are not born with the knowledge on how to sell their business.  Furthermore most small business owners have not sold a business before ,therefore gaining knowledge and information on the best way to sell their business is essential.

Again each business is different and each business owner and business owner situation is different, but below please find a list of questions to consider that may be helpful in the process of selling a business.

        Are Your Ready To Sell Your Business?

Are you ready- Are you emotionally ready to sell your business?- Almost 20 years ago when approached about potential buyers looking to buy my business, I asked my CPA for his advise which I followed and still subscribe to today.  He told me “You will know when you are ready”.  I tell  those I advise today if you wake up one day and think its time to sell your business- take some time and reconsider.  If you wake up 30 days+ in a row feeling you want to sell your business- then maybe its time to sell your business.

Is Your Business Ready?

Is your business ready for you to sell your business?-  Are your financials in order.  In other words do you have accurate financial records that are both accurate and understandable.  Do you have systems and or policies and procedures in place and documented?

                What Is Your Business Worth?

What effect does the amount of money you would get from the sale of your business have on your decision. Is it your complete retirement money?  Is it enough to allow you to exit to pursue your next venture?  What is the difference between what you need the value to be and the actual value.

Getting Others To Help You Sell Your Business

DO you hire a business broker to sell your business?   Can your CPA or your attorney sell your business?  Can you sell your business yourself?  I am a business broker and sold my own business and also purchased multiple businesses as a business owner.  Yet after the sale of my business I chose to be a business broker as I recognized the value and confidentiality a business broker can provide. Furthermore most business owners are busy running their businesses before they add they task of trying to sell their business to their work day.

                Should You Improve Business Before You Sell It?

DO you buy that new truck?  Do I spruce up the inside of my stores?  Do I hire that new employee?

I always advise business sellers to run the business as you will own the business for the next five years.  There is a chance the business will not sell or take a long period of time.  Continue to make your business better and attempt to add value.  Certain Capital expenditure  should be carefully weighed, but continue to try to improve your business.

How Long Will It Take To Sell Your Business?

It seems that typically it will take longer for a business to sell than a business owner may originally think.  I suggest the 1 year time frame as a guideline but again all businesses are different and asking price for a business can strongly influence the time it takes to sell a business.

 

My Personal Advice When Selling Your Business

Every business is different and every business owner  and business owners situation is a little different.  But there also is some commonality shared.  My perspective on this matter is that of one that has started a business, personally purchased several businesses, sold my own business and have helped others buy and sell businesses.

I understand and respect the decision of selling a business is a very important and complex decision and process.  It is NOT all about the money.  The sale of a business  involves multiple facets including  price, emotions, financing,  lifestyle, families  and personalities.

When considering if it is time for you to sell your business spend some plenty of time seeking some answers, but begin with the questions most important to you.