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More than One Reason to Start or Buy a Business

By Scott | March 27, 2010 - 3:18 pm |July 23, 2013 business broker florida, buy a business, entrepreneur, how to sell a business, Main, sell a business, sell a business florida, selling my business, small business ideas, small business owner

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How many times do you go to a cocktail party or just hang out with friends and hear things such as “I got this great idea for this new business”, or “Ive got this great idea for this new invention”, or “If I were the boss and owned this business that I am working at, I would ______________.” Words are said, heads nod, cocktail parties end and friends go home and nothing happens.

But for some the entrepreneur spirit rises to a greater height than just words, and they are able to turn those words into action. What is the difference between those at the weekend cocktail party talking about it and the person that wakes up Monday morning and actually pursues it? Very often, the inspiration to turn words into actions lie in the reasons why one want to pursue this path. What are the reasons some turn those casual interest into action?

Photo (c) bluewolf.com

As a business broker I have many discussions with individuals that want to buy a business. The process of buying a business or starting a business both are filled with trepidation, concern, excitement and pursuing of yet to realize results. One of my functions in working with individuals in the process of buying a business starts with a simple question – WHY? Why do you want to buy a business? or in some cases Why do you want to start a business? There is a big difference between the person that talks about buying a business or starting a business and one that actually follows through on those aspirations. And the reason why one wants to start or buy a business can be very different as well.

The below list is certainly not complete but explores some of the reasons one takes the next step.

Why Do You want to Buy a Business or Why do you want to Start a Business?

1. Sometimes its not just about the money, someone has a passion for a field or effort and just wants to immerse self into that field.

2. Others, want to turn filthy rich. Some studies will speak to the high percentage of individuals that gained significant personal wealth through buying a business or starting a business.

3. Someone may just want to have a job to count on. If you are the boss (of yourself), Who is going to walk into your office and fire you. No one. You have control of your job security. Maybe this venture will turn into more, but at this point, “I just need steady work”.

4. There is a want to start or buy a new business because a person wants out of existing business due to “burnout”, or fatigue and wants to enter a new venture to re-invigorate and try to re-discover the energy that comes along with an entrepreneurial new start.

5. There may be a compelling wish to pursue a new venture that is genuinely making peoples lives better, and a person has a need to fulfill this want of self- fulfillment.

Real Reason For Starting Your Own Business

People who want to be entrepreneurs cite reasons such as satisfying a self-determination, wanting to set their own hours, wanting to be their own boss, and wanting to test themselves, as reasons for starting a new business. But when we get down to it, most people want to start a business to gain financial freedom. Starting or buying a business in the pursue of financial gain and to provide a comfortable existence for self, family or others is a realistic and well-proven approach. Starting or Buying a business so one can spend more time with family is both mis-guided and unrealistic.

The reasons one does start a business, or buys a business can vary greatly, and the list is longer than outlined above. But there are only 2 types of entrepreneurs or small businessman when it comes to buying a business or starting a business – Those that Do – And Those that Don’t.

I Want to Buy a Business… I Think

By Scott | March 11, 2010 - 9:48 am |July 23, 2013 business broker florida, buy a business, entrepreneur, how to sell a business, Main, sell a business, sell a business florida, selling my business, small business ideas, small business owner

Buying And Selling A Business – Facts

I am in the business of helping business owners and individuals buy and sell businesses. I interact with both a lot of potential buyers and potential sellers . Understanding the key points below that outline some information regarding the future sale of your business, or if opportunity presents itself buying a business may benefit your situation:

1. ALL business owners are probable future business sellers

We all need some “exit strategy” from our business. Selling ones business for a nice gain is one of the more appealing exits from a business that exist. Prepare in advance for that fact. Also know and understand the value of what may be your largest asset- your business. Even if you are not plannining on selling your business- it makes business sense to know what the value of your largest asset actually Is. On my website www.sellabusinessflorida.com we list 1000’s of businesses for sale. On this site one could locate “like’ businesses and use this information to approximate the value of their own business. But please keep in mind all businesses are different, but this would be a starting point to ballpark valuation.

2. Not all businesses that try to sell actually sell

Homes are bought and sold all the time. Some homes take much longer to sell than others (especially here in the South Florida market). But ultimately most all homes do sell. The same is not the case for all businesses that attempt to sell. The process of selling a business can be a long process, and that process does not always end with an executed contract and or sales agreement .

Photo (c) tampabusinessbroker.com

3. Most people that say they want to buy a business don’t buy a business

Industry statistic regarding this fact vary, but the numbers may be as high as 9 out of 10 peoplethat actively pursue acquiring a business, talk to business owners about selling their business, and engage in some form of due diligence don’t buy a business. The reasons vary and go beyond the scope of this post, but money “surprisingly” is a determining factor in not having a potential business buyer buy a business.

4. If you have started your own business and are looking at ways to boost sales, buying another like business is a very viable growth business concept

Buying A Business Comes In All Shapes And Sizes

Eliminate the thought that buying a business means $100,000- $5,000,000+ deals. It can be as simple as buying an online web store for $200 that is a perfect fit and the additional traffic that it can drive to you is extremely beneficial. – Eliminate the thought that you need to have big piles of cash and the person selling their business is walking away with an all cash deal. MOST businesses sold today involve seller financing. The seller has both a vested interest in your success, and the seller is eliminating the need for you to go to a bank to finance the acquisition of the business. The seller is your bank. The seller understands their business and the likelihood of your success with their business, very often better than a banker would.

If you have started a business and need to “boost sales” and not sure how to gain additional customers or sales, buying a business that may be a competitor or a complimentary product of service can be an effective strategy. If you are thinking of starting a business, and want to “jump start” your effort buying a small business that you can build on and mold into your own is also a very viable strategy.

Thinking of buying a business? Will you be that 1 out of 10 that actually goes forward and makes that goal a reality.

Florida Business For sale Buying a Florida Business

By Scott | March 3, 2010 - 1:20 pm |July 24, 2013 business broker florida, buy a business, how to sell a business, sell a business florida

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Below please find reason to visit www.sellabusinessflorida.com when pursuing the acquisition or Sale of a Florida Business

Top Reasons To Buy Or Sell A Business Via www.sellabusinessflorida.com

1) If you are looking for a business broker or more specifically if you are seeking a business broker in south florida, or a SWFL business broker, or are seeking a business broker in fort myers florida, seeking a business broker in Sanibel Florida, or seeking a business broker in Florida to assist in your sale or burchase of your business.

2) If you want to sell your Florida business now, you are considering selling your Florida

Photo (c) linkbusiness.com.au

business, want to discuss planning to sell your business, or are seeking to sell your business in Southwest Florida. Just call for a FREE consultation

3) If you seek a business opportunity in the fort myers florida area, are interested in merger and acquisition in the naples florida area or seek a business opportunity in Florida. If you seek to oursue a merger in Florida pls contact sellabusinessflorida.com. We work with business buyers throught the United States and Internationally to assist in finding the right Florida Business to buy just click on this link to view over 1000 Florida Businesses For Sale https://www.sellabusinessflorida.com/
florida_business_search.html

4) If you seek to buy a business in Florida, or are looking to buy a Florida business that is in South west Florida, or wanted to buy a business in NaplesFl, or buy a business in fort myers Florida, or buy a business in Tampa Florida please contact us for more information. The above link allows you to search for the business that is right for your needs and situation. Again, just contact us to arrange a free consultatation regarding how to buy a Florida business.

Please find below a partial List of types of florida Businesses For Sale that we work with:

Florida Electrical contracting business for sale
Florida Retail Businesses for Sale
Florida Restuarants for sale
Florida Print Companies for Sale
Florida HVAC businesses for Sale
Florida Computer Companies for sale

A Day at Entrepreneurs Law School

By Scott | February 5, 2010 - 9:46 pm |July 24, 2013 business broker florida, buy a business, entrepreneur, Main, sell a business florida, small business owner

The Legal Side Of Buying And Selling Your Business

Our hour presentation focused on the Legal Considerations in Buying and selling a Business. The basic premise is that there are many considerations that an Entrepreneur who is contemplating buying or selling a business needs to consider before beginning the process . The Entrepreneur Law School is the product of Florida Gulf Coast University, Lugert College of business. Essentially the day long event had attorneys speaking on subjects such as :

The Entrepreneur Checklist
Common Pitfalls of Contracts
Business Formation and Taxes
Business Entity Selection
Protecting Intellectual properties
Legal Considerations in Buying or Selling a Business

and a dozen other hour long legal issues as it relates to Entrepreneurs were presented. While I was there to present information for the attendees related to the legal aspects of buying and selling a business, I found myself as viewing this as a learning experience for me as well. I think I saw many future successful business owners in the crowd.

I was very impressed with the fact that the small business owner located in our area that is generally battling difficult economic conditions would pay good money and take almost 8 hours out of their Saturday to further educate themselves. Firstly, most small business owners are working so much during the week that sometimes the weekend is the only recluse that can be found. Secondly, money is tight, and expenses are looked at not just once but twice. But these attendees considered the investment in educating themselves to be money well spent.

Photo (c) zc-law.com

The presentation the attorney (Attny Donna Flammang who specializes in Business Acquisition and Sales) , and I conducted was to a full room and essentially we ran out of chairs. I found it both interesting and exciting that most attendees chose to attend our presentation over others that were conducted concurrently. Attorney Flammang started the presentation by stating the importance to consider the selling of your business the day you start your business, or more specifically the day you choose the type of entity when starting your business.

The Importance Of using An Attorney When Buying/Selling A Business

Should you always use an attorney when starting or buying a business was discussed. Letter of Intent, Due Diligence, and how to prepare your business for sale was also discussed by both Attorny Flammang and I. We fielded many questions from the audience and as can happen we ran way short on time- the hour was not sufficient. After closing comments we were both approached by many with additional questions. And again I found myself surprised by the energy and makeup of the attendees. I found myself talking with a husband and wife team that has owned their own bicycle related business for 20 years and were seeking further education!

Most Entrepreneurs have a voracious appetite for gaining knowledge and learning new things. But one may wonder- how long does that appetite for knowledge linger? Here was a couple that have a successful business for 20 years and could be sitting at home relaxing in front of the TV, instead they are paying $200 to attend a day long event covering legal aspects of running a business- which some can find as not that exciting. I personally find legal issue and accounting issues to be very interesting almost to the point that it makes me wonder about myself. Many would rather not bother with either of these components of a small business. These business owners embraced these challenging topics.

As I looked out into the audience, I felt I was looking at Successful people in the making. I know there is no real guarantee formula to success, but the people that would spend both their time and money to gain legal knowledge to further their business in difficult times like these sounds like a good formula for success to me.

How to Fuel Your Business Sales Growth – Organic vs. Acquisition

By Scott | February 1, 2010 - 7:51 am |July 25, 2013 buy a business, entrepreneur, how to sell a business, Main, sell a business, selling my business, small business ideas, small business owner

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Sales Growth. Every business needs sales growth. When the company bottom line is lacking and cash flow is deficient a business owner may pour thru his/hers monthly financials or spreadsheets reviewing line entries to find out where the business is and to find any glaring problems. Most often this analysis results with the same outcome. INCREASE SALES or DECREASE EXPENSES.

I, and many other business owners, recognize that reducing expenses is always a good thing, and during an economic downturn such as the one we are presently experiencing it is more than necessary. But my experience is that you can only reduce expenses so much. It helps your situation month after month to attempt to reduce your expenses to improve your bottom line, (and is a great business discipline), yet at some point you get to the place that you cant really reduce expenses much more, YOU NEED TO GROW SALES.

Types Of Business Grow

Sales growth also occurs across many different efforts, but these different efforts can be simplified to categorize sales growth as:

Internal Sales Growth (or referred to as organic growth)
Growth thru Acquisition

Companies may tend to use just one of the above means, or both of them. In my last business our sales growth came thru a combination of both internal growth and growth thru acquisition. Both means have advantages and potential disadvantages. But both should be considered. The longevity of the business may also dictate what means to utilize for sales growth. Speaking from personal experience of growing and running a business for 20 years here are a few of my findings.

In the early years annualized sales growth of high double digits and or low triple digits was very attainable thru internal growth. But as your sales grows and your year over year comparisons are based on higher sales numbers attaining the higher sales growth figures became more difficult. So acquisitions helped support our internal growth efforts. Efforts for internal growth never stopped, they just got supplemented with strategic acquisitions. Recognize that acquisitions that are synergistic in nature can have some tremendous results on your bottom line.

A poorly performed acquisition can also have the opposite result and can be very costly to the business. Where do you look for potential acquisitions? Competitors are always the first best place to keep your eyes open to. Below are some of the pros, cons associated with growth thru acquisition and thru organic efforts.

Photo (c) punchcopy.com

Sales Growth Thru Acquisition and Organic Efforts

Pros/Cons – When acquisitions are truely synergistic the effect on your bottom line can be significant. Even when considering the acquisition cost of money consider the following. If you sell Yellow Widgets and your sales are $10,000 a month – you may have the monthly cost of business to sell those widgets including a building, a telephone, insurance, advertising, company car, receptionist, etc -cost totalling $6,000 per month. You decide to buy a local competitor that sells Red Widgets and his sales are $7,000 per month. He also has similar cost of business- you may find that you may increase your sales now to $17,000 and you no longer need his building, phone, company car, and receptionist. Even considering the cost of money for acquisition- you probably have increased your bottom line virtually overnight. So immediate sales increase is a plus – But consider:

Handling/managing a big bump in sales “overnight” can be a daunting task and business can be lost in transition and may need to be factored into the acquisition decision analysis.
The customers of the “other” company are used to doing things in a different way. Your way may be an improved way, but the difference may be detrimental in the eyes of some acquired customers.
Financing the acquisition can be difficult- Financing thru the Seller is usually easiest, and being they are in the business- they can better understand and see where the money is coming from and the likelihood of payment.
Acquisition can grow sales at a much higher more immediate rate. You gain the benefit to the bottom line “today”.
In current economic times Acquisitions may be had at more favorable multiples of earnings.
Organic growth – the customer is “brought along” with your company philosophy, approach ,and methods and have a certain “comfort factor” with this approach.
Organic growth rates may decline as the maturity of the business grows.
Organic growth adds to the stability of the company. If acquisitions are not available the company can rely on own internal efforts and have control of those efforts.

Acquisitions for most businesses should be considered. Organic growth can be more “slow and steady”, but “slow and steady” with a surge here and there can be a beneficial company business model towards fueling business Sales Growth.

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