Tag Archives: sell a business florida

A Day at Entrepreneurs Law School

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Sometimes it may be easy to recognize what a successful person looks like because of the fancy car, expensive clothes or the big house or houses.  But, what does a future Successful person look like?

Last weekend I was asked to speak at the Entrepreneur Law School at Florida Gulf Coast University .  I spoke along with an attorney to a standing room only crowd of small business owners in Southwest Florida.  These small business owners paid $100 to attend the day long event that focused on legal matters that affect the Entrepreneur.

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.

Buying/Selling A Business - Attorney

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.

Is Selling My Business the End Game ?

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The End Game

In the business world, your professional career, your job, what is your end game? Do you have a goal to “be done by the time I turn___ years old”? What is your goal? Starting a business and selling it for a very comfortable profit- is that your goal? Climbing the corporate ladder to the top- is that your goal?

Too Busy To Set Goals?

Putting a good meal on the table for the family and retiring comfortably at the age of 65 is that your goal? Retiring by the age of 30, 40, 50 60,70? Is that your goal? Sometime we get mired in our professional/business life and are to busy solving todays problem and have no time to really plan for tomorrow or for the years of tomorrows we will have after “retiring”.

“I want to start a business- grow the business-make it profitable – and hopefully be able to sell it for enough money for me to retire on.”

I believe this to be a reasonable and fairly common goal among business owners and or entrepreneurs.

But I think, like a lot of complex situations, the devil is in the detail. Lets say you are enormously successful and able to financially to accomplish your goal and sell your business at the age of 30, 40, 50, 60 years old? Do you plan to then just relax, and play out your years playing golf, tennis, and waiting for the 5:00 Cocktail hour?

Business Goals

Is Selling A Business Your Ultimate Goal?

Is selling your business the end game, finishing point, or just a step or part of your business life? The demographics of where I live is such that there are many many people retired (ages 50-80) who we live among and interact with on a regular basis. The need to stay active physically and mentally is a priority for most of them, and these are generally people than can be retired and “do nothing.” Exit planning from a business requires careful thought and potentially some soul searching as well.

Selling your business and retiring very often is not the end game rather the beginning of something new. There may be some people that can retire at the age of 35 and play golf, fish, play tennis for the next 40 plus years – And more power to them, but many cannot. And as we get wrapped up in the day to day task, opining to be out on a golf course day after day sounds pretty damn good. Do more than just daydream of retirement and recognize the need to have an exit plan. Take the time to consider your exit strategy to increase your chances for the best decisions for you and your family.

“I have Not Failed I’ve just found 10,000 ways that won’t work” – Thomas Edison

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My family and I lived near Fort Myers Florida for 11 years – Thomas Edison and Henry Ford had vacation homes right next to each other  in the  Fort Myers Florida.

Thomas Edison Business Mindset

Many stories and quotes are attributed to these successful men. The above quote – “I have not failed. Ive found 10,000 ways that wont work” – To me addresses the trials and tribulations of a small business owner or entrepreneur. Failure in start ups happens. It can happen again and again, and will happen. Failure doesn’t get dealt with as a defeat, rather is viewed as a setback. Many failures turn into policy and/or procedure to avoid similar future problems. If you buy a business you can have a pretty good feel on what to expect assuming you’ve performed adequate due diligence.

Thomas EdisonIve been part of many discussion revolving around starting up a company and how many years to either break even or make a profit. Some people say it is one year others say 2 years, others 3-5 years. For every business reaching this milestone of “break even” or “profit” is different. The measuring stick used and the timeline expected should be considered. Arbitrary goals and time frames should not be set. There are many unknowns in a start up. You can only do so much due diligence on something that has yet to happen – “You dont know what you dont know”- this quote may or may not be from Thomas Edison,- but applies.

I think that many people have a certain entrepreneur spirit within. Only a certain percentage act on that spirit. And the successful ones I believe are the ones that are successful at understanding failures will happen, and are resilient enough to accept the many failures that will come your way. Failing 100’s and or 1000’s of times and then coming up with the light bulb is a prophecy most any small business owner / entrepreneur would accept.


Due Diligence – How’s that Going to Make Me any Money?

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“Make sure you perform your due diligence.” A simple statement that can have tremendously far reaching consequences. I work with people interested in buying a business or selling a business, and this statement can almost appears like “boiler plate” language and get glossed over by the parties involved. What does due diligence have to do with running my business or starting my business? – due diligence is just for buying a business .

Due Diligence – Definition

Due Diligence is a term used for a number of concepts involving either the performance of an investigation of a business or person, or the performance of an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations. A common example of due diligence in various industries is the process through which a potential acquirer evaluates a target company or its assets for acquisition.

Originally the term was limited to public offerings of equity investments, but over time it has come to be associated with investigations of private mergers and acquisitions as well. The term has slowly been adapted for use in other situations (per Wikipedia)

Due diligence is essentially a way of preventing unnecessary harm to either party involved in a transaction. This is a definition when read carefully, can be seen as affecting so many aspects of a business owners life that it can almost become a mantra rather than an after thought.

I’ m ready to get that new office space – Upon completion my due diligence.

I am looking at partnering with my largest customer on a project – After I perform my due diligence.

My business has grown such that I need to select a new accountant and attorney – After I complete necessary due diligence.

I am trying to find a new bank willing to provide the needed Line of Credit and need to perform my due diligence on area banks.

Due Diligence In Business

In business transactions, the due diligence process varies for different types of

Due Diligence

Photo (c) viproperties.com

companies. The relevant areas of concern may include the financial, legal, labor, tax, IT, environment and market/commercial situation of the company. Other areas include intellectual property, real and personal property, insurance and liability coverage, debt instrument review, employee benefits and labor matters, immigration, and international transactions

In Giving: I have used due diligence in investigating charities and organizations I am interested in sharing my hard earned money with. I am a fan of the KIVA organization which provides micro-financing to entrepreneurs in third world countries and allows them to expand their business and or start a new business. I performed my process of due diligence on KIVA www.kiva.org and like the way my money helps others help themselves, like the fact that little of my donations go toward administration fees, and most of the money gets towards the intended recipient. And my daughter and I can research these financially less fortunate entrepreneurs on their website and choose where, and to who our money goes.

You can call it “doing your homework”, “doing my research”, ” checking out the facts surrounding the matter”, or “fact finding”. Whatever you refer to it as, it is most important that the function is performed before most every important decision. And yes, when looking to buy a business or sell a business you must do your due diligence. How much is enough and how much is too much?- That will be dependent upon what you are performing the due diligence on. I have 2 teenage boys (great kids) that tend “jump first look second”. If you are able to reflect on some of your business decisions and find that you have jumped first/looked second- you will know that you have not performed adequate due diligence. Very often the line for enough/not enough is not so clear. For me my gut will tell me if I “feel” I have performed adequate due diligence to make a good decision. Sometimes the result of performing due diligences will result in you not moving ahead with a deal and or transaction. And sometimes the best deal is the deal we did not do.

Legal Disclaimer – Legally, I assume Due Diligence can take on interpretation and meaning that can be thoroughly debated and defined among lawyers. Do you need legal determination of this term? – for that you will need to perform your own due diligence to determine.

Small Business Owners (Most All) Affected by Real Estate Downturn

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The Real Estate Downturn Is Affecting Most All Business Owners.

The real estate downturn is far reaching. Very often we hear about the impact on Realtors, construction trades, mortgage companies etc… But what about the small business owner that is a Printer, a Restaurateur, or growing Web-Based company. Most all businesses are affected by the overall slow down of goods and services, but the real estate downturn has affected business owners in possibly a more significant way.

Many small business owners own real estate. They own the businesses building, they own their private residence, or they own real estate investment property. These business will have financial needs, loans, line of credits, etc.. The bank regularly needs/requires personal guaranty and a personal financial statement from the small business owner. A significant part of that small business owners financial wealth is tied to those real estate holdings and the bank determines this small business to not qualify for a loan or L.O.C., because of depressed value of his/hers real estate holdings.

Real Estate Downturn

Photo (c) estacoes-elevatorias.com

So often in the business world it is said that “it doesn’t matter what an employee or a business does when he/she is on personal time or outside the business”. I find this approach to be flawed. What happens to an employee or small business owner outside the business does matter. The small business owner will find it more difficult to convince the banker of adequate security.

It used to be that you knew you had a lot of money if you lived in a nice neighborhood and had a nicer house/car than your neighbors, now you know you have a lot of money if the bank is willing to loan you money. What happens to a small business owners money outside of his business DOES affect his business.

As of today, September 18, 2009, it is hard, but certainly not impossible for a small business owner to get money from a bank. But you better look good and have “layers” of security for the bank. In the past, I have experienced bank loans for business acquisitions that the bank appeared to have the value of the deal as security, but ultimately tied up the valuable real estate that was associated with the business. The sooner the real estate market turns around, the sooner small business owners will realize the benefits of that turn-around, and use those benefits to help/grow and or sustain their business.