Category Archives: sell a business florida

Business for Sale-Who, How Many, How Much?

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I am a business broker based in Florida, and  also a member of an Association called  the Business Brokers of Florida.  The Business Broker of Florida  Association (BBF) is the largest state business broker association in the country and the second largest association of business brokers in the world.   The activity within this association does provide the business owner and or entrepreneur some insight into actual activities related to businesses buying and selling.

Most all business transactions involving the sale of private companies and information regarding this activity remains very private.  And accurate pertinent information can be difficult to attain.  What does a business similar to yours sell for?,  How long does it take to sell a business like yours, and how many businesses like yours are being sold.  One can search and view a lot of information regarding Florida business being bought and sold at Free Search on Businesses For Sale 

Businesses For Sale In Florida

Florida is experiencing the current economic downturn and is somewhat representative of the US economy.  Actually Florida may be feeling the effects of the downturn more than most of the US  as its economy seems very tied to the real estate industry.  I have always found value in trying to understand some of the numbers behind the numbers to help me to perform my role as a business broker. The following are some items of note  as it relates  to business buying and selling activity in Florida.

Certainly not all business sold do  involve a business broker, nor are all businesses sold in Florida handled thru this association, but as a rather large association it is fairly  representative of the buying and selling activities in Florida.    Web based businesses and or websites may be sold at an online auction, larger  “brick and mortar” companies may seek larger M&A firm for representation, but the activity within this association does provide some insight for the  business owner outside of Florida that may buy or sell a business.

Per the currently active listed data available thru the BBF Association-   As of today almost 4000 business are for sale of those:

1) Businesses For Sale in Florida over $10M –      5

2) Businesses for Sale in Florida Priced over $5M-   30

3) Florida Businesses for Sale Priced over $1M – 330

4) Businesses in Florida For Sale with Net Income over $100K – 1227   

Other observations:

a) Largest type of business Listed For Sale in Florida– Restaurants – 773 (this represents almost 20% of all businesses listed)  of those 223 have Net Income >$100k.

b) Home Based Business For Sale – 402 (represents about 10% of all businesses listed for sale)

c) Florida Internet related businesses for sale 43, of those: Asking Sale Price $1M+  is 8, those with net income over $100k – 20

Businesses Sold in Florida thru the Business brokers of FloridaFlorida Business For Sale

of all the business sold in the last year (6/2009-6/2010) Here are the following Averages on Florida Business Sold.

  • Average Sales/Revenues- $636k
  • Average Selling Price- $252k.
  • Average Adjusted Net Cash Flow – $114k.
  • Average number of Days to sell the business- 226 days or approx. 7 1/2.   Please note this figure does not include business that got listed for sale and did not sell. Estimating those in  the average time to sell a business may exceed a year(my guesstimate ).

If you own a business and do not plan on exiting from that business for several years, it still makes sense to understand the value of your business.  What is the asset that you have worth?  What sort of multiple of cash flow should your business sell for?

Understanding what other similar businesses are selling for does provide some basis.  but the devil can be in the detail…  Also growing your company thru acquisition can be both a viable and profitable business decision.  What may it cost to acquire a synergistic company?  A review of some reliable numbers may be a good first step in the needed due diligence.

(some info shared above compiled from Business Broker of Florida Assn website as of 7.30.2010)

Can a Goat Herder Teach Banks How to Loan to Small Business

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Small businesses and entrepreneurs need to be able to get loans from banks to grow and or expand their businesses.  Entrepreneurs and small businesses go to banks to get loans to make capital improvements, large  purchases,   buy a business, and generally expand their business.  Basically small business have financing needs that go beyond the immediate cash flow generated by their business.

Imagine driving to the bank in your new Lexus, dressed accordingy, meeting with a bank loan officer and discussing your 5 years old business, your college degree, ok credit score, net worth of $500k and your business generating $50k a year in cash flow and asking to borrow $10,000.  Do you think you will get that loan?

Change Of Perspective For Business Owners

Now-  For a moment pretend that you are a poor goatherder walking to town to get a loan , you don’t have any money to open a savings account with, you don’t have any normal collateral to secure a loan with,  you don’t have a credit record as you have never been formally employed and you’ve never taken out a loan before.  Also consider that  you might even be unable to complete the necessary paperwork as you are illiterate.  You earn about $1/day,  and you want a loan of $250 to buy more goats to grow your business.  Do you think you will get the loan? – Due to Micro financing the  the goatherder may get the loan before the Lexus college graduate.

Many of us Entrepreneurs and Small businessmen/women donate time and or money to various causes or needs.  I have been involved with Kiva since 2007.  Kiva provides microfinance  to Third World Entrepreneurs to help them grow their business.  Kiva was founded by 2 former 20 something year olds that were former employees of TIVO and PAYPAL.

Microfinance is the supply of loans, savings, and other basic financial services to the poor.  As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term “microfinance” helps to differentiate these services from those which formal banks provide. Why are they small? Someone who doesn’t have a lot of money isn’t likely to want to take out a $5,000 loan, or be able to open a savings account with an opening balance of $1,000. Hence – “micro”.

Microfinance

These are small loans, multiple lenders will “pool” their loans to come up with a lump sum to provide to the Entrepreneur.  Again most of the Entrepreneurs I have loaned money to over the last 4 years earn less than $1/day.  When an entrepreneur pays off a loan, I reloan those moneys to another. So far I have loaned to 18 different entrepreneurs and repayment of loans have been 100%. Sinces 2005 Kiva as a group has loaned almost $150,000,000 to  almost 400,000 Entrepreneurs  and repayment has been 98.27%.

Why can this organization have such success in getting loans repaid from those with so little and banks in our “developed nations” loaning to those with abundant resources have problems so significant that these banks need a “bailout” from their govenment and ultimately taxpayers.  Is it the conventional  bank that is doing something wrong?  Are they loaning to the wrong people on a consistent basis?. How much of the blame falls on those that are requesting the loan?

Getting A Loan For Your Business

Currently how many good entrepreneurs and small business are not able to get loans as a result of mistakes made by conventional banks in the past.   It seems to me that banks tend to over respond to problems.     Obviously if you are a lender and  want to have no loans default and you loan no money- you can achieve your goal.

As a business broker I see the need for lending to allow buyers to finance the acquisition of  buying a business.  I also see income statements and balances sheets of reasonable small businesses that are using credit cards to help finance their businesses. It is hard for me to understand how our economy is benefitting by having small business owners take these “whatever is necessary” financing steps when traditional prudent lending to small businesses could truly be our fastest way to our economic recovery.

The banks reduce/tighten their lending, the need for small business financing continues, higher interest is being paid thru credit card financing, non-conventional means, and when does that higher expense cause employee reductions.    Small business could divert money from high interest payments to investments and  improvements that actually improve their business and create jobs.

Why can the goat herder get a loan and the Print Shop owner not?   Or maybe if I were a banker I could ask why does the goat herder pay off his loans and the Lexus driving College Graduate Default?  I understand there is a lot more that goes on between the comparison of a conventional bank and micro finance- but maybe conventional banks could  learn something from Micro finance groups such as Kiva.

Starting Buying Selling a Business: What Are They Thinking?

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Want to start a business?  Want to Buy a Business?  Want to Sell your business?  These interest are very different but there is one common element among these significant business decisions.  Money- .  While working with business owners and individuals with the process of buying and selling businesses, I consistently come across a common element that I believe would be surprising to most that are ” looking from the outside in”.

Money is always a determinant factor in the process, but so very often it is the other factors that create the motivation that steers the process.  As a  small business owner or one that recently started a business one wonders if the thoughts, trepidations, or concerns that you have are shared by others. It is common to wonder if others struggle with decisions such as you.  What are some of the thoughts others have regarding these important decisions.

Motives Behind Buying/Selling A Business

Buying A Business

Photo (c) expertbusinessadvice.com

Currently I am working with business owners that are selling their businesses and it may be somewhat surprising that money is not the primary reason they have decided to sell their business.  But make no mistake all business owners want the maximum amount they can attain for their business but the reasons for selling  are varied and different.

I am also working with several individuals looking to buy businesses and they as well generally are looking for some sort of change.  Again they are looking  for value in the business they are seeking to buy, but the reasons they are looking to get into something different are also varied and diverse.

Many  people out there, and readers of business articles such as this are contemplating change.  So many of tomorrows business buyers are employees that are working for someone else today.  They are seeking change.  Many of the business owners  looking to sell their business are seeking change. Most all starting a business, buying a business, selling  a business are seeking change.  When talking with seller of businesses and potential buyers of businesses one learns the “why” is varied, and comprises similar thought processes I experienced as one that both started a business, bought several businesses and sold my own business as well.

Perspective very often if the difference maker in what drives this business decision. The excitement and energy that comes along with doing something new where the roads ahead are full of unknowns and optimism  can certainly provide different perspective than the business owner that has experienced the challenges and sees the roads behind him. The reasoning behind the decision to buy start or sell a business may look very similar but it really is the perspective that provides the different “take” on that reasoning.

I want to Buy a Business, I want to Start a Business because…” –

1)MONEY– want to make lots
2)PASSION– I love making widgets
3)ACCOMPLISHMENT– It just feels good
4)OBLIGATION– It was my families business
5)EXCITEMENT– I love working 24/7
6)CONTROL– I control my own destiny
7)OPPORTUNITY– I’m young-limitless
8) CHANGE– I want to do something different

“I want to sell my Business because “-


1)MONEY-Not making enough, money is less important
2)PASSION– I used to love making widgets
3)ACCOMPLISHMENT– The feeling of accomplishment is gone
4)OBLIGATION– My family is no longer around
5)EXCITEMENT– after working 24/7 I am now Burned out
6)CONTROL-Insurance Companies,employees,IRS,State,control my destiny
7)OPPORTUNITY– I feel old- exceeded my limit
8) CHANGE– I want to do something different

While the list could go on and on, Contrary to common belief—– Its not always JUST about the money.

 

Business Succession

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Last week I was asked to speak at a small business seminar on business succession as it relates to selling a business here in Florida.  Succession planning in general  is the process of preparing to hand over control of the business to others. Very often family may be part of succession planning and while most businesses do not have any plans for business succession, those that do, fall short in the planning and communication of those plans. So you are working hard on your business now, what is your plan?

  • Build up  your business to a nice size and sell your business for great financial gain?
  • Pass your business on to your kids
  • Arrange an LBO for key employees
  • Work your butt off, make enough money to pay your bills and do this til you are no longer on this earth.
  • other

Business SuccessWe are all busy running and or growing our businesses, but last week  a few business owner did consider this issue important enough to take a few hours out of their day to attend this workshop and  begin understanding the process.

Presenting at this workshop were an Attorney, a CPA, an insurance provider, and myself.  This seminar was attended by local small business owners seeking knowledge on this topic.  What I found most interesting was that the Attorney, CPA, and I spoke on many of the same issue regarding selling your business  We all spoke for about 1/2 an hour and didn’t coordinate on what we would speak on.  While we touched on the the different aspects surrounding business succession,  I found we spoke on many of the same points, but due to our professions we spoke on those point from varying perspective.

When discussing seller financing for your business, the attorney spoke of the need for extreme caution when setting up seller financing, and additional care extended when family or fiends involved.  The CPA spoke to the proper records to be kept to document what you have and be able to show what you had in the way of your companies performance.  My discussion regarding seller financing  addressed the prevalence of seller financing in the marketplace and the need to be able to offer it to help make a deal happen in to days tight credit market.

What Your Business Success Relies On?

A few key points from this workshop:

  1. Most businesses do not have a succession plan.
  2. Planning is the most important first step.
  3. Seller financing can help facilitate a deal but one must do proper due diligence.
  4. Relying on your business as your only source of retirement funds is dangerous and mis guided.
  5. When doing your annual reviews of company numbers or tax preparation, use that as a good time to look at other matters as it relates to your biger picture

My suggestion is between handling your accounts receivables, accounts pay ables, other office paperwork, social networking, working with clients, and  returning phone calls/emails, take a moment to consider what your exit plan may be.  Even if you just give the subject a few moments of thought, you may find yourself ahead of most or your peers and fellow business owners.

Also, the Internet is a great source of information on business succession and other business matters, but also keep your eyes open for the various seminars, workshops, and expos that may be in your area.  They are not only a great source of knowledge, but also a great opportunity for the “other type” of social networking.

“Earn $10,000 per Month Working just 2 Hours per Day!? “

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“Earn $10,000 Per Month Working just 2 Hours per Week”… “Lose 10 pounds per day by just Sitting on Your Sofa”… “Take this Pill and all Women will Love You”…

Eye catching titles intending to entice one to read your message. Many of us use the Internet to further our knowledge and educate ourselves on our areas of interest.

I am in the business of helping people buy businesses and sell businesses. I also do get involved with business consulting to both startups and small businesses. The above headings are written to get our attention and get us to read.

Is It True Or Just A Marketing Trick?

Does one think that you can get rich just working a couple hours per week? Lose weight by laying on the sofa? I dont think we really  believe it to be probable – maybe we think it to be remotely possible, and just that sliver of hope warrants us to spend our valuable time to read.

Optimism is a wonderful trait-when tempered. Kind of like the optimist that falls off a 90 story building and while falling past the 50th floor says to himself – “so far so good.”

Small business is of great interest to me, and I have various sources of information that I tend to follow. I write for a website that reaches many entrepreneurs, aspiring business owners and current business owners searching for both information and opportunities.  On my own website, I list 1000 plus businesses for sale from Florida and around the United States.  Within these businesses for sale certainly exist tremendous opportunity for those willing to put in the necessary risk and hard work.

And yes one buying one of the many businesses for sale  you can earn $10,000 per month only working a couple hours per week…. But that may occur only after 10 years of working 14 hours day, initially struggling to pay the bills, and dealing with daily dealing with setbacks, and disappointment.

Yes, maybe after you have exercised a)  a good business plan, in b)  a good industry and c) are well funded and d)  properly timed your venture you could earn that money – i.e. One could find quality people to help one execute a solid business plan for a well funded Typewriter Company…. But success would be unlikely – the same above scenario, executed 40 years ago may have proved successful. The timing for a typewriter company has come and gone.

There are people that “hit a homerun” and reach significant financial success with apparent little effort in a short period of time and capitalized on a new idea as the typewriter people may have several years ago.  But I think for every one of those success stories there are the 10,000 others that reach success through long term hard work.

Start Your Business

Photo (c) financeonlines.com

A person may start a business or buy a business and sell it next year for rich rewards. But, I am convinced that most financially independent success stories are the result of hard work over an extended period of time. And for me much of the good valuable advise I have attained throughout the years came through extended conversations, and trial and error – It does not come through short cryptic eye catching statements.

As a writer of a blog based on my experience as a business owner directly involved with several business acquisition,  I contemplate the question of writing what I think readers may want to read or the information that I think small business owners and aspiring entrepreneurs should read. Style or substance – I will tend toward substance knowing I will regularly not catch the eye of the readers looking to “get rich today – retire tomorrow.”

If I write an article about “Why is It Important That A Business Owner Understands His/Hers Balance Sheet,” will it be read? I dont know, but I know it would add value.

Real Business Advises

Some of the advise regarding starting a business, running a business, or buying a business can appear fairly boring and non eye-catching –

  • Do Your Homework
  • Educate Yourself
  • Understand that you will be rarely over-funded
  • Expect to Work Hard (working at “your job” or for others may be hard- but this will probably be harder-maybe more enjoyable, but harder)
  • Expect setbacks and accept it will be up to you to overcome them.

But I do think that readers that are reading small business/entrepreneur blogs, news feeds etc. are taking an important step in educating themselves which is a valuable part of the process of reaching financial independence and or entrepreneurial business success.