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Top 10 Things To Know When Buying a Business in Orlando
As a business broker at Crowne Atlantic Business Brokers, I speak with new buyers on a daily basis. We ask what they are looking for and we try to match up possibilities and assist buyers in their search whenever we can. However with some buyers there seems to be a huge disconnect with what some buyers think they can purchase and should be able to find, verses what business they can actually purchase and what can actually be found. Below are some of the top 10 things buyers should know when they search for businesses for sale in the Orlando and Central Florida area.
1) Most Small Businesses Don’t Keep the Best Books and Records.
When looking to purchase a small business, buyers need to keep an open mind on books and records. Most businesses do the best they can with the time and resources that they have available, but most small businesses will not have fully audited financials that could hold up to SEC standards. Some businesses take some cash on the side or they take business deductions that may be legitimate business deductions or more personal deductions that buyers may be cautious on accepting. If buyers are looking at businesses priced under $100,000 or even businesses priced under $2,000,000, they will need to expect to see some kind of accounting that may not be deemed absolutely perfect. These businesses however may be a perfect fit for a buyer. Our advice is for buyers not to simply judge all businesses for sale based only on tax records and 100% accuracy and to concentrate on the overall picture of each business. By doing this buyers can find other ways to prove a business’s income and analyze things like business turnover, purchase receipts, sales receipts, and the total operation to determine whether or not a business is a great opportunity for them. If buyers refuse to keep an open mind they will most likely limit their options to fewer than 5% of businesses for sale on the market. Keep in mind, fewer than 10% of businesses for sale, actually sell. At the same time, fewer than 10% of business buyers searching will ever purchase a business and many times due to this reason.
2) Most small businesses do not qualify for bank financing and most buyers do not qualify for bank financing on a business.
Many buyers call business brokers on businesses for sale and are of the belief that their personal bank will give them money for a business simply because they feel it is a good deal or because they asked for the money. Other buyers are of the assumption that the SBA process will give them a loan on any business as long as their credit is good, or they have an MBA, or they’re a veteran. In actuality the loan process is always a complex process. To decide whether or not to approve a business loan, banks will form an equation and try to balance the buyer’s qualifications and their net worth with the qualities and inner workings of each business to determine whether the proposed equation will work. The bank can find faults in the equation with either the business or the buyer applying and decide that the loaning conditions on that deal are not safe. The loans that succeed pass extreme scrutiny. When a business buyer gets an SBA approved bank loan for a business purchase it means they have the correct amount of personally held money available and have documented experience and/or background applicable to the business they are purchasing. In order for a business to qualify for a successful business loan, the business needs to have an understandable business model, with consistent cash flow and/or hard valuable assets along with close to perfect tax records documenting as much profit as possible. One quick tip for buyers is that banks will not do an SBA loan on anything priced under $100,000 and in most cases the best SBA lenders will not work on any deal priced under $200,000. So don’t call on a business priced at $65,000 expecting to get a bank loan. SBA lenders will sometimes loan on businesses over $2,000,000 if there are special circumstances. If there is property involved, sometimes going for a commercial loan is a better deal.
3) How much a buyer can spend on a business and how much they actually want to spend can be two different amounts.
When buyers begin looking at potential businesses to purchase, we as business brokers always recommend that they establish what their budget is before they start looking. A buyer may have $1 Million dollars in cash, but may only want to spend $200,000 on a business purchase. There is nothing wrong with this and at the same time we encourage this method for buyers if it is available to them. The main mistake that buyers need to avoid is pulling a bait and switch where they tell business brokers and business sellers that they have a certain amount of cash available but in reality have no intention of spending all that cash. Buyers should be up front with business brokers and business sellers. If they have $500,000 available they shouldn’t let sellers and brokers assume that they will do a cash deal only to come out further in the process and say they only want to spend $200,000 or only want to put $200,000 down. Buyers will do everyone including themselves a better service if they are up front with sellers and/or their brokers about their intentions. For example, if a buyer is looking for owner financing and that is the only way they will do a deal, they should say so up front. This way if the seller is not interested in owner financing with those terms, they can save the seller’s time, the broker’s time, and they can save their own time.
4) Don’t expect small businesses to operate with the same efficiency and resources as large Fortune 500 Companies.
Business brokers receive inquires from a lot of potential buyers that are from the corporate world. We also receive a lot of potential buyers with professional backgrounds such as attorneys, accountants, and doctors. Some of them have been managers and some have been CEO’s of massive companies. Often times we feel that these buyers are looking to purchase a small business that is a smaller clone of the large corporations they were accustomed to working in. This will be difficult for them to do, especially since many businesses owners have never worked in the corporate world and do not run their businesses according to those protocols. Buyers need to be realistic. When they see a janitorial supply distribution business with 3 employees for sale at $200,000, they can’t expect that it is absentee owned business making a huge income stream complete with statistical analysis charts, middle management in place in addition to offering employee benefits and a fully scheduled out 5-year marketing and growth plan. Small businesses in many cases have to compete with larger businesses. One of the ways business owners do this is by being personally involved and focusing on their customers and their service as opposed to formulating and documenting everything they do on paper. They simply don’t have the time. For buyers looking for their own mini-super-corporation we typically recommend that they find a business that they like and work to put in their own corporate structure. If they want to run Hal’s Smoothie Shop like they would run Walt Disney World, we don’t want to get in their way. Buyers from the corporate world should not expect that corporate sized structures will be in place for them when they look to purchase a business unless they are searching in the $3 million dollar and up price range.
5) It is virtually impossible to find a complete and 100% absentee owned business.
Every week business brokers hear from buyers on businesses ranging in price from $50,000 to $5 million and half the time buyers want the business to be absentee-owned. Guess what; truly absentee owned businesses are a rare thing. First off buyers need to keep in mind that most sellers are selling a business because for whatever reason they can no longer operate them. This might be due to illness, relocation, or retirement. If it was truly absentee owned, isn’t it safe to assume that these sellers would not need to sell? Most businesses especially if buyers search in the $1 million and under price range will require some owner input to run on a regular basis. This may be anywhere from a few hours a week to 20 hours a week. Many buyers claim that they know people that have absentee owned businesses, but when you press them for details, it comes out that their friends’ companies are not absentee owned at all. Sometimes companies are significantly larger and have an extremely well paid managers or a president in place. In most cases where businesses seem absentee owned, the owners either make a much smaller percentage of profit or the business runs fine until there is a problem and the owners have to be ready to drop everything and rush over to fix the situation. For most buyers looking for a business, they need to be prepared for the fact that they may need to run things in the business themselves for a while before they get settled in. Even if they purchase a business that is close to absentee owned, there is no guarantee that the workers will stay there forever or that they will be as loyal to the new owner.
6) Buyers should not see businesses that they cannot afford.
Too often business brokers come across buyers that think the process of looking at businesses is similar to attending a Parade of Homes Showcase. The Parade of Homes Showcase is where the public is invited to check out high-end newly built homes and in some cases newly built mansions for a small price of $15. Here the public gets to dream-build and check out homes that they may never be able to afford, but they love the thrill of the hunt and they feel better about themselves because they get to imagine what their living situation could be like. The process of buying a business is completely different. It takes up a seller’s time and they put their business at potential risk by letting a stranger come in and take a look at their operation. It also wastes a broker’s time. This is time they could be spending helping the buyer find an affordable business that would suit them. Most importantly, seeing a business they cannot afford wastes the buyer’s time. In most scenarios unless dictated otherwise, purchase money won’t appear from a wealthy grandfather. If you don’t have the money for a business, don’t waste everyone’s time to see it.
7) Businesses for sale in the Orlando area sell differently than businesses for sale in other states and other countries.
At Crowne Atlantic Business Brokers we work with business sellers to come up with prices that reflect both nationally based pricing models and local pricing models based on what rates buyers are paying in the Orlando area. Some businesses in Orlando sell for higher premiums than they would elsewhere in the country. For example, a vacation property management company or a lawn service business in the Greater Orlando area will sell for a higher premium than they would in other parts of the country. Because good businesses for sale can be scarce on the market, business buyers in many cases will gladly pay more for businesses that have excellent financial records or businesses that operate in a more white-collar office setting. Due to real estate prices, rental rates are also different in Orlando than they would be in Texas for the same space. If a buyer is looking to purchase a restaurant, the liquor license regulations are different here than they would be in states like New York. At the end of the day buyers should not ignore things that they learn simply because it sounds contrary to how things work where they are from. Things do operate differently in Orlando. Potential buyers need to make sure they listen first and then ask questions. From there they can verify by searching comparables instead of jumping to conclusions.
8) The happiest place on earth doesn’t always have the greatest selection of businesses for sale on earth.
The brokers at Crowne Atlantic Businesses Brokers have lived in the Orlando area for decades. It is no surprise to us that people want to relocate and live here. However, Orlando is only so big and for that reason the industries that are based in Orlando are also limited. Most small businesses in Orlando are service-oriented businesses. We have lots of restaurants, cleaning services, hospitality businesses, and contracting businesses available for sale. If you’re looking for chemical companies, manufacturing businesses, or high-tech businesses, you may be searching for a long time simply because we do not have a lot of those businesses in existence here let alone that many for sale. For those that want specific hard to find requests, waiting can be an option or you can go with other business for sale options that will fulfill your needs.
9) If the business proximity to buyer’s house is a hot issue, the buyers should be prepared to move close to where the business is located.
As most business owners know, living close to where they work can be a huge benefit especially in the event of emergency situations at the office. While Orlando is not the most populated city in the country, we are spread out. The city of Orlando alone is over 50 square miles in size and that is not including the surrounding suburbs. Business brokers in Orlando often get calls from people who want to live in newer places with high-end homes like Windermere, Lake Nona, or Lake Mary. These areas are wonderful places to live, however they are located on the outskirts of the city, so when we get requests from buyers who want businesses located close to where they live and they live on the outskirts town it makes their search much more difficult. How can business buyers expect to move to areas developed less than 10 years ago and expect to find established 30-year -old businesses being sold in the area? We’re not sure. Neither are the buyers when we ask them. Our advice on this is clear: there is no shame in driving some extended time to get to one’s business. However, if a business buyer’s priority is living close to their future business, then they should rent a home for a year, find a business first, and then find their dream home close by. Good businesses are hard to find so buyers should take them when they see them. Good houses however are easy to find in Orlando. This is a great place to live and the city is laid out so that most businesses are within just a few miles away from a great neighborhood to live in.
10) Be specific on your needs, lifestyle, and income.
Business ownership is not for everyone. When searching for a business, buyers need to get an idea of the income and lifestyle that they require. If a buyer’s household requires a $100,000 income stream, but they only have $50,000 available for a purchase, they may not have enough to purchase a business that will support them. Buyers also need to be aware that most small businesses do not operate Monday to Friday from 9am to 5pm. Most businesses are open or need to be available during the weekends and in some cases need to be open until late in the evening. For example, one buyer told us they wanted to buy a pizza restaurant, but when we told them that they would need to work at least 50 hours a week mostly on Thursdays, Fridays, and Saturdays from 11am until 1am, they said perhaps they should look at other businesses. For some buyers however, the pizza business fits into exactly the lifestyle they want because it allows them flexibility for other things during the week and the income they desire. Be specific on your needs and wants because they more you know about what you want, the easier your search for a great business for sale in Orlando will be.
There are many other tips that buyers should keep in mind when searching to buy a business in the Orlando and Central Florida area. The majority of businesses that are advertised for sale on the open market are represented by business brokers, and as members of the Business Brokers of Florida we can help you purchase any business you may find or want to pursue whether it is listed by Crowne Atlantic, another business broker, or directly by individual owner. If you have any questions please feel free to check out our website www.crowneatlantic.com or call us at 407-478-4101.
We find sometimes it is challenging for investors from abroad to get the correct information when purchasing a business to obtain an L-1 Visa to immigrate. Below is the information from the government website.
L-1A Intracompany Transferee Executive or Manager
The L-1A nonimmigrant classification enables a U.S. employer to transfer an executive or manager from one of its affiliated foreign offices to one of its offices in the United States. This classification also enables a foreign company which does not yet have an affiliated U.S. office to send an executive or manager to the United States with the purpose of establishing one. The employer must file a Form I-129, Petition for a Nonimmigrant Worker [http://www.uscis.gov/I-129], with fee, on behalf of the employee.
The following information describes some of the features and requirements of the L-1 nonimmigrant visa program.
General Qualifications of the Employer and Employee
To qualify for L-1 classification in this category, the employer must:
• Have a qualifying relationship with a foreign company (parent company, branch, subsidiary, or affiliate, collectively referred to as qualifying organizations); and
• Currently be, or will be, doing business as an employer in the United States and in at least one other country directly or through a qualifying organization for the duration of the beneficiary’s stay in the United States as an L-1. While the business must be viable, there is no requirement that it be engaged in international trade.
Doing business means the regular, systematic, and continuous provision of goods and/or services by a qualifying organization and does not include the mere presence of an agent or office of the qualifying organization in the United States and abroad.
To qualify, the named employee must also:
• Generally have been working for a qualifying organization abroad for one continuous year within the three years immediately preceding his or her admission to the United States; and
• Be seeking to enter the United States to provide service in an executive or managerial capacity for a branch of the same employer or one of its qualifying organizations.
Executive capacity generally refers to the employee’s ability to make decisions of wide latitude without much oversight.
Managerial capacity generally refers to the ability of the employee to supervise and control the work of professional employees and to manage the organization, or a department, subdivision, function, or component of the organization. It may also refer to the employee’s ability to manage an essential function of the organization at a high level, without direct supervision of others. See section 101(a)(44) of the Immigration and Nationality Act, as amended, and 8 CFR 214.2(l)(1)(ii) for complete definitions.
For foreign employers seeking to send an employee to the United States as an executive or manager to establish a new office, the employer must also show that:
• The employer has secured sufficient physical premises to house the new office;
• The employee has been employed as an executive or manager for one continuous year in the three years preceding the filing of the petition; and
• The intended U.S. office will support an executive or managerial position within one year of the approval of the petition.
See 8 CFR 214.2(l)(3)(v) for details.
Period of Stay
Qualified employees entering the United States to establish a new office will be allowed a maximum initial stay of one year. All other qualified employees will be allowed a maximum initial stay of three years. For all L-1A employees, requests for extension of stay may be granted in increments of up to an additional two years, until the employee has reached the maximum limit of seven years.
Family of L-1 Workers
The transferring employee may be accompanied or followed by his or her spouse and unmarried children who are under 21 years of age. Such family members may seek admission in L-2 nonimmigrant classification and, if approved, generally will be granted the same period of stay as the employee.
Change/Extend Nonimmigrant Status
If these family members are already in the United States and seeking change of status to or extension of stay in L-2 classification, they may apply collectively, with fee, on an Form I-539, Application to Change/Extend Nonimmigrant Status, [http://www.uscis.gov/I-539].
Spouses of L-1 workers may apply for work authorization by filing a Form I-765, Application for Employment Authorization [http://www.uscis.gov/I-765] with fee. If approved, there is no specific restriction as to where the L-2 spouse may work.
Certain organizations may establish the required intracompany relationship in advance of filing individual L-1 petitions by filing a blanket petition. Eligibility for blanket L certification may be established if:
• The petitioner and each of the qualifying organizations are engaged in commercial trade or services;
• The petitioner has an office in the United States which has been doing business for one year or more;
• The petitioner has three or more domestic and foreign branches, subsidiaries, and affiliates; and
• The petitioner along with the other qualifying organizations meet one of the following criteria:
Have obtained at least 10 L-1 approvals during the previous 12-month period;
Have U.S. subsidiaries or affiliates with combined annual sales of at least $25 million; or
Have a U.S. work force of at least 1,000 employees.
The approval of a blanket L petition does not guarantee that an employee will be granted L-1A classification. It does, however, provide the employer with the flexibility to transfer eligible employees to the United States quickly and with short notice without having to file an individual petition with USCIS.
Where an L-1 visa is required
In most cases, once the blanket petition has been approved, the employer need only complete Form, I-129S,Nonimmigrant Petition Based on Blanket L Petition [http://www.uscis.gov/I-129s], and send it to the employee along with a copy of the blanket petition Approval Notice and other required evidence, so that the employee may present it to a consular officer in connection with an application for an L-1 visa.
Canadians with an approved blanket petition seeking L-1 classification
Canadian citizens, who are exempt from the L-1 visa requirement, may present the completed Form I-129S and supporting documentation to a U.S. Customs and Border Protection (CBP) Officer at certain ports-of-entry on the United States-Canada land border or at a United States pre-clearance/pre-flight inspection station in Canada, in connection with an application for admission to the United States in L-1 status.
Please refer to CBP’s website [http://www.CBP.gov] for additional information and/or requirements for applying for admission into the United States.
Optional filing of Form I-129S with USCIS
If the prospective L-1 employee is visa-exempt, the employer may file the Form I-129S and supporting documentation with the USCIS Service Center that approved the blanket petition, instead of submitting the form and supporting documentation directly with CBP.
See 8 CFR 214.2(l)(4) and 8 CFR 214.2(l)(5) for more details regarding blanket petitions.
Last updated: 06/17/2013
Recently Crowne Atlantic Business Brokers sold a Philly Cheesesteak Sub Shop in the area of Brevard County by Melbourne. The business was run by an owner with a passion for cheesesteaks and everything Philadelphia. So much so, that after building their established business they decided they wanted to move back to Philadelphia. A buyer with a lot of restaurant experience purchased the restaurant. This buyer reportedly told us that she had inquired and look at over 40 restaurants on the market over a 6-month period. They had recently relocated to Florida from up North and were looking to acquire a business. This restaurant was clean, well-run, the product was excellent, the owner kept financial records, and if that wasn’t enough already, it was an extra bonus that the restaurant’s online reviews were were exceptional.
We’re displaying some pictures on this post so you can see the size of the restaurant. Not too big and not too small. The restaurant had a good working kitchen with a large hood and probably around 50 seats. The staff was told about the sale before it occurred to our knowledge everyone stayed on after the purchase. At the time of purchase the business was grossing an average of $36,000 a month and netting the owner an average of $65,000 a year. The business was purchased for $99,000 including inventory, and both parties got a great deal.
Recently Crowne Atlantic Business Brokers sold a law office in the South Florida area. It was a great transaction both beneficial to the buyer and seller. This particular transaction was not even a large one. In fact this law office actually sold for less than $100,000. So why was it an attractive deal? The office purchased was owned by an attorney who had been practicing for several decades and was looking to retire. He had a huge backlog of files, casework, and current clients that he was currently working with. Instead of simply closing up shop and disappearing, this attorney decided to sell their business to another firm. While the attorney did make some money on the deal, this deal was not about the money.
By selling his law practice he would be able to offer his clients continuity as they would have an entity to go in the event they needed information, advice, or documentation from his practice in the future. After the sale of his law office he would work for a period of time with the buying law office in order to ensure a smooth transition. It also gave a place for his secretary and assistant to continue working if they wanted to.
The law firm that decided to make the purchase made it on the basis that they would be obtaining access to a large client base that this attorney had done work for in the past and knew that these clients would continue to need services in the future. They knew that a previous client would contact the office when they needed work done, simply because that office has access to some of their more recent files. It gives the buying law office the ability to expand their presence and reputation to a client base that previously was unavailable to them.
All in all it was a solid deal, where each party including the clients would benefit. At Crowne Atlantic Business Brokers, we sell law firms and law offices of all different fields and sizes. If you have ever considered selling your law practice or law firm, please feel free to give Crowne Atlantic Business Brokers a call for a free consultation at 407-478-4101.
The other day I was chatting with a former business owner in the Orlando area who owned an industrial supply business. He sold his company in 2012. He said that one of the most important things for him in the transaction was finding the right Buyer. He had plenty of potential buyers that solicited him prior to his sale asking him if he wanted to sell. He declined many of these offers because to him, selling his business was more than just getting a high price. This seller felt the business was part of his legacy, with his name linked to it. Not only is his name and reputation linked to this business, but all of his employees, vendors, and customers that were accustomed to dealing with him would be in good shape after his departure from the business.
Ultimately the Seller had a great business at the point of his retirement. He sold it for what I would consider a good price. It is possible he could have achieved a slightly higher purchase price, but this seller recognized that the price offered was a very fair price for the business and they could retire easily knowing that the name, reputation, and relationships that he had spent the last 20 years building would continue.
As business brokers in Orlando, Crowne Atlantic does its best to not only get our Sellers a great price for their business, but we try extra hard to find the right match as well. Sometimes it is less about the money and more about the right fit in order to do a transaction. In a local community like Orlando, business brokers need to be matchmakers as well as sales makers. At Crowne Atlantic Business Brokers, we want to continue our great reputation as well, so working with qualified Buyers and finding the right people for the right transaction is a responsibility that we take very seriously.
If you or someone you know needs an Orlando area business broker, please feel free to check out our website at www.crowneatlantic.com or phone us at 407-478-4101.
Recently we sold this beautiful small Italian restaurant in the Central Florida area. The business sold to an experienced restaurant operator for a great price. The restaurant was struggling to make a profit for the current owner, even though their menu and sales were doing pretty well. For the Buyer it was a great opportunity to come in with fresh enthusiasm to help make the restaurant profitable again. To transition the Buyer plans on keeping the staff and the restaurant’s existing concept. Most of the changes may come in the form of operational changes where the new owner may work on worker schedules to make sure payroll is not too high and additional workers are not scheduled to work on the slower nights. Some adjustments may also be made to the food costs making sure less food goes to waste and potentially making more food from scratch and in-house.
If you would like more information on how Crowne Atlantic Business Brokers can sell you a restaurant in the Orlando and Greater Central Florida area please check out our website at www.crowneatlantic.com or phone us at 407-478-4101.
In the Orlando and Central Florida area vacation property management is a huge industry. The business caters to mostly to out-of-town tourists looking to stay more in a house setting than a hotel setting when spending time in Orlando. Vacation property management handles what the real estate industry calls, short-term rentals, with most rentals lasting anywhere from a few days to a few months.
Vacation property management companies have two sets of clients they must work with. The first set of clients are the home owners. Many of these home owners use the homes themselves at certain times of the year, others have purchased these homes as an investment. These home owners typically hire property management companies to watch over their homes while they are not in the area. Many of them are located overseas. The property management company makes sure the lawns are mowed, pools are cleaned, and the homes are cleaned and well cared for. The property management company owner will either take on some of these tasks themselves or hires out subcontractors.
The second set of clients that a vacation property management company must cater to are the guests. The homes need to be well managed and well maintained. They also need to be cleaned before and after guests stay at the home.
The majority of these homes are located in the Polk, Osceola, and Lake County areas. Orange and Seminole Counties pretty much do not allow short-term rentals within county limits. Many of the homes managed have anywhere from 3 to 6 bedrooms and have swimming pools. Overall it is a pretty straightforward business to buy in the Orlando area with a lot of room for growth. Many people from overseas have been known to purchase them because they are easy to understand and they provide sustainable income year round. Because they are short-term rental companies, Florida allows people to rent out short-term rentals without the need for a real estate license whereas someone would need to be licensed to rent out a long-term rental.
If you have an interest in purchasing a short-term rental or vacation property management business or selling one, give Crowne Atlantic Business Brokers a call at 407-478-4101.
Recently Crowne Atlantic Business Brokers sold a property management company for $250,000. This company focused primarily on vacation property management otherwise known as short-term rentals. Overall the company was a great deal for the Buyer. It will provide them with an above 6-figure income along with a potential to grow. The Seller was able to get $250,000 at closing which will allow them to pursue other business interests.
While most buyers for vacation property management companies are from other countries in pursuit of investment visas such as the E2 visa, L1 visa, or EB5 visa, this particular buyer was an American citizen. They did not purchase the property management business for a visa, it just happened to be a business formula that they liked.
If you have an interest in purchasing a vacation property management business whether it is for a visa or not…….we can help. At the same time if you are interested in selling a property management business, we have a lot of Buyer demand for them. Check out our website at www.crowneatlantic.com or call Crowne Atlantic Business Brokers at 407-478-4101.
Recently Crowne Atlantic Business Brokers sold an Italian Restaurant in the Central Florida area. The transaction was a great situation for both Buyer and Seller. The Seller felt that they simply were not succesful with the restaurant business and felt that they needed to move on. The buying party had experience in the restaurant industry and already owned another restaurant in town and was looking to expand.
At Crowne Atlantic Business Brokers, selling restaurants is a huge specialty for us. We even have a niche within the restaurant industry where we help sellers sell restaurants that are underperforming, struggling, or in some cases recently shut down. Why would someone purchase a poorly performing restaurant you ask? The answer is simple. There is a segment of buyers that are looking to purchase struggling and underperforming restaurants. These buyers in many case are experienced and in most cases are looking for a good deal.
Some of the benefits of purchasing an underperforming restaurant include:
1) A huge price reduction for the Buyer. Buying a profitable restaurant typically means that the price paid is more than the net profit of the business per year. When a restaurant makes little or no money, sometimes the price is based more on the equipment and asset value. Essentially it is the best way to acquire a cheap restaurant for sale in the Orlando area.
2) Cheaper buildout costs for the Buyer.
A Buyer that moves into an existing restaurant can save on permitting costs, impact fees, and rent when taking over an existing restaurant as opposed to building one out from scratch.
3) Time Savings for the Buyer.
There is a huge savings on time when a Buyer purchases an existing restaurant. If they plan to change the concept they have a huge head start when it comes to potential buildout costs that they can potentially avoid.
4) A Current Concept is Already in Place
In many cases, Buyers purchase a restaurant because they do like the current concept. They feel that the Seller may not be operating the restaurant correctly or they simply feel that they will work the restaurant different and add or subtract items and do a better job than the current owner. This also helps Buyers that have extensive restaurant management experience but are not as skilled at coming up with potential restaurant concepts and menus.
Whether you are looking to Buy or Sell a restaurant, contact Crowne Atlantic Business Brokers on our website at www.crowneatlantic.com or call us at 407-478-4101.
Top 5 Tips for Selling and Transferring a Medical Business for Sale
In our office we work with all different types of businesses and every industry is different. In fact, each business we have ever sold has been unique. When we work with selling a medical based business, there are some major items that need to be dealt with at the time of a transaction. It is always important that the buyer, seller, and broker understand these items so they can handle them when the time comes. Otherwise, the deal could potentially fall through.
1. Transferring a Medicaid License:
One of the aspects business brokers deal with when selling a medical business in Florida is working with state licensing, including Medicaid licenses. These licenses are handled through AHCA (Agency for Health Care Administration). Working with AHCA http://ahca.myflorida.com , is always interesting. Typically, there is a 60 day transfer with this license. Keep in mind However, that it is 60 days from the time AHCA receives the application. When filling out this application, the Buyer must be absolutely precise and not miss anything on the transfer form. If the Buyer looking to transfer the license misses something on the form, AHCA can reject the form and the Buyer has to resubmit the application once the mistake has been corrected. This mistake could take up to an additional 6 weeks to be corrected. ACHA requires other items such as finger prints from the person looking to acquire the license. But sometimes the finger prints are too light and they get rejected. If that happens, you must get fingerprinted again and then that is another 6 weeks. At Crowne Atlantic Business Brokers, we suggest using FedEx with this agency so you always have a confirmation. In the past, we’ve advised our clients to send mail with return receipt, to fax, and to scan and email all communication to AHCA to ensure some form of delivery. If you the sale of your medical business requires a Medicaid License transfer, whether it is a Doctors office, home health agency, or another Medical business, plan on 90 days. Here is the link: http://www.fdhc.state.fl.us/MCHQ/Health_Facility_Regulation/HealthCareClinic/change_ownership.shtml.
2. Transferring a Medicare License:
As main street business brokers, we never promote using a stock sale to sell a business. However, if you want a business that has a license with Medicare and gets reimbursed by Medicare, this license is almost impossible to transfer. At the end of the day, many medical businesses use a stock sale purchase when they sell thus insuring that the Buyer continues to have access to the business’s Medicare License. To do a stock sale properly, both Buyer and Seller are recommended to obtain proper legal counsel and indemnifications on both the Buyer and Seller side. Obtaining a new Medicare license is not easy and often Medicare requires you to be operational for many months before reimbursing…and they don’t reimburse retroactively. You can see the 59-page CHOW (change of ownership) application here: http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms855a.pdf.
3. Transferring Insurance Contracts:
If you contact Blue Cross and Blue Shield, and United and Cigna and such, they will all give you the same answer. The business is tied to the Tax I.D. number. Tax I.D. numbers are only transferrable with a stock sale. However, if you want to avoid a stock sale, many insurance companies will agree to work with medical businesses long as they qualify with the company’s standards.
4. Transferring Clients/Patients
Depending on the type of medical business, this transition may go fast or it may take a year or two. When very personalized medical businesses sell such as Dental Practice or Family Physician practices for sale, Sellers will often take on the Buyer as a partner and the transition takes place over a time frame of one to five years. A great tip is to keep the management, receptionist, and any other important staff members in place to help make for a smooth transition. Often the staff knows the patients, their spouses, their kids, etc, so it is always helpful for a new owner to keep them on. When transferring a business such as an MRI Facility for sale or a Rehab Business for sale, the most important thing for the Buyer to keep is the contacts that feed patients to that facility. Buyers need to be aware how the seller will transfer those important contacts. Often these contacts are not given out until the closing. The Seller may share a few possibly, but generally not the entire referral list.
5. Bank Financing for Medical Business Purchases
Banks love to finance businesses for Doctors. Though an SBA Guaranteed loan is difficult for some industries, it is easier to get approved for a medical business if you are a doctor or own other medical businesses.
At Crowne Atlantic Business Brokers, we sell all types of medical businesses, dental practices, medical practices, MRI facilities, rehab facilities, home care agencies, assisted living facilities and alternative health facilities as well. For a 360 Business Valuation on your medical business or for more information on how to buyer or sell a business, please feel free to call us at 407-478-4101 or www.crowneatlantic.com.
When selling a business in the Orlando or the Central Florida area it is always a good idea to gather up as much information as possible when looking to sell the business to a buyer. Whether you are working with a business broker or working to sell the business yourself, business buyers as a whole will be looking for the same key points of information. The only difference between buyers is that different buyers weigh the level of importance of each point differently.
Today we are going to address a business’s financial information, a key issue for most buyers when looking to purchase a business. As a business broker selling companies in the current Central Florida market we at Crowne Atlantic Business Brokers find that a business’s financial information is in most cases the most important factor when looking to purchase a busienss. Buyers call us on a daily basis searching for every type of business imaginable from a lawn service to a pizza shop. We get calls for manufacturing companies, gas stations, dry cleaners, medical businesses, and distribution businesses for sale. In almost every instance, a buyer will ask if they can see the business’s financial information…………and it is typically one of the first questions asked. Some buyers view the financial information as being so important and so hard to find that many times they do not even seem to care what type of business they purchase, as long as the business has solid books or good tax returns.
The irony is that the one factor that most business buyers search for is the one factor that most small business owners cannot provide or they can only provide them to an extent. In fact, a significant majority of businesses for sale whether they are in Florida or elsewhere in the United States at first glance appear to have terrible financial record keeping practices. Worse than that, some businesses have little or no financial record keeping whatsoever. Many of these businesses have a great deal of cash in the business or personal deductions masked as business expenses. Some document their most of their sales and expenses on their annual tax records but they refuse to declare any profit on their tax records in order to reduce the taxes they have to pay. These type of actions make the business selling process much more difficult because most buyers view a business’s records as their number one criteria throughout their search. If a business cannot provide adequate record keeping, most buyers tend to walk away.
At Crowne Atlantic Business Brokers, we can help business sellers determine the best way to market their businesses for sale and help make sure that their financial records look the best that they can. Buyers typically like to see financial records for the previous 3 years if possible and financial numbers that reflect the business’s year to date earnings. Information on tax records is preferable according to most business buyers, followed by profit and loss statements on a program such as quickbooks or excel. While it is not required for a business to have perfect financial information in order to sell it to a buyer, good books and records typically assure that business sellers can obtain a higher sale price when they sell their business. Business Sellers that have good books and records will also find that fewer issues due to buyer fear and anxiety, or other factors arise simply because a buyer feels more comfortable that every aspect of the business they are looking to purchase is on the legit side of the business for sale spectrum. The great news is that it is never too late to start keeping excellent books and records. Business brokers can often assist in this process, especially if you are looking to sell your business in the near future.
If you would like more information on Selling your business in the Central Florida, Florida, or Orlando area please feel free to check out our website www.crowneatlantic.com or ask us about our Free 360 valuation at 407-478-4101.
When looking for an Orlando business broker to help sell your company in Orlando, you want to look for a broker that can identify with your needs. Whether you are looking to buy a business or sell a business, it helps to have a business broker that knows what your goals are and the best way to go about achieving those goals. The Business Brokers at Crowne Atlantic have different agents that have different talents, different likes, and multiple skill-sets, but there are some common traits that Sellers should look for when searching for a business broker in the Orlando and Central Florida area.
1) Broker Experience
Sellers first need to search for a business brokerage agent that has sold businesses before. This is a critical background question that most business sellers forget to ask for when they meet a business broker. This is important because a well-seasoned business broker that sells businesses on a regular basis not only is sure to have a past book of previous business buyers to advertise to, but they can also advise potential business sellers on the current business selling climate and what expectations current business buyers are searching for. The average business seller would be amazed at how many Business Brokers look right, smell right, and have plenty of work and business ownership experience and yet they have never sold a business to another person before. At Crowne Atlantic Business Brokers our agents have sold hundreds of businesses of every make, model, and size. While it is impossible for any one business broker to have experience in selling every type of business, it is possible to have experience with selling businesses in all the major categories of industries. This is how the business brokers at Crowne Atlantic can achieve great results with any type of business for sale.
2) Broker Locality
The other thing that business sellers need to consider when deciding on a business broker is what services they will require in order to show, advertise, and ultimately sell the business. Does locality matter? There are some great business brokers in the state of Florida, but due to location constraints they simply cannot service anyone in the state. So if you have a restaurant or a factory that can only be shown in the evening or on weekends and the broker must be present, you should try and look for someone locally to represent you that can comply with those demands. However, some Sellers prefer specialist brokers that specialize in specific types of industries and most of the business broker services can be handled from any location in Florida. At Crowne Atlantic Business Brokers we act responsively and if a business seller is located in another part of the state and one of our associates is better equipped to service them we do refer potential sellers to our associates. For increased confidentiality, sometimes sellers want to have a broker outside of their normal area because when the business is advertised, the broker’s phone number will be out of the area and then the buyers might not assume the business is located in a certain area. Confidentiality is always on the mind of our Sellers.
3) Broker Tactics
It is always a great idea to ask where business brokers advertise and how they get their buyer leads. At Crowne Atlantic Business Brokers we have buyers come to us all the time seeking out business opportunities. Some are referrals from friends, attorneys and accountants, and others have contacted us on businesses before. We do a lot of advertising online, advertising to previous business buyers and inquirers, and we advertise and do a lot of deals with experienced cooperating business brokers. Above all, it is most important to match the right buyer with the right business. This is good business for both parties and our local economy. The seller always wants to leave a good legacy.
4) Broker Valuations
Business Brokers have a challenging task when balancing the needs of the Seller and matching those with the conditions in the business market. Some business sellers need a certain price or need a buyer to fulfill certain requirements before putting together a deal. At Crowne Atlantic we can show what past deals in similar business categories have sold for in the past and we can also provide information on similar businesses currently advertised for sale on the market. As a Seller, what you do not want is a business broker that takes a listing simply to get another listing. Anyone can take a business and post it on the internet for sale. However, as most seasoned sellers know, it takes a lot more than an internet posting to sell a business. At Crowne Atlantic we work diligently with Sellers to understand the business they are in and we work hard to calculate what that type of business would sell for in the current market. Because businesses come in all shapes and sizes, the business brokers at Crowne Atlantic combine several factors when determining the value of a business:
we take into consideration the income, the type of business, what similar businesses have previously sold for, current market conditions, current buyer demands, buyer experience required, and geographical area of the business. This presents business sellers with the most accurate outlook of what they can expect when selling their business. This is why our Sellers know what to expect when they put their business on the market. Many buyers hear the word “multiple of earnings” thrown around and really don’t understand what that means. It is a bit of an art to be honest.
5) Broker Compatibility
While this is not the most critical factor in a broker/seller relationship, it can be a huge plus when working with a business broker to market a business for sale. Some Sellers want someone who thinks and acts like them and other Sellers want business brokers that have a completely different personality. Sometimes it is a matter of finding a Business Broker that can deal with Buyers effectively and communicate the best attributes of the Seller’s business in some cases better than the seller can.
Confidentiality is one of the biggest responsibilities of a Business Broker. Often times it is what makes business brokerage a specialty. Because the main legal requirement to work as a business broker in the state of Florida is a real estate license, many realtors and those with active real estate licenses attempt their hand at business brokerage. One of the main reasons many of them cannot succeed is that business brokers specialize in the art of marketing a business for sale without disclosing what it is and who it is. This is the complete reverse of what realtors and real estate agents do as their task is to be public about all the details of what they are selling. To protect business sellers, business brokers do not have that luxury. At Crowne Atlantic, our Business Brokers sell very well-known businesses without disclosing publicly that they are for sale, these include restaurants, bars, services, and many others. Confidentiality is our number one concern. We have the talent to make deals without disclosing details to the world. It allows us to sell high end restaurants and businesses without our Sellers worried about their customers, employees, and competitors knowing.
If you have any questions or would like to speak to one of our agents about selling a business in Orlando or the state Florida, please call us at 407-478-4101.
You can find out more about Crowne Atlantic Business Brokers at www.crowneatlantic.com
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As main street business brokers, one of the biggest requests we receive is for Pizza and Italian restaurants. At Crowne Atlantic Business Brokers, we know that Buyers love these types of restaurants. They are easily identifiable to most Americans and most Americans know how they like their Italian food and how they like their pizza. This is one of the reasons why we, as business brokers get so many requests for Pizza and Italian Restaurants.
When a buyer looks at pizza and Italian restaurants for sale in the Orlando area, they will find these restaurants fall mostly into four categories.
1) The first category is the Take-out and Delivery Pizza category. These shops are typically smaller and have very little to no seating at all. Their sales are derived either from a high traffic area or from deliveries normally based on advertising. Take-out and delivery pizza restaurants can be very profitable particularly by keeping low overhead. There are no tables to wash, no servers to manage, and many times drivers are paid a nominal wage, use their own vehicles, and make their money off of customer tips. They basically take the most profitable aspects of the pizza business and run with it. Papa Johns, Dominoes, and other pizza franchises use this model. It works for both franchises and independent restaurants.
2) The second category is the small pizza/ Italian restaurant. Normally these restaurants have anywhere from 10 to 70 seats. They focus on pizza, but also on Italian dishes both simple and complicated. Chicken Parmesan, Rigatoni, Pasta and Meatballs, and Stromboli in addition to pizza are typically found on the menu. Customers like the small Italian atmosphere when it comes to dine-in and business buyers like them for the same reason. Typically these restaurants do a form of take-out or delivery business unless they are in an extremely high walking traffic area or they are more of a fine-dining Italian restaurant. In most cases their extra profit is made from the delivery and take-out business, however the dine-in business is more coveted by both Business Buyers and Sellers.
3) The third category is your large pizza and Italian restaurants. Many of these restaurants profit from both their pizza and their Italian food. These restaurants typically have close to 100 seats or more. In the Orlando and Central Florida area, these restaurants typically sell more wine and beer and have a good amount of dine-in business. If they have more than 150 seats, they typically sell full liquor and many times customers have the option of sitting at a bar if they want. Some of these larger restaurants have delivery and some of them do not, however most of them still offer take-out and some will offer delivery through another delivery service. These restaurants for sale typically make the most money out of the four categories, but they also have the highest overhead and require the most amount of capital. The benefit of these investments is that when Crowne Atlantic Business Brokers sells a restaurant of this proportion to a Buyer, we know that they will be earning close to a 6-figure income or even more.
4) The fourth category is the one least talked about, but one that we as business brokers get constantly. At Crowne Atlantic Business Brokers we get requests on a weekly basis for Italian and Pizza restaurants that have fallen into trouble. Buyers go crazy for pizza and Italian restaurants that are not making it or are only making a small profit as they hope they can pick up these restaurants for a smaller price. The reality is however that most buyers are not up for the challenge and it is really only those that have restaurant experience that should look at these opportunities. Over the years, Crowne Atlantic Business Brokers has sold hundreds of Italian and pizza restaurants in these struggling positions, but they typically take the most amount of effort on the Buyer’s part out of the four categories.
If you’re a buyer and you’re looking for a pizza or an Italian restaurant for sale in the Orlando or Central Florida area. Call Crowne Atlantic Business Brokers at 407-478-4101 or check out Italian and Pizza Restaurants for sale on our website at www.crowneatlantic.com
Be on the lookout for new trends hitting bars and restaurants in 2014. Because the Orlando and Central Florida area always has a ton of restaurants and bars it is very likely that you will see more and more menu items following these trends below:
1) More Mexican inspired items
Mexican food is becoming more trendy and more dynamic. No longer are Mexican restaurants subject to out of the way stops on the side of the road or stereotyped as Taco Bell type restaurants. With the rise in popularity of restaurants such as Moe’s Southwest Grill and Chipotle, more Mexican menu items can be found and more formal Mexican concepts can also be found. Many believe that Chicken Tortilla Soup (Mexican inspired menu item) is now one of the most heavily order soups in the country.
2) Asian cuisine
Cuisine that features things such as Ramen and Sriracha sauce are becoming big. Plus you can see that finding Teriyaki sauces and ginger dressings for salads are also more common in restaurants now such as Teriyaki flavored chicken wings.
3) Pickled Items
Pickled food items such as Kimchi are becoming popular. Pickling is huge in Asia including places like Russia and Korea.
4) Craft soda
You’ve heard of craft beer! Its the same concept except now they are doing it with soda. These are many times found more in bars and Gastropubs.
5) Healthier Food Items
Many new restaurants, bars, and gastropubs are featuring menu items that are made from local produce and locally sourced meats. These restaurants often highlight these healthier items as major attributes to eating in their restaurants.
6) Alternative foods catering to diets and allergies
More and more restaurants are featuring items that cater to those with allergies or those sticking to a particular diet such as gluten-free items, items that have under a certain amount of calories, and items not made with diary or nuts. Just to show how far this trend has come, try ordering your pasta dish with gluten-free pasta and you will see that many major Italian restaurants will have that available.