Top 10 Tips to Selling A Business In Orlando and Central Florida
1) Keep good books and records; or you might pay for it by getting a lower price!
Orlando attracts thousands of buyers each year. All Buyers want to see good books and records. Businesses that have solid books and records have a better chance of a buyer obtaining bank financing backed by the SBA.
Yes, there are foreign buyers out there. They too want to see good books and records because if they are looking to obtain an investor’s visa: either L1, E2 or EB5. Those immigration attorneys and the U.S. Embassy will require your business’s records to process the investor’s visa.
Most buyers will have accountants examining the business’s financial records. At the same time this information will help the incoming buyer understand their new business.
*If you choose not to show all of the money, this will result in a lower purchase price and your business may not qualify for bank financing. That might lower the price even more.
*Also, have current financials and tax returns available. And if you don’t, then get a new accountant. Your accountant works for you!
2) Orlando is almost always in SEASON!
Yes, Orlando like many other cities has some seasonality, but far less seasonality that most tourist areas. Find ways to make your business sales more consistent throughout the year. However, there are always tourists and there are more and more people moving here every day. It is constant growth.
For example, if you have a business that produces products caters to tourists in the tourist season, try to come up with offerings for potential local customers in the slower seasons.
Just as you would clean up your house or your car if you put those up for sale, buyers want to see a clean business premises. It doesn’t have to be fancy, but keep in mind that one of the appeals of buying a business in Orlando and the surrounding areas is that things are nice, new and upbeat. Buyers want to have the same feeling when they purchase a business. Sweep around, pick up large weeds in outdoor storage areas or parking areas, paint some walls and fix any torn seats cushions or tables that people use regularly. First impression can be everything. If there are two businesses side by side with the same earnings, buyers will opt for the more physically cleaner and organized business.
4) Orlando buyers are open to business purchase options, so any business has a chance to sell.
Plenty of buyers purchase businesses that they have no prior experience in. It’s one of the reasons they buy the business and part of the reason they relocate or live in Orlando; they want something new. Still it always helps a business sale if buyers can be reassured that they will have the tools to manage and run the business they purchase effectively. This means that the more procedures and practices you can document and implement, the easier it will be for the new owner to follow and succeed. At the same time, having skilled employees that can assist the new owner is always a plus so any difficult task that can be hired out should be put into place. Business buyers will see that as one less thing that they will have to take care of.
5) Get Your Lease in Order. Landlords can be Deal Killers!
Know your landlord and what requirements they will require for a new tenant that buys your business. Often times contacting the landlord is left as the final step in most business purchases, but realistically lease transfers should be discussed from the beginning. It varies from industry to industry but landlords can easily stop a deal from occurring if they do not deem the incoming buyer to be a qualified tenant.
If you feel comfortable, discuss what requirements will be necessary before the business goes on the market. If you’re at the end of a lease, find out if a landlord will grant additional options for a person that buys your business. You might find out something horrifying such as the landlord having plans to demolish the building at the end of your lease, but it is definitely better to know that information up front rather than when it is too late.
If you do not feel comfortable about contacting your landlord due to confidentiality reasons, review the lease or ask around to better understand the landlord’s protocol and requirements.
6) Leave Enough Time For The Business Sale To Occur.
Some businesses can go under contract quickly in Orlando. For example, a well-priced manufacturing company for sale, with an owner benefit over $500,000 with good books and records and great earnings. However, most businesses in the Orlando area take approximately 7 to 12 months to sell. Even if a business seller gets a purchase contract within the first few weeks, it still might take three months for the sale to close especially if there is bank financing involved. The landlord management team can require several months for tenant approvals. If possible, plan for the sale in advance. When a business owner plans on relocating within a year’s time, they should probably think about putting their business on the market soon if they are trying to get the maximum dollar.
7) Use The Advantages of Being Located in Orlando To Help With Selling Your Business.
One of the greatest things about selling businesses in Orlando is that it comes with strategic advantages that are important for business buyers. Orlando as a location offers a huge advantage because it provides business owners with easy access to multiple international airports, access to regularly occurring business convention shows, a friendly business climate both with the local and state government and with other business owners. Other advantages include great weather year-round, great places to live in addition to great schools plus being in a city with international recognition is a huge advantage.
8) The Orlando Area Continues to Grow With Constant Development and Population Increases.
Orlando along with the rest of Florida is growing. In 2017, statistics showed that Florida was the 15th largest economy in the world. Orlando is right in the middle of that large economy with the largest airport and a road system that connects all large population centers together. Logistically Orlando is ideal. It also means that buyers can purchase businesses in Orlando that could grow organically fueled by population growth to no marketing.
9) Would You Buy Your Own Business For Full Price, All Cash?
This is a very relevant question business owners should ask themselves before putting their business on the business for sale market. While Orlando attracts thousands of potential business buyers and some businesses in Orlando fetch a premium over these same businesses in other parts of the country, there are limits to what buyers will pay for a business. One way to prepare is to hire a Business Broker who has actual data to support an estimated value range and can explain what businesses are selling for in Orlando and across the state of Florida. Remember, each business for sale is in competition with other similarly priced businesses in different categories in the area.
10) Document your Systems in Place so that it truly is Turnkey!
Spend the extra time to document your systems in place to operate your business. Orlando has a vibrant market that attracts a lot of business buyers. These business buyers however have high expectations and many times these expectations exceed how they operate their own businesses. Hire a consultant if you need to get more focused or organized. When a business is not prepared for a sale it could stay on the market infinitely going from Broker to Broker for years, which is not a great position to be in. Be prepared! Put your financial records in order. If six months of the year have already gone by, business buyers will expect to see current year records as well as tax records from the previous year. Buyers are curious as to what type of software sellers use as well as what kind of accounting, management and inventory systems they have in place. The more systems that are in place, the more attractive a business for sale in Orlando will be.
If you would like more information on selling your business in Orlando or in the Central Florida region, call the Business Brokers at Crowne Atlantic serving the Greater Orlando area at 407-478-4101.