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Wednesday, 12 October 2011 20:31
Selling or Buying a Business--the Law of Supply and Demand AppliesWritten by Fernando Simo
As the economy slowly recovers buyers’ confidence level increases and with that comes a greater demand for businesses available for sale. Buyers, who were waiting for the bottom of the recession to hit prior to making a decision on buying, now find themselves competing for quality businesses in this market. However, as can be expected, businesses which survived the recession now have less competition and with less competition come increase market share and profitability. In fact, business valuation has slowly increased over the last couple of years.
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Wednesday, 12 October 2011 20:30
Selling or Buying a Business??--A TestimonialWritten by Fernando SimoIn my last blog, I mentioned that Business Brokers add value to the process of buying and selling businesses. This week, I would like to share with you a testimonial about our services from a recent buyer. Indeed, we, the Transworld Business brokers, can change someone’s life and make dreams a reality as we go about our job in “adding value to the process.” TESTIMONIAL December 2010 Testimonial for Fernando Simo - our Business Broker. “We did it.” My wife and I moved to Tampa Florida this week with our two young daughters. We now own a lovely restaurant in the heart of busy downtown Tampa and the simple truth is we could not have done it without Fernando. There is a long story and a short one. Since this is a testimonial, we’ll give you the short version, however feel free to ask Fernando to give us our contact information for the long version as we experienced a dream come true and would be happy to share our story to others with similar ambitions.
We were looking, intensely, which you can do on the Internet these days especially from overseas. A number of brokers were contacting us, from existing and new business ventures. We were looking for a business that could qualify for an E2 Investor Visa Application, meet our budget, fit our lifestyles and enable us to earn an income to live on. Fernando contacted us during the bombardment of calls. He was a purposeful yet reassuring voice at a time when we were weary of all sorts of reasons how this could go wrong. He drove to Tampa and met with us during one of our trips here. From that moment on we formed a bond and determination to succeed. What made the difference for us with Fernando is that we felt protected all the way. I was a Manager back home but this was our first business acquisition; it was overseas and part of a much wider move for our family – further we were risking everything we had on this move. Fernando looked after us in a way we never expected. He understood what we needed, was patient, gave sound advice and was able to tell us whether the business was suitable or not. During the acquisition process he went way above the call of duty to push back others when needed. This all happened for a listing that was not all his, but that did not appear to faze him at all. The entire process took a few months and we definitely could not have done it without Fernando. There were times we were down, scared, worried and unsure – all of these emotions were swirling through us yet we felt as if there was a parent taking care of everything, making it comfortable and achievable. “We did it!” “Thank you, Fernando!” On behalf of my Family, we will never forget what you did for us.
Should you want to know more about buying or selling a business in Orlando or Central Florida, please contact Fernando Simo at 407-361-8886, email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or please visit my webpage at www.bizbuyorsellflorida.com.
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Wednesday, 12 October 2011 20:29
Selling or Buying a Business?--Business Brokers Add Value to the ProcessWritten by Fernando Simo
As we define the purpose of a Business Broker, we simplify it by stating that we:
1. Bring sellers and buyers of businesses together.
2. Understand sellers’ financial requirements and, therefore, structure a sale to achieve those requirements.
3. Assist buyers and sellers in completing transactions.
4. Add value by streamlining the business process.
Although (1) and (2) above are important to the process, I strongly believe that we add more value in assisting buyers and sellers in “completing the transactions” and “streamlining the business process.” The majority of buyers (and sellers) come to us with little to no experience in what it takes to buy or sell a business. Because of that lack of experience, we try to help them understand:
1. Their purchase: in some cases, we bring them back to reality with recommendations as to what they SHOULD buy given existing resources and skill levels.
2. Valuation: we may be simplistic in this process, because valuation is not a science, it is an art. However, we get our point across in very simple terms and/or comparable presentations.
3. Simple Immigration requirements: although we are not experts, we can point them in the right direction and explain simple concepts and benefits associated with VISA requirements.
4. The Legalities of the transaction: we normally prepare and explain Purchase Agreements to both sellers and buyers. However, it is their responsibility to ensure that the agreement meets with their—and their lawyers—approval.
5. The Due Diligence Process: we are the managers of this process. We collect all relevant documentation and deal directly with lawyers, CPA’s, landlords and others in helping buyers determine the viability of their business proposition-- Perhaps, the key to completing transactions.
6. Lease Assignment: we typically help throughout the entire process of transferring a lease or preparing a new one by working closely with landlords.
7. Closing of a business: we explain to both sellers and buyers the documents they will need to sign at closing. This normally avoids misunderstanding and “dead deals” at the closing table.
Therefore, in reality, the broker “adds value” by being the voice of both seller and buyer throughout the transaction process. If you want peace of mind while either selling/buying a business, work with a Business Broker!
Should you want to know more about buying or selling a business in Orlando or Central Florida, please contact Fernando Simo at 407-361-8886, email me at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or please visit my webpage at www.bizbuyorsellflorida.com
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Unfortunately, sellers often ignore one very simple truth: The value of their business increases in direct proportion to the buyers’ decrease in risk. I think this is a very important element of valuation and, as such, should be very well understood by those looking to sell or currently selling their businesses. So, the less risk the more value you may be able to get for your business buyers will compete with price to get at your business. So, let us discuss some of the things that will make your business more valuable and less of a risk to buyers:
1. Increasing Sales. This is an indication that the business continues to grow, and as such is able to increase greater profitability in the future. A business that has “topped out” may be considered risky and less valuable.
2. Increasing Profits.
3. Accurate Financial Statements. The due diligence process is key to most buyers and understanding the financials of the company they intend on buying is highly important. The less cumbersome it is to understand the company’s financials, the less risky it becomes to the buyer and more value it creates.
4. Accurate Tax Returns. Cheating on your taxes may give you an immediate tax benefit, but it will hurt you in terms of getting the right value for your business in the long term.
5. Simple Financial Recasts. When recasting financials, are you going beyond the obvious in add-backs, such as owner’s salary, depreciation, amortization, personal insurance? Since recasts help determine “Owner’s Benefit,” which in turn is use as a multiple to determine value, buyers find less risk in a simple recast.
6. SBA Financing. Does this business qualify for an SBA loan? If it does, there is further confirmation to the buyer that the business has a solid backbone and the ability to pay back debt service on the loan and a provision for the buyer’s life style and earning requirements.
7. Seller Financing. If the seller is willing to provide financing, the buyer trusts in the business ability to generate sufficient cash to pay back the debt and meet his personal financial requirements.
8. Solid Management in place. The less dependent a business is on the owner the better.
Obviously, a business which provides for the aforementioned will get significantly more value and price than those who do not. So, start now. Make sure that your business prepares for and builds on its value by managing your business and applying these practices, accordingly.
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or please click here for more information
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Wednesday, 12 October 2011 20:28
Buying a Business?--Why Sellers Sell their Business.Written by Fernando Simo
Recently, I was having a meeting with one of my network colleagues. During our conversation, she pointed out how leery she was of businesses for sale. When I asked why, she indicated that if the seller wants to sell the business is because it is not doing well. I found her response interesting and immediately indicated to her that sellers sell for a variety of reasons, most of which are not related to poor performance, cash flow or profitability issues. Here are ten (10) other reasons:
1. Health. The seller may no longer be capable of running the business because of health restrictions.
2. Retirement. The seller wants to enjoy his/her golden years.
3. Relocation. Wants to go back to or move to a preferred location.
4. Family. Wants to be closed and/or misses family members.
5. Job. The seller’s significant other gets an opportunity somewhere else or the seller found a job which generates more cash flow than the business.
6. Profitability. The seller wants to cash-in on his investment. This may be a planned or unplanned exit strategy.
7. Business Demands. The business demands may be too much to bear—restricting the seller’s personal enjoyment and relaxation.
8. Other Business Interests. Other opportunities may be more profitable than the existing business.
9. Taxes. It may be to the seller’s benefit to sell the business for tax purposes.
10. Cash flow Requirements. The seller does not have the equity required to grow the business and cannot get financing.
So, if you are thinking about buying a business, from my perspective, it is really not that important to find out why the business is selling. What is important is to select the right kind of business for you. Once you find it, conduct the right level of due diligence to ensure that what you bought is exactly what you are going to get.
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or please click here for more information
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How would you like to buy a business using 401K funds--without any tax penalties? The purchase would leverage the government's taxable share of your 401K--therefore lowering your risk--and be effectively tax free on its operating profits. Should you want to know more, please contact me at 407-361-8886 or email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Also, please click here for more information on buying and selling a business in Orlando or Central Florida.
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Wednesday, 12 October 2011 20:27
Selling or Buying a Business?--Is there an Economic Upturn?Written by Fernando SimoThere is no doubt that a major topic of discussion (and concern) today for most of us is the economy. One of the main issues regarding a market where unemployment nears ten (10) percent (or 20% for those who include workers who no longer submit claims or are simply working on a part-time basis, or simply gave up), is whether the recession and/or the recovery is underway. Based on two continuous GDP growth quarters, most economists would indicate that the recession is over—and has been since July 2009. Of course, many would argue that recovery without job creation is nothing but number crunching. In all of that confusion, I wanted to clarify what has been happening in the Business Brokerage world (in Florida) since July 2009.
In a recent article written in the South Florida Business Journal, they indicate that “there are signs of life in the field of buying and selling businesses.” They go on to say that “fourth quarter (2009) figures for South Florida show a rebound in sales prices, prices paid as a multiple of cash flow and the number of businesses sold.” What makes this statement a lot more encouraging is that typically the fourth quarter is the lowest quarter of the year. Here are some other Transworld data which further show a positive trend:
1. Second half 2009 sales transactions increased 32% over first half of 2009.
2. Fourth quarter of 2009 was the second best fourth quarter ever!
3. 2002 is the last time where we showed growth in three consecutive quarters.
4. The Q2 to Q4 positive trend was the second biggest jump in sales at Transworld over two quarters.
Given the aforementioned, many in our business would show cautious optimism for an economic recovery filled with opportunities for those looking to buy and sell a business. Andrew Cagnetta, Transworld President, mentioned in the South Florida article that “anybody who wants to start a business or relocate a business is going to find it pretty easy to find a location and get a good deal.” So, don’t waste any time, take advantage of the turnaround and call us to help you with your business transaction.
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or please visit my webpage at www.bizbuyorsellflorida.com.
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Wednesday, 12 October 2011 20:26
Selling your Business??--What Happens after you Sell it?Written by Fernando Simo
b. Allocation Agreement. An agreement as to how the sale of the business will be allocated among its assets, where the balance normally is goodwill. c. Bill of Sale. The seller indicates his/her agreement to sell their business and the components of it; such as websites, Business name, etc d. Buyer Written Action. The buyer’s corporation consents to the purchase of the business. e. Closing Agreement. Buyer and Seller indicate that conditions within the contract have been satisfied. f. Indemnification. Buyer and Seller hold each other harmless from losses. g. Non-Compete. Seller agrees not to compete within the pre-established distance and time. h. Pledge of Lease. Buyer agrees to guarantee lease payments or forgo business. i. Security Agreements. Buyer pledges the business as security for non-performance on Promissory Note. j. Seller Written Action. The Seller’s corporation consents to the selling of the business. k. Promissory Note. The conditions to pay back the seller financing. l. Closing Statements for both Seller and Buyer. Distribution and Receipt of funds. The proper management of the areas listed above would insure the successful completion of a sale. Make sure that you have a competent business broker who can effectively negotiate and navigate your sale through these very “dangerous waters.” Should you want to know more about buying or selling a business in Central Florida, visit my website at www.bizbuyorsellflorida.com, email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call me at 407-361-8886.
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Wednesday, 12 October 2011 20:26
Selling your Business??--Get it Pre-Qualified!!Written by Fernando Simo As I mentioned in one of my previous blogs, the Small Business Administration (SBA) has relaxed some of their policies in regards to lending. I said before that they “became a lot more flexible by making changes to the acquisition policies impacting purchases which included Intangible Assets. These changes give “Preferred Lender Providers” (PLP) more flexibility to provide business loans WITHOUT going through the SBA for final approval. In addition to providing PLPs with greater flexibility, the changes give buyers more leeway in what regards the minimum amount of equity they must invest for the project.” So, how does this benefit sellers and buyers?
Well, sellers whose businesses: (1) have good financial records (normally three (3) years worth of tax returns) ; (2) generate enough cash flow to cover the repayment of the SBA loan AND the buyer’s life style and; (3) are selling their business for at least $300K, may get lenders to Pre-Qualify their listing for an SBA loan. Note: I used the $300K, because most lenders like to provide loans in excess of $250K coupled with equity investments of between 15-25%--which may include seller’s financing. Sellers benefit because when a business is Pre-Qualified, it increases its market potential—more buyers are now able to afford the purchase of the business. Additionally, sellers normally get 100% of the sales value at closing. I recently sold a business within two days after it got pre-qualified.
Now keep in mind that the pre-qualification applies to the business NOT to the buyer!!! Buyers must qualify on their own merits to get the SBA loan to purchase the business. This normally means having good credit, some level of expertise in the business being bought, submission of personal financials (net worth) and the ability to personally guarantee the loan. The buyers benefit because they do not have to sell the merits of the business to the lending organization—the business has been pre-qualified.
So, if you are a seller, ask your business broker to look into pre-qualifying your business for an SBA loan. It may help you in more than one way.
Should you want to know more about buying or selling a business in Orlando or Central Florida , please contact Fernando Simo at 407-361-8886, email me at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or please visit my webpage at www.bizbuyorsellflorida.com .
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Wednesday, 12 October 2011 20:25
Buying a Business??—What I recommend foreign buyers to do.Written by Fernando SimoMany foreign nationals come to Central Florida to purchase a business in order to get visas into the US on a somewhat permanent basis—so long as the business is viable the visa holder may stay, if not, they may have to get back to their country of origin. The two most common types of visas are the L1 and E2 visas.
The L1 visa is normally available to foreign business owners who wish to acquire a business in the U.S. and assign a person-- on an inter-company transfer—to manage the business. The person managing the U.S. business gets the L1 visa. The good news is that normally the L1 visa can be converted into a green card within two to three years.
The E2 category of US visas is normally given to foreign nationals who have bought a company in the US and wish to manage it. To qualify, you must be a national of a country that maintains a treaty with the United States. Additionally, the foreign national needs to make a “substantial and non-marginal investment of no less than $100,000.” However, size and nature of the business may also be determining factors. I have sold and heard of many businesses being sold for E2 reasons which do not reach the $100K plateau.
Please understand that the above are generalizations and that you need to know more. However, now that I mentioned the types of visas, let me make some recommendations to foreign buyers.
1. Get proper legal (immigration) advice.
2. Get an ethical and reputable Business Broker to broker the transaction.
3. Get good financial advice from accountants or CPA’s. By the way, normally one of the requirements for the visa is a five (5) year business plan.
4. Buy a business which has solid financial records. Audited Financial statements and tax returns are normally good when dealing with US immigration.
5. Please do not buy “cheap,” buy good. It is better to pay more for a business that has long term potential than not. Remember, after a couple of years you will have to renew your visa and the financial results of your company may determine whether or not you stay in the country.
6. Perform a very detailed Due Diligence on this business. Your visa depends on it!! The due diligence will help you determine the viability of the business and verify that what you bought is what you are going to get.
7. Do not spend it all on the business acquisition; you may need more to run the business.
8. Understand your life style expense requirements and buy a business which supports it.
9. Buy a business with a very simple Business Model—they normally succeed.
10. Talk to other foreign nationals with E2/L1 visas. Understand their successes and struggles.
Buying a business can be stressful enough without combining it with a transition to a different country. Please follow these recommendations and your stress would certainly diminish significantly.
Should you want to know more about buying or selling a business in Central Florida, please contact Fernando Simo at 407-361-8886, email me at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or please Click here for more info.
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