Because the process of business sales varies greatly from state to state, it’s important for all of our out of state buyers, and even our in-state sellers to understand the way that business brokerage works in Florida. The more our buyers and sellers are educated on how things work in our world, the better their experience will be, because they will have an idea of what to expect. Knowledge is definitely power, and we want to give all of our buyers and sellers everything they need to navigate the complex world of business sales in Florida.
Business Sales Are Confidential
Business owners have worked hard for years to build their company to what it is today. Understandably they don’t want to risk losing any part of that business when they list it for sale. So, for us as business brokers, it is our number one job to protect the confidentiality of our sellers and their business’s details. In order to do that, we creatively market all businesses that we list for sale confidentially, we require potential buyers to sign an NDA (Non-Disclosure Agreement), and even after an NDA is signed, some details aren’t shared until an executed sales contract is in place.
We advertise the general location (normally at the county level), industry, cash flow/owner benefit, number of employees, value of equipment, etc so that a buyer can see if it is a business that they are possibly interested in. If they would like to find out more, then they will need to fill out an NDA (buyers will need to sign a different NDA for each business they inquire about) in order to receive the Confidential Business Review (CBR). The CBR will tell them the name of the business, the exact location, and other details about the business and its financials, such as its revenue and expenses for the past 3 years.
If the buyer is still interested in the business after viewing the CBR, then they normally have a meeting with the seller. This is done either at the business after hours (to protect confidentiality), off-site, or via conference call. Normally the business’s employees aren’t aware of the sale, and we definitely don’t want the customers or clients to know that the business is for sale, so that’s why any site visits to the business location are done outside of operating hours. Items like the business’s tax returns, bank statements or employment contracts aren’t normally given to the buyer for review until the Due Diligence period starts, once an executed sales contract is in place.
Those are just a few of the ways we work to protect the confidentiality of the business being sold, and we hope that buyers can understand the importance of confidentiality. After all, one day our buyers will be sellers too, and when the shoe is on the other foot, they will appreciate everything that is done to ensure confidentiality.
Business Brokers of Florida (BBF)
In Florida, we have a very strong association of business brokers called the Business Brokers of Florida or BBF for short. Most of the business brokers in the state of Florida are members of the BBF and we are all held to the same rules and standards. Part of being a member of the BBF means that we all co-broke together on business deals. Most states don’t have this concept of co-brokering business sales, so we are in a very unique situation in Florida. The opportunity for co-brokering means that we can help buyers not only to purchase our own listings, but we can bring a buyer to any business for sale in Florida. The listing broker and buyer’s broker will collaborate and work together to get the deal done. This means that buyers can find a business broker that they really enjoy working with, and they can work exclusively with them to purchase any business. One thing that makes this co-brokering very easy in Florida is that we have a multiple listing service or MLS for just businesses, which is the central database that all of the Florida business brokers work with.
As mentioned above, Florida is unique in the fact that we have an extensive central MLS for business sales. Only business brokers who are BBF members have access to the MLS business listings, so buyers working with a professional business broker will be at an advantage. The MLS has the most accurate and up-to-date business listings, as brokers are required by the BBF to keep their listings current. So, when a buyer is searching through business listings on the MLS, they will have the true picture of what’s really available in the marketplace. Popular consumer listing sites like BizBuySell have many old, outdated, or dummy listings that are basically just click-bait for buyers. We’ve seen buyers get very frustrated with inquiring on countless listings that are no longer available or aren’t what they were advertised to be. That’s why we always encourage buyers to skip those sites when shopping for a Florida business, and just search on our website, which pulls directly from the MLS. To search for Florida businesses, click HERE.
We are always happy to help answer any questions buyers or sellers may have about how the business sale process works here in Florida. If we can help in any way, please give us a call or drop us an email.