Buying A Business
As a buyer you there will be lots
of questions in your mind which needs to be
addressed, we tried to put these in words
for you and what we can do for you.
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Owning your own business
can be the Dream of Life
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What will
be the profit at the end of the month
Earnings
potential limited only by self
Rewards
tied to performance
Independence
in decision making
Broad
range of activities
Control of
ones security and future
Tax
shelter options
Estate
builder
Opportunity
to work in a field that you choose
Provide
jobs for family members
Can
provide flexible work schedule
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Buying a Business |
If you are
buying a business, there will be many
questions that will need to be answered
before we begin. What kind of business am I
looking for? How much will I put down? What
is the "right business" for me? What will be
the right area for the business?
This section will give you some basic
guidelines to help you answer these
questions and show you what to expect when
buying a business. We will also show you how
United Business Brokers will guide you
through this exciting process. Please
understand that there is no charge to you
for this service.
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When do I want to buy? |
The broker
that is assigned to you will need to know if
you are going to buy right away or just
thinking of it in the future. In order to go
through the rest of the process we will need
to know that you are ready to make a
decision once you find the business you
like.
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What types of businesses
interest me? |
As a new
business owner you will want to make sure
you buy a business that is fun for you. If
you are going to work hard, make sure you
enjoy what you do.
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Where do I want to buy
the business? |
As a new
business owner you want to make sure that
you are buying the business in a area which
will give you and your family a means to
live a happy life. As a well known proves
Happy Family is Happy life. We make sure
you enjoy your life with the family.
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Confidentiality |
The first step
in the process to finding you the right
business is for you to sign our
Confidentiality Agreement
. Selling a business must be kept very
confidential as it may cause employees of a
business to leave competitors to use it to
their advantage, or customers to leave if
they find out before the seller introduces
them to the new buyer. United Business
Brokers has a fiduciary responsibility to
our sellers to only show businesses to those
buyers that will abide by the
confidentiality guidelines.
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The Education |
We will then
take you through an education process to
explain pricing, terms, cash flow, the
process, what to expect and how to make the
right decision.
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Show you the Businesses |
We will then
begin discussing the businesses that match
your criteria and begin showing you these
businesses.
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Viewing the Businesses
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Now you are
ready to start viewing the businesses we are
offering. There are two ways you will do
this. Either setting an appointment with the
seller to meet face to face or on your own.
Meeting between seller, buyer and United
Business Brokers. This is how we will handle
most of our meetings. What you are trying to
accomplish at this initial meeting is: Do
you like the business? What you can do to
improve the businesses? Information on the
staff and the business.
Viewing the business on your own. United
Business Brokers may ask you to view the
business on your own. You may go with your
spouse or a friend. You will go in as a
customer, order something, and just observe
the business. If you do this it is very
important not to go in "snooping around" the
business and asking questions. This could
break the confidentiality guidelines. You
are only to ask questions once your United
Business Broker has set up an official
meeting with the seller.
Once you find the businesses you are
interested in we will begin speaking with
the sellers regarding the finances and other
company information. Once you narrow your
search you will move to the Purchase Offer.
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What to Expect
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Before we get
to the Purchase Offer, we will answer a few
questions and speak about pricing.
Am I looking for the perfect business! There
is no perfect business. If the business was
perfect then most likely the seller would
never sell. If you did find a business that
was perfect you would be paying a very
handsome price for it. Your opportunity as a
buyer of a business is to see the weaknesses
of your new business and determine how you
can make the business better if you dont
see that right away, you probably wont ever
see it.
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What about financing?
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Many
businesses sell with some owners terms,
meaning, the seller will finance part of the
business. This will usually entail putting
30% to 50% down on the business. If not,
then United Business Brokers has many
lenders that can work with you to get you
financed. Your United Business broker will
use their expertise to come up with creative
finance terms that will satisfy both buyer
and seller.
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Documents required for
financing
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Before United
Business Brokers can help you find a
business there are a few questions you will
need to answer.
How much money do I have to put down on this
business? Also how liquid that money is, can
be crucial. Generally, we are looking for a
minimum of 20% down with finances that can
be obtained within 7 business days. If your
money is in real estate and not very liquid,
you will need to make that money liquid
before we start showing you businesses. Be
sure to leave enough money in the bank for
working capital. A basic financial statement
will help us determine your purchase power.
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Personal
Tax returns last three years.
Business
tax returns last three years.
Business
P&L last three years.
Sales tax
returns last three years.
Personal
Financial Statement forms dully filled and
signed.
Credit
check application dully filled and signed.
Bank
Statements for the funds availability.
Please visit
Bankrate.com for
financial planning.
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How does my attorney and
accountant come into play?
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We suggest
that you have an accountant and an attorney.
However, they are not in any position to
tell you to buy this business or not. The
accountant will be looking for the perfect
business in the financials and the attorney
will be looking for the perfect business in
the paperwork. Remember, that the perfect
business does not exist. If you need
guidance in your decision we suggest a
friend who has bought or owns a successful
business who knows what they are talking
about.
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Will the business
generate income to pay the debt and leave
you enough to make aliving?
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If not, the
business may still be a good takeover
candidate.
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Price of the Business |
So how do you
determine the right price to ask for the
business? We have a simple formula to help
with this.
Imagine a triangle with three equal sides.
Each corner has a label. The labels are
Price, Terms, and Cash Flow. The triangle
represents "The Deal" or the potential
purchase. The deal can stand as long as it
is standing on two of the three sides. If
the price of the business is high, then the
seller must be willing to offer good
financial terms and must be making good
money. If the business is not making good
money then it must have a good price and
good financial terms. Remember, a good deal
has to benefit both buyer and seller.
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Finally, are you
comfortable with the price?
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The Purchase Offer
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Now you are
ready to make on offer on the business.
United Business Brokers has all of the
contracts you need to help you with this.
You will put in the terms, conditions (if
any), and offering price. You will also need
to be prepared to attach an earnest money
check with the offer, which is a small
fraction of the down payment. Your American
Business broker will then take the signed
offer with the earnest money check to the
seller. If the seller signs the offer, you
have just bought a business. We will then
prepare the closing date and United Business
Brokers will guide you on finalizing the
process.
The closing usually takes place within 4 to
16 weeks. It is understandable that you
would want to get the business for a good
deal, but asking too low and playing the
offer back and forth will only kill the
process. Eventually the seller will be tired
of it and ask us not to allow you to make
any more offers. Ask for a price that is
fair for both parties.
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Setting up the business
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Once the offer
is accepted and contract is signed by Buyer
and Seller. There are several steps to do
before the closing date set by the financial
institution or by the owner in Owner
financing.
The chronological order: |
Collect
all the papers needed for the financing
according to the Financing requirement.
Meet the
accountant for opening up the Business
Corporation.
Get the
State sales tax and Federal Employment
identification number.
Apply for
all the licensees as applicable for your
business, examples food and sanitations,
Liquor city and state, smoke/cigarette ,
Lottery, gaming and other local and state
required licenses.
Inventory
calculation date will be set and be present
to get it done in presence of you.
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Please
contact us with any questions about
buying or selling a business.
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