Your SlideShare is downloading. ×
0
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Information For Business Buyers
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Information For Business Buyers

339

Published on

Information for Business Buyers

Information for Business Buyers

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
339
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Transcript

    • 1. A Business of Your OWN SUNBELT ® Business Brokers If you’re never going to be President of the company you’re with, you may need a new company!
    • 2. Why?
      • Job Security
      • Control your own destiny
      • Financial Independence
    • 3.
      • Government Surveys show over 60% of new start-up businesses fail in the first 3 years.
      Why Buy an Established Business?
      • Why?
        • Poor Location, Product and/or Service Mix
        • Under Capitalized
        • Poor Planning
      Existing businesses have a proven track record of success!
    • 4. Benefits of Buying an Existing Business…
      • Actual Operating Results….not Projections
      • Immediate Cash Flow
      • Trained Employees in Place
      • Established Customers and Suppliers
      • Training Assistance by the Seller
      • More Financing Options
    • 5. Reasons People Sell
      • Retirement
      • Illness
      • Partnership Dispute
      • Relocation
      • New Commitments
      • Upgrading
      • Divorce
      • Death
    • 6. Three Components of a Successful Business
      • Location
      • Product/Service
      • Management
    • 7. Buying an Existing Business…
      • …provides the two essentials to success:
      • 1. Proven Location
      • 2. Right Product/Service
      = Positive Cash flow
    • 8. YOU provide the Third ingredient:
      • Management
      Work Buying an Existing Business…
    • 9. Who Pays for the Business?
      • The only monetary investment you have in your new business is…
      … the down payment. The business pays for itself out of its cash flow.
    • 10. How?
      • Cash flow
      • It’s the Seller’s Discretionary Cash
      • -
      • Moneys that you’ll take home as the business owner after paying the debt.
    • 11. Cash Flow = Seller’s Discretionary Cash $ = Buyer’s Discretionary Cash Less 25%* - Your Acquisition Cost $ = SELLER’S DISCRETIONARY CASH $ + Net Profit (Loss) from P&L $ TOTAL ADJUSTMENTS $ b. Amortization $ a. Depreciation $ Non-Cash Expenses $ Non-Recurring Expenses (explain) $ g. Owner(s) Personal Expenses paid by the Business $ f. Owner(s) Benefits and Perks $ e. Entertainment $ d. Interest, if not applicable $ c. Insurance (excess) $ b. Travel $ a. Auto Expense $ Discretionary Expenses, if included in expenses $ Owners(s)/Officers Salary, if included in expenses Addendum to P&L Summary
    • 12. Example: 36,000 Annual Net X 12 3,000 Monthly Cash Flow (1,000) 25% for Debt Service 4,000 Mo. Cash Flow 30,000 1/3 down $100,000 Sales Price
    • 13. Financing Options
      • Use other people’s money!
        • Personal Guaranty
        • & possible additional personal collateral
        • Personal Guaranty
        • & possible additional personal collateral
        • Greater Independence
        • Greater Owner Commitment
        • Business Serves as
        • Collateral for the Loan
        • Business Serves as
        • Collateral for the Loan
        • Application, Processing
        • & Loan Closing
        • Simple Credit Checks & Loan Closing
        • Low Down payment
        • Low Down Payment
        • Various Financing Options at much longer terms
        • Lower Interest Rate
      Institutional financing Seller financing
    • 14. Valuing a Business
      • 2 to 3 times earnings
      • Equipment + Inventory + 1 Year Net
      • 1 Year Gross Sales
      Business Worth Terms Production
    • 15. Buying a Business
      • Cash Flow
      • Down Payment (entry fee)
      • Business Retires Debt
      • The Business Buys Itself !
    • 16.
      • If you can buy a business ...
      What the Business is Worth to you. for the amount you have to put down...
          • And it will still earn the desired profit…
            • That is what the business is worth to you!
    • 17. Buying Process:
      • Interview with your professional Sunbelt Business Broker helps determine potential businesses you may be interested in.
      • Confidentially tour businesses that are of interest.
        • (How does it make you feel?)
      • Can you make improvements?
      • Make an offer based on initial disclosure information provided by the seller (Safe Decision, Certified Earnest Money)
    • 18. What is An Offer?
      • Further, it should be made contingent upon:
      • All equipment being in working order
      • Books/Records check to prove Seller’s gross sales
      • Lease Assignment or Sublease
      • Ability to get necessary licenses or financing
      • Business passing necessary inspections
      • Business being sold free & clear of debt, except as noted.
      An offer expresses your interest to purchase & doesn’t become an agreement to buy unless your price and terms are accepted in full!
    • 19. Getting to an Agreement
      • Removing Contingencies
      • Your protection
      • You must be satisfied
      • You are in control of your money
      • Each contingency removed, one-by-one
      • IF they don’t check out, you have the option to:
        • Make another Offer
        • Cancel the Offer and Get your money refunded
        • Make an Offer on Another Business
    • 20. Brokers Do… drive you to the closing! We’ll even Present Facts Arrange & facilitate Franchisor meeting Aid in your meeting your Landlord Coordinate any inventory tabulations Bridge gap between you & Seller Provide tips & resources on incorporating & starting out Negotiate Identify professional support - attorneys, accountants, & appraisers Educate Facilitate funding your purchase with either the Seller or Lenders Save you Time & $$
    • 21. Brokers Do Not…
      • Make your decisions
      • Manage your business
      • Show you the Seller’s books and records without an offer
    • 22. Advisors
      • Talk to…
      • Businessmen for mentoring on buying your business
      • Attorney for Legal and Tax matters
      • Accountant for Taxes, Accounting & Bookkeeping
      • Lenders
    • 23. Escrow Attorney
      • Does Not represent Seller or Buyer
      • Draws up all closing documents
      • Cost shared equally by Seller & Buyer
    • 24. The Closing
      • Who’s there:
        • You & Seller
        • Broker
        • Escrow Attorney
        • Lender
      • What Happens:
        • Documents briefly reviewed, approved & signed
        • You and Lender release check to Seller
        • Seller gives you the keys
    • 25. And with the. . . Keys in your pocket! Documents signed. You Are In BUSINESS Congratulations!

    ×