|
|
|
5 Ways to Build a Downline
We all know that joining an affiliate program is worth absolutely nothing unless you have a significant sales force under your belt to promote it and build your income... You join a program, you get a replicated website with your affiliate info,...
Chris Carpenter's Google Cash - An Ebook Review
It is rare to find a brand new blueprint for making cash on the internet. The continuous churning of rehashed and ripped off regurgitated pablum has plagued the internet guru market for the last few years. But ever so often with some...
How You Can Finally Make Instant Profits and Leave the Scams Behind at Last!
If you are financially and emotionally spent from joining all the wrong, dead-end programs, then this is the program you need to be part of. Just by only using the FREE promotional tools that are provided to you, I am making incredible money...
Ideal Marketing Methods for Home-Based Businesses
What is the difference between a small business that makes it and one that does not? Most likely, the one that was successful engaged in some effective marketing. Wise marketing is critical for owners of home-based businesses for a number of...
Is Network Marketing Easy??
I personally believe we do a dis-service to the industry and ourselves if we openly state...or even allude...that NWM is easy. It's not. Nor is any business....WAH or brick & mortar. Anyone who does say different is not being wholly truthful. I...
|
|
| |
|
|
|
|
|
|
Buying A Business
Buying a business in today’s economic climate requires that you, the buyer, be on the ball, with regard to business basics. This economic climate, as far as businesses are concerned, is a sellers market.
With the corporate downsizing, economic downturn and other factors, there are a lot of very knowledgeable buyers out there looking for one of the very few good business to buy. This means that you, as a buyer have a lot of competition. Consequently, you need to be well prepared. Professional business buyers, report that it takes anywhere from 3 months to 3 years to find the right business. So, if anything, what can be done to speed this looking process and at the end finally get a good business?
The decision – the first step is deciding to buy a business. Once you have made this decision and you are definite and firm about the fact that you are definitely buying a business, the process has started.
The second step is to decide what kind of business. This is really really important. What are the criteria for this business you are looking to buy? Do not make a wish list or what would be nice. Make a list of what is important. For example, if your standard of living requires $100,000 income, do not compromise by looking at businesses that make only $50,000.
That is unless you consider yourself a knowledgeable business manager and marketing person who knows that any business they buy will double in income and sales. That kind of buyer can buy a business that makes no profit and probably should.
Other criteria include; is it something you can handle? What kind of work are you willing to do? If you like sales and do not like running a factory, buy a distribution company, or sales organizations, and do not buy a manufacturing firm, unless you have a partner that likes running a production line.
I have people call me to inquire about buying a body shop that have no automotive experience at all. You can buy an auto repair shop, muffler shop, brake shop or lube store, and learn the business, with no experience to start. You probably should not buy a salvage yard body shop, or scrap yard with out being raised in the business. If you are a salesman you can buy almost any business.
All manufacturing, distribution or retail sales require good personal sales skills. If you are poor at communication skills or English is a second language, consider buying a liquor store, gas station or hamburger stand, just a few of the businesses that do not require, personal selling, or do they?
About you - There are some things you need to prepare for the brokers when they start coming to you with possible businesses. You need to make sure that you have your down payment sorted out. Expected down payments are anywhere from 25% to 100% of the selling price. So make sure you know what you want to spend and then make sure you have the down payment easily available.
Then you need to get your financing options determined. You can get yourself pre-qualified for a business loan or an SBA loan if the business you are buying is required by you to show a profit on the books. SBA loans are only available to businesses that have shown a 5-year profit on their tax returns. If you are looking at businesses that are heavily unrecorded income, you must have cash or seller financing.
Being your own broker - You should determine who is going to make your offer. A broker, or yourself? If it is you then you should locate the necessary offer forms and study them carefully. Determine what must be in your offer so that you can put in an offer, the instant you find a business that meet your requirements. This is an important step, as putting in an offer tends to lock out other buyers while you look over the business. Make sure you have contingencies in your offer, which means you have lots of “get out of the deal” clause.
I would like to suggest, for the less experienced buyer to hire as a consultant the sharpest attorney or business broker you can find and pay him for his time to watch your rear end, in negotiations and in reviewing the companies you are considering buying. In real estate we call this a buyers agent, except with businesses the listing agent will not always co-operate in splitting the commission. This means you need to be willing to pay your agent an hourly fee for helping you. Let me give you a real example.
David and his father were looking for a business to buy. They were interested in a Scrap yard that I was selling. I asked their buying agent to bring them over so I could interview them and to explain this business to them. In 3 minutes it was clear that they should not even consider this business. We spent the balance of the meeting talking about the businesses they had looked at and the pros and cons of each. I gave them my honest suggestions about each from their description. They thanked me and left.
Two months later David calls and asked if he could come talk to me. He told me about an FSBO “For Sale by Owner,” who would never pay any agent a commission unless he got his price + the commission. That of course doesn’t make sense to a buyer. David told me about the deal and I gave him my honest opinion about it. David asked what my time was worth and gave me a check for an hour’s time.
Two months again passed and David called and said, "I need to see you today." He proceeded to tell me about a Car Wash Soap manufacturing company that was suppose to be making $500,000 profit per year. The asking price was $2 Million. David wanted several things from me. He wanted my opinion of the business, he wanted me to help get the price down to a more reasonable amount and he wanted me to verify the income. It took me 30 hours of reviewing the books and talking to the seller to determine that the business was making only $350,000 per year including what was not on the books. The books were made complicated, intentionally so that no one could understand what was going on.
I related my findings and told David he had to do his own negotiations but I would coach him every step of the way. David paid my fee and I didn’t hear from David for one year. When he called, I asked what happened to the car wash soap business. He filled me in on the story.
He bought the business for more than I suggested because he saw where he could improve the business instantly. The profit turned out not to be $500,000 as the seller guaranteed, but exactly $350,000 as I had determined. David took over sales and marketing and within 1 year had the company profit up to the $500,000 he was
promised.
David now had found a related business that had been listed with an agent who did not understand the business he was marketing and could not sell it. David was now talking to the seller directly. The seller wanted $550,000. David wanted me to negotiate, on a consulting fee bases with the seller to get the price down.
I instructed David that I would appraise the business, and convince the seller that my appraisal was accurate, but David had to do the negotiations. The seller would never talk to me about the inside details if he was negotiating with me directly. This time I spent 5 hours with the seller, not the books, to determine the business was worth $350,000. The seller would not take the price, but felt I had done an excellent appraisal. I suggested to David to wait 60 days and open discussions again. I also told him the seller would eventually take the $350,000.
I again didn’t hear from David, this time for 6 months. When David called I asked for his report on what happened. The seller called him after one month and sold the business to him for my appraised amount, just as predicted. What did David want this time? Two guys wanted to buy the business and David wanted me to justify a price of $500,000? I did my updated analysis and got paid. I will not find out what happened until David calls me with my next assignment.
Get the word out - Now that you have got all of your preliminary work done you are ready to go looking for businesses. You are ready to look for businesses for sale. Go on to the Internet and look at sites that have businesses for sale. Look in the classified section of your county newspapers and look at what is for sale. Contact business brokers and tell them what you are looking for in detail. Call on broker listings and FSBO (For Sale by Owners.) When you find something interesting you move through the steps with a broker, accountant or attorney or without a broker, accountant or attorney.
Find out what financial records they have. This will eliminate 75% of the businesses. The records are false because of cash sales and/or cash payroll. A lot of auto repair shops pay their mechanics a base salary on the books and the balance in cash. This is crazy and illegal. They have cash sales, which are illegal, and not reported and then they give this money to the employees illegally. Have fun figuring out the profit on these businesses. Some businesses do not want to give you any financials. They do not even want to lie to you about the numbers; they just do not give them to you. You need financials even to just see what the operating expenses are.
Cash income -- The problem with cash income, besides being illegal is it is unconfirmed. Jack bought a body shop doing $60,000 sales on the books. The seller showed Jack records that proved to Jack, an experienced body shop owner that the business was really doing $125,00 month in sales. After escrow closed Jack was given the production records for the last 5 years by the general manager that stayed with the company. The business was doing $60,000. Exactly what was on the books! There was no cash. The seller reported every dime. I hate to say it but if someone were willing to lie to the government and their business broker, why would they tell you the truth?
Find out what the seller wants – the next key step is to ensure that you find out exactly what the seller wants. You have already stated what you wanted when you got the word out. Now, you need to make sure you understand what the seller wants. Make sure you get full information on this from the broker or seller. On this step, you are basically finding out what the seller wants for his or her business exactly. That includes, down payment, seller carry back terms, time he is willing to train you to run the business, and what he is including in the price. Inventory can be included or extra. Leased equipment basically has you as the buyer assuming the debt, where financing on owned equipment is paid off in escrow or the price is lowered because you are assuming the debt. With all of this information, you can begin your negotiations.
Negotiate – Ok, now you know what the seller wants and you know what you want. On this step, the objective is to get the two wants to match up and agree with each other, so that the deal can take place. What you are trying to do at this stage is decide if you are going to go ahead with the deal or if you are going to continue talking with the broker and the seller until what they want is closer to what you want. The key here is keeping the conversation going (negotiate). As long as the conversation is going, it is much more likely to result in the deal taking place. So keep the conversation going!
Almost the final action – after the negotiations and an agreement has been reached, there is one final action that is vital. Your offer is in, but you are not done yet! Due diligence is required. Here you must get documentation on the financial figures you have been given. You want to verify that what you have been told is indeed the case. Get Profit and loss statements, business tax returns and other important documents. If you have been told that a body shop has a contract with the local city to service all their vehicles, or some such story, ask for and see the contract and verify that a valid contract does indeed exist. Part of this final action is ensuring that you have the advise of a competent professional as well.
Escrow - Never buy an asset sale purchase without an escrow. We have already established that the sellers may be lying to you about any number of things, but they may have debts that they do not even know about. The escrow will do a “bulk sale notice” that gives creditors of the business a chance to file their claims, and if they do not the buyer cannot be held liable. The escrow also makes sure that the payroll taxes; sales taxes; federal and state income taxes are paid in full. The IRS has come into companies and assessed for many years of unpaid taxes. As the buyer you would get stuck with this bill, if you didn’t do an escrow.
Conclusion - Following the above steps will see you through most of the pitfalls in buying a business.
About the Author
Willard Michlin is a Business Broker, California Real Estate Broker, Accountant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net. See other articles by Willard Michlin at http://www.kismetbusinessbrokers.com
|
|
|
|
|
| Book marketing and book promotion advice from John Kremer, author ... |
| Promoting Your Books: Book marketing and book promotion tips for book authors, book publishers, self-publishing authors, POD authors, and e-book publishers ... |
| www.bookmarket.com |
|
| John Kremer's Book Marketing Tip of the Week |
| Archives of the weekly Book Marketing Tips of the Week and Internet Marketing Tips of the Week. Learn how to sell more books, tapes, and other products. |
| www.bookmarket.com |
|
| Bookmarketing Limited |
| and the consumer syndicated surveys adhoc commissions retainers how to subscribe client list expanding the market contact us · Book Marketing Society ... |
| www.bookmarketing.co.uk |
|
| Book Marketing Works |
| Book Marketing Maps - an electronic directory of special-sales buyers, customized to your particular title. |
| www.bookmarketingworks.com |
|
| Book Marketing Services, India |
| A specialist marketing consultants group, started in 1987 offering package of marketing and sale promotion services in the Indian market to publishers of ... |
| www.bookmarketing.org |
|
| Sensible Solutions: Book marketing for happily published authors ... |
| Sensible Solutions: Book marketing for happily published authors & publishers. |
| www.happilypublished.com |
|
| Book Marketing Profits |
| Smart Book Marketing. How to market your book or information product cost effectively through trade shows, mail order, the internet, premiums, book reviews, ... |
| www.bookmarketingprofits.com |
|
| Promote a Book - How to market your book online |
| Self Publishing How-To | Print on Demand Publishing | Offset Press Publishing | Getting Published | Book Marketing | E-mail Morris. |
| www.fonerbooks.com |
|
| Self Publishing Book Help. Book Promotion and Book Marketing Tips ... |
| How to Self Publish, Market and Sell Your Own Book. Self Publishing information, tips, and resources to show you how to sell hundreds of thousands of books ... |
| www.inktreemarketing.com |
|
| Writing-and-Speaking - Book-Marketing Ezine Articles |
| EzineArticles.com allows ezine or email list publishers to upload or download free expert content that can be used within email newsletters or websites. |
| ezinearticles.com |
|
| Book Marketing - High Quality Books & Gifts |
| Book Marketing - Direct sellers for High Quality Discount Books, CDs, DVD and Gifts. |
| www.bookmarketing.com.au |
|
| Amazon.com: Complete Guide to Book Marketing: Books: David Cole |
| Amazon.com: Complete Guide to Book Marketing: Books: David Cole by David Cole. |
| www.amazon.com |
|
| Amazon.com: A Simple Guide to Marketing Your Book: What an Author ... |
| This refreshingly succinct handbook is the easiest way to organize your book marketing campaign. Bobbie Hurst, Book Publicist ... |
| www.amazon.com |
|
| Sand Hill Book Marketing |
| Sand Hill Book Marketing. Distribution for Small Press & Independent Publishers. Browse Titles, Submit Titles, Find Retailers, Submit Retail Locations. |
| www.sandhillbooks.com |
|
| The independent bookstore on the web! |
| Although Francine Silverman’s Book Marketing from A-Z does not go into depth in each outlined promotion, the ideas and resources offered from more than 300 ... |
| www.bbotw.com |
|
| Author Resources: Book Marketing |
| Author Resources: Book Marketing ... AuthorHouse author and humor columnist Gordon Kirkland uses public appearances as a book marketing tool. ... |
| www.authorhouse.com |
|
| Substance Books Inc. - Online Book Publicity, Marketing & Book ... |
| Providing Web / Book Marketing Ideas & Promotional ... Receive Substance Books Inc.'s free BOOK-MARKETING NEWSLETTER designed for writers and publishers, ... |
| www.substancebooks.com |
|
| Publicity / Book Marketing / Bookstore / Ebooks |
| Publicity, book marketing, and publisher for self publishing books as well as excellent online bookstore. |
| www.virtualwordpublishing.com |
|
| Mega Book Marketing |
| Reserve your seat at MEGA Book Marketing University before 5pm PST January 5, 2007.and you get the home study version of last year's event for free (a $349 ... |
| www.megabookmarketing.com |
|
| Book Marketing Plan: Launch Your New Book Profitably and Confidently |
| Tame all your "Should I?'s" into "To-do's"! The Sample Book Marketing Plan is 24 pages and costs $95.00; it's in PDF (Adobe Acrobat Reader) format. ... |
| www.yudkin.com |
|
|