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Finding the right business, especially your first business, can be a daunting task. Then, once you think you have found it - how do you determine a fair price with workable terms - what about financing? How can you verify the "Real Earnings" with confidence? The list of issues that must be faced is lengthy and it is critically important that they all be addressed completely. That is why we created our family of books and software designed to help you (and your financial and legal advisors) Find and Buy the Right Business and Pay the Right Price. All of our products are based upon the experience and knowledge gained in more than 2,000 business acquisitions. Tip #1 - Don't Buy a Business Just Because it's For Sale It's not unusual to spend many months and thousands of dollars in professional fees reviewing businesses only to have the deals fall through. As a result, and in total frustration, many have bought a business, not because it was "the right business" but rather because it was the first business they could. Most of these folks began their search lacking focus or an "acquisition criteria". "I don't know exactly what I want to buy - perhaps light manufacturing or distribution. I'll look at just about anything. What I do know is that I don't want a pizza shop or ............" We have heard this from thousands of opportunity seekers over the years. In order to find the Right Business you should know what you are looking for. Chapter One of "Buying a Business Made Easier" is devoted entirely to developing your personal and unique acquisition criteria. Tip #2 - It's Not What You Pay it's How You Pay it A seasoned businessman once told me that he would pay anyone's price no matter how exorbitant if he could set the terms of sale. He gave as example that he would gladly pay $1,000,000 for a particular automobile if the terms were $1 a day for a million days. :-) Terms are important that's why both VALUware 6.0 and EZbizPRICER 2.0 software programs contain a Transaction Structuring matrix so you can do "what ifs" and make sure you have a deal with Terms that work for you so that the business stays sold. Tip #3 - Are All the Right Things Wrong? There are no perfect businesses just like there are no perfect people so if something is going to be wrong it might as well be something you can easily fix. Our book In & Out of Business . . Happily" has an entire chapter designed to help you recognize businesses that fit you. Tip #4 - Determine and Verify the Real Profits An accountant friend of mine once told me "Private companies aren't supposed to make money but the owners are". Our Six section Business Acquisition System checks, cross checks and double checks the veracity of your "Real Profit" Calculations using the same methods the IRS uses when they audit a business. There is even an entire section on the special issues you must address to determine the Real Profits of Cash Businesses. Tip #5 - Motivation Trumps Money! Buying or selling a business is not entirely a financial transaction. The money part is important but savvy Deal Makers know that satisfying your and your seller's motivations are key to a successful transaction. Actually, we experienced a situation where the seller refused an all cash offer to accept a comparable no money down offer because the later had recognized and addressed his unique motivations for selling. An entire chapter and case study examples discussing seller motivations are found our book In & Out of Business . . Happily" Books and Software to help you |
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