Are you interested in BUYING a business?

INDEX

1. Confidentiality – Buyer/Seller Meetings
2. Buying A Business Is Buying A Job
3. Match Making
4. Immediate Cash Flow – Income
5. Forms Required To Begin The Process
   

CONFIDENTIALITY

Unlike the real estate business, whether it is residential real estate or commercial real estate, we encourage the buyer meet the seller, to have several meetings together if necessary, and to keep every piece of information about the business strictly confidential. Think back on the process you were involved in when you purchased your house, for example. The real estate agent insisted that you never meet the owners of the house until the day of the Closing. In fact, each time you took a look at the house, the owners were never there. Sunbelt Business Brokers of MS uses the exact opposite approach. Ask us why.

BUYING A BUSINESS IS BUYING A JOB

Especially these days in hard economic times, there are more and more employees of businesses who have been “let go”, “terminated”, “downsized”. Many times it is because of the employee’s age and/or his salary level. When this happens, the terminated employee thinks it will be no problem to quickly find another job. After a year or so of looking, he realizes that he has had no employment offers, and has no other alternative to bring in needed income, but to buy a small business. In essence, he is “buying himself a job”.

MATCH MAKING

We do not consider ourselves in the sales business. If anything, we are better described as business consultants and advisors. The primary reason is, we do not apply arm-twisting or selling to get you to buy a business. We feel that no matter what, we cannot make a person buy a business they don’t want to buy and we cannot make someone want to sell a business they don’t want to sell. We are matchmakers. We simply present listings we feel are a good fit for the buyer and let the buyer decide if it is the right business for him or her to buy.

CASH FLOW

Very few businesses are sold based on the assets of the business. Cash flow is the one thing that will indicate if it is the business for you, as it cites what your “take home income” will be, based on the business’s gross sales less the deductibles and overhead. If you don’t believe this is true, tell your banker you want to purchase an office building or an apartment building. At first, he will be excited, and based on the price of the building, the appraisal of the building, and the location, he will think you are on the right track. Even a hard-assets lender, like your bank, will then want to see how much income this building is producing for the current owner. Here is where the “cash flow” factor comes into play. If that building has huge on-going upkeep, transient tenants, building is only half full in terms of leased tenants and capacity, or is in a declining neighborhood, your banker will quickly re-evaluate whether or not you are getting a good building and a good deal afterall. Then he will ask you, “How much is the Cash Flow?”

FORMS REQUIRED TO BEGIN THE PROCESS

1. Buyer Questionnaire (2 pages)
2. Confidentiality Non-Disclosure Agreement
3. Confidential Financial Statement

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