Buying A Business

The following information is meant to assist the buyer in the process of purchasing a business. Our methods and advice have been the reason many buyers have found and purchased the "right" business. Our commitment is to do the same for you.

First and extremely important, is the reason for buying an ongoing business. Approximately 75% of new businesses fail within the first five years. Buying an ongoing business, rather than starting a new one, greatly increases the possibility of success.

As a buyer, avoid wasting time by defining the criteria for a business you are qualified to buy. Start this process by working up a "buyer's profile" on yourself. This profile would include your strengths, weaknesses, past work experience, likes, and dislikes. Many buyer's have no idea of the amount of money required, or the financing available. Review your finances and decide how much cash you can afford for a down payment. At the same time, try to decide how much personal income would be required to be taken out of the business.

Another major concern is about entering an unknown field, however, the majority of buyers end up buying a business different from their background, yet they are still very successful.

One question that usually surfaces: how is a business priced? There are no magic formulas that work with every business. The sale of a business must be a win-win situation for buyer and seller. A business should pay for itself after a reasonable down payment, plus afford the buyer an income at the same time.

Finding the "right" business is no easy job. It requires time and patience. Along with this, expert help is sorely needed. We at Florida Business Group hope to be an integral part of the buying process by which you achieve your goals. As part of the buying process we submit the following for your consideration.

From your original communication with us, (E-Mail, mail, fax or telephone) we will request for you to visit our office. Please allow a minimum of one hour for this interview. The reason for this interview is to build a rapport between you and us. This will in turn help us to identify business opportunities that will fit you perimeters. Part of the interview will include a "buyer profile". This profile will help us determine your needs in a subjective manner. We are seeking a fairly consistent idea of the income required for you to maintain your normal lifestyle. Also, we will be inquiring as to the amount of money you will be taking from your savings to be used as a down payment.

Beyond the financial portion, we will be asking about your previous qualifications, hobbies, likes, and dislikes. With some buyers, it is easier to list what is not to be considered. At this point, we may have a business you may be interested in, or, on the other hand, we may take a day or two to compile a number of businesses for you to review.

Should one of these businesses be of interest to you, a one page business listing information (BLI) sheet will be made available to you. If your interest extends beyond the BLI stage, then we will ask you to fill out a financial statement and sign a non-disclosure. The financial statement is for the seller and the non-disclosure is for the protection of the seller's business. At this point you will receive additional information, if available. If not, it will be secured for you.

Once available, look over all the information provided to you. Give thought to products, services and markets. Keep an open mind, and do not be swayed by what you would consider a low price. In real life, there are reasons for low prices; some are legitimate, and some are not !

Everything considered, when the discussion is made to proceed, the next step is a tour of the business and meeting with the seller. Go prepared with your questions and thoughts. Remember that this is the same seller that may be financing your purchase. A good first impression is important. During this meeting with the seller, it is extremely important NOT, that is NOT, to discuss price, terms of sale or down payment. This will all be addressed later in your offer made through the broker. There exists a myriad of questions that can be asked, but price, terms, and down payment are not part of this myriad.

Once your questions are answered and satisfaction is attained, the next step is an offer to purchase. The offer must be reasonable; it must be a win-win situation for both you and the seller. Normally, this document requires signatures from both husband and wife, plus an "earnest money deposit". This offer will be open for acceptance approximately 48-72 hours; Florida Business Group, Inc., will convey the offer to seller. The earnest money deposit will be held by Florida Business Group, Inc. in our escrow account, until price and terms are agreed upon between buyer and seller. This offer and counter-offer may take two or three drafts to satisfy both buyer and seller. Should buyer and seller not be able to agree on price and terms, the earnest money deposit will be returned immediately.

Once price and terms are agreed upon, any and all contingencies must be completed and removed within time frames that are part of the offer. Contingencies such as financial records, where the buyer hires an accountant to verify same, is an example. Other examples are the lease and approval by an attorney for the closing papers. Once the contingencies are removed, transfer (closing) of the business will be ready to take place. Closing takes place in the office of the closing attorney; the cost will be split 50/50 between buyer and seller.

Buyer will be required to bring certified funds drawn on a local bank to closing. Prorations, monthly rent, etc., will be outside of closing. Florida Business Group, Inc. will be at the closing to keep anything and everything on track.

Congratulations you are now the proud owner of your own business; however, Florida Business Group, Inc., is not finished. We make ourselves available for any additional transfers, such as telephone and power companies. From this point on we look forward to your success. Good Luck!

Last, but not least, is to recommend our services to family and friends.