5.
Re: Where do I begin Nov 21, 2008 12:31 PM
in response to:
letsgo1
Thanks for the 'well informed' compliment, however I prefer to think of it as all the experience gained by doing or watching someone else do the wrong thing at the wrong time.
If I was trying to do what you are doing, the first thing would be to be a stealth patron. Breakfast, lunch and dinner. Think about what you like about the business, then what you do not like about the business. How would you make it better? What things could you do to make it worse? (trust me on #2 here).
Second, how much money do you have to toss into the deal? Do you have a great credit score? Stocks? Investments? Retirement? Are you young enough to be able to cash out to start the business and survive retirement? Make a list, check it twice, do a home budget and total up the columns. You will need money for attorney fees and other things before you even present the contract/offer to the current owner.
Third, try to find some information about the business on the internet and through any tax records that may be available. You will need this for any property price points (if they own the building or lease the space). Next talk to the owner and ask them if they are willing to sell. If yes, then contact a business attorney (one who specializes in business sales) and discuss the terms of a contract. Your attorney will be able to give you all of the contract details.
Price of the business. If leased you also need to know who the landlord is as well. The contract should also include a due diligence clause that gives you a fixed amount of time to inspect the books and financial statements of the business. You may have put some earnest money up to be able to do this, your attorney will be able to help you iron this out.
Once you present a contract to the business owner there will be some haggling and changes, expect that and be prepared to deal with it. Do not get emotional. Business is business.
