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    6 Replies Latest reply on Nov 21, 2008 2:42 PM by letsgo1

    Where do I begin

    letsgo1 Wayfarer
      Hello, I am a new member to the community and looking forward to needed information. I plan on buying an existing restaurant in the Western North Carolina area. I have spoken to brokers in that area but would like more leads. I know the first and most important thing is to have a solid business plan. The next part is where I am concerned and that is with financing my new venture. I have been doing a lot of research and have found that owner financing is the best way to go. What do you think would be a fair down payment? How would you address the owner and present this. Thanks to everyone who answers, I am looking forward to the responses.
        • Re: Where do I begin
          DomainDiva Ranger
          Have you been in contact with the present owner? Approaching him/her directly instead of through a broker may be a better way to go, unless the business is already LISTED wtih a broker.

          You really can't develop a good business plan when purchasing an exisiting business until you have done your due diligence on the business. You will need access to the financial records as well as other details. You may want to spend some time in the business as a paying customer to understand the menu, the personnel working there, pricing and traffic befoer you proceed further.
            • Re: Where do I begin
              letsgo1 Wayfarer
              DomainDiva, thanks for the response. If your able to share more info that would be appreciated, you sound very well informed. Thanks
                • Re: Where do I begin
                  DomainDiva Ranger

                  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.
                    • Re: Where do I begin
                      letsgo1 Wayfarer
                      DomainDiva, I have contacted a person about a place, here is the offer that was presented to me, see if you follow. A renovated old building ( $300,000.00) to renovate. The owner closed it down for the renovations and never re-opened. Claims her business was very succesful for 15years but it was time to move on. If this was to open again it would be very succesfull she claims. The restaurant has all the furniture and fixtures and equipment. She offered the business to me for $250,000.00. She wanted 30% down and She would owner finance the rest. 6% interest rate for 10years. Plus I would have to pay a monthly lease. She said this is a great deal. I am going to visit the area in 2 weeks and take a look at this place and others. I live in Florida but am relocating to this area of NC. What other questions would you ask? Thanks
                • Re: Where do I begin
                  LUCKIEST Guide
                  Where do I begin. Welcome

                  You begin by telling us your name. Do you and your partner have an Accountant??, A Lawyer??
                  An Insurance Agent?? You will need all three.

                  I am a SCORE Counselor and I tell everybody who wants to start a business or buy an existing business to visit SCORE. SCORE is FREE both in person and online.
                  SCORE can help you develop both the Business and the Marketing Plan (FREE).
                  Your local SCORE knows your area and can also recommend local bankers (who will want to see your Business Plan.

                  Good luck, LUCKIEST
                  • Re: Where do I begin
                    letsgo1 Wayfarer
                    selected wrong button