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<address>Unique Situation, Welcome
Who are you?? Go to Members page and share some info.
Now lets think "outside the box". If the owners want to retire and sell the business to you, maybe they will take notes and you can make monthly payments to them instead of a bank.
*Do you have a Lawyer?? Good luck, LUCKIEST*</address>
What Luckiest said PLUS....you always need a business plan you never know when you will need financing or funding.
Congratulations on your opportunity.
Lending institutions / banks will want to see the books of the business that you are planning to buy. Having a proven business model that shows profit and future potential goes much further than submitting a plan based upon speculation.
They may request that you include a business plan if the business has seen a significant decrease in their recent profitability, if you plan on changing the name / concept of the business and if you are at risk of not retaining the current customer base.
In these cases, they may request a paired down business plan to verify that you have a clear vision for the business and for repaying the loan. Additionally, depending on the amount of the loan as it compares to their valuation of the business, they typically will want to see your credit information (scores and history), your liquid assets and collateral to back up the loan.
I would recommend that you seek out a business broker and hopefully one that has experience with buying and selling businesses in the industry of your target purchase. The sellers will need to agree to this (and hopefully will since it will help protect them, too) since they will be responsible for covering a majority of the fees. The business broker will be able to walk you through the appropriate paperwork and should have some good connections with lenders. Plus, if they have experience in your industry, they can give you their professional opinion as to the viability of the business' future success as well as a fair market price.
If the sellers don't agree to working through a business broker, they may be willing to do a seller carry back as Luckiest was suggesting. Make sure that you have a solid agreement in place. I would recommend a lawyer / business broker depending on what is customary in your area.
Hope this helps.
Securing financing to purchase a business from the existing owners who wish to retire gives you lots of options. If you, your family or friends can come up with a reasonable negotiated price, just use the power of cash and a winning smile to come to a low and fair price.
If not, you could get financing from a bank or SBA loan but yes, you should absolutely prepare a business plan. It should include the past 3 - 5 years of financials and your 1 - 2 years of projections on how you plan to operate the business - with all the explanations attached on what you plan to do to make things go well or better. For help, you can contact the SBDC at www.sba.gov then click on Local Resources then click on SBDC for Small Business Development Center near you.
Or yes, have a long, open and professional discussion with the current owners that could involve them phasing out over time, continuing to receive a portion of the proceeds for a period of time, continuing to work and earn part time, etc. If you and they get along this option requires no cash up front and you get the advice and friendship of new 'partners' with you in control.
If you have more questions, contact me directly. Good luck Ben
Thank you all for your responses. They have been extremely helpful. I appreciate you taking the time.
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I'm in a unique situation where I can start my own business, I'd have a set clientele and not many, if any at all competitors. A similar company exist and the owners want to retire and they've been in business for 25 years...I'd like to "continue" it but with my own name and branding. I can even use them as consultants. I just need financing (isn't that always the problem). Any ideas? Can I bypass your typical business plans since one kinda sorta exist? I'm also a woman and a minority but really are those "grants" really out there??