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    2 Replies Latest reply on Aug 14, 2009 12:39 PM by Bridge

    Existing Business Purchase

    JacoWooten Newbie
      Hi all. I am new to this forum and have a few questions. The following details/questions are to help me better understand what I need to know going into this venture to better equip myself when asking for money from a lender.

      I have never owned my own business. I have experience in retail management and am an enthusiast of the products that I intend to sell.

      I am considering the purchase of a small, local drive thru coffee shop. I called the current owner of the shop to ask questions I think are pertinent to the understanding everything about the current business and the model they are using, compared to the model I envision. I asked for purchase price, lease info (for the land the property sits on, vendor information and costs, daily traffic stats (or at least estimates), average sale per customer, etc.

      The owner balked at most of the questions, saying that the information is private and will send me what she thinks she can safely distribute.

      What information should I be asking for, and what information should I expect to receive? What information will the bank be looking for?

      I have limited cash available, but do possess lots of technology and software that will be crucial to the running of the business. Will these assets be considered by a lender?

      I am eager to hear what you all have to say and any advice will be read thoroughly.

      Thank You.
        • Re: Existing Business Purchase
          LUCKIEST Guide
          Existing Business Purchase, Welcome

          If I was planning to purchase a business, I would do TWO things first.

          ONE: Develop a Business Plan TWO: Contact SCORE. SCORE is FREE.

          Do you have an Accountant?? A Lawyer??

          Who are you?? Where are you?? Go to Members page and share some info.

          *Thanks, LUCKIEST*<!--Session data-->
          • Re: Existing Business Purchase
            Bridge Navigator
            You should have a confidentiality agreement in place with the current owner. They should provide you, at a minimum, the information you requested. Based on yout initial review, you would submit a non-binding Letter-of-Intent outling your basic purchase proposal. After agreement on the LOI, you conduct a more dtailed due diligence, arrange your financing, and negotiate a mutually agreeable Asset Purchase Agreement.

            Banks care about cash flow - that is what pays back loans. I would suggest NOT applying directly to banks but rather using a reputable small business loan broker who can properly package your deal.

            There is a right way and a wrong way to buy a business and the wrong way can be financially devasting. If you have never purchased a business before, get professional help. Would your perform even "basic" surgery without training? Probably not.

            For those who will post, "I did it myself, it's easy". Ignorance is bliss. I am glad it worked for you but you will never know how it could have been better or what you missed in due diligence. Additionally, all the failed acquisitions far outnumber the ones that worked - and those who got lucky.

            Best of luck,

            Gerg Dupuis
            Bridge Ventures, LLC