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    4 Replies Latest reply on Mar 6, 2010 3:00 PM by alytus

    Help with buying a business - need financing

    cstickman Newbie
      Hello -

      This is my first post - what a great forum to use and read. I was getting lost looking and reading everything. Well here is my problem - I have been wanting to buy a business for a long time. I have gone through a rough divorce that has screwed my credit up pretty bad. I found this business that is a great opportunity for me to get back on my feet. I have done all my research on the company and I want to make an offer. The seller will help with financing the business. The problem is they want me to invest some of my money as well. They are requesting at least 100,000.00 down and have some capital to start with as well. So probably around 150,000.00 for the down payment and to put money in the bank right away for supplies. They have been in business for over 3 years and they gross about 45K - 50K a month. They have no website and no marketing to speak of - the buyers are to the point right now that they just want to go to work and thats it. They have lost all motivation with the business. Where I am young (33) and I can bring a lot to the table. I want to offer a full website that I will program and offer other incentives and really get my name out their. My sister and brother in law both have degrees in marketing and business. They will help me along the way. I can turn this 45K month store into a 100K a month in no time. After doing the market research on it last year alone this type of business brought in over 50 billion dollars. This type of business is growing as the economy is falling. So what I am asking is how do I get this money? I have no real estate and no real assests. The company I am buying does it has almost 400K in inventory can I use that? Any help to put me on the right path to owning this business would be greatly appreciated. Thanks to everyone
        • Re: Help with buying a business - need financing
          LUCKIEST Guide
          Help with buying a business

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

          Have you developed a business plan that I can read??
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          • Re: Help with buying a business - need financing
            Tracker

            Cstickman:

             


            Sorry to hear about your divorce and financial troubles.

             


            Why have the current sellers lost interest in their business if it is profitable? Typically, most business owners that operate a successful business will find someone else to run the business for them instead of selling it if they have new interests to pursue. Everyone else (which is the much larger percentage) claiming they are selling because of "other interest" are masking some other problem. I know you may not have shared everything you know here, but I strongly recommend that you perform an in-depth interview with the current owners and scour their books before buying.

             


            Regarding finances, I recommend you contact a community member here that goes by the nickname "phanio". He offers excellent financial advice.

             


            Based upon the size of the loan you seek, I think what you will find is that lending institutions are highly unlikely to give you the funds without good credit, assets and money of your own that you can invest. Lending is still tight. Banks want to know that they have a high likelihood of protecting their investment. If you don't have personal assets, they have nothing to go after. If you don't have any skin in the game (put in your own money), it can be very easy to walk away from the business if you lose interest. However, as I mentioned above, check with "phanio", he is the expert in this area.

             


            I hope this helps.

             


            Doug Dolan

             

            The Solopreneur's Guide

             

            http://thesologuide.com/
            • Re: Help with buying a business - need financing
              Slenner Newbie
              In order to assess the viability of the business, you need to know the profit or lost for the past 3-5 years. Its very important to perform due diligence,for example, to make sure that revenue agrees to the bank statement, that the information agrees to the tax return,that there are no skeletons in the closet., the working capital requirements(are the current liabilities greater than the current assets), is the company highly leveraged, and so on.

              Also, consider writing a business plan. It's up to you to develop and execute a methodical plan of action to fulfill your dream or goal of running a successful business.You will be investing a great deal of money and you need to proceed cautiously. Success is based on proper planning and the approach you choose to take and of course, luck. A business plan and due diligence should be part of your planning before you buy any business.

              The most important aspect which is not mentioned, which is the company's profitability I suggest that you contact your accountant and ask him/her to perform some due diligence for you. You should inform your CPA of your concerns and the two of you should agree on the procedures to perform. This may cost you a few thousand dollars, buts it well worth. You can take a look at my websitehttp://www.sl-cpa.net/ for some ideas for financing and other financial topics. But most of all, speak to your CPA.
              • Re: Help with buying a business - need financing
                alytus Scout
                apply as much time to your buisness as possible, about 90 hrs a week, good luck.