Post a new topic
    26 Replies Latest reply on Apr 14, 2009 7:26 PM by BizOptimizer

    Help - I need advise ASAP!

    driven Newbie
      My husband and I have an oportunity to purchase an Art & Frame shop in the upscale area of Scottsdale, AZ. The seller has owned the business for 5 years, he hates what he does (selling art and framing) he has tried to grow the business but says (he is Korean) he has a very hard time communicating with customers and that has been a roadblock for him.

      He has run this business solo (no help at all - again, lack of communication) and he just wants outwhich is reflected in his decreasing sales since he placed it for sales due to his closing early and on weekends He originally placed the shop up for sale with a business broker back in Nov. of 07 at $125,000 reduced it to $75,000 then to 40,000 and it's now at $20,000 which is very attractive to us considering the artwork, stock and equipment which is worth a minimum $130,000. It's a very desirable location, (millionaires are plentyful) only one other frame store in the area. The shop is 1780 sq ft and beautifully done inside.

      I have not only an art background, but I was a Loan Consultant fo 16 yrs so I have vast experience in Sales and Marketing. I have some strong ideas to grow the business as quickly as possible such as, aquiring commercial accounts (i.e, interior designers and planners, Law offices, Architecture firms, Project Managers, Hotels & Resturants which all around the shop are tourist resort hotels - also, dealing directly with businesses who require art, framing and unique framing solutions. The artwork displayed also includes limited editions and I would like to add original artwork by up and coming artists in all mediums as Scottsdale is definitely an Arena for that type of purchase. I would also like to have open houses at least once a month to showcase those artist.

      Now my dilemma? We have the funds to buy but need a loan or line of about $30,000 to 50,000 to operate until I have my plan in full swing to grow the business in the right direction which I feel would take 6 months to 2 years.

      We have placed our home up for sale ato reduce personal expenses and are looking to rent something closer to the shop. At this point the business would be the priority.

      I look forward to hearing advice as I have to have an answer for the broker by Wednesday if we are moving forward with this purchase.

      We have very, very good credit - have always paid on time. I am hoping with my knowledge to grow this business, the upscale area that it's in and the potential it has to offer that the risk would be lower than usual.

      Thank you in advance
        • Re: Help - I need advise ASAP!
          LUCKIEST Guide
          Help - I need advise ASAP, Welcome.

          YOU CAN NOT LET THIS OPORTUNITY PASS YOU BY. GO FOR IT
          My husband and I have an oportunity to purchase an Art & Frame shop in the upscale area of Scottsdale, AZ.

          With your art background it sounds like a WIN - WIN situation.

          *You are NOT giving us much time "*I look forward to hearing advice as I have to have an answer
          for the
          broker by Wednesday."

          How can I talk and encourage you, LUCKIEST
            • Re: Help - I need advise ASAP!
              driven Newbie
              Hi Luckiest,

              I soooooooooo appreciate your positive support - my only concern is operating cash - because of his dissatisfaction with the business since Dec 07 he has let the business slip by closing early, not opening on Saturdays when the area is jammed with people - he had a fairly good net profit up to then.

              However, Jan - Mar of 08 he is in the red by $932.00 - I am wondering if I could survive until I can get that business back and my growth plans materialize without some funding? Can you give me direction and advice on this?

              The business broker said she would try and negotiate something with the landlord about the steep rent - possibly a month or two free or reducing it a bit which would help us with overhead costs until we get a foothold.

              I just came back from my bank and they said because of the market conditions, they have reduced their lending. They will not lend money unless I have two years of running the business myself - in other words NO! I know I can make it a success I owned a Corian Fabrication firm from 1987 to 1991 in New Jersey and made it successful within a year but I had a family friend of my dads who loaned me $40,000. I know few people in Arizona and that family friend is long gone. lol

              Can you help?

              Thanks so much!
            • Re: Help - I need advise ASAP!
              Bridge Navigator
              The broker has to have an answer by Wednesday....why? It has been on the market how long?

              Must act now...limited time offer....sounds like hard selling tactics. There is the possibility that there is another buyer but it appears that your are buying a liquidating business rather than an ongoing concern. The best thing about this business is the price. No deal is too good to walk away from.
              Who valued the art & equipment at $130,000?

              There are several directions you could take:

              1) Give the seller his "full" offering price but on your terms - defer payments
              2) Keep your current house and get a home equity loan (suck up the drive for the time being)
              3) Use 401K financing to buy the business (several companies help structure these so that there are no early withdrawl penalties
              3) Use outside financing

              It seems location is very important to this operation - check on the current lease. Is it assignable, how many years are left, any options?

              Is this more of an Art OR Frame shop? Scottsdale can be high-rent versus other areas. Is it located in the "Art Walk" district of Oldtown Scottsdale?

              If you will be targeting customers by going to them, is location important?

              I would be happy to talk to you if you would like some free advice - it's probably worth at least half of that!

              p.s. I am a former long-time Scottsdale resident and still have many relatives in the area.

              Good Luck!

              Greg Dupuis
              Bridge Ventures, LLC
              Merger & Acquisition Advisors
              813-343-2214
              www.bridgeventuresllc.com

               


              1 of 1 people found this helpful
                • Re: Help - I need advise ASAP!
                  driven Newbie
                  Hi Greg,

                  Thanks for the reply - yes, I would like to call you - the business broker will be here in about an hour I will have alot more information so can I call you later say around 4 or 5 my time? Let me know if this is ok speaking with you I think would really help me!

                  Best Regards
                  Gail
                    • Re: Help - I need advise ASAP!
                      Bridge Navigator
                      Gail,

                      Best to call me BEFORE the broker gets there! Even if it is for 5 minutes to help develop a strategy to talk to him.

                      Greg Dupuis
                      813-343-2214
                        • Re: Help - I need advise ASAP!
                          driven Newbie
                          Hi Greg,

                          Thank you for taking the time to speak with me - I know your time is valuable and I do appreciate it!

                          Your advice was a lot of help to me, I met with the Business Broker and we filled out the paperwork, I did not sign it though, I told her I needed my attorney to take a look at it (it was 7 pages of small print) which I promptly faxed to him. She also stated that the seller wants the whole $20,000 up front that the financing was available when the sale price was $40,000 - so I offered a couple of options if I can't come up with the other 10,000, the one you gave me regarding the Art work - selling it and giving him half.

                          I also told her my wish list from the landlord - I went in bold....reduction in rent and 6 months free - I am curious to see how he responds. She said the max rents she has seen over there was $4000.00 - big difference from 5348.00 + 1500.00 CAM fees.

                          How do you feel about the quick cash loan based on credit card sales? It seemed interesting to me.

                          If you have anymore advice I will take it!

                          Best Regards,

                          Gail

                          p.s. You left AZ to move to Florida?? So Humid Greg - humidity & cold is why I left NJ
                            • Re: Help - I need advise ASAP!
                              Bridge Navigator
                              Gail,

                              Call me tomorro during busness hours and I will be happy to follow-up with you. I have never been a fan of quick cash loans - they typically cost too much and you get deeper in the hole.

                              The borker has a responsibility to present any offer you make to their client.

                              I have made offers to purchase $50 million companies in much less than 7 pages of small print!

                              Two big clauses you need:

                              1) Contingent upon due diligence
                              2) non binding

                              Make sure you use an attorny with experience in structuring business acquisitions/sales - this makes a BIG difference.
                                • Re: Help - I need advise ASAP!
                                  driven Newbie
                                  Hi Greg,

                                  I will call you tomorrow and fill you in. Again, I appreciate your help with this - if I were in N.J. I would be better informed because I know the contracts there - your right about the length of the contract - 7 pages??

                                  Even the the non-disclosure was 2 full pages and small print at that cramming in alot of info - in N.J. the non disclosure is only a paragraph or 2 and the contract to purchase is only 2 or 3 pages. If you can do a 50 million dollar offer with less paper work why can't it be done here - unless it's just this business broker.

                                  Have a great night and I will call you tomorrow.

                                  Best Regards,

                                  Gail
                        • Re: Help - I need advise ASAP!
                          dtominus Wayfarer

                          MY NAME IS DAVID I CAN HELP YOU WITH THE FUNDS , NO NEED TO WAITE, PLEASE CALL
                          ME FOR DETAILS

                          727-545-9530
                            • Re: Help - I need advise ASAP!
                              driven Newbie
                              Thanks David, I emailed the broker to see if the seller can get those merchant BATCH statements for me and I not only emphasized BATCH but explained why.

                              I also checked out the sight, read some testimonials - I am feeling better about this! Plus I read some articles on this subject and saw merchants as a recommended sight for this.

                              Talk to you soon.

                              Gail

                              p.s. When I receive the Batch statements I will apply and make sure your name is down as the referral.
                            • Re: Help - I need advise ASAP!
                              dtominus Wayfarer
                              Thanks Gail I am glad I could Help , and Remember that refferal offer
                              take care....
                              • Re: Help - I need advise ASAP!
                                dtominus Wayfarer
                                gregg

                                 

                                This business cash advance is 100% tax deductable and there is no interest rate , its a flat fee..
                                also its 100% unsecured no personal gurantee, try that with a bank loan! and you can use the money
                                any way wish , and its paid back over time , Please if you have questions call me at 727-545-9530
                                or email me dtominus@yahoo.com
                                • Re: Help - I need advise ASAP!
                                  brokesocc22 Newbie
                                  Hello just a little hint if you go to the bank and apply for a small business loan and are turned down because you have not been in business for more than a year or two don't get discouraged. After being turned down your are eligible for an SBA loan. Which has many small business loans to help with things. Make sure that your personal banker is aware of this.
                                    • Re: Help - I need advise ASAP!
                                      Bridge Navigator
                                      You do not have to be "turned down" to be eligible for an SBA loan. The SBA does not lend money - they guarantee loans that banks make. The point is, you should find a bank who is an approved SBA lender. Many banks are not approved for a variety of reasons - some just don't like the paperwork.

                                      SBA loans ofetn times have more favorable terms than traditional bank loans and the rate they can charge is regulated.
                                    • Re: Help - I need advise ASAP!
                                      heretohelp Newbie
                                      Hi Gail,

                                      Please contact me. 781-341-0700. I can definitely help you get the capital you need!

                                      Best,
                                      Tiffany
                                        • Re: Help - I need advise ASAP!
                                          heretohelp Newbie
                                          Hi Gail,

                                          I apologize I missed your call. I was on another line. I will be available to speak for the rest of today and all of tomorrow if that works for you.

                                          Best,
                                          Tiffany
                                            • Re: Help - I need advise ASAP!
                                              driven Newbie
                                              Hi Everyone,

                                              I want to apologize to bridge for not calling you back on Friday - late morning I started feeling ill - It's been windy here the last several days and the dust caused a very bad sinus infection - I am feeling better today so I wanted to take this time and THANK EVERYONE THUS FAR that includes you Luckiest, who gave their time to try to assist and direct me.

                                              This is the status thus far... I went to the bank on Thursday and applied for an SBA loan (Chase has a relationship with SBA for this purpose) I have not heard back yet. I spoke with the bank representative today and he said it was still in underwriting and that they have not asked for anymore documentation (I gave them 2 years tax returns and 2 yrs balance statements on the business and 1 year personal tax return - its all they've asked for... so far) The bank rep said that the SBA has only been approving about 10% out of 100% of applications submitted, that was not encouraging even though I feel that this purchase has low risk attached to its continued viability even without me growing the business.

                                              I was surprised that the underwriter hasn't asked for the inventory list, my background & experience to run the business or what my plans are to grow the business.

                                              The broker had a meeting with the landlord this morning - he will only go down 1.00 a square foot which would only reduce the rent $118.90 a month, he said he would wave the transfer fee of $1500.00 - my question is...if he won't give me a new lease (current seller will be responsable for the original lease until 2014) then what is the transfer fee for? He will not give me any months free - he was standing his ground or the broker didn't know how to deal with him thereby being ineffective at the meeting.

                                              Does anyone have experience or had experience with the SBA loan process recently (within the last 6 months to a year) I would love to hear from you I need some insight into the SBA in the present.

                                              Tiffany, I never called you - it must have been another member.

                                              Thank You guys

                                              Gail

                                               

                                               


                                                • Re: Help - I need advise ASAP!
                                                  Bridge Navigator
                                                  Gail,

                                                  You bank is not being responsive. Give me a call tomorrow and I will give yoi the names of two lenders who will quickly be able to tell you whether or not they can get this financed.

                                                  Greg
                                                  1 of 1 people found this helpful
                                                    • Re: Help - I need advise ASAP!
                                                      driven Newbie

                                                      Thanks Greg, I will call you tomorrow for that information - the bank Rep said it has only been 2 days - I told him that I was told initially that it would only take two days!

                                                      Gail
                                                        • Re: Help - I need advise ASAP!
                                                          heretohelp Newbie
                                                          Hi Gail,

                                                          I apologize, it was another member. If you have very
                                                          good credit, I can get you the 30-50K you need fairly easily through an
                                                          unsecured loan.

                                                          Unlike your traditional lending institutions, we put
                                                          little bearing on personal credit and actually can take into consideration your
                                                          future revenue as an asset. Some
                                                          of our products don't even look at your credit score, and you won't even have
                                                          to risk or collateralize any of your personal assets or go through red tape
                                                          normally experienced at a bank.
                                                          As opposed to taking months, we can get you capital
                                                          in as little as 72 hours to 10 days. We like to start small and build a
                                                          relationship of trust, so 18-36 months down the road, depending on how you utilize your capital, we will be able to advance you an open line of credit from tens of thousands to
                                                          a hundreds of thousands, to even millions of dollars.

                                                          I understand you're in a tight position right now to get financing, so if you are interested, you can contact me at 781-341-5938.
                                                • Re: Help - I need advise ASAP!
                                                  BizOptimizer Adventurer
                                                  Be careful - what sounds too good maybe. Be sure there isn't a new big-box or some other reason they were failing - or one coming that caused to give up. The story you get is not always/usually the whole story even if true. Be sure leases are available - no impending street construction or traffic diversions, etc.

                                                  Also, take some of the risk out - ask the owner and maybe even the broker (less likely) to leave some skin in the game - more assurance they will help you out. Get him to finance at least 1/2 or hold out for baloon note.

                                                  Then get someone who knows to go through the financials and see where you can optimize the business - chances are there are lots of room for improvements. Get a marketing person to give you ideas. Run some "grand re-opening" specials to move inventory and generate cash! Work out longer terms for new inventory purchases.

                                                  If you are only making 1% profit, it takes $100 in sales to put $1 back on the profit line - so you want to ensure every dime you spent is bringing you a return.

                                                  1st lesson - there are a million ways to solve problems in business! You'll find your opportunity in finding them.

                                                  Good luck with your venture!