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Buying a Business

Start thinking about buying an established business if you want to avoid the immense risks involved in starting one. Not everyone wants to start a business from scratch, and buying a business with the infrastructure in place lets you focus on building it up, as opposed to getting a new business off the ground. This is not to say that it’s easy to buy an existing business; it’s a fairly complicated process throughout which you need to know exactly what you’re doing.

First off, decide that you do want to buy before you begin your research. This way you will look at options more carefully. A particular business may not be exactly what you’re looking for, but if you’re sure that you do want to buy, then you won’t brush it off immediately, without first considering how you might grow with it. Vested Business Broker’s deals with a wide range of businesses and will surely help you make up your mind quickly.

Talk to the people in your life who are likely to be affected by the venture. Let them know the hours that you are likely to have to work and the risks involved. You might need their support if you initially go through a rough patch.

Using a Broker

It would be more prudent to use the services of a broker in buying your business. All the important groundwork in terms of research would already have been done. And, you can focus on finalizing the deal.

A broker will handle all those complicated negotiations which you may just find too much to handle. And, when things turn unpleasant you can leave it all to your broker.

Brokers are supposed to have systems in place to take care of deals. The sale is usually a time of some stress for both the buyer and the seller, so having someone to put everything together and take care of the paperwork is very helpful. You will appreciate a broker’s services as it will allow you to concentrate on getting a worthwhile deal, and not have to worry about whether all the documents -and there are a lot of them- are in order.

Of course, your broker will charge you a substantial commission, but it will all be worthwhile if you get the deal you want. Vested Business Brokers can be counted on to take care of the nitty-gritty that ensures a successful deal.

Business Essentials

Once you figure out your particular area of interest, think about the size of the business that you want to buy, the location of prospective sellers etc. Know your financial resources so that you don’t waste time looking at businesses that are beyond your reach, even if you have always fantasized about being a ship-builder.

Identify your strengths. Are you good at sales? Operations? Look out for a business that is in a position to benefit from your particular strengths.

Once you’ve identified a business that you want to buy, make contact with the seller but hire professionals i.e. accountants, attorneys, etc. to take care of different aspects of the purchase. Using Vested Business Brokers services would surely help you narrow down your search and identify all the expertise you might need to close the deal successfully.

Allow yourself a gut instinct about the seller and the business. Feel free to ask why they want to sell the business, and evaluate your decision based on their reasons. It might just reassure you that you should go ahead with the deal.

Company Valuation

There are many methods of valuing a company, and it is up to the seller to decide how to go about it. Make sure the price is a fair representation of how valuable the company is likely to be to you. It is obviously disadvantageous to you if a non-performing company that is heavy in assets is priced based on the net value of its assets.

The asking price is negotiable. Even in a situation where the seller is firm on her price, enquire as to the method of valuation and challenge it if you think it leaves you with an unfair deal. While negotiating, be prepared to challenge the seller with facts and statistics.

Find out what specific concerns the seller has about the deal, and address them. Be sensitive to the fact that selling a business can be an emotional process but at the same time make sure that you don’t end up paying for its sentimental value. With Vested Business Brokers you can be sure to get yourself a fair valuation of the business of your choice.

Financing the Deal

To finance the deal, seller financing is probably the best option available to you. You won’t get a bank loan without offering a 100% collateral. The Small Business Administration does offer some financing but only for deals that meet a strict set of criteria.

The good thing about seller financing is that it shows that the seller is being serious and honest about the deal, and is not trying to offload an ailing business onto you. It shows that he has enough faith in the business he is selling to share the risk involved in running it with you. There’s no better way to be sure that a business is really worth buying. Seller financing also allows for far greater flexibility than any other kind of financing.

Most people who start looking for a business to buy never actually end up buying. If your first deal doesn’t come through, don’t let it deter you from looking for other businesses. Learn from the experience and use it to sharpen your skills so that the next time around, you know exactly what you want and how to go about getting it. Vested Business Brokers can offer you a range of financial options.

Services

Vested Business Brokers offers all services required in buying a business:

1. Initial Consultation – You will have a one-on-one via phone or in person with a broker in your area to discuss all of your questions and concerns regarding the business buying process. Our brokers are trained to help you with business concerns as well as personal concerns. We realize that this is not only a financial decision, but a lifestyle decision as well.

2. Buyer Profile – Once all of your concerns have been addressed and you have signed a buyer registration agreement, your Vested Business Broker will create a buyer profile by which he/she can search for the exact type of business you are looking for.

3. Viewing Listings – Once we have entered your criteria into our database, our computer will generate matches. Your Vested professional will then go with you to take a look at the listing and address any questions you may have.

4. Offer To Purchase – If one of these businesses fits what you are looking for and you have had a chance to think about making an offer (sometimes you may have to make several visits to the business to be certain), your broker will help you fill out an offer sheet. This sheet details the price and terms at which you would like to purchase the business. Here the experience of your broker will help you in making the best offer. In addition, Vested offers financial services that can help make a deal happen, even if you are short of funds.

5. Due Diligence – Once the offer has been accepted, the buyer conducts a period of research on the business. Basically, due diligence is the process by which you work with the seller to verify the financials of the business as well as a period in which you learn the inner workings of the business. This process typically takes two weeks. A buyer may want to bring in his/her attorney or CPA to help during this phase of the purchase. (We have many relationships with excellent professionals, if you need a referral). Your broker will be available to assist you in the due diligence process in every way.

6. Contract & Closing – Following a successful due diligence period in which all of your concerns have been addressed, a contract will be drawn up between yourself and the seller of the business. Typically this is done between your attorney and that of the seller. (Again, Vested has relationships with many attorneys if you need a referral). If the contract meets all contingencies you have set forth, it can be signed and a closing date set. At closing, the business will officially change hands and you will have completed the buying process. Keep in mind that our brokers are here for you every step of the way to ensure that you are making informed decisions.

The process doesn’t end at closing. Vested has developed relationships with many business service providers to offer new business owners services that are vital to the success of their businesses.

At Vested Business Brokers we have enough experience in putting together successful deals. Our web page is http://www.vestedbb.com

Matchmaker, Matchmaker, Make Me a Match! – How to Choose the ‘Right’ Business for You

All right, so you’ve decided to jump off the corporate ladder and build your own. Congratulations! You’ve just joined the growing community of home business owners in the US. Expanding at an estimated rate of 10 % per annum, the home business segment is being chosen by millions of people today. Running a home business offers economic self-sufficiency, unparalleled freedom and the satisfaction of finally being in charge of your own life. All of this without a boss dangling on your head and without the guilt of ignoring your family and the “me-time” you so badly need.

Choosing Mr. Right

Now that you have decided that a home business is the best thing for you, the first question that springs into your head is ‘what is the right business for me to go in to?’ For every single idea you think will work, there may be ten that won’t. Since you will be investing a lot of time, money and energy into this project, it is imperative that you first evaluate the feasibility of the idea.

In a business, you could be selling a product or a service or a combination of the two. To decide what is the best mode for you, a simple guideline here is to clarify in your own mind, two things:

1. What do I want to do?

2. What I am capable of doing?

Take a stock of your interests and capabilities and then decide on what would you rather be selling. For instance, if you have been in the hospitality industry all your life, it may be a good idea to choose a service-focused business like catering, rather than selling computer peripherals, no matter how profitable that looks. But if you’ve always been interested more in, say, fashion designing and have had some experience in that field, you have more chances of succeeding with starting a boutique for clothes. So, a good recipe for success would be to marry your interests with your core competences. Team it up with hard work, determination and a wide focus vision to go a long way.

For some new business ideas, look up the websites for:

Ahbbo.com
WordPress.org (choose the home business articles)

Once you have decided what business you want to put all your money into, you must evaluate the option by measuring it against some parameters:

  • Does it fill a need-gap?

  • Does my idea satisfy an existing market need, not fulfilled by any other or many other suppliers?
  • Will my idea fulfill an existing need in a much better and cost – effective manner?
  • Will my idea ‘Create’ a new real need for consumers?
  • Along with these, also assess the size of the market. Many a business has failed because the market size was inadequate to keep the business beneficial in the long run.

  • What is my level of interest in this idea?

Ask yourself if your level of interest in the project will sustain a couple of years down the line. Try to forecast how the idea can grow into something bigger. For instance, if you decide to turn your hobby of landscaping into a serious consulting business, ask yourself where you would want to take it by the end of one year. Do you see yourself doing this for a long time and do you feel there is scope of expanding this business. If you are brimming with ideas here, then yes, you are interested enough in this idea to take it up.

  • How well can I manage this business, given my interest and capabilities?

  • Do I have the required knowledge on this service or product?
  • Do I have significant experience in this field?
  • What are my managerial and marketing skills for this business?
  • Do I have any additional professional qualification that will help me run this business more efficiently?

  • Financial viability of the project

  • What is the revenue stream? Where from and how will the money come in? I. This is one of the most important aspects you should look at when considering a new venture. Unless you see a clear revenue inflow to the business, discard the idea.
  • What will be the total cost of putting this project on its feet and how will I fund my start-up? I. Evaluate the options you have. You could either be financing the project from your own savings or through a bank loan. You have to be very clear on how you will manage your personal finances, if a large chunk of your savings gets engaged in the business for a certain period of time. If you will be opting for a bank loan, remember that it has to be re-paid in a certain time period. Would your business start giving enough returns by then?

  • How much time can I dedicate to this project?

  • Each business has an approximate “gestation period”. That is the amount of time it takes to break even. Some businesses may need upto one year to mature and start giving returns. Do you have the patience to wait and not get disheartened?

  • Do I own the space required to run this business?

  • Whatever business you start from home, you will need physical space to set up an office, stock your product, need space for documents, other paraphernalia. Do you have that kind of space at home that you can dedicate to your project? If not, then it means you will have to rent space, which is not only an additional cost but also takes your business from the realm of home businesses and into the SME segment.

  • What equipment do I own which will be needed to run this business efficiently?

  • You will need to furnish your office with a computer, a workstation, fax and phone lines, a modem and an Internet connection. Since the Internet is the backbone of most home businesses, it would be helpful if you were already connected to it. Make a laundry list of all the equipment and gadgetry you possess and see what can be used in your business. It would help you later in bringing down the cost of buying new office equipment. Also see: http://www.powerhomebiz.com/vol13/evaluateideas.htm

Most home business owners start out with a positive attitude and the will to kick up some dust with hard work. That is good, but not sufficient to guarantee success. Success depends on carefully choosing a business idea, meticulous planning and some reality checks.

Business Community Relations 101 – Getting the Most Out of Your Chamber of Commerce Membership

Since the major part of a small business typically comes from business to business services, it is essential to maintain a positive standing with the local business community. It is of value to you to join as many business type organizations as possible in your town. You should attend meetings when possible and introduce your clients to each other.

Most towns and all cities have chambers of commerce. The chamber offers many things to small businesses especially new ones and start-ups. Chambers provide a voice for the business community, a bridge between government – small business – corporations – volunteers – religious organizations – schools – clubs – homeowners associations – corporations – general public – etc. It’s a monumental job, always changing. It takes money, lots of it. It takes coordination and a knack for small town politics. It takes members who will volunteer, who care and are dedicated. Of course that’s where you come in. Chambers of Commerce hold various events such as:

· Mixers

· Table Top Exhibits/Expos

· Seminars

· Luncheons

· Committee Meetings

· Installation Dinners

· Benefits

· Educational Exchanges

· Home Based Business Groups

· Networking Breakfast Meetings

· Membership Drives

If you attend some of these events, you will make new friends, contacts and customers. Anyone can join the chamber. It usual costs $100-450. But you only get out what you put in. Many small business owners may see it as a waste of money. In actuality it is relatively inexpensive depending how you chose to use your membership. It can be long lasting advertising in the form of:

· Promotion

· P.R.

· Networking

· Free Media Coverage

· And Fun

Joining Committees

If you truly want to become involved, we suggest you join various Chamber of Commerce committees. Committees need your input. You probably talk to one hundred business owners and residential customers per week. Five hundred per month. They know you, they trust you and they generally speak their mind to you. When these associates, business customers and business people talk to politicians, it’s a more tactful type conversation. When they talk to Chamber of Commerce staff, they tend to also choose their words more carefully. When they talk to you, it’s more point blank, to the point, blunt and the reality of the way they really feel. You’ll never get a sugar coated answer to a small business dilemma from an actual owner. They’ll tell you how they feel. Whether they are happy or mad as hell about an issue. You also are the eyes and ears of the community with it’s residences.

When you come to these committees you bring knowledge. You will soon find your ideas, observations and personal opinion are paramount. You are the most valuable tool a chamber committee could ever hope to have. You need to ask yourself “Do you have the extra time?” If you don’t, don’t volunteer. There is nothing worse than a committee member who volunteers and then doesn’t pull through when he or she is needed. If you have the time you be repaid in new business contacts and customers and the feeling of knowing you made the difference.

How do you join a committee? Talk to the president of the chamber. Tell them you want to volunteer. Find out which chamber committees have openings. Many times there is no limit to the number of people, so try to pick one with a large group of members. You will be able to do more networking and big groups tend to divide sub-committee work loads more evenly. Join a committee that interests you. Don’t join one you don’t care about. Just like in college, you always got better grades in the classes you enjoyed, didn’t you? Make sure the people in the group really want to get something done and it’s not just a who’s who social gathering. That kind of group eventually fails to accomplish even the most basic of mission statements. You are a winner, so you should be in a winning group.

Make sure once you have gone to a couple of meetings, the turnover is low and that no one person’s ego stands out in the group, especially if it’s the chairman. If this happens, go to one more meeting and dismiss yourself. “Business is so good, I don’t have any time left.” Then volunteer to with flyer distribution by leaving information on your counter or delivering this vital information to your customers and business clients. Tell everyone you are more than happy to be of assistance. Then give everyone in the group your card. You can still help without battling personalities. Remember everyone there is volunteering and it is better to be a friend than an enemy.

Board Of Directors

Being on the board of directors of a Chamber of Commerce is extremely important. It’s an easy job and very prestigious. It’s also great for business. You will receive notice when board seats come up for election. Usually chambers ask their members through direct mail if anyone would like to run for a board seat. Fill out the form with a brief resume. Make sure not to go over the maximum word count. Try to shave off ten percent if possible because people tend to read the short ones more. Don’t exaggerate your accomplishments. If you need help with this, call one of the current board members you know who is not re-running for the same position. Find out from the chamber what day they will be mailing the ballots and call everyone in the chamber two days before. It’s important not only to win, but to win by a margin. It gives you clout with the chamber members and staff. When you win, make sure to attend as many meetings as possible. Usually meetings are only one time per month.

Grand Openings

When you are privy to information about a new business opening or a grand opening ribbon cutting event, you should visit the business:

· To sign them up as new customers

· To offer to give free products or service coupons for grand opening goers

· To help them meet potential buyers, namely all your customers

· To say hi and let them know you are all in the same boat and wish them many years of success

Internet Programs

Always try to get your company listed in the Chambers on-line directory. There may be an additional charges for this, but it is worth it.

Distribution Of Monthly Newsletters

Most Chambers of Commerce publish a monthly newsletter of what’s going on around town and with various business members. The more hot little hands these newsletters get into, the better it is for the advertisers and the better for you as a member. It’s also great for chamber membership, the more people who join the Chamber the more people in the club to buy from you and help all the businesses in the community. If you have a mobile type business and volunteer to deliver a chamber newsletter to every business in your area, you will surely be a chamber favorite. If you are a retail or location based business, have them on your counter for customers and associates. Your customers will also be glad to receive a copy and and your business customers will eventually join the chamber if they haven’t already. You will be helping businesses everywhere in town by doing this. This will be recognized. It will also help you when the chamber does a story on you to put in the newsletter. Of course, that month we will print extra copies and direct mail them to every licensed business in your town and all of our franchisees. Try to refer fellow businesses to the chamber each month.

Membership Drives

Whenever the chamber has a membership drive, you should volunteer to help. You have fax data bases and distribution power “plus” you know personally many business owners in town. Chamber membership is the life line of their existence. The more you, we help them, the more they help you. It is okay to join many chambers or at least all the ones where you want customers.

Logo On Vehicle

Offer to put a magnetic sign on your work vehicles with the local Chamber of Commerce logo. This helps the chamber and legitimizes your business. If this is not possible, put your Chamber of Commerce member plague on your dash board. If you have a location business, be sure to display your plaque where it can be seen by all visitors

Meeting With Chamber

You should be on a first name basis with the Chamber of Commerce president. You probably already are. He or she needs your feedback. They need to know what’s going on at the street level and no one knows better than you. You will be the eyes and ears for the chamber. You should set aside one hour per month to discuss concerns you’ve heard on the street and possible solutions you’ve worked out. Try to make it a regular meeting such as the first Tuesday of the month at 8:00 am. This meeting can be with the Chamber manager or even a Board Member you can relate with. If you belong to a committee bring your information and observations there.

Network With Other Groups

You should network with your service club whether it be Elks, Lions, Optimists, Kiwanis, Rotary, Soroptimists, whatever. Bring those concerns with you. Help the chamber co-sponsor events with your club and other clubs, making one big happy united family town thanks to you. You can also volunteer to help on the Boys and Girls Club, United Way or other associated non-profit, which helps people. By adding your Chamber Membership to a non-profit commitment, you will make a difference and super-charge your business.

Attending Meetings

You should attend meetings sponsored by your Chamber of Commerce. As many as you can. Enough that you don’t need to wear a name tag because everyone already knows you. You still should wear a name tag. However write on it:

· A New Friend

· Customer Service

· Me

· Label

· Name Tag

· Just Me

· I love meeting new people

· Put name on upside down

Sounds funny but it’s a great ice breaker. It works every time. After all, there is bound to be a new face popping up every once in a while. Many of these new members may feel intimidated and you can help them and really make a new friend and business associate creating team work, co-marketing efforts and sharing of customer lists with non-competing businesses.

Trade Shows

Table top mixers and trade shows are very important. Smaller shows – such as city fair, county fair, Chamber of Commerce Business Fair, etc. – you can do for relatively low cost. Pretty good statistics. Trade fairs and shows are good.

One of the major advantages of exhibiting in a show is the tremendous impact that you can deliver and direct to a preconditioned group of prospects. Through your exhibit, these prospects can see how they can benefit from your services and/or products. Exhibiting in various types of shows offers you both short and long range benefits.

As with any of your sales promotion programs, the success of your show participation depends largely on proper planning. Before you enter a show, analyze all the factors involved and determine if the show will attract prospects who will require your services. Your final decision should be based upon the estimate of value you will receive for the money, time and effort put forth.

To get information on the shows scheduled for your area, contact your local Chamber of Commerce. If you are considering entering an annual show, ask for a list of regular exhibitors from past years. Then check with these exhibitors for their opinions as to the value of the show.

Referrals – Word Of Mouth

No matter what you do at a Chamber of Commerce meeting, remember to bring cards. Chamber mixers draw about fifty people or more, grand openings twenty, committee meetings ten. Always say when handing out cards, “If you do not need our service/products please take this card and give it to someone who might be interested. Thanks.” This will make the person happy that you are not pressuring them and they will be glad to pass it on.

Letters To The Editor

You should rifle off at least one letter a month to the local paper praising a small business, the Chamber of Commerce or how happy you are to have a business here. If you have a reason to praise more than one person, type the letter and have a co-worker sign it.

Conclusion:

Your success in your business is up to you, we live in the greatest country in the world. You are allowed to unlimited success, but with that incredible gift you are also allowed to fail. The ball is in your court, your chamber membership can be one of your greatest assets, but you only get out what you put in. Stay involved, do not ever give up and use your chamber to help you win.