Buying a Business

Have you considered being your own boss, creating your own financial independence and making your own dreams a reality? You're not alone, owning your own business is the "American dream". But the reality is that buying a business is a serious financial and personal commitment that requires an understanding of what makes a business successful.

Let Sunbelt Business Brokers of West Central Florida help you buy the right business at the right price. Whatever type of business you are looking for we have the resources and expertise to help you get the best business for you and to make sure all the details are handled correctly. Contact Us Today at 352-341-4166

Finding the Right Business For You!

1 · Why buy an existing business?

2 · Fundamentals of buying an existing business.

3 · When you buy a business, just exactly what do you buy?

4 · How to find a business.

5 · Utilizing the services of a Sunbelt Business Broker.

The Process of Buying a Business:

All too often, new owners jump blindly into a business venture, overwhelmed by the tremendous workload of starting a business from the ground up.

A government survey shows that 60% of new businesses fail within the first three years. An existing, established business that is purchased by a new owner shows a minimal failure rate.

• You get immediate cash flow from the ongoing business
• You will have trained employees in place
• You will have established suppliers
• You will have established customers and referral business
• You will have existing licenses and permits
• The seller will train you in operating the business
• In most cases, the seller will provide the financing you need to buy the business

Sunbelt Business Brokers know the reasons a good business succeeds…the first step is assuring a good deal for both buyer and seller….. As an experienced “transaction” broker, the Sunbelt West Central Florida Office, brings expertise for informed decisions to both sides of the negotiation table to insure mutually beneficial deals …and successful closings.

The next step is to help assure your understanding of the reasons for continued success …..from why an on-going business can provide a positive cash flow,… to the value of an established name, location and customer base,…. Sunbelt can make your dreams a reality. With the right negotiations, a business can actually pay for itself - let Sunbelt show you how.

Our standard contracts seek to protect the interests of both buyers and sellers [click here to review standard contract form in PDF Document Form].

Confidentiality
Unlike the sale of real estate or franchises, the sale of an on-going business is very confidential for both the seller and the prospective buyer. All inquiries are held in strict confidence. Meetings and information shared or observed are to be held in strict confidence. To ensure confidentiality for all parties, Sunbelt brokers require that a Confidentiality Agreement be signed [click here to find and fill out form ] This signed agreement is in return for granting you, the prospective buyer, access to investigate the operations of the seller's business and otherwise private information, the prospective buyer promises to use the information for the sole purpose of evaluating the benefits and risks of purchasing the seller's business in strict confidence.

Net Worth and Credit Checks
Depending on the transaction a buyer will be required to provide personal information regarding credit history and/or financial capability to satisfy a general pre qualification requirement of the broker and/or the seller which all serious buyers willingly submit with full confidentiality assurance of the Sunbelt office. You may fill out the Buyers Net Worth Form [click here to fill out net worth and credit history] or download and view BUYERS INFORMATION FORM [click here to download form in PDF format].

Financing
Brokers can skillfully negotiate financing and formulate a financial plan that works for you. Due to a banks reluctance to finance small businesses, over 90% of business purchases are financed by the current owners, demonstrating their confidence in the continued success of their business. Financing a business purchase through an owner vs. through a bank brings a lower interest rate, lower payment plan, simple credit checks, using the business as collateral for the loan and greater owner commitment to your success. Sunbelt brokers know how to make financing terms work in your favor, quickly and easily.

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The Search

Our Sunbelt location in West Central Florida provide a listings menu that generally include about 200 local area businesses and over 2000 businesses for sale within the State of Florida. We offer hundreds of locations and business categories with prices ranging from under $50,000 to over $10,000,000. Our database has something for every prospective buyer… including new and resale Franchises.

We feature three tools, to help you find a business… which include several levels of business listing search detail.

1. Surrounding Area Listings:
Search listings by a broad business category and local area counties Citrus, Hernando Sumter, Marion and Levy.

2. State of Florida Listings:
Search listings by any one or more state counties, several business types and by financial criteria.

3. Franchises:
Browse the current franchises available in the area.

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General Tips

• The interest that should be kept a priority while looking for a business that YOU will enjoy owning AND OPERATING IT. Visualize yourself running a particular type of business and taking your friends and relatives to see your new business. Do you like what you see? If not, this type of business is not for you, no matter what your friends or relatives have told you!
  
  

• Carefully consider the geographical area you are searching in. Do you really want to live there? Moving to a new area and taking on a new business are two big steps that will be made simultaneously. Thoughtfully consider these life-altering decisions and make sure that you are prepared for such a change.
  
  

• Be selective, but also, flexible in your choices. If you lock into only one type of business, it may take you much longer to find a business than if you select a broad range of business types. Don't be too limiting in your search.
  
  

• When making an inquiry to Sunbelt of West Central Florida it would help if you take a moment to also fill out your profile.[click here for form]. You can be assured that your information will be kept in complete confidence and will only increase your chances of being matched with the right business. When you give the broker all of the information, he will be in a more informed position to assist you.
  
  

• The initial business information sent to you will consist of general points of information about the business, excluding any detailed specifics. Why? BECAUSE YOU CAN'T BUY A BUSINESS BY E-MAIL, SNAIL MAIL, FAX OR TELEPHONE. You must be willing to visit the broker AND THE BUSINESS before the seller will be willing to divulge detailed confidential information to you. REMEMBER, the information supplied to you prior to a visit is only intended to allow you to decide if the business is one you may be interested in learning more about - IT IS NOT INTENDED TO ENABLE YOU TO MAKE A FINAL DECISION.

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The Steps

1. Carefully consider the decision to buy a business.
   
   
2. Educate yourself on the type of business you would like to buy.
   
   
3. Conduct research on options of businesses currently for sale.
   
   
4. Determine how much money you can afford to pay.
   
   
5. Contact and consult us on initial goals and criteria.
   
   
6. Evaluate the businesses that are being offered for sale.
   
   
7. Confidentially tour the businesses you are interested in, note improvements or changes that you would make, location and "feel" of business.
   
   
8. Through our office, place a bid on the business or businesses in which you are interested.
   
   
9. Engage in negotiations with the seller using this Sunbelt West Central Florida office as your intermediary.
   
   
10. Once an agreement has been reached, we will walk you through the details of finalizing a sale. Details include negotiations, new owner financing, complete documentation for the purchase and closing the purchase.
    
    
11. Close the purchase.
    
    
12. Congratulations! You are the new owner of your own business.

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Finding the Right Business For You!

1-WHY BUY AN EXISTING BUSINESS?

The business brokerage profession generally holds that 20% of businesses are for sale at any one time and of those, 20% will eventually sell. Using our numbers, that means that there are 1,100,000 businesses for sale and of those, 220,000 will sell. With this many businesses for sale, there must be a right business for you! What are your alternatives?

A - Get another job.
B - Start a business.
C - Buy an existing business.

Obviously, we think the third alternative is the best. But let's consider each alternative.

A - Get Another Job
If you have the necessary skills, and you are not too old (not politically correct, but true), you might be able to get another job. You might even find one that will provide an income sufficient for your family. However, there seems to be no end to the downsizing trend. Even if you find a job, you may very well be back in your current situation in a very short time. Job security is definitely a thing of the past!

B - Start a Business
This is scary, and it should be! Once again, there are many different statistics regarding business start-ups, but everyone agrees that over 50% of new businesses fail within the first year. Why take such a chance with your future and the future of your family? There are many unknowns in a start up. How much capital will be required? How long will it take to open for business? Where will you find employees? Can you get the necessary permits? Can you find the proper space for your business? How long will it take to get the income up to a point where you can start taking a salary? Etc., Etc., Etc.

We believe that the better choice is to...

C - Buy an Existing Business
Why? Because there are eight significant advantages to buying an existing business versus starting a business.

You can review actual operating results rather than projections. If a business has been owned and operated by the same owner for a number of years and if that business has been the source of income for his family, you can be reasonably sure that the business is profitable and viable.

Immediate cash flow. No expensive advertising to lure customers - the cash register starts ringing the first day you take over, just like it did the day before for the seller of the business.

Trained employees in place. When you take over the business, you will have a complete crew of trained employees to run the business. No down time for training and no customer dissatisfaction with untrained employees.

Established suppliers and credit. For the most part, the existing vendors will continue to do business with you without missing a beat. Remember that they have been supplying the business for a while and they know it is a good business. They don't want to lose your business, they want you to succeed and buy more goods and services from them!

Established customers and referral business. Your customer base is already in place and it will, through referrals, continue to grow - unless you drive them away.

Existing licenses and permits. In many cases, all you have to do is transfer the licenses and permits to your name. In those cases where you have to re-apply for a license or permit, you have the comfort of knowing that the business, in its current location, was approved for the license or permit (for example, a liquor license for a restaurant).

Training by the seller. In addition to the trained employees, you will receive training from the seller in how to operate the business. You will be introduced to customers and suppliers and will get the benefit of the seller's extensive experience in running the business. You will not have to make the same mistakes the seller made!

The availability of owner financing. Over 90% of the businesses sold by Sunbelt Business Brokers are financed by the seller of the business. This may be the single most important advantage of buying an existing business. The seller who finances your purchase of his business has a vested interest in your success.

Clearly, the best solution to finding a way to provide for you and your family is the purchase of an existing business. Another good avenue is the purchase of a franchise. However, franchises are generally more capital intensive than the purchase of an existing business. Most existing businesses are purchased with a cash down payment ranging from 15% to 50% of the total purchase price. In start-ups and franchise purchases, the cash requirement can reach up to 100%. Even when financing is available in these situations, the terms and conditions of the third party financing are generally much more stringent than the terms offered by the sellers of privately owned businesses.

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2-FUNDAMENTALS OF BUYING AN EXISTING BUSINESS

These Six broad categories of business areas provide a good starting point;

1. RETAIL
2. SERVICE
3. MANUFACTURING
4. DISTRIBUTION
5. RESTAURANT
6. LOUNGE
7. COIN OPERATED BUSINESSES

First review the following personality characteristics for each category and see how you fit:

Once you have selected a primary category, you can begin to look for a business in earnest. You will find many different businesses within each category that share the primary characteristics of the broad category. You will then have to "fine tune" your selection. For example, within the retail category, we have clothing stores, shoe stores, boutiques of all types, bicycle shops, etc. Within the restaurant category, you can choose from full service restaurants to ice cream stores. JUST BE SURE YOU LIKE IT BEFORE YOU BUY IT!

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3-WHEN YOU BUY A BUSINESS, JUST WHAT EXACTLY DO YOU BUY?

In almost every situation you encounter, you will be (and should be) purchasing the assets of the business. There may be instances where the seller wants you to be the stock of the corporation he owns, which in turn owns the business. The primary reason for the seller's desire to sell stock is TAXES, DREADED TAXES!

Most privately owned businesses are owned as sole-proprietorships and some are "Sub-S Corporations" and partnerships. Some larger businesses may be owned in what is known as a "C-Corporation". Simply put, sole-proprietorships, Sub-S Corporations and partnerships are taxed as if the income went directly to the owner. Whatever income the business has is divided up among the owners and the owners file a personal tax return and report their share of the income on their personal tax return.

In a C-Corporation, the corporation itself is taxed and then, if the owner takes out money in salary or dividends, he is also taxed. Tax is paid by the corporation, AND by the owner. If the owner of the business has the business owned by a C-Corporation, the corporation will pay taxes on the gain on the sale. Then, when the money is taken out by the stockholder, he will be taxed again. The sale of the assets of a C-Corporation results in double taxation of the gain. If the owner sells his stock to you, only the gain on the sale of stock is taxed - single taxation.

For many reasons, you do not want to purchase a business by buying the stock of the corporation that owns the business. First, the corporation is an entity unto itself and it may have liabilities that you are not aware of. If you buy the stock, you are also buying these liabilities. Second, you will not be able to depreciate your purchase price. Substantially all of your purchase price will be allocated to basis in the stock and you will have to wait until you sell the stock to deduct the cost of the business.

You will seldom run into the stock sale scenario when purchasing a business with sales of less than $1,000,000.

So, if you are buying assets, exactly what assets are you buying?

You will be purchasing the inventory, furniture, fixtures and equipment, goodwill, trademarks and trade names of the business. Unless you specifically agree otherwise, you will be buying these assets "free and clear" of any liens and mortgages. Although you may agree to assume an existing debt as part of your purchase, you will generally not be assuming any of the existing liabilities of the business.

What about the cash and the accounts receivable? Put yourself in the shoes of the owner of the business. The cash and the receivables were the result of sales made by the owner before you purchased the business. The owner thinks, and rightly so, that the cash and the receivables belong to him. Also, the owner has to pay the existing accounts payable and other current liabilities and the cash and the receivables will probably be used for this purpose.

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4-HOW TO FIND A BUSINESS

You know that you want to buy an existing business, you understand what you are going to be buying and you understand what to expect in the way of financial information about the business. But, how do you go about finding a business to buy?

There are three primary ways to locate a business to buy:

Go to our Listings menus

You can contact us now

Read classified ads for business opportunities for sale.

Referrals from business owners who have already used trained/qualified business broker services.

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5-WHY UTILIZE THE SERVICES OF A PROFESSIONAL BUSINESS BROKER

• Maintain confidentiality.
• Educate you and walk you through the entire purchase process.
• Offer advice and consultation.
• Saves you time & money.
• Present the facts to you regarding your opportunities.
• Professionally handle negotiations.
• Coordinate the transfer process.
• Provide escrow protection.
• Offer large number and variety of businesses.
• Provide experience.
• Bridge the gap between you and the seller.

PLEASE READ THROUGH ALL OF THIS “BUYERS” SECTION TO UNDERSTAND WHY YOU SHOULD SELECT SUNBELT BUSINESS BROKERS OF WEST CENTRAL FLORIDA TO BE YOUR PERSONAL BROKER... because we are part of the nations #1 business brokerage network

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Our home office is located within the Historic Town
of Inverness on the shores of the picturesque Tsala
Apopka Chain of Lakes.

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