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we can do for you..."
big advantage in buying an ongoing business is that you, as the
new owner, have an immediate cash flow
and an established customer base.
You do not have to build a business; you simply take
over an existing, successful business with the present
We assist you in obtaining financing.
Banks are approached to finance business purchases,
and they scrutinize the transaction.
Most small businesses attempt to minimize profits shown
on financial statements to reduce tax liability.
Also, a bank cannot come in to manage a business if
foreclosure becomes necessary.
Unlike the sale of real estate or franchises, the sale of an
ongoing business is very confidential for both the seller and
the prospective buyer. All
inquiries are held in strict confidence.
Meetings are confidential, and we are available after
hours and on weekends.
"Things a buyer should know..."
at Equity Financial Group, Inc. are advocates of finding a
business that you like and feel
comfortable owning. You, like
every other prospective buyer, have a vision of being independent
financial business and calling your own shots.
An old saying in the real estate industry is …
“The three most important things a buyer should look
for are cash flows, clients, & location”
While location is important
to a business buyer, be aware that track
record and client base round out the three components
of a successful business. Let
us assume that you find a business that you like and its location
is fine, but because of poor management,
the business may not show the greatest record of accomplishment.
Purchased for the right price and terms, this business
could become more successful with proper management making
it a good way to achieve your vision of being in business
for yourself. Finally, be aware
that many businesses sell for much less than they are originally
listed. So, if it is a business
that you like, do not be afraid to make what you consider
to be a fair offer.
process of buying a business is as follows:
the basic information on alternative businesses that sound
interesting to you.
business (if possible) to get a “feel” for the
with the Seller, asking from general to probing questions
on anything and everything, except
actual asking price.
your preliminary evaluation, based on the information forwarded
from the seller to Equity Financial Group, Inc. and on
an offer, assuming that all of the information you have been
provided is correct, but include
contingencies, which allow you to confirm such information.
Equity Financial Group Inc. will assist you with writing
an offer to protect you as the buyer.
a sales price is agreed upon, make a closer investigation
of the business, confirming to your
satisfaction the validity of information provided by
documents prepared for the closing. You
may agree with the seller to share the cost of a closing
lawyer will not argue the position for either party, but
drafts all necessary legal
documents to comply with the agreement a buyer and seller have
the purchase, and begin your first day as the owner of your
own business. The seller
assist in an orderly transition if that is agreed upon
in advance by the parties.
are part of the American Dream – You
and your family own your own business!
Tips for Buying the Right Business Right
a business you like.
Although profitability is important, you will risk
making a terrible mistake if you do not buy a business
that you like. Often,
people who buy hastily without considering personal
satisfaction later sell their businesses at a loss.
Will you be proud to own the business?
If you are not sure, do not buy that type of
Financial Group Inc. advises its clients to be open to all sorts
of businesses. Do not lock your self into a McDonald’s or a Mailboxes,
knows, you may surprise yourself by taking a liking t a
Blimpie or Signs Now franchise. If you lock into only one type of business, it will take you
much longer to find a business to buy.
Examine the following categories: retail; service;
manufacturing; distribution; restaurant; lounge;
First, decide if there are any categories that you
do not want to be in, then focus on the remaining
not expect much financial information.
Do not expect “traditional” financial
information from the owner of a privately owned business.
The only accounting required of a privately owned
business is filing tax returns, which are prepared to
report the lowest possible tax liability.
There are other ways to verify cash flow later.
may seem like an unusual recommendation, but Equity Financial Group,
Inc. tells its clients to forget about buying a business if they do not
like the current owner.
The buying process is a long and somewhat
complicated one -- it is imperative that the buyer and
seller work through it together.
with owner financing.
The owner of the business should finance the
most cases, this is the sole source of financing available
to buyers of an existing business.
With owner financing, you can feel secure in
believing the owner’s representations as to income and
expenses, and you have a remedy if there are any problems
after closing. It
also gives you a “silent partner” with a personal
stake in you success.
not pay cash. You
may not want a loan over your head, but do not pay all
cash for a business – even if you have it.
You should keep a stash on hand for emergencies and
If you insist on paying all cash, at least place
some of the purchase price in escrow for a period of time
to protect yourself from any problems that may surface
after the closing.
an offer before you have seen all of the financial and
other business records of the business.
It is simply not possible to know everything about
a business before you make the initial offer.
The offer does not commit you to the business, but
it does let the seller know you are serious.
a business can be like dating.
You’ve got so many emotions going –
do you like the business, does the owner like you, is this
feasible, what does my family think, etc. – that
you’re bound to get a little flustered.
Keep your wits about you; you will need them. Remain calm, and negotiate your offer with quite reflection
and reasoned discussions.
As you go through negotiations, always use this
simple formula: Cash Flow Available minus Annual Payments
to Owner = $$$ for you and your family. If at any time during the negotiations this formula does not
result in enough money for you and your family, stop.
the business. Once
the owner has accepted your offer, the real work begins.
Verify cash flow and identify any hidden problems.
If you see red flags in either of these areas,
change or terminate your offer.
There should be stipulations in your offer that
allow for this.
the deal is made, try to close as quickly as possible.
You do not want owner to have second thoughts or
news of the sale to leak out to employees, suppliers and
90% RULE: FACTS ABOUT BUYERS
of all buyers are first-time buyers.
In other words, they have never been in business
of all buyers will finance the purchase of their business.
of all buyers do not know what kind of business they want
or best serves their needs.
of all buyers are terrified and/or uneducated in the
business buying process.
of all sales will be financed by the seller.
(or more) will not buy the business that was advertised or
the one that they called in on.
Advantages of Buying an Existing Business
results rather than pro-forma.
employees in place.
suppliers and credit.
customers and referral business.
licenses and permits.
by the seller.
availability of owner financing.
of Buying A Franchise
name means instant recognition.
product or service.
support means you are in business for yourself but not by
than 90% of new franchises are successful.
system in place all the mistakes have been made!
to add additional units within the franchise system.
by the seller.
availability of owner financing.
Remember ultimately the success or failure of the
business is the owner’s responsibility,
and there is no “Right” business, so buyers must be
in a business we have listed on our website?
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