Unless you've bought or sold a business in
the past, you'll find that buying a business
can be a confusing and even trying experience
for the unprepared. Even if you have experience
in the corporate world of mergers and acquisitions,
you will still find yourself on unfamiliar
ground when buying a small company. That's
why it's important for you to take the time
to read this explanation of the process. And
if you're a veteran in business transfers,
and you've bought and sold many small businesses,
you'll gain a valuable understanding of the
VR process that will assist
you in working with our firm. |
 |
The search for a business opportunity almost
always starts with a telephone call or a visit to
a web site like the one we host at VR. Sometimes
the prospective Buyer is a Corporation, Private
Equity Group or a Private Investor who has a very
definite idea of the type of business wanted. But,
often the Buyer is a first time Buyer and is still
in the formative or exploratory phase of the search.
Many times a Buyer's first question is, "What
kinds of businesses do you have?"
Well, we have lots of businesses, so that's a tough
question to answer without some idea of the Buyer's
resources, skills and needs. Maybe we just listed Ford
Motor Company and you, our prospective Buyer, just happen
to have several billion dollars and a background in
automobile manufacturing. There's a match made in heaven,
but it's a match we can't uncover without questioning
you and learning more about you.
So the first and most important step is telling us
about you. Be patient when we ask, "How many days
per week are you comfortable working?" and "Do
you like having employees?" and "How much
cash do you have for a down payment?" and many
other questions. We're not just being nosy: We're narrowing
your search and saving you time and aggravation. Our
web site Buyer registration offers a message block that
is a great way to narrow your search and help us help
you find the business of your dreams.
After we've talked for a while, we can probably begin
narrowing the search to a few appropriate business opportunities.
At this point, we communicate non-confidential summaries
of our exclusive opportunities to you in a number of
ways. Since you're viewing our web site you can see
the non-confidential summaries of our exclusive listings
by simply using the "Businesses For Sale"
button. VR non-confidential summaries show our profile
number, a description of the business, a summary of
financial performance, the reasons why we think it may
be a good opportunity and the asking price. We recommend
that at this point you focus on the business and not
on its financial performance or price. It's far more
important now to find a business type you'd enjoy owning.
At this point in your search, you'll find yourself
holding one or more non-confidential summary sheets
for businesses you want to know more about. This "digging
deeper" step takes your business opportunity search
to a new level.
This new level is one of mutual trust and obligation
between you, VR and the Seller(s) of the business(es)
you're interested in. Now you're being exposed to the
specifics about the businesses you've been considering
and your agreement to keep this information confidential
is required. Before we send you confidential information,
we require you to send us your Buyer Profile and we
require you to sign a Non-Disclosure and Confidentiality
Agreement. When you return these documents to us, we'll
divulge to you the name and address of the business
you're interested in. You obtain a copy of these documents
by selecting the Forms & Resources > Non- Disclosure
Agreement button and then printing the documents. Please
note that when you sign the Non-Disclosure Agreement
you are agreeing to keep all of the information that
you receive from us strictly confidential. And, you
are agreeing not to contact the owner of the business
except through us and with our permission. We take any
violation of this bond of trust between you and us very
seriously, and we will not tolerate any breeches of
this trust.
A big part of our job on behalf of the Sellers we work
with is to do the work of selling their business while
affording them the time to run their business. This
means that we will work with you to answer your questions
about the business before we introduce you to the Seller.
We accomplish this in several ways.
The most important element in this process is the VR
Business Profile. This report on the business you're
interested in is written to give you the information
you need to decide whether or not the business is right
for you. A typical Business Profile contains a detailed
description of the business, summary financial data,
additional business facts like lease information, number
of employees and much more. After a thorough review
of the Business Profile and discussions with your VR
representative, you will have a good understanding of
the business and its operations.
In addition to the Business Profile, VR also produces
Digital Videotapes (DV) available to prospective Buyers
to be viewed in our offices. These tapes typically include
a tour of the business and an interview with the business
owner, and are produced to answer Buyer questions and
to give the Buyer a feeling for the business and its
management. For many of our client firms, these tapes
replace the need for a working hours tour of the facility.
After reading the VR Business Profile, reviewing financial
data and seeing the DV tape on the business you're interested
in, you should be prepared to make an offer for the
business. If not, your VR representative will answer
further questions and may, if indicated, set up a meeting
with the business owner prior to your making an offer.
This is an important step. Not only are you learning
more about the business from the person who knows the
most about it, you are also seeking to tell the business
owner as much about you as possible since you may be
seeking installment terms from the business owner. Often,
Buyer credentials are presented at this time.
After meeting the business owner and touring the business,
the next step is making an offer for the business. Making
an offer is not a final step. In fact, it should be
viewed as the first of several steps, each of which
bring the Buyer and Seller closer to completing the
transaction.
Since this is a privately held business, the Buyer
is obligated to make an offer before seeing the business'
detailed internal financial records. The Buyer must
understand that their offer is always contingent upon
the Seller proving his or her representations. Due diligence
- a specified period of time during which the Buyer
investigates the business fully -- is costly and time-consuming,
and it must be done only after an agreement on price
and terms is reached.
It's the Seller's responsibility to prove everything
to the Buyer. Put another way, your agreement on price
and terms will be "non-binding" until you've
had the opportunity to see all financial records and
we have removed all contingencies.
Your Offer To Purchase will consist of the following:
Terms. Price, down payment and agreed-to financing
(interest rate, period, etc.).
Approval of books and records, equipment, inventory,
assignment of leases or loans and any other items that
the Buyer requests to be incorporated into the structure
of the agreement.
Conditions. Non-compete clauses, consulting agreements,
training agreements and other relevant parts of the
structure of the agreement.
Your resume of business background and experience.
Your financial statement.
Your credit report (paid for by you).
And your "Earnest Money" deposit check
in the amount of 10% of the offered price. This check
is not deposited until the close of the due diligence
period and you are comfortable moving forward with your
purchase. Typically, your check is cashed upon the opening
of escrow.
Due Diligence: Clearing The Way. You and
your advisors - attorney, accountant and others - will
have a specified period of time to complete your due
diligence and remove the contingencies (typically 10
days). When due diligence is complete and the contingencies
are removed, the contract is binding. Should the business
fail to pass due diligence, you are free to rescind
or amend your Offer To Purchase.
Financing: Working with Sellers and the SBA.
Almost every deal requires some form of financing. At
VR we work with Buyers to help obtain the appropriate
financing for the business being purchased. Often, this
means a Seller's Note and it also often means a bank
loan guaranteed by the Small Business Administration.
But whatever the financing requirements, Buyers can
expect guidance and assistance from VR in this important
area.
Escrow typically takes about 3-4 weeks. After escrow
receives signed instructions, the escrow officer will
contact government tax agencies for clearance and publish
your fictitious name filing, enabling you to open business
and banking accounts. Also during this time a Notice
To Creditors will be published allowing anyone with
a claim against the business to step forward.
Congratulations Finally, the big day arrives and you
open the doors of YOUR business for the first time.
There is no bigger thrill, no better feeling than knowing
that you are in control of your destiny.
When you work with VR, we guide you along the way and
help make your transition to business owner stress free
and simple. So, now is the time to go back to our "Businesses
For Sale" section and get started on your search
for your part of the American dream. |
Contact
us 
SERVICES
