FOR IMMEDIATE RELEASE

Dallas, Texas – VR Huntington Business Group of Dallas assisted in the successful sale of Sweet Land Tree Farm last week from Wintters Realty, LLC to HHH Nurseries, LLC.

Todd Wintters, president of Wintters Realty, LLC, acquired the farm three years ago from the founder. Sweet Land became a division of his engineering company, but as his core business evolved, it became a priority to move away from the tree business and find a suitable buyer for the farm.

“When it came time to sell the farm, I had two routes to consider,” Wintters said. “I could list the property with a real estate broker or try using a professional business intermediary. In the end, choosing VR Huntington was the best decision I could have made. The farm benefitted greatly from being marketed as an operating business rather than just a piece of property.”

HHH Nurseries, LLC was formed by brothers Blake and Jason Hearnsberger, along with their father, Roy. The group has real estate interests in other parts of the state and Sweet Land provided them an opportunity to expand their operation into East Texas as well as into the wholesale tree business.

“Having acquired other agricultural properties previously, our objective was to expand those holdings with an income-producing opportunity,” said older brother Jason. “This business was a bit further from the Houston area than we were looking to go, but based on the quality of the operation and the amount of detail readily provided by VR Huntington, Sweet Land became a viable option for us.”

Wintters gives VR Huntington credit – not only for generating significant interest in his business and producing multiple offers but also for the expertise they provided in evaluating each buyer individually.

“VR produced four offers on my business,” Wintters said. “The buyers were all qualified and motivated to make the purchase, which puts a lot of pressure on the owner to make sure and choose the right person. With VR’s guidance I selected an offer, and it turned out to be the best buyer I could have hoped for.”

Sweet Land Tree Farm (www.sweetlandtreefarm.com) offers wholesale customers access to a variety of Texas’ most popular hardwood landscape trees, including red oak, live oak, Chinese pistachio, pond cypress, cedar elm, lacebark elm and many others. The farm sits on 20 acres of prime property in Grand Saline, Texas. Contact Sweet Land at 903.962.3986.

The sale was facilitated by Jeremy Furtick, Senior Business Intermediary, with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas.

The VR network was established in 1979 and is the oldest professional business brokerage in the nation with more than 125 offices and 800 agents worldwide. VR Huntington Business Group (www.vrbigd.com) is based in Dallas and has finished the last four years as one of the top VR offices in the world. VR Huntington specializes in assisting the owners of privately-held companies to value, market and sell their businesses, as well as representing buyers interested in professional assistance in their business searches.

You’ve decided to buy a business but how do you know that the business you’ve chosen is the right one for you? Here are 7 questions every buyer should ask when they’re looking to buy a business.

1. Are The Numbers Provable?

One of the more frequent comments we get from buyers is that there are too many businesses where the seller cannot prove the numbers. So the strategy here is simple – if the seller cannot prove it, buyers will not pay for it, so only represent what can be documented. Additionally, if the seller has unreported income, do not expect to get paid for it. The benefit has already been realized.

The ability to provide buyers with detailed documentation to validate the financials is vital to a successful transaction. If the books and records are in disarray the seller should take time to organize them before taking the business to market.

2. Can It Be Financed?

Cash sales are rare. Serious buyers, however, do understand they have to put down a substantial down payment, but buyers want to utilize some financial leverage. There are three primary options for financing:

• Traditional lenders
• SBA loan program
• Seller financing

Traditional lenders rarely provide funds for acquisitions unless the loans are fully collateralized.

SBA type programs are growing in popularity. VR Huntington Business Group has established relationships with several SBA lenders and will pre-qualify the Seller’s business to determine the amount a qualified buyer may borrow. This greatly enhances the marketability of a business.

Seller financing is quite common and is addressed extensively amongst the various articles that have been posted on this site. Please read these articles as they offer valuable insight to this ever more popular means of securing financing.

3. What Does The Future Hold?


A business will almost always be sold that is valued upon past financial results, but the decision to buy will be based upon the future potential of the business. While some buyers consider growth to be their main criteria, at the very least the majority of buyers want to know that history will repeat itself. In other words, is the business sustainable and are there any issues that could impact it negatively after they buy. A realistic picture to the buyer should be presented, but at the same time the seller will want to present the business in a compelling fashion that demonstrates that all the parts are in place for them to takeover and continue to be successful.

4. Will Employees Remain?


This is especially important in businesses that may have some key employees. The buyer will more than likely want to meet them prior to closing. The seller should consider structuring the milestones of the deal to allow for the meeting.

5. If The Business Relies on Location Will the Lease Be Assigned?


Landlords can sometimes derail the sale. Consider meeting with the landlord to determine what issues will have to be addressed. A SBA loan will require that the business have a home for the term of the loan. Therefore, renewal options should be in place. To ensure that this doesn’t kill the sale, buyers should find out if their business broker is licensed to handle real estate transaction. For example, VR Huntington Business Group requires all staff members to have a real estate license to handle just such issues. In addition, we also have a Real Estate broker on staff to assist with the complexities of leases and landlords. If the seller owns the real estate and wishes to include it in the sale of the business then we will likewise guide you through this process.

6. Are there Any Hidden Problems?


The best strategy is to be upfront with prospects about any potential issues so that they can be dealt with early in order to maintain credibility and trust. When the seller wants to sell and the buyer wants to buy and the parties trust each other, it is almost impossible to prevent a successful transaction.

7. Is The Business Right For Me?


Ultimately, this is the question that is the make or break question. The buyer must make this decision, but the seller and his advisors should be of some assistance. VR Huntington will soon be releasing a proprietary program designed to answer this question. This program is in the beta stage now, but is called “Business Match Indicator”. The Business Match Indicator helps the buyer and seller to better understand the ideal profile and skill set of the perfect buyer for the business. This process helps the business intermediary conduct the pre-qualification screening of prospective purchasers.

Mike Derrick is a Senior Business Intermediary with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.

Agency plans to restart Recovery Loan approvals by December 28, 2009

FOR IMMEDIATE RELEASE

WASHINGTON, D.C. - President Obama signed the U.S. Department of Defense (DOD) appropriations bill on Saturday, which included $125 million to continue through Feb. 28, 2010, the enhancements made possible through the American Recovery and Reinvestment Act (ARRA) to SBA’s two largest loan programs. The SBA estimates the additional funding will support $4.5 billion in small business lending.


New approvals of loans with the higher guarantee and reduced fees made possible by ARRA are expected to begin by Dec. 28. Loan applications from borrowers who chose to be placed in the SBA’s Recovery Loan Queue will be funded first, followed by new loan approvals beginning on or before Dec. 28.

“This Administration and Congress recognize that these key programs were successful in helping jump-start the economic recovery for America’s small businesses,” said SBA Administrator Karen Mills. “The increased guarantee and reduced fees on SBA loans helped put more than $16.5 billion in the hands of small business owners and brought more than 1,200 lenders back to SBA loan programs. The extension of these programs through February is important to continuing our path toward recovery and will mean thousands more small business owners have access to the credit they need.”

“Just two weeks ago, President Obama laid out key aspects of his jobs plan, including significant ongoing support for small businesses. We will continue to work with Congress on moving those proposals forward, including extending these loan enhancements as the President called for, to ensure that small business owners have the tools they need to drive economic growth and create jobs in communities all across the country.”

As part of ARRA, SBA received $730 million, which included $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. More information about the waived fees can be found here. The funds for these programs were exhausted on Nov. 23.

SBA created the Recovery Loan Queue as part of its transition back to pre-ARRA lending on Nov. 23 because previously approved loans are sometimes canceled or never disbursed for a variety of reasons. Eligible small businesses, in consultation with their lender, could choose to be placed in the queue for possible approval of an ARRA loan if funding became available. Currently there are 1,069 loans totaling almost $530 million in the Recovery Loan Queue.

The extension included in the DOD bill authorizes the higher guarantee levels through Feb. 28, 2010. The fee relief is authorized until this additional funding is exhausted or the end of the fiscal year, whichever comes first. As was the case in November, SBA will transition into a queue system as the funds start to wind down in order to ensure the maximum simulative effect of the programs and disbursement of funds.

For non-ARRA 7(a) or 504 loans funded during the transition period, this extension does not provide a retroactive guarantee or waived fees. Loans that were funded under non-ARRA terms cannot be canceled and resubmitted to take advantage of the ARRA extension provisions.

This extension does not affect other SBA ARRA programs, including the America’s Recovery Capital (ARC) loan program or the agency’s microloans. ARRA funding still remains for both of those programs.

For more information about this News Release, contact Hayley Matz of the SBA at (202) 205-6948 or visit www.sba.gov/news

FOR IMMEDIATE RELEASE

DALLAS, Texas – VR Huntington Business Group of Dallas assisted in the successful sale of two Pump It Up franchise locations from Advanced Cycling Concepts, Inc. to John D. Ruchman Enterprises, LLC.

Carol Welch, president of Advanced Cycling Concepts, Inc. opened her first Pump It Up location in Dallas in 2004. Then in 2007 she started a second location in Plano under the “Junior” concept, which caters to smaller children. After dedicating countless hours to opening and operating the two locations, Welch decided it was time to move on and let a new owner with new enthusiasm take over the business.

“I loved every minute of starting and operating both Pump It Up locations,” Welch said, “but there finally came a time where I decided it was a good idea to move on – I was burnt out. So we started interviewing business sales professionals, and ultimately chose VR Huntington out of several options.”

John D. Ruchman Enterprises president, John Ruchman, first became interested in Pump It Up four years ago while attending a birthday party at the Dallas location with his family. Years later when he became aware that the operation was available for acquisition, he dedicated himself to making this venture the next move of his professional career.

“I can still remember being at the Dallas location and my wife telling me, ‘You ought to buy this business someday’,” Ruchman said. “I was absolutely thrilled when I saw this listing go on the market and came to find out the Dallas location was available.”

Welch and Ruchman both had high praise for VR Huntington.

“It’s no secret that the past year has been difficult for good businesses to find qualified buyers,” Welch said. “We are extremely grateful to VR for sticking with us through this tough year and also for being able to negotiate a deal for our business that we never thought we would be able to get in this economy.”

“VR Huntington did a great job of helping me through this process,” Ruchman said. “I felt like I was working with people who actually cared about more than the ‘sale’.”

Pump It Up (www.pumpitupparty.com) is an indoor inflatable party center franchise operation with more than 175 locations nationwide, including 10 locations in Dallas/Ft. Worth. The Dallas location is at 9201 Forest Ln., and Plano is at 4101 E. Park Blvd. Both locations can be reached by dialing 972.792.9663.

The sale was facilitated by Jeremy Furtick, Senior Business Intermediary, with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas.

The VR network was established in 1979 and is the oldest professional business brokerage in the nation with more than 125 offices and 800 agents worldwide. VR Huntington Business Group (www.vrbigd.com) is based in Dallas and has finished the last four years as one of the top VR offices in the world. VR Huntington specializes in assisting the owners of privately-held companies to value, market and sell their businesses, as well as representing buyers interested in professional assistance in their business searches.

Everyday, I’m asked this question by business owners who are looking to sell their business. It’s good question. Why do you need to hire a business broker? The answer is simple - expertise.

As a business owner, you understand that you need to hire experts to handle certain aspects of your business to protect your investment and its continued success. That’s why you don’t think twice about hiring a CPA or an attorney. The principal is the same when hiring a business broker.

Typically, business owners hire a broker because:

• You have spent a great deal of time and energy building your business
• Your business may be your largest financial asset
• You are uncertain how to protect your confidentiality
• You have no real idea of what the business is worth
• You don’t know how to find and qualify buyers
• You may not have negotiating skills
• You don’t want to take your eyes off the business while it’s being sold
• You may not even be certain of what the first steps are to sell your business

Just like hiring a CPA or an attorney, you need to do your homework when hiring a business broker. A good broker is a skilled professional who will manage the sales process for you and handle all of the complications so you can continue to grow your business!

A member of the VR network which has been providing sell-side services since 1979, VR Huntington Business Group in Dallas has been recognized on numerous occasions as a leading firm amongst all professional intermediaries and business brokers in North Texas.

What you should know before hiring a Business Broker

Prior to engaging a broker let us first begin with the skills and qualifications that your broker should possess and how to determine if you are selecting the right broker to represent you.

Seller Due Diligence: A prospective buyer will undertake due diligence - so should you. Review the broker’s experience, credentials and references. Visit their office to be certain they are not operating from their home. Check the BBB. Have they handled sales of your type of business before? How long have they been serving your market?

Check IBBA: The International Business Brokers Association® (IBBA) is a non-profit trade association of business brokers that provides a professional certification process after a rigid education program is completed. Are the leading members of your brokers’ firm certified?

Use a Specialist: A business broker who spends all their time selling businesses, as opposed to real estate agents for example or part-time business brokers, will add more value to your sales transaction.

Confidentiality: Selling one’s business is a highly confidential matter. Your business broker should ensure all measures are in place to protect your company. Any knowledge by your suppliers, employees, or customers that you are selling can have adverse repercussions.

Marketing Plan: Selling your business is all about strategic marketing. Properly positioning the sale of your company to attract as many buyers as possible is the objective. A skilled broker will have a detailed marketing plan with advertising strategies designed to attract a wide range of prospective buyers.

No Upfront Fee: A business broker’s fee ranges from 10 to 15% commission of the sale price of your company. Avoid any broker asking you for an upfront fee.

What a Good Business Broker Will do for You

Qualified brokers will meet the standards outlined above and will, in addition, be able to provide the following to ensure that your objectives are fully satisfied:

Value your business using several different methods and give you an idea of the price your business is likely to sell for. good broker will adjust your financial statements and recalculate the cash flow since it could be higher than what was disclosed to the IRS

Add a layer of confidentiality to the transaction thereby protecting the value of your business and helping you get the best possible sale price for your business.

Reach more buyers through channels that you may not be able to access directly on your own.

Negotiate with buyers and their advisors to get you the best price and sale terms for business.

Educate you about the sales process - Many sellers are not aware of what they have to disclose in documents such as the Non-Disclosure Agreement or Purchase Agreement

Manage the due diligence process. Selling a business can be a long and tedious process. A good business broker will help you by answering many of the typical questions that buyers have allowing you to focus on the daily operation of your business.

Complete the deal. An experienced business broker can work with you to structure the financing of the sale and help close the deal.

Remember - A good broker will allow you to get you a lot more money at the best terms (even after you have deducted their fees).

Mike Derrick is a Senior Business Intermediary with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.

While there are a few good and strategic reasons for the owners of a C Corporation (“C Corp”) to maintain C Corp status (e.g., plans to take the company public, preserving health care deductions, etc.) the owners MUST prepare in advance and develop an Exit Strategy in order to avoid the shock that typically comes when they receive the tax bill following the sale of their company.

We at VR Huntington Business Group often find that business owners have very little knowledge of the tax consequences that are triggered when they sell their business. These consequences are most especially severe for the owners of C Corporations.

C Corporations pay taxes on the income earned and, if the earnings and cash levels warrant, they then distribute the after-tax earnings in the form of dividends to the shareholders who will in turn pay taxes on those dividends. This is known as “double-taxation” and is the subject of much frustration for many C Corporation owners.

When a C Corp is sold it will generally take the form of an asset sale as opposed to a stock sale, which means the buyer will purchase the assets of the corporation and the proceeds will go to the corporation. The corporation will then pay taxes on any profits from the sale. What remains is then distributed to the owners who will in turn be taxed a second time - the “double-taxation” I mentioned earlier. Tax rates vary according to earnings and capital gains rates but, of critical importance, if the C Corp owners are not careful they will pay double taxes on the sale of the company.

If owners of a C Corp are considering the sale of their company in the next few years, they should meet with professional advisors to begin developing an Exit Strategy. The owners’ CPA and a professional business intermediary should be contacted to start developing an exit strategy well in advance of the sale. For example, it may be desirable to make an S Corp election and take advantage of favorable tax strategies now available under the American Recovery and Reinvestment Act of 2009.

We, VR Huntington Business Group, have on numerous occasions advised our clients to consult with their CPA regarding how they can minimize their tax burden by classifying the sale as one that predominately includes personal goodwill. This structure may be applicable and can substantially reduce the taxes on the sale of a C Corp. In other cases the owners’ CPA or other advisors may be able to develop alternative tax strategies to substantially reduce the tax liability. There are, as noted above, advantages to C Corporations but when selling a C Corp the owners must plan carefully and well in advance.

In summary, VR has often been contacted by owners of C Corporations that it most cases should have considered converting to an S Corp many years earlier. These owners are now presented with significant hurdles that advance planning could have avoided. We find that many middle-market business owners, unfortunately, do not understand the effects that a C Corp status has, not only on the eventual price the owner will receive for the business and the taxes to be paid on the sale, but also on the challenges that a C Corp status presents in marketing the business.

Focus should be on advance planning – VR Huntington Business Group offers consultative services to ensure against the pitfalls that many C Corp business owners should avoid before selling their business.

Mike Derrick is a Senior Business Intermediary with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.

Understanding how much money the business owner is truly making is one of the most difficult, if not THE most difficult aspects of buying a business. If the 5.6 million-word tax code doesn’t make it difficult enough, business owners and their accountants sometimes only add to the confusion with their “creative” bookkeeping techniques.

You’ve probably heard a dozen terms that describe the profits of a business – Cash Flow, True Owner Net, Seller’s Discretionary Earnings (SDE), Seller’s Discretionary Cash Flow, Owner Benefit, EBITDA – these terms all pretty much answer the same question … How much money does the owner really make?

What you have to understand and accept first, before even looking at a financial statement or report, is that the objective of a business owner is to make as much money and pay as little tax as possible, and that “good” accountants and CPAs find ways to help business owners accomplish this goal. This can make your attempt to determine true cash flow a little more difficult but always keep one thing in mind – business owners have to prove what they claim.

Recasting

The first step we take in determining a business’ cash flow is to recast the financials. Recasting financials is a fancy term that simply means we “correct” them or adjust them to provide a more accurate picture of what the business is truly producing in regards to profit. When we recast financials, we are looking for expenses to “add back” into the net profit of the business – we call these items add-backs or fringe benefits.

Personal Expense

As a rule-of-thumb, anything that is a personal expense is an add-back. This commonly includes items such as family cell phone plans, family health insurance coverage, personal vehicles and meals. Keep in mind that some of these items could be a combination of both personal and business expenses, so we must be careful only to add back the portion of the expense that is truly for personal use.

Discretionary Spending

In addition to personal expenses, we also have discretionary spending to account for. These expenses can include charitable donations, excessive legal fees or season tickets to a local sporting venue. What we are looking for here are specific items, although they are often legitimate business expenses, that are not mandatory to operate the business – hence, discretionary, meaning a new owner can choose not to spend this money and the business will not suffer.

Non-Recurring Expense

Another major add-back can be the one-time, non-recurring or extraordinary expense. Maybe a business owner paid cash for a new piece of equipment or maybe there was a major repair that had to be done to the building after a storm. These are examples of legitimate business expenses that were unique and only appear once in several years of financial records. We add those items back in because they skew the “normal” cash flow picture of the business.

Owner’s Salary

Don’t forget about the owner’s salary, or any payouts to partners or other family members that are shown as expenses. We add these items back too. They are the easiest expenses to add back because the owner could very easily choose not to pay himself a salary and those dollars would simply fall to the bottom line profit of the business.

EBITDA

Finally, a note on EBITDA or Earnings Before Interest, Taxes, Depreciation and Amortization. This simply refers to a business’ profit before any interest, certain types of taxes, depreciation and amortization are deducted as expenses. Any CPA will tell you that EBITDA is universally accepted. Although EBITDA becomes less and less relevant as businesses become smaller in size, those items are still added back in our recast.

So once we have examined the financial statements and determined what personal expenses, discretionary spending, non-recurring charges, owner’s salary and EBITDA items should be added back, we have completed the recasting of the financials. Now we have a very clear understanding of what the business’ true cash flow is. Think of it as a pot of money at the end of the recasting rainbow – then it’s up to you as the new owner of the business to determine how you want to run your books, and allocate those funds accordingly to empty your pot as you see fit.

Jeremy Furtick is a Senior Business Intermediary with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.

As I mentioned in previous post, there is more to selling a business than the sale price. Buyers can offer big numbers when they’re looking to buy a business BUT can they pay that price. Here’s how to make sure they can.

Put Like With Like

Look at your business and ask yourself, “What role do you fulfill?” Yes, I already know what your answer will be: “Everything!” But if YOU do everything then you have nothing to sell; you’d simply be irreplaceable, and not in a good way. What is the role, realistically speaking, that you fulfill in the business? Sales and marketing? Production? Logistics? Bookkeeping?

Specifically, what do you do that makes the company uniquely yours? Your job and that of the business broker/intermediary is to hire someone that can do this job not just as well as you did it but actually better than you.

This is not rocket science, but rather this is something that can be done very effectively 99% of the time. And guess what? You have help from the business brokerage firm, and you have a say as to who the buyer is; none of this process happens without your active participation.

How many investments can you say that about? I mean, it’s not like as a shareholder of Coca-Cola or Yahoo! you have a say about who the new CEO is of that publically traded company where you invested your retirement funds. Here you play an active role in planning for your retirement by screening the buyer applicants for your company. After all, the better screened the buyer; the more likely he or she will be to run your company successfully in your absence.

Resumes, References and Credit History

That is why it is important when you are qualifying the buyer that you ask for resumes, references and credit history. You need to make sure that you can understand what type of buyer I would suggest you lend money to.

Huntington Business Group Inc. in Dallas, the business brokerage firm that I own and operate, takes this point very seriously. In qualifying the buyer, you should have a resume in front of you to consult. This resume should include the work and experience that relates directly to the business that you own.

As I said in a previous post, when I sold my janitorial business, the buyer didn’t have janitorial experience but had extensive and relatable sales experience that, reading between the lines, I could see would apply directly to my company.

While considering the buyer, it is equally important for you to examine your business strengths, your weaknesses and the role you play. Once you leave the company, the business must be strong in operation (even without you) because of the employees that you have in place.

Obviously, the buyer doesn’t need to be strong in this area; the employees you entrust with your company should do their jobs and do them well, regardless of who signs their paychecks. The buyer should be strong in the areas that you fulfill, or the business needs to be able to grow and be more successful. In fact, what you are looking for in the buyer is someone that can take your business to the next level.

This is how you are going to get paid.

Forget what the business is currently doing; if the buyer is the right match, then two years from now, the company will be much larger and have much greater capacity to pay you the money you are owed and the interest that is mounting.

Another area when qualifying the buyer is credit history. If the buyer has relatable experiences, then you would look to their creditworthiness. Now, as a business transition specialist, I must say here that rarely do I see a buyer with bad credit. So what I really want you to focus on is not just the credit score. Take a look at credit history, and in particular look for what type of credit they have had previously and, if any, what type of problems you can see in their credit history.

Again, you are not alone in this process; it doesn’t have to be so hard. In my business, this is an area that we help you with. We will sit down with you as a “Credit Committee” to analyze the creditworthiness of an individual to buy your business. I bring this up because I have seen a buyer with a credit score of 700; but they had a red flag buried somewhere in there, a repossession of a car.

Now, as a broker where the seller has put his trust in me to sell his business to the right buyer, this is concerning to me. I want a complete explanation of what happened and how the issue was handled. If the buyer is the type that would allow their vehicle to be repossessed, then they may be the type of buyer that would walk away from your business when the times get tough.

In this particular situation, the buyer had a lemon car and was able to show the documentation of this and, upon request, a letter from the lender where they were correcting the issue on their credit report (even though it had not been done at the time we were reviewing). In the end, the buyer ended up being more than qualified to purchase the company and paid the seller note in full, giving the story a happy ending.

Without a quality brokerage firm in place checking on these things, the seller might have missed the repossession in the first place or seen it, misunderstood it and turned the buyer – and a good prospect – down out of a kneejerk reaction. Neither course is advisable.

Parting Words About the Buyer’s Experience to Run Your Business

At the end of the day, this process is all about getting paid. Finding a qualified buyer, making sure he or she is best suited to run your company and vetting the prospect through a series of verifiable processes just makes sense to ensure your investment – now and in the future.

Of equal importance is finding a buyer who is experienced enough to run your business in your absence, regardless of what line of work they succeeded in previously. Be it suitcase sales or the restaurant business, retail or manufacturing, if you find the buyer’s experience suitable for your company, you’ve found a qualified buyer indeed.

Scot Cockroft is the owner and president of Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.

It’s no secret that acquiring a business can prove to be one of the most lucrative and rewarding financial decisions an individual can ever make. What else can you invest in that offers immediate cash flow along with long-term appreciation while providing the freedom associated with being your own boss?

Unfortunately, too many perfectly capable and motivated people are scared away from the idea of purchasing a business simply because they don’t understand the process.

Admittedly, successfully buying a business is going to be more complicated than picking out a new couch for your living room, but as is the case with most multi-faceted procedures, having the right guidance, direction and advice can make all the difference in the world.

With these ideas in mind, it became clear in 2009 that the rules have changed – buyers need an advocate in the acquisition process. Although attorneys and accountants can offer their expertise on certain aspects of the business buying process, purchasers in the marketplace just don’t have the representation they need to smooth out an often bumpy road to acquiring a business.

The world of business brokerage has long been focused on the seller – list the right businesses and the right buyers will find you, then it’s up to the buyer to figure it out and jump through hoops to actually buy the business. I propose that it’s time for buyers to be offered an equal voice, as well as an equal level of expertise, in the business-buying process.

Buyers need someone from the broker’s side of the table to join their team and shed light on this complicated process so that they can break through the uncertainty and doubt and move forward with their dreams of owning their own business – and that is just what VR Huntington Business Group is offering.

We have taken our years of experience with hundreds of transactions and created a buy-side representation program that is designed to assist purchasers in the acquisition process from the initial moment they begin looking at a business, all the way to the closing table.

• How can you tell if a listing is “too good to be true?”
• Is it appropriate to submit an offer sheet or LOI?
• Is it possible to get financing on a business you are looking at?
• What are the typical offer structures that sellers should consider?
• What details should you expect a seller to disclose and when?
• When is it appropriate to meet the key employees?
• Should you assume the current lease or negotiate a new one with the landlord?

These are just examples of the hundreds of questions you will find yourself asking at certain points in the buying process, and these are the types of questions a buyer’s agent will be able to help you answer so that you can move forward more quickly and confidently.

Acquiring a business is like walking through a minefield – a buyer’s representative is there to navigate you through that minefield – they have been through it before and know where to step to avoid fatal results.

Jeremy Furtick is a Senior Business Intermediary with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.

You’ve made the decision to buy a business. You’ve done your research and you’re ready to request more information. You click on the link to send an email or you make that call to the Business Broker and you anxiously wait for a return phone call or email. Then you wait and wait and wait but nothing - no response. You’re confused and frustrated as to why the Broker has ignored your inquiry.

Everyday we hear this complaint from Buyers - “I’ve inquired about several businesses but never got a response from anyone.” Ideally, the “average” Business Broker should respond to your request for more information about a business within 24 to 36 hours. If you are having difficulty receiving a response from the business broker, you are either dealing with an incompetent Broker or a one man office or it could be you, the buyer.

Unfortunately, I can’t help you if you’re dealing with a one man office or an incompetent Broker other than to say do not use the services of that Broker if they will not respond to you in a timely manner. That being said, Business Brokers are inundated with inquiries from Buyers concerning the businesses for sale that they represent. 9 out of 10 buyers will never buy a business, therefore Business Brokers must determine if you are one of the nine that will never buy a business or are you that one buyer that will buy the business and begin the adventure you have always dreamed of - owning your own business.

Here are some reasons as to why a Business Broker has not returned your call:

1. Inquires on multiple businesses at the same time

When a buyer’s initial contact with a broker includes interest in more than 2 listings it brings up a couple of concerns for the Business Broker. Their first concern is whether or not the buyer is really serious about buying a business or are they just “lookers” or “tire kickers“. Another concern for the broker - has the buyer thought through the buying process and determined what industry best fits their skill set. A good Business Broker can definitely help a buyer locate the right industry and business that best suits them, however, when submitting an inquiry to a Business Broker it is always best to start with one listing first. Remember, you can always mention to the broker that you’re interested in additional listings and would like more information.

2. Your first contact is a request for detailed financials

Buyers obviously need to see financials for any business they have interest in; however, it is not the first thing you should look at when you are researching a business. A business is more than just what you see on paper. You need to understand location, product, employees, niche etc. as part of the evaluation. Looking at the financials only is not a fair look at the overall business and you might possibly miss a great opportunity if you just focus on the financials. A Business Broker will typically have 3 years of financials for all of the businesses that are listed (there are some exceptions to the rule).

3. You require the physical address of the business

Most buyers in our experience desire a business located close to where they live so they want to know where the business is located. That is understandable, however, all businesses that are for sale are confidential which includes the location. The location of the business is a competitive advantage to the business. To maintain the integrity of the business before and after the sale, the actual address cannot be disclosed until after a non-disclosure agreement has been signed and sometimes not until you have met with the Business Broker to be sure the business is the correct match for you - the buyer.

4. You refuse to sign a Non-Disclosure Agreement

As a Business Broker we must fight against the perception that a business for sale is a negative occurrence. Employees, vendors, customers and competitors must not know that the business is for sale as the employees will become nervous and may start looking for other employment, customers will stop buying from the business and vendors could stop supplying the business. Should a competitor become aware that a business is for sale it could become a disadvantage to the business. This would cause irreparable damage to the current and future business. When a buyer refuses to sign a Non-Disclosure Agreement it creates concern with the Business Broker that the buyer might be a competitor or are they trying to steal proprietary information from the business.

5. You do not provide complete information

Along with the Non-Disclosure Agreement most Business Brokers also request additional information in the form of a Buyer Profile. The profile often requests your contact information as well as details about the industry you are interested in, the amount you are comfortable investing for a down payment and a little bit of background on your skill setetc. These questions are often tailored to the specific Business Broker that you are working with. The main thing to remember is that the more information you can provide the Business Broker the more likely they will consider you a serious buyer.

Business Brokers need a buyer who is able to complete a transaction, however, as I have already mentioned 9 out of 10 buyers will never buy a business. If you are serious about buying a business follow the suggestions above and Business Brokers will want to respond to you to your inquires and help you find that perfect business for you to start the entrepreneur adventure.

Mike Cockroft is a Senior Business Intermediary with VR Huntington Business Group Inc. a VR Business Sales firm in Dallas (www.vrbigd.com).

VR Huntington Business Group, located in the heart of the DFW Metroplex, serves the entire Dallas-Fort Worth Metro area as well as North Texas. The company specializes in Business Brokerage, Mergers & Acquisitions, Business Valuation and Consulting services focusing on small businesses and mid-market companies.