BUYERS

BUYING A BUSINESS.............

For the buyer, one of the most important steps
to acquiring a business is qualifying yourself.
If you have business ownership experience,
you will know what that means. If you have
never owned a business, you must take an
inventory of what you can bring to the table besides investment, ideas and
enthusiasm. In either case, take inventory in such a way that you are very aware of
your financial status and future requirements. Explore what experience and skills
have you attained that will contribute to the list of assets you're bringing to the
business.

After you have given me some personal background and your financial parameters, I
can match you with a business that can work for you. After you sign a
Confidentiality Agreement (in which you agree to maintain confidentiality
regarding any information I share with you about an available company), I will get
you an overview of the business and we can discuss it in more detail. If you like the
business in the overview, we then set up a tour of the business and have an
opportunity to speak with the seller. This will be the time to receive answers to
specific questions that in most cases can only be answered by the owner. At this
point, you will be aware of some, if not most, of the negatives of the business.
Remember, there is no perfect business. None will match 100 percent of your
criteria. If you want to be a business owner, you will have to choose from those
which come closest to your parameters, and correct any problems after you take
over. If you will only settle for perfection, you will want to remain employed in a
perfect job.

Once you've found the business that makes the most sense for you, based on the
information received so far, we will draft a letter of intent.If the seller accepts the
letter of intent, you will start your due diligence of the business and it's financial
numbers.

Most business owners use every trick in the book to avoid paying a penny more in
federal and state tax than they have to. One of the biggest advantages of owning a
small business is having the opportunity to use the business to minimize your
personal income tax liabilities.

The books and records of a small business will reflect this. They will, at times,
require explanation before you will be able to comprehend what you are reviewing.
One of the main tasks that I routinely undertake is to examine the seller's records to
paint a true picture of the business's money- making capabilities. The results are
used to set a price range for the business and to support that price with regard to
cash flow and how it relates to a return on your investment.

In a nutshell, all of the expenses that were not necessary to running the business
were added back to the cash flow. One of these items might be the owner's
compensation, which will be used in its entirety by the new owner. Another is the
owner's personal life insurance policy. Perhaps, the difference in wages paid to
family members that were far higher than would be paid to another worker to do the
same job, would be added back in. The unnecessary trip to Hawaii for the Widget
conference that happened to coincide with his wife's birthday, would be put back in.
You get the picture, don't you? When you buy the business it will be up to you to
decide where that money will be allocated.

Once you accept the financial numbers of the business, the seller's attorney (who is
generally the closing attorney) will draft all documents for the sale. This is done at
the seller's expense. You and /or your attorney will review them, make any needed
changes and the closing can take place.

Manasota Business Brokers, Inc.