GAGNE BUSINESS BLOG

I spend most of my days meeting with or calling on small business owners. I absolutely love this part of my job and I thrive on the interaction with the entrepreneurial breed. Entrepreneurs have a spirit like no other segment of our local, state or national economy. Entrepreneurs are the people who have said “I can do this better than the next guy” or “I know other people will want this product or service”. Entrepreneurs are leaders who have decided not to depend on anyone else’s ideas to support them, but have forged their own way. They don’t mind the risk but invite it in and eat it for dinner. They look at the challenges owning your own business presents and say thank you Lord for not just another day at the office. Yes, Entrepreneurs are a breed like no other, usually.
Unfortunately these are not the business owners I have been meeting with. The business owners I have been meeting with lately look more like the troubled and the down trodden. They look like life has really deflated them this time. You can see their spirit starting to disintegrate right before your eyes. The same enthusiastic spirit that fed creativity and encouraged competition. That spirit has been replaced with the phrases of “I have too much going out and not enough coming in.” Or “I don’t know how much longer I can stay open.” These comments literally break my heart when I hear them. I can’t help but think that every time one of these businesses closes it is not just the loss of revenue America losses but it is a loss of spirit. The next time that entrepreneur has a great idea that broken spirit will fester up and tell them not to try, it’s not a good idea or worse yet it’s not worth it.
Although the beginning of this article may lead you to believe that this is going to be some philosophical commentary on the erosion of the American Entrepreneurial spirit under taxation without representation or how the American business owner has lost its will to capitalize in a capitalistic society. I assure you that is not the article I intend to present. More or less these series of articles will be a self help to the American businessman, a back to basics of business 101.
My wish is that you will read these articles and apply them to your everyday business. Then, slowly but surely you will begin to repair the marriage between opportunity and cost. My desire is that you will rekindle what was lost and find that perfect union again. I yearn for you and your business to become profitable, inventive and energetic again.

Flipping Businesses

2010-02-04T14:26:00.000-05:00

You’ve heard of making money “flipping” houses, but have you heard of making money by flipping businesses? Just like finding the worst house on the best street, you can find a business that needs turning around. This is not a quick risk free way to make a bundle of cash, but no matter where you look you will find opportunities. The business of flipping businesses needs an entrepreneur with a strong stomach, good business sense, some cash or a way to finance the deal and a somewhat long term outlook.
When I say a strong stomach, I don’t mean rock hard abs. I mean having the ability to withstand the emotional roller coaster during the revamping process. Unlike flipping a house where once you have gone through and made the cosmetic improvements, you are done and the rest is left up to the realtor. In business flipping, making cosmetic changes is just one small part of the process. You then need to run the business for 1-3yrs in order to bring sales up to the level where you can make a profit when you sell the business.
This brings us to our second point, a good business mind. Believe me, I’m not suggesting that you need to be a Harvard business school graduate, but you do need to understand the basics of running a business. It always seems to help if you have had some hands-on experience in running a business like the one you are thinking of flipping. By the basics, I mean the importance of a business plan, knowing how to budget, an understanding of staffing and how to handle a payroll, what types of business insurance you need and how much you need … the basics.
Money is where it all starts and I’m sad to say that this is not an article you will see made into a late night infomercial. I am not going to try and convince you that you can make something out of nothing. I will tell you that you are looking for a depressed business so you may not need as much as you think. Additionally you may be able to find a business that’s offering partial owner financing with a good credit report. If the seller is not offering owner financing you may be able to get a loan from the Small Business Administration, or think about bringing in a partner, or if you own a home you might want to consider a home equity line of credit.
Understanding that this is not going to be a quick flip and that you need a long term perspective is essential. As I stated earlier in this article, you need time to increase sales enough to warrant a higher selling price. For example: You purchase a pizza shop for $30,000 with an annual gross revenue of $100,000. Your goal is to profit $100,000 after adding $25,000 of improvements. This means that you would need sales that would support a $155,000 purchase price. A sales price of $155,000 would need gross revenue around $500,000 / yr. Understanding how long it will take to achieve those types of sales will put the long term outlook into perspective.
My intention in writing this article is not to discourage you from capitalizing on these opportunities but it is my intention to bring a realistic view to them. As a business broker I run into 2 or 3 businesses a month that fit this mold. You can find some of those businesses on my website @ www.gagnebusinessbroker.com. If you are the type of person that has the interest and ability to look at a business and see areas of improvement, then you have the heart for flipping a business. Now you just need to look at the other components and determine where to get started.

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

Adverse Credit Issues

2010-01-25T09:29:00.001-05:00

Your loan has just come back DENIED!! And now you are not going to be able to get that home mortgage, car loan or home equity loan. You feel deflated and a little embarrassed. It may be the end of your searching for now but with a little help and perseverance you can overcome those adverse credit issues.
Anybody who turns on the TV has seen commercials for credit counseling companies. Some are good and some are bad the answer lies in the fine print. This article is more for the people who want to tackle their credit problems themselves. I am not going to kid you sometimes this requires much discipline and hard work. In most cases this approach will require you to reduce your household expenses. If your credit issues are mistaken it will require you to dig for proof and write many letters. A point that will become very frustrating is that even if it isn’t your fault the burden of proof lies with you. In some cases you may even need to involve an attorney that specializes in credit issues.
Who handles credit information? There are three credit reporting agencies and they are Equifax, TransUnion and Experian. I dare say these companies may have more control over you future than even you do. Every time you apply for a department store card or auto insurance or even utilities these are the companies they check with to see if you are credit worthy.
Now that we know who the players are how do we overcome these credit hurdles? If you have been denied credit you must be told why and what is affecting your credit. Equifax, TransUnion and Experian make their money by selling your credit information along with your credit score to companies so in most instances you would be required to pay a fee in order to see your credit report this is not the case if you have been denied credit, additionally once a year you are allowed to pull a credit report from each of the agencies for free. They will charge you for the FICO score but the information that the score is based on is free. The fee for the score is very nominal, usually around $5. I would always opt to get the score otherwise it’s like getting your report card with just the comments but not the grades.

www.experian.com
www.transunion.com
www.equifax.com
Once you have obtained the credit report you can work at repairing your FICO score. Look for the organization that is reporting late payments or judgments. As I stated earlier this may require letter writing, phone calls and sometimes the involvement of an attorney that deals with credit problems.
Another reason your loan may have been denied was because of over extended credit. Meaning, simply that you have too much debt waiting you down. The way to tackle this problem is simple fiscal responsibility. You may need to get a second job and dedicate that money directly to reducing your debt. Maybe you bring in plenty of money but are just bad a budgeting it. If budgeting is the problem I have a suggestion for you go to this great debt reduction calculator I found @ www.vertex42.com/Calculators/debt-reduction-calculator.html This calculator will help you figure the best and fastest way to pay down your debt.
They key to success in anything is perseverance. Whether it is your personal life or financial life you need to stick it out and see it through. Credit issues are both emotionally and fiscally demanding. The good news is that you have the ability to overcome them.

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

Buying a Home

2010-01-21T09:00:00.001-05:00

If your goal is to become a home owner then here are the basic steps. I have been thru this process many times as a home owner, investor and real estate agent. I stated selling real estate at the age of 20 and sold real estate for 10 years before becoming a business broker. Please read on and discover the basic outline to the most common road to home ownership. As always I would advise you consult an active real estate agent that has been working in the area you are look to buy. At this time in history we are experiencing rock bottom interest rates, huge rebate incentives and realistic home prices. If you have the slightest interest in buying a home now is the time to pull the trigger.

Step 1: Find an agent. A real estate agent is valuable to have from the start. They are your industry insider and can guide you through all the steps of purchasing a home. Many times people acquire an agent only to get them in “the house”. The right agent can help you get pre approved for your mortgage. Knowing how much you can afford leads us to step two.

Step 2: Get pre approved. As stated in step one your agent can help you find a loan officer or if you know someone who has been through the process before ask them who they used and if they were happy with their service. Getting pre approved lets you know your home shopping limits. Sometimes you can afford a much larger house payment than you are comfortable with. Sometimes you get your heart set on the “perfect” home only to find out it is out of your price range. Getting pre approved usually does not cost you a penny. I would be cautious of anyone who is going to charge you at this stage of the game. You should be prepared to pay some up front cost later on down the road, but not during the pre approval process.

Step 3: Start shopping. Most likely you have started shopping even before step one either online or in your local real estate publication. Now that you have your agent and pre approval out of the way you can start to get serious about what you want to buy and where you want to live. Remember you have your budget do not do your self or your agent any disservice by wanting to look at houses out of your price range. The thought of you negotiating a house down 10, 20, 0r 30% is hugely unrealistic and you need to get those thoughts out of your head. When you start shopping you should created 2 lists. The first list should consist of things you want. These items should be considered a wish list, things you would love to find in a home in your price range. The second list should be a list of needs. For instance you have a family of five you need three bedrooms and 1.5 baths you want 4 bedrooms and 2 full baths. See the difference?

Step 4: Purchase Offer. You did it you and your agent found a house with most of your needs and even some of your wants. The home is just in your price range and now it’s time to write the offer. First, ask your agent to run a list of comparable properties and see how your house compares to them. Knowing how your house compares to other homes that are on the market now or that have recently sold allows you to justify the price you are going to offer. Closing date, you want all outside parties to keep moving on your deal so don’t give them extra time make sure they have enough time to do their work but make it a slight stretch. The rest of the must haves in the contract are usually already there. A couple of items you will want to add to the purchase offer.

Step 5: Attorney approval, you need to have your attorney review the contract before it becomes official. This doesn’t mean you can’t present the offer and have it accepted but it can not become binding until your attorney has had a chance to review.

Step 6: Home Inspection, I prefer to have an engineer go thru the home. This usually cost a little more but the engineer will be able to sort through the real issues and the non issues. If there is an issue you can have the engineer write up the report and this will carry much more wait than a home inspector.

Step 7: Offer expiration, you will want this offer to expire at some point. This time should be long enough for the sellers to see the offer and decide. You don’t want your offer sitting out there for long periods of time. This will allow the sellers to make a list of dislikes and will also allow time for other offers to come in. Keep it short and sweet.

Step 8: Closing, be prepared for anything at the last minute. I have been thru many closings personally and professionally and something always pops up. Stay calm and remember no matter how crazy everyone is acting they want the deal to close also. Closing day is payday for many of the parties involved. Some of the things that I have experienced are. 1. Needed to come up with extra money ($1,200) to cover unexpected escrow. 2. Sellers left huge amount of trash behind. Attorneys disagreed on fund distributions. Found another mortgage 2 weeks before closing. I can honestly say that all of these deals closed and many more just like them. Don’t fool yourself into thinking that it won’t happen to you because it will. If it doesn’t, write an ehow article about it.

Step 9: Welcome Home! There you have it, you made it through the process. You are now home owners with your own little piece of the world. I bet you even have some good stories to tell about it. Congratulations and good luck! Enjoy your life.

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @his website @ www.gagnebusinessbroker.com

Evaluating a Business For Sale (Part 3 of 3)

2010-01-14T15:54:00.001-05:00

Knowing when to ask for outside help and when you can handle the due diligence between yourself and your broker requires putting your pride aside. As a broker I always imagine this part of the process as war room time. War room time is described in Donald Trump’s book, The Art of the Deal; written by Donald Trump and Tony Schwartz, published by Warner books. He describes his team and himself as working all night and sometimes all weekend, just to finalize a deal while never leaving the room except for bathroom breaks. That type of situation and the adrenaline associated with it sounds exciting. To be honest, those type of situations are few and very far between. As you will see most business? deals are very typical and predictable. This is not to say that there aren’t moments of excitement, but not war room type excitement.
No matter how big or small of a deal, you will want to call in some specialized help. These professionals, just like your business broker, have a great deal of experience and training in their respective areas. The professionals that I am talking about are Accountants, Lawyers and Business Brokers.
Accountants have a trained eye for finding out how the business is being run financially. Selecting a good accountant is an important step. If this is your first business, you may want to do some searching for a good one. If I am shopping for a new “anything”, I usually go to my trusted friends first or family and ask what accountant they have and if they would recommend him/her.. . Maybe you don’t want to tell anyone you are looking into this business and you would like to keep it confidential. The next person I would ask would be my attorney and see if he/she can recommend anyone. This is a good person to check with, since they maybe working together throughout this deal and it would be good if they already have an established relationship. If you don’t feel comfortable with whom the attorney suggested another very reliable source would be your business broker. The broker will also be working in conjunction with the accountant so an already established relationship would again be very useful. To review a bit from part 2 of 3 (which can be found at www.gagnebusinessbroker.com or www.gagnebusinessblog.blogspot.com) the accountant will be looking over financial documents and possibly even leases. He will ultimately be advising you on the potential profitability.
Attorneys are not hard to find, but what you’re looking for is an attorney that deals in the purchasing and selling of businesses. Look for an attorney that has an established name within the business community. The attorney will be responsible for performing lean and judgment searches on the business you are thinking of buying. You, the client, need to know exactly what you are buying. Most likely, with minimal asking around, you will be able to find a lawyer that will be more than happy to assist you through the process. When in doubt, feel free to ask your broker. They have gone through this process many times and will have recommendations for you.
Your business broker will be a part of this deal from start to finish. The broker’s responsibilities consist of EVERYTHING. The broker is the liaison between all parties and the gopher for all parties. A good business broker acts as the glue that keeps the deal moving forward and more importantly, keeps the deal together. The broker will make it so you see the finish line. Brokers are like every other part of this team and can have many diverse working/ training backgrounds and you will want someone that you feel is working for your best interests. By now, you should know what type of resources your business broker can provide.
Like any other event in life you want to surround yourself with honest, knowledgeable, and hardworking people. You are probably putting a good sized nest egg on the line here and you will want to take as much risk out of the process as possible. Your search for financial independence has started. You are ready to create your own future. .

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

****This article like all of Dave’s articles was edited by his loving wife Becky. Becky is a crafty entrepreneur; please check out her online store at http://www.etsy.com/shop/starfish32 . ****

Evaluating a Business for Sale (Part 2 of 3)

2010-01-11T11:46:00.000-05:00

In the previous article, we established basic criteria for determining how much time and effort is needed in executing due diligence. Now let’s take a look at what type of information you and your business broker should be looking at. The complexity of the business will play a big part in what type of information you are going to ask to see. We will assume that you are buying a business that is easy to moderate in complexity. Let’s say you’re buying into the 36 billion dollar / year pizza industry. Some aspects are the same if you purchase a pizza shop or a small manufacturing outfit, but you are going to ask for a more in depth look into the small manufacturing outfit.
Let’s focus on the basics. You have submitted the offer or Letter of Intent (LOI) and your broker has made sure you are allotted time for due diligence. The main items you want to request from the sellers are as follows.

-Last three years worth of financials.
-List of equipment to be included in the purchase.
-Copies of current lease between the business owner and bldg owner.
-Copies of current equipment leases.
-A review of any agreements with current suppliers.
-A review of any debt and any debt agreements.

Starting with the financials, you are going to want the owners to prove that they are making what they say they are making. If they, the owner, are taking a paycheck out of the business you will want to make sure that is sufficient for your lifestyle. Financial records come in all shapes and sizes. Some business owners have their own spread sheet system, others keep their records in a simple note book, and some others hire a CPA to do the work for them. Last but not least, are their tax returns. Some examples of common documents as well as other information can be found on my website www.gagnebusinessbroker.com under resources. These examples come from the Small Business Administration (sba). The sba’s website is www.sba.gov . No matter what format the financials come in for your review, it is up to you, your broker, and any other outside resources, to feel comfortable with the information received.
The owner has informed you that the equipment is included in the sale of the business. You, the ever trusting buyer assumes that means all the equipment. Like any good business broker will tell you, you need to have it in writing. Make sure your broker asks the seller for a list of equipment, identified by make and model, and have that become part of the contract. In addition to the list of equipment, your broker should also find out if there are any lease agreements on the equipment and if so, what the details are surrounding them. If you are going to assume the leases you will want to see a copy of the agreements.
Now is a good time to address the lease between you and the building’s owner. Most likely the business you are buying is located in a building owned by someone else. The owner of the building and the owner of the business have a lease currently in place and if you are going to be assuming the lease, you will need to review this lease.
It doesn’t matter what type of business you buy, you are going to have suppliers. These are businesses that supply your raw materials for further processing or finished goods for resale. Sometimes, the previous business owner has contractual arrangements with these suppliers. The arrangement may deal with minimum orders, frequency of orders or some other arrangement. The important thing to know is that you need to understand what they are and how they are going to impact your business.
Debt or debt arrangements carried by the business you are purchasing is another importnt area to review. It is not always out in the open for all to see and you will want to involve your attorney during this process. Debt can be found in many places. Debt can be found in the form of existing loans, leases, credit cards and with those suppliers we just mentioned. It is very important that you have your attorney perform a search to look for outstanding debt, leans or judgments. The owner may be completely upfront about their existing debt and, in fact, it may even be part of the purchase offer for you to assume the debt in exchange for a lower purchase price.
I hope I have given you a little start into understanding what it is you should be looking at when purchasing a business. To quote one of the great American heroes’s of my generation…knowing is half the battle…G.I. JOE!
In the next segment we will look into choosing your team who should make up our team and how to choose them. Please look forward to: part 3 of 3 in my series entitled Evaluating a Business that is For Sale. Please do not hesitate to follow my blog @ www.gagnebusinessblog.blogspot.com

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

****This article like all of Dave’s articles was edited by his loving wife Becky. Becky is a crafty entrepreneur; please check out her online store at http://www.etsy.com/shop/starfish32 . ****

How to Evaluate the Business You are Buying

2010-01-06T08:14:00.002-05:00

You have decided to take the leap into business ownership. Your business broker has found the perfect business and now it’s time to do your “due diligence”. Due diligence is a process with an allotted period of time that allows you to review and analyze the business you are thinking of buying. How much effort should you put into the due diligence process? What should you and your broker look into? Do you need help from an outsider? Let’s take a few minutes and analyze the first question: How much effort should you put into the due diligence process? (The next two questions I will post in the coming days, so please check back soon.)
The clock is ticking and you need to make sure you are getting what you paid for. The answer is…it depends. For me I would look at a couple of factors to help me decide.
1. How much money do I or will I have into this investment?
2. How complicated is the business to understand?
3. What are my skill sets?
The more money I am going to have invested in the business the more I am going to take my time and get to know the business. Some small businesses sell for $30,000 and others sell for over a million. Some small businesses are very complex and others are not. Some businesses that seem very easy at first, end up being very complex and the owner is stuck owning a business they are not prepared or skilled for. In general, I would say a hot dog cart is an example of an easy business to own and something along the lines of a large towing company can get very complicated very fast. Items like debt service, leases and customer contracts can twist a potential owner around very quickly and put the sale in jeopardy. Check with your business broker and he/she should have the resources to guide you through this process.
Are you buying a business that matches your skill sets? Do you have experience in this particular industry? Depending on the complexity of this business, this may or may not be an issue. Approximately 40% of all businesses sold are in the food industry. Not all of those business owners have prior experience, but the complexity is low so they can adapt and learn quickly. Another interesting fact is that 90% of all businesses are bought by someone who has never owned a business before.
This should give you a good start into finding the business that is the right fit for you. If you have any questions please don’t hesitate to contact me through my website @ www.gagnebusinessbroker.com I hope you’ll take the time to check back an read the next two installments dealing with buying a business. In the next two articles we’ll look at the type of information you and your business broker should be looking at and what you should be asking for.

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

****This article like all of Dave’s articles was edited by his loving wife Becky. Becky is a crafty entrepreneur; please check out her online store at http://www.etsy.com/shop/starfish32 . ****

You’ve bought it!... Now What?

2010-01-04T09:28:00.001-05:00

You took the plunge. You have stepped into the world of entrepreneurship. You have bought a business. Now what? No matter what type of business you have acquired, there are some common basic steps you need to take. Throughout this short article I will touch on a number of topics. If you would like to find out more information on each of these topics please visit my website @ www.gagnebusinessbroker.com .
The number one item you need when owning a business doesn’t come out of a catalog or from any supplier. The number one item you need when owning a business is a business plan. What’s that you say? The bank didn’t require you to have a business plan to purchase the business. Guess what… that’s the banks problem. Rule number one: don’t base your business on the minimum effort required. A business plan is a way for you to organize how you are going to market your business. A business plan helps you with knowing & identifying who your competitors are. You will find yourself being pulled in many different directions and your business plan will be your compass. A sample business plan can be found at http://gagnebusinessbroker.com under business resources. The general outline of a business plan contains these categories.

 Introduction
 Description of Business & Vision for the Business
 Define your Market
 Your Products and Services
 Organization and Management of the Company
 Types of Marketing you Plan on using
 Financials

The last step of the business plan is preparing the financials for the business. In this instance I’m not talking about tax returns. I’m focusing on budgetary financials such as your income statement, your balance sheet and your cash flow budget. You can find templates for all of these financial documents at http://gagnebusinessbroker.com under business resources. If you are just starting this business, these are going to be projections. If you have bought an existing business, most likely the previous owner has supplied you with several years’ worth of these statements. On the other hand if your business has been up and running for a number of years, under your ownership, and you haven’t taken the time to prepare these documents. It’s never to late to start!
The last thing I want to say about keeping good, accurate financials is that these documents take your business from being just a bundle of goods or services to being a sought after asset. Buyers want to see financial documents that back up what you are telling them about the business. For instance if you are telling a potential buyer that they can make a living off this business then that buyer wants to see where and how you get those figures. Also, what’s your ideal salary? $40,000, $50,000, $100,000? Everybody’s idea of making a living is different.
Whether you have been in business 1 day or 100 years, the discipline of preparing and operating a business under a business plan is worth the effort. A business plan is a living document. You may need to revisit your plan six months into the fiscial year and adjust it accordingly. Thank you and good luck!

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

****This article like all of Dave’s articles was edited by his loving wife Becky. Becky is a crafty entrepreneur; please check out her online store at http://www.etsy.com/shop/starfish32 . ****

The Typical Profile of a Business Buyer

2009-12-30T20:10:00.001-05:00

A key element of Business Brokerage is knowing who your buyers are and where they come from. Even in today’s economy buyers are out in full force. People have been down sized, right sized and efficiently removed from corporate America. Their life plans have been put on hold, their kid’s college education funds are no longer being added to and in some cases they are looking down the road and noticing how small the career section of their local newspaper is.
The positive aspect to all of this is that they have been handed severance packages and buyouts from their employers. Now with cash in hand they are looking to buy a “job” with the security that comes in the form of perseverance. They are tired of their fate being left in the hands of someone else. Given the opportunity for this “rebirth” they are ready, willing and able to be Captains of their own ship, Titans of industry and Entrepreneurs! They are more than eager to tackle a pizza shop, bakery, dry cleaner or small manufacturing operation.
Many of these buyers have been well trained by corporate America and bring with them a wide range of skill sets. Life has also brought them many interests and now they are in a position to enthusiastically marry the two. 90% of today’s business buyers have never owned a business before. They have been told that owning your business is not easy and it’s a thankless job. They have been told that you have to be willing to cook the food wash the pans and pay the help to watch you do it all. Still they don’t care they are eager to invest with blood, sweat and tears for a chance to play in the game called Capitalism.
The typical buyer is looking for an established business in the $100,000 - $200,000 price range. Most entrepreneurs are looking for the seller to hold some amount of “paper” at a reasonable interest rate. Sellers often look at this opportunity as a win, win situation. The buyer after proving his credit worthiness to both the business broker and then to the seller can move the sale along quicker than if he was going thru a financial institution. This is also a way for the seller to earn additional monies from the sale of his business in the form of interest on the principal. Another added benefit to the seller is that it removes some of the financial barriers for the buyer. Buyers are often times more willing to offer closer to the asking price than if they were made to go thru a bank. Obviously not all buyers are the same and some may not want to have the seller hold a note for 50 – 70% of the purchase price. Some buyers are either in a financial situation to pay for the business in full or would rather find some other source of lending. Often Business Brokers know of the best sources for funding and are more than willing to help.
The buyer breakdown: Below is a breakdown of what potential business owners usually buy. All percentages are approximations.

40 % - Purchase a food or drink business
25 % - Purchase a retail business
25 % - Purchase a service business
10 % - Purchase other types of businesses

One of the favorite parts of my job is meeting with business owners and discussing what their plans for the future are. A common question I run into is “with the economy the way it is are people able to buy a business?” The short answer is yes, for more explanation please refer back to paragraph #2. As you can see there are many variables in selling a business and it is always best to have the guidance of a business broker at your service. This has been just a short glimpse into the typical profile of your average potential business buyer. For a more in depth look at who is out there as potential buyers or if you just have a question please contact me, Dave Gagne, a Business Broker Associate with AMD Business Brokers. Please feel free to check out my website @ www.gagnebusinessbroker.com

This article was written by David Gagné a Business Broker with AMD Business Brokers, LLC in Rochester, NY. If you are thinking of buying or selling a business in the Buffalo, Rochester or Syracuse, NY area or already have a business for sale by owner and would like some advice please contact Dave Gagné @ 585-966-9628 , visit his website @ www.gagnebusinessbroker.com

****This article like all of Dave’s articles was edited by his loving wife Becky. Becky is a crafty entrepreneur, please check out her online store at http://www.etsy.com/shop/starfish32 . ****

MERRY CHRISTMAS!!!

2009-12-24T10:28:00.009-05:00

2009-12-22T14:23:00.002-05:00

Welcome to the Gagne Business Blog.
I am a Business Broker Agent for AMD Business Brokers in Rochester, New York. Check out my business website: http://gagnebusinessbroker.com

AMD
A-Acquistions
M-Mergers
D-Divestitures

Before I started working for AMD Business Brokers, I sold real estate. My real estate career started in a small office in Orleans County with my most recent real estate employment being Nothnagle Realtors.

Real Estate gave me a broad range of skills that benefit my customers in Business Brokerage.
• contract negotiation
• helping buyers obtain financing
• finding the best buyer/seller for my client
• understanding the need to be available for my client

Helping my client is my main concern in every aspect. Whether my client is selling their current business or buying one, I will guide them through the process from start to finish.
I enjoy business brokerage because I have always considered myself to have an entrepreneurial spirit. I really enjoy going out and meeting different business owners and helping someone find their first business that they never thought was possible.

Honesty and family values are very important to me, my two girls, and my wife of ten years. My free time is spent with my family. You can often find us playing in the yard, going to Rochester Rhinos' games, attending church, teaching our girls to garden, camping, or watching a movie with our dogs lying at our feet.

Now that you know a little bit about me, I would like to learn something from you. Check out my website: http://gagnebusinessbroker.com.

If you are a business owner in the Buffalo, Rochester or Syracuse, NY area and would like to be a guest blogger, please let me know. Maybe you’re a local business owner that would like to discuss the business climate in our area and how we can make it better, let me know. Maybe your not from my area but are interested in business and would like to bounce some ideas off me, let me know. Again, Thanks for stopping by and please check back.