Buy or Start a Home-Based Business?
Buy or Start a Home-Based Business?
Of course, that's no slam-dunk either. You always have to wonder why someone would be selling a perfectly good business. Is it an "opportunity" or someone else's headache? Beyond what the owner or the broker tells you, you need to look for real reasons the owner is selling. Is the business cash poor? Is it past its prime and now on the way down. Has something temporarily boosted income or reduced costs in the past couple of years? Is there a new competitor on the scene? Is a regulatory change looming? Are costs on the way up? Is something threatening to make this company obsolete?
As a buyer, you need to take a close look at the companies financial statements for hints about what's really going on. You have every right to review the tax returns for the business you are buying as well as the financial statements and supporting documents such as agings of accounts receivable (what the small business is owed from customers), and accounts payable (what the small business owes to its vendors -- and if the operator is paying within terms). If you're not comfortable evaluating the numbers, have someone do it for you. This could be the biggest opportunity of your life or the biggest mistake.
Unfortunately, you can't believe everything you see. Even copies of tax returns have to be suspect. That why, for example, based on the demonstrated lack of integrity of many sellers, all tax returns are verified with the IRS when banks are processing SBA loans.
The internet can provide you with background and access to research data on most industries. We just discovered our local library provides free access online to InfoTrac, a collection of over 47 million full text articles from 4500 magazines and most newspapers going back to 1980. Industry membership organizations and franchises are a great source of information too.
If you want to borrow money, a lenders primary concern will be the company's historical cash flow. If your seller claims they "really make more than we report", it's not going to convince your lender unless you can actually document the missing income.
Remember that a lender will not finance 100% of your new venture. You'll need to: put down at least 25-30% for most lenders; demonstrate that you have the talent and experience to run the business; and show that historically, the business generated enough cash flow to pay off the loan.
Buy or Start a HomeBased Business - To learn more about this author, visit Kate Lister's Website.
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When it comes to starting a home-based business from scratch, the unknowns can be daunting. One alternative you might consider is to buy an existing business.
Of course, that's no slam-dunk either. You always have to wonder why someone would be selling a perfectly good business. Is it an "opportunity" or someone else's headache? Beyond what the owner or the broker tells you, you need to look for real reasons the owner is selling. Is the business cash poor? Is it past its prime and now on the way down. Has something temporarily boosted income or reduced costs in the past couple of years? Is there a new competitor on the scene? Is a regulatory change looming? Are costs on the way up? Is something threatening to make this company obsolete?
As a buyer, you need to take a close look at the companies financial statements for hints about what's really going on. You have every right to review the tax returns for the business you are buying as well as the financial statements and supporting documents such as agings of accounts receivable (what the small business is owed from customers), and accounts payable (what the small business owes to its vendors -- and if the operator is paying within terms). If you're not comfortable evaluating the numbers, have someone do it for you. This could be the biggest opportunity of your life or the biggest mistake.
Unfortunately, you can't believe everything you see. Even copies of tax returns have to be suspect. That why, for example, based on the demonstrated lack of integrity of many sellers, all tax returns are verified with the IRS when banks are processing SBA loans.
The internet can provide you with background and access to research data on most industries. We just discovered our local library provides free access online to InfoTrac, a collection of over 47 million full text articles from 4500 magazines and most newspapers going back to 1980. Industry membership organizations and franchises are a great source of information too.
If you want to borrow money, a lenders primary concern will be the company's historical cash flow. If your seller claims they "really make more than we report", it's not going to convince your lender unless you can actually document the missing income.
Remember that a lender will not finance 100% of your new venture. You'll need to: put down at least 25-30% for most lenders; demonstrate that you have the talent and experience to run the business; and show that historically, the business generated enough cash flow to pay off the loan.
Buy or Start a HomeBased Business - To learn more about this author, visit Kate Lister's Website.
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Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
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