BusinessesForSale.com doesn’t just put buyers and sellers in touch with each other.
Another service it offers is the Buyer Networking Forum. You can post queries about any issues that you are unsure about and problems you encounter during the business buying process.
Any site users can then respond to these queries, putting minds at rest, clarifying issues and suggesting solutions to problems. People who have bought and sold businesses often share their valuable experiences, although a range of other experts are also seen to offer their help – solicitors, accountants and finance brokers for example.
BusinessesForSale.com staff also pitch in where they are able to assist, or at least point people in the right direction.
An organic site, where people can share their experiences, offer a helping hand and keep other people informed about the latest industry developments, is an up-to-date, relevant and engaging site.
User-generated content is becoming more fashionable on the internet – and there’s a good reason for that.
But the user-generated model – and we do plan to encourage users to write articles as well as share ideas and advice in forums on BusinessInACan.com – works particularly well in the business firmament. There’s no standard, one-size-works-for-all model for succeeding in business. So why should we have a monolithic editorial output, written only by journalists?
No matter how much editorial we at Dynamis – the web publishing company behind BusinessesForSale.com and BusinessInACan.com – can produce (and we are producing a lot!) we can never cover every angle and claim to convey the unequivocal gospel truth on every business issue. If you want to know about a trend in the market for pool halls, we cannot promise to have an article on it. And if we have a six-month-old article on buying an online business then you may wish to know some more up-to-date information on this fast-changing market.
Anyway, here is a sample selection of 10 enquiries from the Buyer Networking Forum and how they were answered by site users and the Dynamis team.
Dear BusinessesForSale.com,
I have never bought a business before and I am in full time employment now and renting my home. My problem is that I have no deposit and a bad credit history. With this in mind, how can I get funding to buy the business? Who will lend me the money? Is it easier to start at the bank or with a broker?
You may have problems! Normally, high street banks won't touch 100% funding for business acquisitions as the risk levels are too high for their criteria. There are obviously loads of finance houses you can find on the internet who may be willing to lend, but the fact you have bad credit, no deposit and no home to put up as security makes your situation difficult. All you can do is contact them and see what they say. Or, as you mention, go through a broker to cut down on the leg work. If you are offered finance, expect to pay a high rate of interest – because you are high risk.
Dear BusinessesForSale.com,
How do you keep existing staff happy when taking over a business? I am having some issues with the business I have just bought as the staff seem very demotivated.
There is usually an element of despondency among the staff when a business is taken over by new management. Generally, when a business is taken over the turnover goes down by about 20% to 30% over a period of about two to four months. But once the new management is in place and staff realise their jobs are safe the turnover goes back up.
I would suggest regular staff meetings. Start by airing the negatives of the past, present and future. Get all the staff involved with the running of the business and offer an incentive for growth.
Dear BusinessesForSale.com,
Am I too old to buy a business? At 55, I now have the finance to invest in a business and I want to carry on working for at least the next 8 years. I long to do my own thing but most of the profiles on your site refer to people 20 years my junior. I am physically fit and have loads of enthusiasm. Should I just wait to claim my pension? Or should I give it a go?
You are never too old! The only thing stopping us is ourselves. There are hundreds of people out there who are looking to buy a business having realised that they may need some additional income during their retirement. BusinessesForSale.com's recent customer survey revealed that 12% of our registered business buyers are aged 55 and over, while 32% are aged between 45 and 54.
Dear BusinessesForSale.com,
I am considering buying a newsagent. One grey area that concerns me is the final stock figure and value. How do you go about ensuring this is correct?
When a business is being transferred you must always employ a professional stock taker to make an accurate assessment of the stock value. A good business broker or accountant will direct you to a company that provides a stock-taking service. You can also go on the internet or the Yellow Pages to draw up a list of stock takers. I would aim to make a shortlist of three before appointing one.
Dear BusinessesForSale.com,
Is it unreasonable to ask for a breakdown of goodwill, fixtures and fittings and the lease on the business? I have recently asked an agent for the monetary values of each element and was told that they do not provide such detailed information. Is this right?
Absolutely not! It is very important that you speak to your accountant when purchasing a business and usually the breakdown is noted in the contract to purchase. The amounts are normally agreed between vendors’ and buyers’ accountants.
Dear BusinessesForSale.com,
I hear you can claim back tax on the interest of a commercial mortgage... how does this work?
You do not get tax back. The interest on a commercial mortgage is tax-deductable against your company’s profits.
Dear BusinessesForSale.com,
We are looking to buy a small hotel and guest house with our two adult children working as staff. They will do the front-of-house work and I will assist behind the scenes, carrying out maintenance and cleaning. What kind of qualifications and assistance should I look for?
I've been running our guest house for some years now and I don’t regret a single minute. Get hold of as much assistance as you can. Look for an accountant who has experience in this sector. You really need to know what you're doing or it can be a very costly business. You will find it useful if you work with an existing owner for a few weeks. Apart from the standard financial control that comes with any business, knowledge of areas such as stock control and rotation of stock and ordering are essential, along with peaks and troughs of business, seasonal trends and percentage of bed-space booked.
You must have a good accountant. He will save you more than he costs. For good advice go to your local tourist board. They will give you help on how to present your hotel business, what the legal requirements are and the health and safety and environmental requirements.
Dear BusinessesForSale.com,
When selling a business that currently has a customer base (but no physical contracts with any of them) can these customers be used to increase the selling price of the business?
The repeat sales to a customer base are the only proof of the value of a business. A customer list of 5,000 where you can prove that 3,000 of them have purchased from you in the last year is a valuable asset. Conversely, 1,000 repeat sales prove that much needs doing to bring the business up to scratch. Where someone is selling based on the accounts, you need better statistics and proof. Ultimately, I would ask for retention of the sale price for a certain period against loss of customers. Also, if you’re worried about the vendor taking customers when they move then you could seek a ‘no trespass agreement’ against the vendor.
Dear BusinessesForSale.com,
Honest advice needed! We are a couple of 50-something-year-olds who would like to spend a few years running a business before we retire. Our capital is limited and we have no experience (apart from running a sub-post office 30 years ago!). We are sick of all the restrictions and money needed for businesses in Britain. We love Thailand and its people, as well as Spain and Cyprus. Is it a stupid dream or could it happen? We're sociable, hard working and very young at heart. Where can we get advice and maybe talk to someone who's done it?
I have bought and sold many businesses in many different countries over the years. Firstly I would suggest that what you are looking to do is certainly achievable as long as you are willing to put in the effort to learn about your new market - in particular the laws, customs and general business culture of the country. I would suggest that you look for businesses that are either close to what you know or else are easy to learn and where the seller is willing to spend some time transitioning the business with you.
Also, one key point to remember is that the single biggest reason businesses fail is a lack of sufficient working capital. They simply run out of money before they become profitable. So plan, plan, plan! Prepare a full business plan otherwise you are in unfamiliar territory without a road map! And keep in mind that there are many sources of capital available. But do run through some worst-case scenarios and make sure you can weather downturns in business.
Of the countries you mentioned, I would suggest that Spain (depending on the region) is probably the most business friendly. I would suggest you look at Mallorca. It has a very good and steady business climate.
Dear BusinessesForSale.com,
I’m looking to buy a sandwich shop and I am looking for some advice. How much should I pay? When looking for a business to buy, I have noticed that many have a turnover of only £1k per week yet the asking price is £40k.
You would aim for a gross profit of about 70%, which on £1k per week is £35k per annum. Say your rent and rates are £10k, your light, heat and water are £2k and you pay an employee £10k, then you have made £13k gross for yourself. It hardly seems worth getting out of bed for especially as you’ll be working in an early-rise trade.
If you manage to double the turnover through hard work and grit then you may make a lot more money as a lot of these costs are fixed and not attached to the volume of business. However, sometimes you have to detach the location from the actual business. Sometimes the location is just so brilliant that you can make serious money by doing it right. A great business person and a bad location is a possible combination but why make it hard for yourself? Do your research carefully.
