Unless you've bought or sold a business in the past, you'll find that buying a business can be very confusing and frustrating. Even if you have experience in mergers and acquisitions, you will still find yourself on unfamiliar ground when buying a small company. That's why it's important for you to take the time to become familiar with the buying process. And if you're a veteran of business transfers, and you've bought and sold many small businesses, you'll gain a valuable understanding of the VR process that will assist you in working with our firm.

Getting Started: Questions and more questions

The search for a business opportunity almost always starts with a telephone call or a visit to a web site like VR’s. Some buyers like Private Equity Groups or Private Investors have a very definite idea of the type of business they want. But often, the Buyer is an individual or group who has never purchased a business before and is still in the formative or exploratory phase of their search. Many times a Buyer's first question is, "What kind of businesses do you have?"

Well, VR represents a lot of businesses, so that's a tough question to answer without some idea of the Buyer's resources, skills and needs – both personal and professional. Maybe we just listed Ford Motor Company and you, our prospective Buyer, just happen to have several billion dollars and a background in automobile manufacturing. There's a match made in heaven, but it's a match we can't uncover without questioning you and learning more about you.

The first and most important step in the buying process is telling us about who you are and what you want. When we ask, "How many days per week are you comfortable working?" and "Do you like having employees?" and "How much cash do you have for a down payment?" we're not just being nosy. Instead, we're working to narrow your search in order to save you time and money while finding the business of your dreams.

Defining the search: Non-confidential Summaries

Once we know what you’re looking for, we can provide you with business opportunities that fit your criteria. At this point, we communicate non-confidential summaries of our exclusive listings to you in a number of ways. Since you're viewing our web site you can see the non-confidential summaries of our exclusive listings by simply using the "Businesses for Sale" link on our website. VR’s non-confidential summaries show our profile number, a description of the business, a summary of financial performance, the reasons why we think it may be a good opportunity and the asking price. We recommend that at this point you focus on the business and not on its financial performance or price. It's far more important now to find a business type you'd enjoy owning.

Focusing on a few: Digging Deeper

Once you’ve decided which businesses you’re interested in, you’ll start the "digging deeper" phase of your search. This new level is one of mutual trust and obligation between you, VR and the Seller(s) of the business (es) you're interested in. You’ll be required to sign a Non-Disclosure and Confidentiality Agreement and submit a Personal Financial Statement. When you return these documents to us, we'll provide you the name and address of the business you're interested in. Please note that when you sign the Non-Disclosure Agreement you are agreeing to keep all of the information that you receive from us strictly confidential. And, you are agreeing not to contact the owner of the business except through us and with our permission. We take any violation of this bond of trust between you and us very seriously, and we will not tolerate any breech of this trust.

The Business Profile: The Facts & More

A big part of our job is helping our clients sell their business while allowing them the time to continue to run their business. This means that we work with you, the Buyer, to answer as many of your questions about the business prior to introducing you to the Seller. We accomplish this in several ways.

The most important element in this process is the VR Business Profile. This report is written to give you the information you need to decide whether or not the business is right for you. A typical Business Profile contains a detailed description of the business, summary financial data, and additional business facts like lease information, number of employees and much more. After a thorough review of the Business Profile and discussions with your VR representative, you will have a good understanding of the business and its operations.

Included in our Marketing Package, along with the Business Profile, is a High-Definition video. The video highlights the company’s successes thus far and any potential growth opportunities. It also includes a tour of the business as well as an interview with the owner that answers many of the common questions Buyers have about the business and its management while still maintaining our client’s confidentiality. For many buyers, the video replace the need for a facility tour.

The Business: Face to Face

After reading the VR Business Profile, reviewing financial data and seeing the HD video for the business you're interested in, you should be prepared to make an offer for the business. If not, your VR representative will answer further questions and may, if indicated, set up a meeting with the business owner prior to you making an offer. This is an important step. Not only are you learning more about the business from the person who knows the most about it, you are also seeking to tell the business owner as much about you as possible since you may be seeking installment terms from the business owner. Often, Buyer credentials are presented at this time.

Making an Offer

After meeting the business owner and touring the business, the next step is making an offer for the business. Making an offer is not a final step. In fact, it should be viewed as the first of several steps, each of which bring the Buyer and Seller closer to completing the sale transaction.

Since this is a privately held business, the Buyer is obligated to make an offer before seeing the business' detailed internal financial records. The Buyer must understand that their offer is always contingent upon the Seller proving his or her representations. Due diligence – a specified period of time during which the Buyer investigates the business fully – is costly and time-consuming and must be done only after an agreement on price and terms are reached.

It's the Seller's responsibility to prove everything to the Buyer. Put another way, your agreement on price and terms will be "non-binding" until you've had the opportunity to see all financial records and we have removed all contingencies.

The Offer: Terms, Contingencies & Conditions

Your Offer to Purchase will consist of the following:

Purchase terms including price, down payment and agreed-to financing (interest rate, period, etc.).

Contingencies:

Approval of books and records, equipment, inventory, assignment of leases or loans and any other items that the Buyer requests to be incorporated into the structure of the agreement.

• Conditions. Non-compete clauses, consulting agreements, training agreements and other relevant parts of   the structure of the agreement.
• Your resume of business background and experience.
• Your financial statement.
• Your credit report (paid for by you).
• And your "Earnest Money" deposit check in the amount of 10% of the offered price. This check is not deposited until the close of the due diligence period and you are comfortable moving forward with your purchase. Typically, your check is cashed upon the opening of escrow.
• Due Diligence: Clearing the Way. You and your advisors - attorney, accountant and others - will have a specified period of time to complete your due diligence and remove the contingencies (typically 10 days). When due diligence is complete and the contingencies are removed, the contract is binding. Should the business fail to pass due diligence, you are free to rescind or amend your Offer to Purchase.

Financing: Working with Sellers and the SBA

Almost every deal requires some form of financing. At VR we work with Buyers to help obtain the appropriate financing for the business being purchased. Often, this means a Seller's Note and it also often means a bank loan guaranteed by the Small Business Administration. Whatever the financing requirements, Buyers can expect guidance and assistance from VR in this important area.

Escrow & Closing

Escrow typically takes about 3-4 weeks. After escrow receives signed instructions, the escrow officer will contact government tax agencies for clearance and publish your fictitious name filing, enabling you to open business and banking accounts. Also during this time a Notice to Creditors will be published allowing anyone with a claim against the business to step forward.

You're In Business

Congratulations! Finally, the big day arrives and you open the doors of YOUR business for the first time. There is no bigger thrill, no better feeling than knowing that you are in control of your destiny.

When you work with VR, we guide you along the way and help make your transition to business owner stress free and simple. Check out our "Businesses for Sale" section and get started on finding your part of the American dream.