Real Estate vs. Small Business

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Information about Real Estate vs. Small Business

Published on February 12, 2014

Author: edkeels916


PowerPoint Presentation: Real Estate vs. Small Business Acquisition: Understanding Key Differences PowerPoint Presentation: Overview Purchasing a business is a different animal than a real estate acquisition. Entrepreneurs who approach a business purchase like the acquisition of a home could end up paying too much for the business, losing the deal or buying a business that’s a lemon. Beyond Breakeven, Inc. can teach entrepreneurs the right way to approach a business acquisition. PowerPoint Presentation: Business Sales Purchasing a business is unlike purchasing a home, as you can easily determine whether the asking price is fair based on comparable home sales in the neighborhood. Banks are much more willing to make mortgages than business loans. No comps are available for business sales, as these sales are not publicly recorded. A business valuation is the only way to determine whether a business is worth buying and the viability of obtaining a loan for the purchase. PowerPoint Presentation: Get A Valuation Savvy entrepreneurs will get a business valuation when considering purchasing a business. A business valuation will provide an objective opinion regarding the true value of a business and a fair selling price. Tools for valuing businesses differ among valuators, but some common areas inspected by them include: Evaluation of similar businesses Financial statement analysis Discounting cash flow models PowerPoint Presentation: Finding Financing If you’re looking for a home mortgage and have decent credit and a job earning a sufficient income, there’s no shortage of banks willing to lend you money. Finding financing for a business is a lot tougher. Banks have historically only financed about 7 percent (7%) of business acquisitions. During the height of the recession, that shrank to below 1 percent (1%). In a home sale, a decision to lend is based on your credit. In a business acquisition, it’s largely based on the financial health of the business and its ability to generate sufficient profit to cover loan payments. Seller participation is often essential to obtaining financing for a successful business sale. PowerPoint Presentation: Seller Cooperation Buying a home is an adversarial process, you’re trying to get the home for the cheapest price, the seller is trying to sell it at the highest. A business acquisition must be more cooperative. Banks and lenders often want business owners to provide seller financing for about 10 percent (10%) of the money needed for the business sale. Sellers and buyers must work together to agree on a fair price and terms of the sale to satisfy bankers. The seller must also cooperate with the buyer in helping them to prove to the lender the amount of business cash flow and ability to service the debt. PowerPoint Presentation: Make It A Win-Win To successfully execute a business acquisition, you have to make the transaction a win-win. To achieve this goal: Don’t immediately attack the price. This will antagonize the owner. Wait for the business valuation to give you an accurate estimate of the value, then talk price. Insure that all parties realize the seller won’t be 100 percent (100%) cashed out at the end of the transaction. The seller may have to finance some, if not a significant portion of the sale. PowerPoint Presentation: Also Remember… Interest rates are not as important in business acquisitions so long as the business cash flows. Business brokers and agents are much different than real estate agents. In many cases, they work for the seller, not you. Also, there are few, if any, professional qualifications for business brokers and agents in most states. Lowering the price won’t likely make a loan forthcoming from the bank. Adjusting terms is a better solution. PowerPoint Presentation: How Beyond Breakeven Can Help Beyond Breakeven can provide a number of services that will help entrepreneurs in business acquisition, including: Providing business valuation services Help to negotiate the terms of a sale Structure of the deal and offer Providing resources for 100% of the needed funding with no down payment or collateral requirements PowerPoint Presentation: About Beyond Breakeven, Inc. Beyond Breakeven, Inc. advises entrepreneurs on how to acquire businesses with minimal risk to their own finances, and how to boost business performance. We structure deals that utilize funding sources that do not require down payments or collateral, while most often times providing 100% of the funding needed to start or buy a business. Accredited by the Better Business Bureau with an A+ rating, we have a reputation for excellent client service and success. For access to a free video training series on the secrets of business funding visit

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