Often times in today’s business world we are often very disappointed when we need help from sales or service people, especially business or real estate sales. The sales person involved makes you feel that he/she is doing you a favor for selling you the product or service.  When  questions or concerns arise the answers we get are short and not very comforting. Good old fashion common sense  advice based on the sales person training, knowledge or experience is rarely provided.  

Well this all was pleasantly different with the invaluable help of Mr. Sam Saa of Metropolitan Business Advisors. Right from the start he spent  a great deal of time with us and was very involved in finding what we needed. He  provided much needed and valuable advice,  and most importantly worked with us from the first day to the closing and beyond. He was very generous with his time, he was prompt  in returning our phone calls, he truly helped us work through all the steps to purchase our new business. He was there at every meeting with the seller, landlord, and the closing attorney. If we had not had his help, the purchase would have cost more and been less secure, especially with the landlord.

It’s great to see that helpful sales people like Sam Saa are still around.

Buying a franchise can be a lot like starting your own business. You will likely have construction or, at least, remodeling costs. However, unlike starting your own business, you are not on your own. You will have a parent company to instruct you through the start-up process, and later to guide you in your operating procedures. More than likely, you are bound by certain operational aspects of a franchise, but these are meant to convey a high level of standards and consistency that would be expected by the customer.

Some business owners find that franchises offer the best of both worlds – the independence of running your own business without jumping into the complete unknown. Frequently, the brand-name recognition and the lower wholesale purchasing costs associated with running a franchise appeal to new business owners.

Tips for moving forward

If you’ve already decided that purchasing a business is the right choice for you, you may still have questions. Namely, how do you proceed? Here are some suggestions to help you start on your path to profits and success.

• Consult a business broker. Business brokers, like real-estate agents, have expert knowledge of the buying and selling process. They also have real-world experience and can offer good advice.
• Check the credit history. The second edition of Small Business for Dummies recommends that you run a credit check for the person selling the business. Why? Non-payment of bills may indicate hidden problems with the business.
• Talk to the customers. This will give you a feel for the business itself.
• Evaluate, investigate, research, and explore. Look into every nook and cranny, figuratively and literally. The more you know about the business, the more educated your decision whether to buy or not will be.
• Negotiate the best deal possible. Ask the current owner to throw in equipment, office supplies, even company vehicles. If he or she is eager to sell, you may end up a great many extras you might otherwise have had to purchase separately.
• Make it legal. For your own protection, don’t try to complete the sale without the help of your legal advisor with experience in small-business transactions.

You bought the business, now what?

Make sure you disclose the transfer of ownership to all the business’s creditors. If possible, try to arrange for an article to be published in the local paper. This will accomplish the two-fold task of making the transfer of ownership public and can serve as free advertising for the business itself. Inform employees of your business plan, but take time to implement major changes.

Last but not least, try to keep in touch with the prior owner. You never know when you might have a question or even need advice.

1.      Plan Everything

Ask any small business owner about launching a business and he or she’ll tell you to plan as much as possible. Start by putting together a business plan; it’s essential. In the business plan you will need to outline your overall approach to starting a business, as well as information on your competitors and the business’s financial needs and expectations.

2.      Lay the Groundwork

Once you have a solid business plan and the financial backing to support it, your work really begins. Everything from the name and location of the business to the staffing needs and day-to-day processes gets determined by you. The great thing about this is that you get to choose how you want to run things. The challenge, of course, is that you have your work cut out for you. Be sure to reach out to family and friends for assistance in getting your idea off the ground.

3.      You’re the Boss

After you’ve laid down the groundwork and poured countless amounts of time, energy and money into your business, the next step is to start running things. It starts with a grand opening and, hopefully, flourishes throughout the years as a reward for your hard work. Challenges will be aplenty, but at the end of the day you’ll find satisfaction knowing you report only to yourself.

4.      Purchase an Existing Business

Building your own business is hard work. That’s why many entrepreneurs choose to buy an existing business rather than starting from scratch. But how can you avoid sinking all your resources into a business that is sure to fail? What should you look for? What should you avoid?

There are several advantages to buying an existing business as opposed to starting your own. Most obviously, you save time. Opening your own restaurant means creating your own recipes and menus; building a business from scratch can take years. But when you purchase an existing business, the “dirty work” has already been done.

Buying an existing business will allow you to evaluate its cash flow and operating expenses, giving you a better idea of how much investment capital you will need. When you start your own business, these numbers are much more difficult to estimate, and investors consider start-up businesses higher risk than existing ones with operating histories and proven track-records.

Perhaps the biggest advantage to buying over starting a business is the existing business’s potential. You may see growth opportunities the current owner doesn’t, or maybe you have a superior business plan. Your enthusiasm and excitement for the business can revive it and help it to grow, and often relatively minor changes in advertising, personnel, or procedure can greatly improve profitability.

Of course, there are disadvantages to buying a business, and you must weigh them seriously against the advantages. For example, unless you plan to replace all of the existing staff, you will have employees working for you whom you did not hire and whom you do not know. They may be resistant to the changes that you make. You may find it difficult to motivate employees who have become complacent under the old management or that there are personality conflicts between new and existing employees.

Evaluating the current operations of any business can be a daunting task, and when you consider buying you must do this thoroughly and with diligence. Heath inspections, building inspections, financial analysis – the list goes on, and you must be prepared to do it all before you sign the dotted line. This can become costly, especially if you are comparison-shopping.

Remember, the seller may try to downplay any business problems. He or she may not be honest about operating cost or profits, and there is the possibility that the “books are cooked.” That is why you must have a capable business broker and a financial expert to explore all records thoroughly.

A business plan is a comprehensive overview of the business idea. It outlines what the business will do and how it will be launched, covering everything from sources of funding to potential competitors. Business plans are especially useful for startup food service operations looking to attract and convince prospective investors; but a business plan also serves as a roadmap for your management team.

Yes, food service operations need a business plan too. Start preparing for your business plan by asking yourself some key questions. Will your business be a Corporation or LLC? Where will you get the money to launch and run your business? What is unique about your food service operation?  What audience will you target?

According to Entrepreneur Magazine, a typical business plan should have the following seven sections:  

1. Executive summary: Just like it sounds, it’s a summary of the basic idea and should catch the reader’s attention.

2. Business description: This section provides the framework for what the business is all about.

3. Market strategies: After exhaustive research and analysis of the target market and its needs, talk about it in this section, along with how you plan to position the new business.

4. Competitive analysis: Discuss competitors, their products and strategies, and how the business will have a competitive edge.

5. Design and development plan: What will the new operation look like and function? How will it be marketed?

6. Operations and management plan: This section covers the basics of how the business will operate on a day-to-day basis.

7. Financial factors: This last section includes income and cash flow statements.

Many potential investors expect an appendix including the resumes of the leadership team, market research results, etc. While the idea of starting a business is exciting, doing the homework is critical. Putting together a well-researched business plan will help communicate your vision and lay the groundwork as you prepare to launch your own business.

Metropolitan Business Advisors can assist you with resources to complete a business plan and profile, which is often a requirement when purchasing or leasing space for your food business.

1. Experience Counts

You want a broker with a proven resume. Essentially, your success may depend largely on the expertise of a business broker that specializes in your industry. Finding a broker that has the credentials and is affiliated with the appropriate trade associations offers further assurance.

2. Beware of Generalists

It’s not enough to Google any brokers you’re considering using and call their references. Part of the vetting process includes making sure your broker is the right fit for your business. For starters, you want a broker who specializes in representing buyers and sellers in the type of business you wish to engage.

Each industry has its own unique culture, requirements and knowledge base. A broker that says they can sell any business would be something to question.

3. Size Does Matter

Also critical is whether the broker you choose can handle transactions of your size. Look for a business broker that can give you the level of attention regardless of the size of the transaction.

4. Manage the Process

Getting a clear picture from the beginning on how the process will unfold is critical. Ask what the steps will be in valuing your business, preparing the business for sale, uncovering potential buyers, and following through.

5. The Fees

Typically, business brokers benefit only when a transaction is complete. You should never work with a broker that asks you for money up front, that’s a big red flag.

6. Timing

In all likelihood, your relationship with your broker will be a lengthy one. On average, it takes nine months to a year to sell a business — from the time you and your broker start assembling a comprehensive marketing package for your business to the time the sale closes. It is customary to sign an exclusivity contract, but a good broker will be flexible on the timeframe of the contract. “You’ve given somebody a reasonable time to perform. And if they’re not showing you their best stuff at the front end, it’s unlikely they will later.”

7. Trust Your Gut

While you don’t need to bring your broker home to Mom, you do want to hire someone you’re compatible with. You have to work really well together as a team and have a good chemistry. You want to see the world the same way, see the opportunities the same way, because it really is a partnership to get your business sold.