Getting Started: Questions and more questions

The search for a business opportunity almost always starts with a telephone call for a visit to a web site like the one we host at Apeiron. Sometimes the prospective Buyer is a Corporation, Private Equity Group or a Private Investor who has a very definite idea of the type of business wanted. But often the Buyer is a first time Buyer and is still in the formative or exploratory phase of the search. Many times a Buyer’s first question is, “What kinds of businesses do you have?” Well, we have lots of businesses, so that’s a tough question to answer without some idea of the Buyer’s resources, skills and needs.

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.

So, the first and most important step is telling us about you. Be patient when we ask, “How many days per week are you comfortable working?” And, “Do you like having employees?” Or, “Are you up early in the morning or do you stay up late at night?” “How much do you have for a down payment and how are you planning on funding the purchase of a business?”

Your answers to these questions and many more will help not only us but you as well to narrow down your search saving you time and aggravation. All of our agents are qualified to help you through this first phase. We can tell you what price range you will be looking at for the income you want. We can tell you if you might be a good candidate for an SBA loan.


Defining the search:
Confidential and Non-confidential Summaries

After we’ve had an opportunity to discuss your wants and needs we can probably begin narrowing the search with some parameters. At this point we can start giving you some prospectuses to review after having you sign a Non-Disclosure Agreement and provide us with a personal financial statement. Or, we will give you some web sites that have non-confidential overviews of businesses.

It is always best that you review what is available because you may spot something that touches on an interest that we did not discuss when we talked about possibilities. We encourage you to review all of the businesses on our site by clicking on the “Businesses For Sale” button. Try to keep as a priority, finding something you would enjoy doing rather than focusing on its financial performance or price. While these are very important, your enjoyment of what you are doing every day will be a big factor in how successful you will be. Not unlike finding a marriage partner.


Focusing on a few: A Closer Look & Confidentiality

At this point in your search you may find yourself coming back to one or two businesses that intrigue you and you want to know more about them. This new level is one of mutual trust and obligation between you, Apeiron and the Seller(s) of the businesses you’re interested in.

Now you will be given specific and confidential information about the business you’ve been considering and your agreement to keep this information confidential is required. Any "broadcasting" of this information could cause the seller irreparable damage to the business and could even force them to remove it from the market. You do not want to be the cause of that. You also agree not to contact the owner of the business except through us or with our permission. This eliminates putting the owner in an awkward position and makes the process run more smoothly. We will not tolerate any breeches of this trust between you and us and we take it very seriously.


The Business Profile: The Facts, & More

A big part of our job on behalf of the Sellers we work with is to do the work of selling their business while affording them the time to run their business. This means that we will work with you to get answers to your questions about the business. We accomplish this in several ways.

The most important element in this is the Prospectus or Business Profile. This report on the business you are interested in is written to give you the information you need to decide whether or not the business is right for you. A typical Prospectus contains a detailed description of the business, summary financial data, additional business facts like the structure of the business, employees, the lease, ways to grow the business as well as a little history of the business. We also mention things about the business that would be pertinent to your decision making process such as how many hours the owner works or any special skills that you would need to run the business. You should have a good idea of what the business is about after reviewing one of our Prospectuses.


The Business: Face to Face

After reviewing the Prospectus it is time for you to make a list of questions or concerns that you would like to talk to the Seller about. We urge you to put whatever pops into your mind on your list. We will let you know during the meeting if an item is a due diligence question and would be more appropriately answered after an offer is made and accepted on the business.

The purpose of the initial meeting is to meet the Seller and be able to get to know a little about them and get a feel for what they do in the business. It’s to answer your questions and get a general overview of what goes on in the business. It is not a time to delve deeply into financial backup, customer names and other things that would be considered proprietary information for the business. The answers to those questions come after “offer and acceptance”, during the due diligence period.


Making An Offer: Moving Forward

Once you feel your questions have been answered and you are comfortable it’s time to make an offer on the business. Once the offer has been accepted by the Seller you move forward to the Due Diligence phase. During this specified period of time both you and the Seller have obligations to fulfill.

The Seller needs to prove that the information they provided is accurate. You and if you choose, your professional advisers, CPA and / or Attorney will have the opportunity during this time to request back-up information and look at issues in greater detail. If at any time during the Due Diligence period the business fails to meet expectations you are free to amend your offer or if you decide that you do not wish to move forward for any reason, let the Broker know and your Earnest Money Deposit will be returned to you in full.

Due Diligence is a very labor intensive process which is why we require the Buyer and Seller to at least have a contract in which they agree on Price and Terms or there is no reason to move forward. Your agreement on Price and Terms will be “non-binding” until you’ve had the opportunity to see all financial records to your satisfaction and signed off on contingencies. We instruct the escrow company to hold the funds and not do any searches until you have signed off on all of your contingencies.

Our Offer to Purchase Contracts are well written, addressing the concerns of both Buyers and Sellers and they have been reviewed for Sellers and Buyers by the most prestigious law firms in the Phoenix Metro area. Of course, any Buyer is free to employ an Attorney to craft a purchase contract for them.

If you will be requesting that the Seller carry a note we will require a current credit report be submitted with the Purchase Contract. A good report will go a long way in helping the Seller decide how to respond to your offer.

When Due Diligence is complete and all Contingencies have been removed, the contract is binding.

Financing: Not all lenders are the same

If one of your contingencies is SBA financing we can be of assistance. There are cash flow lenders and there are hard asset lenders. We work with the lenders that we know can get the job done in a reasonable period of time. You will need to have preliminary SBA approval and then final approval.

The lenders we work with are top notch and we can assist you in preparing to get the loan. We know what they will want from you and from the Seller. We use only Preferred SBA Lenders. The banker you have used for years may tell you “sure, no problem” when it comes to getting a business acquisition loan but far too often it is nothing but problems. We are very experienced in getting successful SBA financing for Buyers because we use the best in the industry to get them done.


Escrow and Closing:

How will you take ownership? If you plan on buying the business as an LLC or a Corporation it can take several weeks to get approval. SBA can’t loan on an entity that has not been approved and escrow can’t make your entity the Buyer without approval, so you will need to set this entity up early. You will also have to set up a bank account in the name of the entity and get a tax ID number. It is best to do it right when you decide you are going to buy a business- one less thing to get anxious about. We can assist you in getting the proper documents together to take to the Corporation Commission.

We request that escrow send us the closing documents early so we can review them and go over them with both the Buyer and Seller to see that everything is as expected. Escrow will do lien searches on the business to make sure any money that is owed will be paid at the Close of Escrow to deliver the assets of the business free and clear of any liens or encumbrances.

We will all meet at the escrow company on closing day and you and the Seller will sign all the documents that the escrow company has prepared. The escrow company will record the sale with the county after closing. The escrow company can also service any note that may be involved between you and the Seller.

You and the Seller will get together after closing and notify utilities and any vendors if that has not already been done.

Congratulations, you’re in business for yourself!

There are few bigger thrills than opening the doors of YOUR business for the first time, knowing that you are in control of your destiny. So, let’s get started. Click on our Businesses For Sale section and get started on your search for your part of the American Dream.