"The most complete program on buying a business that I have ever read."
Peter Shea- Chairman and CEO - Entrepreneur Magazine
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THE SELLER AND THEIR IMPORTANCE
The seller is the second-most important part of the equation; you, of course, are first. The seller of a retail business must "pull the trigger" from the other side in order to complete the deal. You will come to discover that the seller can be a wealth of information for you throughout the process. After all, who better than the owner to know the business? However; they do NOT share the same agenda as you!
WARNING! WARNING! No matter how decent, kind, reasonable and helpful a particular seller may be, never forget that they want to sell you! Will they lie to you? Perhaps. Will they "stretch" the truth to make the business more appealing? Always! You must keep in mind that they see you as their exit strategy and they will say and do whatever they must to sell you the business. They want to close the deal, so although they can be a wealth of information, you must validate it or face the consequences of its inaccuracy later on.
In this section you will learn:
- The Mental Aspect of a seller's point of view.
- Seven things you must do immediately with each retail store seller.
- How they can be a help to you.
- How they can hurt you.
- How to qualify all of the information they will provide.
- How to establish direct negotiations with them.
- How to deal with uncooperative sellers (and there are many).
- Specific steps to investigate the information they give you.
- Why you must get them to become a fan of yours.
- Getting them to finance the purchase.
- The approach you must use when they "stretch the truth".
- Being sensitive to their worries, concerns and fears.
- Recognizing and dealing with "Seller's Remorse".
- Gaining their trust and why this is so important.
- How to limit your exposure with them.
- The training you need them to provide - get them to stay twice as long as they've offered.
- Working with the owner after closing.
- Determining whether or not they should stay.
- What to do after the training period.
- Preparing for the obstacles you will face.
- Keeping them available for future questions.
- Legal agreements you need to be certain they provide the proper training.
FOCUSING ON A TARGET
This is the first stage where the retail business buying process claims its victims. It is where "lookers" remain lookers or they are converted into serious buyers. Focusing on the right target is crucial, but it is useless to look unless you know what to look for specifically.
This section incorporates worksheets, real-life examples and case studies so that you can easily analyze retail business for sale listings and focus all of your attention and search for stores that make sense for you.
In this section you will learn:
- How to tear apart the business listings and identify good potential retail businesses to purchase.
- There are more than 70 individual items to review in every retail business for sale listings and we'll provide you with the specific things to look for with each of them!
- Which listings to eliminate immediately and why.
- Review of all the available resources.
- The best places for you to find what you are looking for.
- What to look for in the classified section.
- How to interpret the Broker listings. Review of "Retail Stores For Sale By Owner" listings and learn the precise approach you must use for these (if you don't, you'll mess it up and then you can forget about these listings).
- Sample letters to use and specific techniques to follow when approaching private sellers.
- Useful industry publications to reference.
- Leveraging your network of family, friends, business associates, lawyers and accountants (they have incredible networks).
- Reviewing your income expectations.
- Multiple Listing Sheets - a line-by-line analysis - case study and detailed examination of everything that you will find on the listing sheets that brokers and sellers will send to you.
- Completing an initial financial review.
- Interactive worksheets and real-life examples.
VISITING THE BUSINESS - The 84 key questions to ask every seller
After reading this section of the program you will know how to properly prepare to meet with the Seller, the specific questions you must ask them, the answers to look for, point-counter-point strategies, and techniques for every possible situation. You will also learn what the seller will ask you, what answers to give them, and the real reason why they are selling, plus tons of other tips.
YOUR MISSION: When you begin visiting businesses it will be a very exciting, scary, anxious and exhilarating experience. Don't worry; the seller is feeling the exact same thing. Your mission is very simple: first of all, you want to learn enough to determine if you should pursue it further; and second, you need to obtain adequate information so you can begin gathering information on the industry and the competition to see if a second visit is warranted.
You will also learn how to ask the really “tough questions”, and uncover the truth.
This section includes sample letters, interactive worksheets, a meeting-by-meeting breakdown of what to do, what to expect, and how to follow up.
In this section you will learn:
- Preparing for the meeting (doing background checks, location, formulating the meeting agenda, preparing your questions, compiling the documentation required, timing, what you should wear, and how to be perceived as a polished buyer).
- The 100 specific questions that you need answered (each comes with an explanation and a strategy for any answers they may give and counter-questions you must ask).
- How to use the four-part Prospective Business Portfolios include with the program to help you prepare and evaluate the business.
- Understanding why you must ask your questions first.
- Detailed listing of the typical questions the Seller will ask you and what answers to give them (and what to avoid).
- Techniques to use to get confidential information prior to the meeting.
- The program includes a post-meeting follow-up checklist and sample letters to send to all parties (seller, brokers) recapping your meeting.
- Second meeting preparation, strategy and agenda.
- Key issues to look for to determine the owner's level of interest and enthusiasm.
- How to determine if any other buyers are seriously interested in the business.
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ANALYZING THE LEASE
You heard the old question: What are the three most important factors that determine the success of a retail store? Answer: location, location, location. Well that's true but the location is only as good as the lease. It is truly amazing how many prospective retail store buyers fail to do a thorough job analyzing the lease and guess what? They're soon out of business.
In this section you will learn:
- Preparing to negotiate with the landlord.
- Language to look for to determine if the lease is transferrable to the new owner.
- Determining renewal terms and what can force you out of the location.
- Lease issues to review if you are buying a franchise
- Determining the extras that the seller may not disclose.
- A benign clause that actually allows the landlord to move your business at their option and how to protect yourself.
- Getting the landlord to waive the rent during renovations (if any).
- Non-compete clauses you need to prevent competition from opening next door.
- Protecting yourself in the event the landlord sells the property.
- Lease restrictions that can halt your own product expansion plans.
- Four crucial issues to address immediately.
- Understand the five components of mall leases you must investigate at once.
GATHERING INFORMATION ON THE INDUSTRY AND THE COMPETITION
GOING UNDERCOVER: Gathering information about the industry and the competition are crucial parts to buying a retail business. it is also an exceptionally interesting and educational aspect of the buying process. You will utilize some incredibly creative techniques to get the information you need quickly and effectively, and you will discover that these strategies will be a great asset for you in the future as well. Yes, you're really going to be playing "detective".
In this section you will learn:
- A complete checklist of everything that you need to know.
- Learning the techniques to uncover information that the retail business seller will never disclose voluntarily.
- A step-by-step strategy to get all of the information you need from Industry Associations, Trade Publications, the seller's employees, competitors and customers.
- How to evaluate the competition.
- Understanding current and predicted industry trends.
- How to determine if the business is well poised for the future.
- What tools is the competition using most effectively to market their products.
- How to get key industry information for free.
VALUING A BUSINESS
There are four critical things you need to know about valuing a retail business:
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Nearly every single store listed for sale is overpriced
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If you want to negotiate the right deal, you need to understand how to compile a proper valuation. Keep in mind that what a seller thinks his business is worth, has absolutely nothing to do with the real value.
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The asking price has nothing to do with the purchase price.
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Sellers will ALWAYS overvalue the inventory.
In this section you will learn:
- Understanding the true meaning of value.
- How to identify what holds the value in a retail business.
- Understand how Sellers fix their Asking Price.
- Why their methods (or the ones their brokers use) don't work.
- Traditional valuation methods.
- Understanding Asset-Based Valuations and when to apply them.
- Fair Market Value pros and cons.
- Liquidation Value and why this is an important figure for you to establish.
- Why traditional valuation methods don't work.
- Cash-Flow Based Valuation Methods.
- Risk - something for you to think about.
- Preparing yourself for a true valuation process.
- Turning value into an offer.
- The Five-Step True Valuation Calculation (a bulletproof method to ensure you get the value right).
- You will also use our proprietary formula: "The Diomo Business Assessment Method" that weighs all of the business strengths, weaknesses, potential problems and good points and applies an appropriate multiple to it thereby establishing an accurate valuation.
- How to convince any Seller that your valuation is correct.
- Reviewing all of the possible scenarios.
- Why you will never overpay for a good business (but always pay too much for a bad one).
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NEGOTIATING AND MAKING AN OFFER
Negotiating the deal is a scary thought to most people and it's understandable. You certainly do not want to agree to something that you'll regret later. Great negotiators have the ability to think on their feet and win the most important points because they are well-prepared for every situation. They go into any negotiation having thought about all of the options beforehand, so they are never bullied into a bad decision.
After reading this section you will know all the “Do’s” and “Don’ts” of negotiating. You will get a complete breakdown of every point to negotiate in a retail business for sale, what your position should be, and a point-counter-point strategy for every rebuttal.
You will be able to formulate your offer and effectively negotiate all of the various clauses.
You are going to know how to play "what if" like a pro: "If I do this what will they do? If they say this, I'll say that. If I were in their shoes what would I do?"
You are going to anticipate and be able to pre-plan every possible scenario that may arise and know exactly what winning strategy to propose for each situation.
In this section you will learn:
- Quickly learn 19 "can't miss" skills to become a great negotiator.
- Your emotional makeup.
- Identify the seller's emotions and learn how to play them brilliantly.
- The interacting emotions.
- Win/Win is great in theory but not necessarily practical. The goal here is that YOU win and the seller is "reasonably happy"!
- The greatest negotiating technique in the world.
- A point-counter-point strategy for every type of retail business and situation.
- Understand why great minds think differently.
- 17 things you must avoid when negotiating or you risk losing every deal.
- Outline of the different stages of negotiation.
- Understanding a Letter of Intent - when it should be used instead of a full Offer to Purchase and the critical clauses it must contain.
- Determining how much your first offer should be.
- The rationale behind your offer.
- The strategies and techniques to use depending upon whether an offer is accepted, counter-offered, or rejected.
- Preparing to negotiate a full Offer To Purchase Agreement - everything you need to know.
- Agenda and meeting notes - Learn how to prepare for every possible scenario.
- We'll show you how to get the financials and all other "confidential information" long before anyone is prepared to give it to you.
- The "Do's" of negotiating.
- The "Dont's" of negotiating.
Negotiating Part 2 - Making An Offer
- Setting the tone.
- Getting down to details.
- Complete review and discussion with point-counter-point strategies for every clause in a formalized offer. There are over 50 specific clauses and you'll cover them all.
- Specific negotiating techniques for the Down Payment, Balance of Sale, Deposits, Guarantees, Assets, Liabilities, General Obligations, Contracts and Leases.
- Non-Compete clauses - their importance and the exact language to be used.
- How to deal with any Real Estate that may or may not be included.
- Due Diligence clauses and exhibit - The time you need to conduct a flawless investigation and contract language that you must use.
- Management assistance (the seller's training period) and what to negotiate for post-training.
- Contractual recommendations to deal with "Seller's Remorse".
- How to protect yourself from any obligations the Seller has to the Broker.
- A mechanism to resolve potential disputes.
- Why you should include an arbitration clause and sample language to use.
- Drafting the points.
- Precise steps to present the offer.
- How to handle renegotiation if necessary.
- Sample/Exhibit of a complete Offer To Purchase Agreement.
EVALUATING PERSONNEL
They have a lot to say; but the owner may not let them talk to you. In many businesses you simply cannot proceed with a sale without the opportunity to interview the key employees. This is especially true when it comes to buying a retail business- you will need to speak to the manager if the owner does not handle that role.
You will learn an effective way to gain immediate access to them so that you can pose all of the questions that only they can answers. You learn what to avoid and situations that can trap you later on.
IT CAN'T WAIT: It is of utmost importance that you meet with any key employees individually as early as possible in the process. Some of the most intriguing insights you will get on any business will come from them, not the seller. Now, it is understandable if a seller doesn't want you to meet with them early on as they may not want to let word get out. You have to respect their wishes but you must temper this with the fact that you may have to meet with them at some point and long before you buy. The absolute latest you can wait to meet them is during the Due Diligence phase.
In this section you will learn:
- How to convince the seller to meet them early on.
- You won't believe what they have to say!
- Which employees you should keep.
- When should you meet them?
- The questions they will ask you.
- Getting background checks where necessary.
- Understanding their fears.
- Getting their input.
- How friendly should you get with them?
- Understanding the "I'm the brains of the operation" mentality.
- One question that will indicate what they really think about the future of of the business.
- Preparing to deal with blackmail and sob stories.
- A Question-and-Answer worksheet to use for your first meeting with all the employees ( a very effective tool).
FINANCING THE PURCHASE
Using our proven strategies, 91 percent of our clients get the Seller to finance the bulk of the purchase.
You will get a complete background on all possible lenders, the different loans available to you, and how to creatively structure financing so that it’s easily affordable regardless of your financial position.
Many prospective store owners worry about arranging financing. You will be pleased to know that you can always finance a good business. Unfortunately, most buyers wait until they find a retail business to buy before they seek financing, and then it's too late. You will miss out learning some of the incredible ways to arrange great financing.
The emphasis in this lesson will be formulating strategies that will convince any seller to finance your retail business purchase. If any business is half as wonderful as every Seller is going to paint it to be, then why on earth shouldn't they finance it? Unless, of course, they believe that you're not going to be successful. Why's that?
Getting the money is easy; getting it on the right terms and conditions requires some work.
Without the right information, buyers end up getting stuck with terms that are not even close to what they could have negotiated had they been better educated and prepared.
In this section you will learn:
- A loan is a loan... right? Wrong!
- Understanding the various loan types and the structures that make sense for you.
- Everything you need to know about: Debt Financing; Equity Financing; Debt To Equity Financing.
- Formulas to be sure the business can afford the purchase and service the debt.
- Understanding and leveraging Collateral.
- Pledging Assets (how to get away with the absolute bare minimum).
- Understanding the differences and consequences of Recourse and Non-Recourse Loans.
- How much does the business need and how to get more than you need (you can never have enough).
- Where to go for the money.
- Why your priority must be to negotiate Seller Financing, and every technique that will help you achieve this goal (pay attention to this section).
- SBA Loans - your tax dollars at work?
- Structuring Seller Financing at incredible terms.
- Learn what to negotiate to leverage all of the assets.
- Techniques and strategies to use with Banks, Asset-Based Lenders, Factoring Companies, and Leasing Companies.
- Discussion regarding financing from family and friends: there is a lot more at stake than money.
- Obtaining financing from Angel Investors, Professionals and others.
- ***BONUS SECTION -COMPLETE BUSINESS PLAN AND MARKETING PLAN RATIONALE, DISCUSSION, OUTLINE AND SUGGESTED RESOURCES***
DUE DILIGENCE
The Due Diligence period occurs after you have reached an agreement on the retail business purchase and you will now be inspecting all of the company's files and records.
Every business has secrets! Every owner knows certain things that they do not want you to uncover. Eventually they will all surface! The question is: will you learn about them before or after you buy?
Due Diligence is the moment in time when prospective buyers mess everything up, drastic mistakes are made, and it can happen to you as well, if you do not know exactly what to do.
This is the time for you to investigate far more than just the financial aspect of the specific business to determine what the future may hold for the business. Sure, the financials will be reviewed in great detail, but even if they are exactly as the seller has presented them, then what?
HELPFUL HINT: If you allow the seller and their broker to negotiate too short a Due Diligence period and you decide to buy the business, you will fail. Sellers will do everything in their power to get you to commit to a Due Diligence period of about 10 days or less. Unbelievably, the majority of buyers agree. How can you possibly learn everything about the inner workings of a particular business and industry within days? It's absolutely impossible.
In this section you will learn:
- An 84-point checklist of exactly what you need to investigate during the due diligence of any retail business purchase.
- 22 additional key points that you must know in advance.
- A complete To-Do List, and Required Materials checklist required to investigate each and every component of the business.
- Historical financial data investigation techniques.
- Assets-evaluation formula.
- Review methods for the store's policies, procedures and personnel.
- Establish the viability and long-term growth prospects of the business and the industry in which it operates.
- The current systems and the technology available to jumpstart any business.
- Access all contracts, leases, and agreements in place and evaluate the long-term viability of each and any exposure you may have.
- Legal and corporate issues to be sure that you have no exposure whatsoever.
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PULLING THE TRIGGER
READY! AIM, AIM, AIM! Buying a retail business should never be a "leap of faith". However, many prospective business buyers get through an entire buying process, pass each stage and then "flip out" at the end and become afraid or unwilling to buy the business. This happens when they haven't completed each stage properly, they are still not sure, there are too many unknowns and loose ends, and so they back out.
On the other hand when you go through each stage thoroughly, and you completely investigate each part of business, making the final decision to buy, will simply become a logical choice. When decisions are made based upon facts, your final decision is no bigger than anything else you've done along the road. You're confident, informed, rational, decisive and you're ready. End of story!
We'll provide the tools so you can assemble everything you learned to make the best decision you've ever made.
In this section you will learn:
- This section will take you through all of the last-minute considerations.
- You will understand why people fall off at this late stage.
- You will know what it is exactly that you need to have in place to make the final decision.
- You will learn how to piece together all of the information that you have accumulated to make the right decision, even if it means walking from the deal.
- You will see why, if you have done all of the work, "Pulling The Trigger" is simply one more step in the process.
CLOSING THE DEAL
In this section you will learn:
The actual closing of the deal includes a number of specific documents to be executed such as: the non-compete agreement, promissory notes, bill of sale, purchase price allocation, transfer taxes, agreement to cooperate post-closing, lien filings, and title transfer of assets amongst others. Plus, there can be additional contract details that may have to be satisfied such as the lease assignment.
While a competent attorney will assemble the necessary paperwork, you should have a clear understanding of what all of the documents are, what you should or should not include, and what to look out for so that you are properly protected.
This section will outline all of the "legal talk" in a straight forward and easy to comprehend manner.
POST PURCHASE PRIORITIES
START NOW: Unfortunately, many new owners experience a drastic decline in the first three to six months and there's only one reason: they walked in without a concise plan, and by the time they began to focus properly, they were months into their ownership.
After reading this section you will precisely how to: get ready, get in and hit the ground running!
No matter what stage you are at with buying a retail business, you must begin at once to log each and every thought and idea that you have about anything you want to do once you buy that business. Don't wait until you have the keys to the place to start planning.
FOCUS LIKE A LASER BEAM: Your first three months are crucial. There are 10 things to focus on and you want to accomplish each of them, which will be a great morale-booster for all. This lesson outlines all of them for you. One thing you should also do: clean up the place, throw a coat of paint on and make some cosmetic changes from day one. The business is new, you're the new boss, and the employees should feel renewed with you as the owner. Freshen up the place right away so everyone can see that positive change is the way of the future.
In this section you will learn:
- A strategic outline for the first 90 days after you buy the business.
- Ten things to focus on once you takeover.
BECOMING A GREAT RETAILER
So you’re going to be the boss – that’s great. Now, we want to be sure that you are incredibly successful in your retail business.
Retail businesses rely heavily on human capital. Sure having the right location, competitive prices, profitable ancillary products/services are all important, but if the wrong driver is operating the train, it’s going to crash.
In this section you will learn
- Eleven critical attributes that every successful retail store owner possesses.
- How these skills impact the business.
- Measures you can take right now to turn any of your weaknesses into strengths.
RECOMMENDED RESOURCES
This section will recap all the suggested resources provided in the materials. With this list you will be able to eliminate an incredible amount of time searching for information on where to find specific industry data that you can use for any retail business you may consider purchasing.
GLOSSARY
The retail business has a wealth of industry jargon that sellers and brokers will toss at you. Understanding what it all means is going to put you way above other buyers because you will come across as a seasoned veteran. In this section you will learn all the terms you will hear during the process of buying a retail business and you will know exactly what they mean.
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