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How do you value a direct mail franchise with only 1 full yr of history? 1st yr-good profit.Asking price- high

This is a very sales oriented business with sales reps on commission. The first full year of business showed good profits and had 2-3 territories for the year. There has since been a fourth territory added. The business has relatively no assets and comes with a hefty price tag. With only one year of history one would have to worry that maybe it was an extraordinary year.

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We are financial consultants to a group of investors whom we have their consent to manage their funds which is in our custody for cooperation in joint venture business investments.

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Jul 5, 2017
Steven St
World Business Partners, Inc
Los Angeles County, CA

The one year is a BIG problem and I hope they have a really good reason for wanting to sell after such a short time unless they are just looking for a possible "whale" to buy the deal which is why there's such a high price tag.

I would say step back and if you are serious bring in a really good accountant, attorney and/or a business consultant (not broker) to look at the deal. Remember, the owner is a salesperson and all he does is sell. He may be trying to sell you a deal that's not a good deal for you.

Step back and get a reality check about the business and then go from there. Also, it will be extremely hard to finance with anything conventional.

Hope this helps.

Apr 25, 2009
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The BAF Group LLC

I hope it is a small one and you can pay cash. You will, in all probability, not be financed through a bank or the SBA. First, the banks and SBA what three (3) years of history, ideally. Most businesses fail within the first 18 months, if they fail at all. The banks take the position that three years gets through any "fad" that has been created by a new business, and demonstrates that it can build and succeed in a sense of stability. Why would the Seller want to sell after only one year? What happens with the Sales Reps when s/he sells? Do they have a non-compete contract? Is the Seller willing to finance the deal? If not, if s/he is asking a high price, I would not touch it. You need to really study his/her P&Ls, the kinds of business that has come to the business, the chances for those clients to continue...You are talking about an industry that is in a big slump. Buying now COULD be a problem.

Apr 18, 2009

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