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Is there anyone left in America with significant cash, or is everyone financing these businesses today?

Being located in Miami, I've had more interest from capable cash-laden foreign buyers, than all domestic interest. I've put a little effort into highlighting the advantages of 'buying American' and getting "permanent resident status based on EB-5 eligibility" because immigrants, and their direct families,can get EB-5 visas in exchange for an investment of $500,000 to $1,000,000 in a US based business through this program. Now I'm wishing I spoke Spanish or Chinese. . .

Beau Bennett

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Answers (9)
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Monmouth County, NJ

Beau. I like your "about me" statement. Congrats on your continued success.

Sep 5, 2009
Beau Bennett
THECLIP.COM, Inc.
President
Miami-Dade County, FL

Hi Chuck. Thanks for answering. I am hoping to structure a deal wherein the buyer comes in with 49% down, in exchange for 49% equity for a year. I'd like to structure a commitment for the balance buyout where specific financial performance objectives are met over 1, 2 or maybe 3 years.

My overall goal is to retire after spending a year or so with the new owners. If we can meet strong objectives during that first year, I'm sure the new owners will move me out sooner to gain the financial rewards of total ownership. A good buyer would make it easier, and probably more fun.

I think you are absolutely correct Chuck, regarding owner financing. Besides, it fits in this economy where people are rightfully skeptical about current performance claims and potential for growth. Since I listed this business online, I've seen some pretty sketchy businesses offered for what I believe are wildly inflated values and potential markets, especially in franchises, software and web services.

What do you think of my strategy?

Sep 3, 2009
Chuck Woolweaver
Amerivest Group
Business Broker/ Franchising Specialist
Palm Beach County, FL

As a south Florida business broker, Beau I can tell you that traditional financing is still tight and most sellers are offering up to 50% seller financing

Sep 3, 2009
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The BAF Group LLC
MD

NDAs are difficult as sin to enforce. It is easy if someone steals your client list, or some other, tangible part of your business. But trying to make certain they don't use your strategy for example, is almost impossible.

The real issue is, what are you protecting? You normally are most concerned about your Employees, your Clients and Vendors, so the knowledge of an impending sale does not destroy the value of the business, whether or not it is ultimately sold.

But if it is a matter of simply not letting your private financial information out, then it is an issue, but not necessarily a crucial one. I would obliterate your EIN number and Social Security number and even your name and that of your Company, from anything you provide. That will help to a great degree. Then, the forms become a set of numbers that could be any Company.

You could also provide P&Ls, again without a Company name, until and unless they provide an LOI and deposit. Then you know they are serious. That is a version of what we do with our Client's information.

Any NDA should state who is covered by the form. Normally, these limit who the Buyer can turn these over to, which is usually their Attorney, Accountant and - when working with Corporate entities - internal corporate counselors. Knowing who they are distributing them to is key, and you have every right to ask them that question. Whether they tell you the truth or not...Well...you gotta have faith. And if not, a good Attorney.

Anything more I would say is complete conjecture. I would suggest you talk to an Attorney about that issue, if you thing you really have something to be concerned with. As I usually say in these kinds of situations, I am not an Attorney, and I don't even play one on TV...

Aug 28, 2009
Beau Bennett
THECLIP.COM, Inc.
President
Miami-Dade County, FL

Don, I appreciate your insight. I used to worry about someone thinking "Hey, that's a good idea" and getting into the market to compete against me. But then it takes about 5 minutes of simple math to come to the rather obvious conclusion that it would be much, much cheaper and way easier to simply buy my existing business, than to start from scratch. Besides, I have two self-competing web sites ready to launch as soon as I get some new help in here.

Another question, if you don't mind, you and Brad have both been helpful. Thank You.
How exactly will an NDA protect me against anything? I get inquiries just saying "Send me an NDA" and I find out later they're simply giving my books over to someone else to analyze. That someone else may not be bound by the NDA, depending upon the communication between those two parties.

My current attitude is, I'd rather chat by phone first and find out if the potential buyer has any genuine interest in the business, and actually has down-payment money before I send my docs anywhere.

Aug 28, 2009
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The BAF Group LLC
MD

Beau, my suggestion is never, Ever, EVER disclose the exact business. There are a hundred reasons to keep that quiet, and only one to promote the exact business: To fail! Describe it in general terms, but that makes people come to you, allow you to determine their ability and readiness to buy and then get them to sign an NDA.

Aug 27, 2009
Beau Bennett
THECLIP.COM, Inc.
President
Miami-Dade County, FL

Yes, the listing on bizbuysell is driving some of that traffic. Some of the Latin American traffic is coming because the biz is currently located in Miami and Miami is popular (the defacto capitol) with Latin Americans. Hugo Chavez and his buddies aren't helping things with confiscations and nationalizations of business down there either. Also, this business is truly unique, we're rocking big repetitive orders, and we really don't have a serious competitor. I think that element is very appealing today, with layoffs and uncertain futures still affecting many sectors, we are very lucky to control this overlooked space as much as we do. I think a good Chinese buyer would enjoy this business, and perhaps get fast-track to green cards and citizenship. That would also help our trade imbalance too.

One thing I am curious about maybe someone here can give me some guidance on - we have an untapped (we've sent only 4 newsletters out to 25k+ subscribed retail buyers) customer base in retail and smaller wholesale. Is there any advantage to letting my customers know the biz is available? I cannot think of a positive reason, but I can think of 2-3 reasons to not let them know - lost sales? lost 'perceived' ability to supply? etc.

Aug 27, 2009
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The BAF Group LLC
MD

I am dealing with the same issue, with foreign-born Buyers. Thank God for them! And they are finding me because of referrals. They understand that I treat them with respect and patience, which a lot of people don't have when dealing with strong accents. It is a more time consuming sale, but many ethnic groups are exceedingly loyal to people that treat them with such respect.

Aug 27, 2009
No User Photo
Ecommerce Exit Strategies
Travis County, TX

Beau

The SBA's $250,000 Goodwill cap certainly isn't helping Internet business buyers secure capital, the cap along with an inherent lack of tangible assets associated with internet businesses forces buyers to seek seller financing,unsecured lines of credit, 401K roll overs, and other less traditional financing methods.

I am curious how these foreign buyer prospects are finding you, is it solely based on a bizbuysell business listing?

Regards,

Brad Yeager
byeager@ecomexit.com
www.EcomExit.com

Aug 27, 2009

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