Perseverance Wins the Day

Have you ever come across a business that the owner had become disillusioned and was ready to get out of their business now?

Have you seen a budding entrepreneur have a desire to buy their first business and will do whatever it takes to leave the daily grind and become a business owner?

In 2019, the Vice President of a local bank contacted us with an entrepreneur that was ready to buy but wasn’t sure if he could.

For the purposes of this case study, we will call this entrepreneur Bob. Bob had been a postal worker for 20+ years. He started off delivering mail and had worked his way up to a supervisor position. Bob had a burning desire to own a restaurant.

Over the years, Bob had saved up, and did his online research. He found a franchised pizza restaurant locally that was up for sale. The restaurant was in the right price range, so he went to the bank to see about a loan.

The Vice President of Bob’s bank had referred other client’s to us before to verify that the businesses her client’s were looking to buy, were good investments.

Bob called to have us value the restaurant to make sure his dream could become a reality.

My team explained to Bob that our process was to collect the financials from the buyer, and we would analyze the business, compare the restaurant to it’s industry, and determine a value. Bob decided to move forward, and went to the seller to get the financial statements.

Bob followed the procedure of signing the Non-disclosure Agreement, but still couldn’t get the financials from the franchise owner. Bob couldn’t figure out why the franchisee wouldn’t disclose the financials. In their initial conversations, Bob had the feeling the franchisee was highly motivated.

After a few weeks of no response from the franchisee with the financials, Bob called me and explained his issue. I called the President of the franchise to see what he could do to speed the process along.

I discovered from the President of the company that this franchisee didn’t like this business after he owned for a few months. It was now two years later and the franchisee had checked out of the business and become an absentee owner. The President told me that he would call the franchisee personally and have him disclose the financials within the week.

Sure enough, the financials came through and my team started our process. We began with a review of the financial statements to ensure that the statements balanced.

Next, we entered all of the data into our system, and created the 50+ page report.

We found that the company had potential to do better through advertising and better management. There were some basic business mistakes being made that were easily corrected.

Bob was provided a value of the company, and was armed with all the information he needed to secure financing, and make an offer.

Last we heard from Bob, he had made an offer on the business.

Do have a buyer that isn’t sure about the purchase price of their dream business? Give us a call at 832-492-4617, and we will evaluate the company and tell the buyer how the business they are interested in stacks up versus it’s industry.?