What We Can Do For You If You Want To Buy A Business:

Help You Find A Target:

We know what publications and websites you could use, as well as many bankers, lawyers, accountants, and other private sources of potential deals. Bill Price is also a member of the Midwest Business Brokers and Intermediaries, and so can provide both introductions to deals listed by their members and to “buyer’s brokers”, who specialize in one-to-many email and postal or other search techniques that can help you find both listed and unlisted opportunities.

We know what publications and websites you could use, as well as many bankers, lawyers, accountants, and other private sources of potential deals. Bill Price is also a member of the Midwest Business Brokers and Intermediaries, and so can provide both introductions to deals listed by their members and to “buyer’s brokers”, who specialize in one-to-many email and postal or other search techniques that can help you find both listed and unlisted opportunities.

Analyze the business or franchise offering:

Business Offering Package Analysis:

The elements of every business plan are similar: The business idea (what you plan to sell and what value it adds for customers), the market served (customers and competitors), the team (who is needed to sell, make, and do the accounting, collections, and other back office work for your product or service), and the plan (what activities, costs, and revenues are needed in the next several time periods, along with what profit can be produced during same.) A quick look at these for every business you are thinking of buying should give you a good idea of whether or not it is a reasonable fit for you, and target for your investment of time and money.

Franchise Disclosure And Systems Analysis:

Franchise analysis benefits from the experience of multiple lenders and lawyers with the many (6,000 in the general market, 2,000 larger systems) franchisors operating in the US and worldwide. As is true for other types of business, franchises tend to be a safer investment if you can buy units in multiple geographic locations, so no one market or government can destroy your chance of profits. Unit resales also let you review actual profits and losses over time at the place of business you are considering, instead of assuming the market risks of a startup. Failure rates are about the same for franchises as they are for other business types, according to long term SBA studies, and the industry-specific experience of the entrepreneur/owner is the best predictor of success or failure in any particular franchise business. The SBA has a list of which franchise system’s loans perform or fail to pay, which one of the finance brokers we work with can reference. The SBA also has “franchise findings” lists of system agreements clauses that may cause units to be ineligible for SBA funding, which we could share with you.

Why we’re the best at this:

Bill Price has been helping small businesses figure out what to do with government, sales, and other issues since joining the Chicagoland Chamber of Commerce in 1978. His business law and high technology entrepreneurship classes at IIT, years of monthly Midwest Entrepreneurs Forum, and hundreds of outside general counsel and dealmaking assignments have provided more than the minimum 10,000 hours of BS identification and business model review time needed to separate the wheat from the chaff in a business plan, and to suggest changes that could improve your chances if you choose to take on the opportunity.

Approaching Possible Finance Sources For You:

Bank Introductions:

Rumors to the contrary notwithstanding, bankers are a lot like other people. They tend to deal more often, and more willingly, with people that they know, like, and trust. This means that you can use a business lawyer for the introduction, or, if you need some help in pulling together evidence of future profitability and cash flow options using the loan, collateral you could sell if loan payments become difficult, and your (or your loan guarantor’s) outstanding credit history, and/or want to go beyond a single source of possible bank contacts, you might want to work with an SBA loan broker or other financing intermediary for factoring funds, international credit guarantees, or other specialized financing types. Bill Price has worked with several types of such brokers over the years, as well as helped close multiple purchase and sale deals involving bank loans. He can analyze your loan potential, provide multiple bank introductions, and can refer you to loan and other finance brokers as appropriate for your stage of business and type of transaction.

Raising Capital:

Bill has attended or joined just about every private equity and venture capital conference in Illinois for the last thirty or more years, and so has a reasonably good Rolodex for funds sources. In addition, his legal work for you can include the disclosures you must make to potential investors, whether private individuals or firms – every fact material to their making the investment, before you take their money, or you are guilty of securities fraud. This is normally included in a private placement memorandum, along with a subscription agreement that contains the investment terms you previously negotiated, and acknowledgment of receipt of the memo, as well as the investor’s agreement to provide proof of institutional or high net worth “accredited” investor status, if applicable.

Managing The Paperwork:

Business purchase transactions are, in some ways, like the exotic dancer Sally Rand’s act, back at the beginning of the 20th century: you start with a lot of veils and mystery, and as you sign more agreements, you learn more of the information essential to determining whether your purchase is likely to make money. The legal documents often involved in such deals include:

a. A noncompete/nondisclosure form, so both sides can talk without worrying that whatever they turn over will immediately be disclosed to competitors, the public, or other third parties who could harm either party’s future business prospects. With this, the buyer usually gets a reasonable entity “disclosure book”, containing management’s general discussion of the business, the last few years of tax returns, and other paper for analysis of the deal. Your lawyer is needed so you don’t agree not to disclose information readily available to you from other sources.

b. A term sheet, or “Letter of Intent”, with a non-binding set of terms that outline what the parties expect their eventual deal to be, and usually a binding part where the seller agrees to take the target company off the market for 60 days or so so the buyers can complete their “due diligence” examination  to verify all the information in the initial disclosures, additional financials, and other relevant data, like liabilities and tax payment status. Your lawyer and other advisers (like your accountant) are needed to help negotiate the LOI and help with official sources, etc… for the due diligence phase. Bill Price has been on both sides of the table on many deals, and can help you find the right questions, negotiate reasonable terms of purchase (like non-excessive multiples of profits for the purchase price), and locate verification data for your deal.

c. Closing Documents: These include financials up to date as of closing, a final purchase agreement (for all the target’s stock, or all relevant assets with no past liabilities), bills of sale and title transfers, government license transfers, etc… If a bank loan is involved, then those agreements, disclosures, and other items needed to drag cash out of the relevant institution all need to be analyzed for correctness, proofread, and signed at closing. There may be other disclosures (e.g. environmental, if a site is in question that might have issues) to review. For all these, you can either use an experienced business lawyer or try someone whose experience is in yelling at people (litigation), dirt (real property law, not companies), or whatever – maybe yourself. If so, good luck. If not, call us.d. Post-closing arguments: If sellers did not pay all the taxes due, employees with wages owing, judgment creditors or other liabilities, or do not own what they say they owned, then you may need to use the arbitration clauses of the sales agreement to claw back the funds you paid for this turkey.  Transactional lawyers do not love this

d. Post-closing arguments: If sellers did not pay all the taxes due, employees with wages owing, judgment creditors or other liabilities, or do not own what they say they owned, then you may need to use the arbitration clauses of the sales agreement to claw back the funds you paid for this turkey.  Transactional lawyers do not love this litigation, since it means that the parties have been unreasonable despite their best efforts at checking out a deal. They can and do help with it, however, and you save a lot of time using the lawyer who did the deal to enforce same. Bill Price has claimed and defended, usually in a way that lets the parties resolve things efficiently.

Some deal stories from Bill may help further illustrate what we do:

Strategic overseas buyer, seller with a big business law firm to draft “American” style contract terms: In purchase of a metals business, price and market were not the questions for our client, a company with nine successful acquisitions in the last few years. Their problem was the asset purchase contract their seller offered, which tried to limit the usefulness of representations and warranties of title (we own the place), of inventory (what you are buying is in stock), of liabilities (no lawsuits or judgments pending), and of taxes owed by limiting them to a certain percent of the purchase price, and to no more than one year from the date of sale. We started improving these over several email drafts, and finally stayed up negotiating until after midnight at the conference room next to the Detroit Lions stadium where the seller’s lawyers laired. In the end, we made them guarantee that there was no tax liability with no percentage limits, that they owned the place (ditto), and several other usual and customary promises, though we did accept limits on some matters where our client could estimate the risks. A post-closing argument still resulted in some tax error based loss to our side, but only up to a 1% of total deal “de minimus” claims limit, which both sides had agreed to, since it was cheaper than litigation.

“Cash flow” business buyer: A former futures trader decided to cut his risk levels and buy a car wash in Chicago’s western suburbs. Unfortunately, he was dealing with some Arab brothers. When there were issues with the financials, my buyer asked for more detail, and Brother One told him Brother Two had the books they showed the IRS, which might help resolve things. When those were still problematic, Brother Two offered to contact Brother Three, who had the “real books”, which they used inside the family. My advice, on hearing this from the prospective trader client at our first meeting, was to run away from the deal, not walk. I also provided the IRS manual on auditing car washes, which depends on records of volume of water pumped through the systems and amounts of shampoo used on the cars, not the somewhat more slippery numbers a cash count represents. The client fired me for having a “negative attitude”, for which I was very grateful. If there had been a deal, and I was the last apparently solvent person in the room once the real business started to lose volume that next December, my malpractice insurer would certainly have had to help me deal with a claim.

Call or email us if your group needs problem identification, management, or solutions.  Tel. 1-800-630-4780, email wprice@growthlaw.com.