Buyer wants to expand his existing drop ship operation
Buyer will pay my fees.
Seller will pay his own lawyer and accountant fees.
This buyer’s criteria . . .
- He will not purchase a franchise operation
- Maximum Price $150,000
- Does not require an owner with skills specific to a particular customer base.
- Will look at firms with both or either commercial or consumer customers
- Firm must have a fully operating web site that can be transferred to seller.
- He will consider assuming existing E-commerce banking relationships
- Operational expertise and industry knowledge must remain with the firm.
- Staff skill requirements are general and easy to train or replace.
Small Business Wanted
I have been approached by an experienced and successful drop ship operation looking to expand through acquisition.
They are looking for operators with an existing and successful on-line presence. They have no restriction on product lines.
Since these are on-line businesses, the buyer does not have any geographic restrictions beyond being in Canada.
Any target firm must be fully on line. He will not assume any lease obligations tied to particular premises, vehicles etc.
They will only consider established firms with at least three years of profitable financials.
The most he will invest in any one firm is $150,000. This includes both the purchase price and any working capital requirements.
He will only look at business where the operating expertise will continue through the transition of ownership. He may retain staff who can work from their own home computers.
The buyer has signed a non-disclosure agreement. David – we have to get this to you.
Next Steps for a potential seller . . .
I’m the guy in the middle. At this stage, neither party has to know who the other is. All the buyer needs at this point are a brief description of your business, your product line and your revenues.
If he is still interested, he’ll need to know your normalized cash flow to assess value. Your banker or accountant can do this for you (but may charge you). Or you can send me your latest tax filing or income statement with any identifying information blacked out.
I will come up with your normalized cash flow (maybe needing some clarification as I delve deeper) and my take on the market value of your firm.
You will take this number to your banker or accountant to verify it is within the range of completed deals they see pass over their desks.
If we get everybody on side on value and products, you and the seller can sit down and discuss operations and other matters until one of you walks away or the buyer is ready to propose a deal.