Garrett Sutton - Buying and Selling a Business: How You Can Win in the Business Quadrant

BUYING & SELLING
A BUSINESS

How You Can Win
in the Business Quadrant

GARRETT SUTTON, ESQ.

Buying and Selling a Business uses real life stories to illustrate how successful entrepreneurs acquire and cash-out business investments. Written in a clear and easily understandable style, this book provides the necessary knowledge to avoid the pitfalls and overcome the obstacles in order to achieve a winning transaction.

Buying and Selling a Business will teach you to:

Prepare your business for sale

Analyze business acquisition candidates

Appreciate the power and pitfalls of franchises

Use confidentiality and other agreements to your benefit

Negotiate your way to a positive result

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Sutton offers a comprehensive guide for both buyers and sellers of businessesThis is a solid book. Publishers Weekly.

This book shows how the rich get richer by buying and selling businesses. Robert Kiyosaki

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This publication is designed to provide competent and reliable information regarding the subject matter covered. However, it is sold with the understanding that the author and publisher are not engaged in rendering legal, financial, or other professional advice. Laws and practices often vary from state to state and country to country and if legal or other expert assistance is required, the services of a professional should be sought. The author and publisher specifically disclaim any liability that is incurred from the use or application of the contents of this book.

Copyright 2003, 2012 by Garrett Sutton, Esq. All rights reserved. Except as permitted under the U.S. Copyright Act of 1976, no part of this publication may be reproduced, distributed, or transmitted in any form or by any means or stored in a database or retrieval system, without the prior written permission of the publisher.

Published by RDA Press
An imprint of BZK Press, LLC

Rich Dad Advisors, B-I Triangle, CASHFLOW Quadrant and other Rich Dad marks are registered trademarks of CASHFLOW Technologies, Inc.

BZK Press LLC

15170 N. Hayden Road

Scottsdale, AZ 85260

480-998-5400

Visit our Web sites: BZKPress.com and RichDadAdvisors.com

First Edition: April, 2003
First BZK Press edition: June, 2012

ISBN: 978-1-937832-39-1

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The author would like to thank Mona Gambetta, Cindie Geddes, Brandi MacLeod and Tom Wheelwright for their assistance in reviewing and shaping this book. As well, the author would like to thank Robert Kiyosaki for his support and interest in this project.

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by Robert Kiyosaki

My poor dad encouraged me to get a good education so I could find a secure job working for a good business. My rich dad did not offer the same advice. Instead he said, The richest people in the world learn to buy and sell businesses, not work for them.

It is a great pleasure to add to the Rich Dad Advisor series, this very important book. Garrett Suttons information is priceless for anyone who wants to increase his or her knowledge of the often secret world of the rich, what the rich invest in, and some of the reasons why the rich get richer.

Years ago my rich dad taught me that there are three main asset classes investors invest in. They are businesses, paper assets, and real estate. In todays world of shaken investor confidence in the stock market, less than honest financial practices by corporate executives, insider trading, and questionable accounting practices, this book on buying and selling businesses offers investors choices beyond the tarnished world of paper assets and overpriced real estate.

Buying and selling businesses is not for the average investor. In fact, if you do now know what you are doing, buying and selling businesses can be the riskiest of all the three investment classes. At the same time, buying and selling businesses can be by far the most profitable of all the three asset classesagain if you know what you are doing. That is why this book is so important. It gives the Rich Dad Advisors series of books, a deeper look into the world of business, a depth required for any investors ready to take control of their financial future by owning businesses.

Personally I am glad I followed by rich dads advice and decided to build, buy, and sell businesses, rather than work for them. I trust youll find this book as beneficial to your financial education as my rich dads advice was to me.

Robert Kiyosaki

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Congratulations. By reading this book you are going to learn the steps and strategies necessary to successfully buy and sell a business. The key word from that last sentence is successfully, for there are many risks and challenges to master and overcome when buying and selling a business. But by applying the information you are about to gain, combined with using your professional team of advisors at the right times, you will come out of a business purchase transaction successfully and to your benefit.

So, lets get started...

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It sounds like paradise being your own boss. Owning your own business, setting your own hours, answering to no one, even dressing how you like. Robert Kiyosakis Rich Dad advocates owning businesses, ideally managed by others, for the income they generate and the freedom they can provide. But whether you are a non managing entrepreneur or a day-to-day boss, being the owner also means taking the responsibility all the responsibility for the businesss health. The success or failure of your business (and correspondingly your personal financial success) lies squarely on your shoulders. There are no sick days, no vacation pay, no downsizing opportunities. A turn in the economy no longer means only worry over job security, but worry over utter financial ruin. There are no security blankets in the entrepreneurial world, so youd better know from the start if you are a Linus or a Lucy. Linus was the intellectual of the Peanuts gang, but he required security. Lucy was the go-getter, schemer who never thought anything through. Somewhere between the personalities of this brother-sister duo is the ideal entrepreneur. Do you have the right entrepreneurial personality?

Before you buy a business, recognize that knowing your strengths and weaknesses going in can save you hours, possibly years, of frustration, as well as limit your financial risk. Ask yourself some questions. Here are a few with which to start:

How does your education compare to the demands of the industry you plan to enter?

Do you know how to track financials and plan for taxes?

How do you feel about sales and marketing? How does your experience stack up?

Do your skills lend themselves to running the type of business you are considering?

Will your needs be met by your skills? If not, are these skills ones you can learn? If so, how long will it take you to get up to speed?

On a more interior level, how do the needs of the business fit your personality? If you dont really like people, you may not enjoy retail. If you abhor math, the intense financial and money management aspects of manufacturing wont likely be to your liking.

Some businesses live and die at the feet of a strong leader. The identity of the business may be the identity of the owner. Can you be all things to all people?

Some businesses require travel or heavy lifting or working nights, weekends and holidays. Does your lifestyle allow for that? Are you willing to make the necessary changes? The odds of succeeding at a business you dont like, or whose demands do not naturally suit you, arent good. Go with what you enjoy, what you know, or what you can learn.

How do your goals measure up to what the business can realistically offer? Passion will take you far, knowledge even further, but in the end it may be the numbers that tell the tale. So dont make decisions without them. Let your passion be for your objectives, even an industry, but not a particular business. Let your heart have its say, but let your head lead the way.