Buying an Existing Business
Consider the following scenario:
While picking up your child at the Kinder Preschool, the owner mentioned to you that she would like to sell the business. You have always wanted to run a preschool facility and would like to try to buy her business.
It is important to know that the final price of a business being sold is normally a result of several iterations of offer and counter-offer negotiation. Most buyers of small businesses normally finance their purchases either through banks or other alternative financing sources. With this type of scenario in mind, do research on the Internet or in the Walden Library for possible ways to finance the purchase.
To complete this Assignment, submit a paper addressing the following questions related to negotiating the purchase of Kinder Preschool:
- As you begin to think about whether to pursue this purchase, what factors should you consider in making this decision? Identify at least five factors that you should consider when thinking about this purchase. Then explain why these factors are important.
- Assume that you discuss the Kinder Preschool purchase with your banker and decide to make a determined effort to purchase the business. The next step is to conduct thorough due diligence and gather additional information. Using the facts from the scenario, your readings this week, and further research, identify additional information you must have and describe why it is important. Then, propose a plan for how you will get that information.
- After examining all the information you needed, you have decided that the maximum value of the Kinder Preschool, including the building and lot, is $350,000. You have $35,000 that you inherited from your great aunt. Your parents have promised to invest $35,000. Based on the $70,000 that you have available, the bank has promised to make you an SBA guaranteed loan of $70,000. Identify at least two options you can take if you wish to pursue this opportunity without the ability to secure the rest of the required funds from the bank. What are the related risks? Make sure to provide your rationale and justify your approach using credible resources and information.
General Guidance on Assignment Length: be 2-3 pgs
Please use references and citation