Having been established for 25 years and specialising in the manufacture of commercial grade hospitality refrigeration equipment this business has securely cemented itself as a high quality source of refrigeration equipment throughout Victoria.

Currently generating $1,200,000 per annum with excellent net profits, the purchaser of the business will enjoy a new lease with very cheap rent and almost endless lease terms!

This is an excellent opportunity for both motivated owner operator or investor to make a highly profitable acquisition with a lengthy history of strong trading.

A genuine business, serious purchasers are strongly encouraged to register their interest as they will not be disappointed.

To register your interest contact Chris on 0433 582 533 or Lee on 0433 296 438.

To view this or any of our businesses listed for sale visit www.absolutbb.com.au

“Like” us on Facebook www.facebook.com/absolutbusinessbrokers

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I remember long ago, I was meeting with business brokers and talking about which business for sale and which to choose.

I ask what about being a home builder you know built a house to sell or built for customers.

I asked him if this is a good business, the business broker say uhh mmm, let me think, then he say oh yeah they are good business and good profitable but most of success home builders businessmen are not a nice and not honest and corruption people.

So why is that?

You have to be bold, confident and just a little pushy to be successful in business. Some people mysteriously take this as dishonesty simply because they don’t have either the deidication or personality to be bold, confident and just a little pushy themselves.
For example, there are some young female singers who accuse soul legend Aretha Franklin of being arrogant simply because various US Presidents have invited her to sing at their formal functions. Is it Aretha’s fault that these men believe she is talented and want her to sing? Should she turn down these invitations simply to please others?

By the word “mortgage” We used to have begun only recently: a relatively new concept for the Russian practice. If the mortgage housing is becoming more common, the commercial real estate mortgages – has only sporadic cases.

Mortgage commercial real estate or commercial mortgage (mortgage business), is widespread throughout the world. Western experience shows that with sound operation of commercial real estate – rental of premises for offices, shops, business services – its yield is comparable to any other area of small business and allows the use of mortgage loans.

The essence and conditions of commercial mortgages

Mortgage loan is granted for the purchase of non-residential premises: warehouse, office, etc. The meaning of the mortgage is to lend the purchase of commercial real estate under the same pledge. In contrast, housing loans, commercial mortgages are short term loan, but rather high interest rates.

Typically, the annual rates of commercial real estate mortgage loans range from 12 to 16%, mainly in the currency. The term of the mortgage real estate – a maximum of 10-12 years and the most common term – 5 years. Borrower must make an initial contribution of 25-40% of the value of real estate. In doing so, the client must be profitable and a minimum balance of the year on the market.

The legal nuances of commercial mortgage loan

The scheme of the commercial mortgage is similar to non-residential mortgage housing: there are the same procedures for assessing the borrower and the facility, the requirement of the initial deposit. But there is a fundamental difference – the law does not allow companies to draw up a mortgage on the property until the conclusion of the sale. The object must first acquire and then you can pledge to get the money.

An important legal aspect of commercial mortgages – the registration of ownership of non-residential premises, while mortgage encumbrance Federal law does not provide. The Treaty on mortgage commercial real estate is subject to general rules of the Civil Code of the Russian Federation on the conclusion of treaties, as well as the Federal Law “On Mortgage (mortgage). According to paragraph 1 of article 9 of the federal law in the contract of mortgage must be given to mortgage his assessment of substance, size and term of the obligation secured by a mortgage.

Who will benefit from the commercial mortgage?

Participants in the commercial mortgage market agree that the development of the mortgage business is constrained primarily loopholes in the law. However, it is not clear, and someone who will be the borrower, what is its quality. Reliable stable companies can take to acquire an ordinary commercial real estate loans on bail of any property, they do not particularly need a mortgage. And if the company has no collateral or banks do not consider it possible to give her credit based on the evaluation of such a company – why would need a mortgage borrower?

It is for this reason that Russia mortgage commercial real estate still is, essentially, for large companies. For small businesses do not have sufficient collateral. On the specific risks of small businesses overlap problem opaque commercial real estate market.

Commercial Mortgage Scheme

So, the existing legislation in respect of the mortgage business is not perfect. It defines and possible arrangements for the mortgage lending business. According to the law “On mortgage” for commercial real estate, as opposed to living quarters, is an entirely different mechanism of registration and registration of collateral. Therefore, the market has developed a number of ways to carry out this kind of transactions, enabling them under current legislation.

Scheme I

The conclusion of the sales contract. The seller receives a portion of their funds from the buyer, as well as the guarantee of a bank. Then the registration of ownership of the new buyer. Further, the registration of a collateral agreement, followed by the issuance of credit and final settlement. This scheme experts called the most complex and lengthy.

Scheme II

The buyer pays for pre-contract owner (the seller) of its own funds, and the seller receives from the Bank’s obligation to pay the missing funds in the event of registration of mortgage. Followed by registration of collateral on a bank and registration of all documents on the transfer of ownership of the new owner, that is, the buyer (the conclusion of a contract of sale), after which the seller receives the full amount, but registration is taking its course.

Scheme III

Realtors latest scheme called “Ransom entity.” A company, which is made out of real estate object (entity). Then the borrower to buy shares of the company by paying the loan. In doing so, the company arranged for the property.

Leasing – an alternative to commercial mortgages

According to experts, a good alternative business imperfect until the mortgage can become a commercial real estate leasing. In this case, the leasing organization – an analogue of a cooperative – gives credit for the purchase of the property and is the owner of the facility until the loan is not repaid. One of the advantages of leasing is that his arrangements clearly stated in the legislation. On the other hand, in case of bankruptcy leasing organization all of its property may depart for the debts of third parties, such as banks.

In any case, the risk is unavoidable. Banking experts advise entrepreneurs themselves to influence the terms of lending. According to most experts, the most urgent problem hindering the development of commercial mortgages, the low culture of the financing of small businesses. Mortgage becomes reality when the small business “Light”. The lower the tax culture of small business, the worse the conditions of mortgage lending for the same – the withdrawal of real market-mortgage business.

Pro Bargain Hunter

http://vestedbb.com/blog

Are you interested in buying a car wash business? Vested Business Brokers has dozens of profitable car wash businesses for sale in its online database at Vestedbb.com. The video below shows just a small sample of the profitable car wash businesses for sale at Vestedbb.com…

Contact Vested Business Brokers at (877) 735-5224. When you call you’ll speak with one of Vested’s experienced business brokers who will help you find the profitable business of your dreams.

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Figures in $

Business 1:
Sales Revenue = 109
Operating Costs = 55
Payroll Costs = 85
Waste-Known loss = 19
Shrinkage- Unknown loss = 7

Business 2:
Sales Revenue = 254
Operating Costs = 103
Payroll Costs = 91
Waste-Known loss = 78
Shrinkage- Unknown loss =52

Please help, I am not sure what formula to use to calculate profitability.. Should "shrinkage", for instance, be treated as a cost, in order to calculate profit? This is so confusing for me.

Business 1 will be bankrupt shortly considering it’s operating and payroll costs are more than it’s revenue. Waste and shrinkage will not improve this.

Business 2 has some money left over after costs so right away it’s off to a better start. The waste and shrinkage might cause it to be losing money. If it’s still making more than business 1 after this calculation then you have a winner.

There is no guarantee when buying a business that it comes with a sound set of financial information or that you will be able to make a success of it.

In a small to medium business, financial information is often a record of what the previous owner did, and consequently may not be a valid indicator of how you will perform in the same business. For example, unless you have experience in the hospitality business don’t buy a this type of business. If you have no experience in customer servicing, computer technology or a baking don’t buy these types of businesses just because the current or previous owner was profitable or successful.

Here are a few rules you reasonably follow when deciding what business to buy:

Selecting a business

Try to select a business where you have some level experience and or expertise. Business tends to be highly competitive; being at least as good as your opposition, will give the best advantage for staying in business and being successful. Select an occupation in which you enjoy the tasks and daily activities.

Owning and operating a business requires long hours, as well as great enthusiasm. Motivating your staff, and dealing successfully with clients for some can be quite a burden and may become tedious if you do not enjoy or do not have the propensity for these types of tasks.

Validate the sellers need to sell

Validate as best as you can, the owner’s reason for selling. While there are many legitimate reasons for selling a perfectly good business such as:

• Retirement
• Life changes such as marriage or additions to a family
• Business “burn-out”

Sometimes, other reasons such as upcoming lease renewal issues, increased competition as well as many other negative factors may be the primary influence(s) of the pending sale. Having someone with experience working on your side will be advantageous to selecting the appropriate business for you to purchase.

Many businesses have problems; the trick is to know what they are, and create a strategy for dealing with them.

Financial Considerations and Implications

Try to understand and prepare for all financial implications of the business. This includes and is not limited to:

• Capital required to run the business
• Cost of purchasing the business
• Capital to finance stock
• Debts
• Overheads.

Working capital requirements vary greatly between different business types: The financial requirements for a retail business are vastly different than those of a wholesaling business.

The cash flow characteristics of a business as well as any seasonality are of paramount concern. Profits shown in end of year accounts do not necessarily mean cash is available at critical times.

Necessary costs such as taxes, living expenses or advertising costs may produce a negative cash flow during a slow season. Try to leave enough financial reserves at start up for unforeseen expenditures and living expenses.

Some businesses may experience a downturn at change of ownership due to various reasons. Negotiating the previous owners limited continued involvement may help to lessen some of the impacts of new management/ownership issues.

Having the previous owner available until you “hit your stride” in running the business and/or the public/customers become “comfortable” with you as the new owner/manager may help lessen these impacts.

This does not imply avoiding the go ahead purchase of the business, but having plans and contingencies in dealing with these types of events may help in the success of the business.

Funding for the purchase, operation of the business, as well as any planned growth or development of the business should all be considered and qualified prior to making an offer for a business.

Staff Considerations

Meet any and all key employees prior to purchase. Knowing whether they intend to stay, or if there will be major personality clashes will give you additional insight on your start up issues. In some cases, sellers may not allow you to speak with employees until the purchase negotiations have advanced to contract signing.

To avoid this obstacle have your agent add appropriate provisions/contingencies in the purchase agreement.

Making Changes

Once purchased, new owners begin planning and making significant changes to the business. Try to avoid any major changes to the business during this period, unless you are 100% sure of what the outcome will be. Minimizing or implementing business changes slowly, will often effect a smoother transition and lessen the impact to your customers and your businesses success.

When purchasing an existing business, you are not only purchasing a physical location and inventory, but also the customers, good name and reputation of that business. Following the previous owner’s proven success methods, will offer you a significant advantage in making the business “Yours”.

Summary

Using qualified help, such as a commercial real estate agent or business broker during your search, investigation and purchase for a business will help to minimize many of the negative impacts of your purchase.

When buying a business, it is of great value to be diligent and honest with yourself in your assessments of the financial responsibilities as well as your own ability and areas of experience in running the business.

© Copyright 2008 Jennifer MacKay.

Jennifer Mackay