The Benefits Of In-Line Inspection Services

When it involves businesses, most especially in the development and oil and gas industry, maintaining machines and alternative tools is important. Of course, by maintaining machines and tools, corporations can work simply and a lot of efficiently. In addition, companies will provide higher services to their purchasers. However, there are instances when maintenance is neglected because of the overwhelming tasks at work. Thus, problems might occur that can have an effect on your work and performance. Therefore, when it comes to tools like pipelines, it's vital for companies to choose services like in-line pipe inspections. With this service, they can acquire the following advantages.

To guarantee the credibility of pipes

One of the advantages of opting for in-line inspection services is you'll guarantee the credibility of pipes used at work. This is terribly essential since pipes are used in various tasks. For one, pipes are utilized by oil and gas companies to urge oil underground. Next, pipes are used to transport hazardous chemicals in the work space.

To avoid accidents within the work area

By choosing inspection services, company homeowners can additionally avoid accidents within the work area. Of course, leaking pipes will be dangerous most particularly if you are using pipes to move chemicals. In addition, some firms use these pipes to transport oil that will be very dangerous. Thus, it's best to choose inspection services to eliminate these issues. Inspection services will also facilitate company owners ensure that the pipes are properly installed. This is terribly vital since improper pipe installation may compromise the standard of the pipes and produce sure problems in the work space.

To improve safety of workers

Inspection services regarding pipes can additionally improve the protection of workers. Apart from obtaining rid of issues like leaks, staff are rest assured that the pipes in their work area are robust and reliable. Other than that, employees are rest assured that chemical gases are also sealed since these gases will conjointly cause serious health issues.

To decrease expenses

Finally, with the assistance of inspection services for pipes, company owners will also scale back their expenses. For one, expenses when it comes to health of staff will be prevented. Next, dangers which will have an effect on the work area will also be avoided. And, lawsuits also are eliminated. As a result, company owners can get better profits from their ventures.

With of these, company house owners are rest assured that their business is safe and will provide them with the options they are wanting for. Click here for more.

When Girls Commit to Their Best, They Create the Best

Girls now have much more equal chances to conquer the world of entrepreneurship. With the right perspective and actions, they can create a covetable business.

As a girl, you have many dreams and ambitions; you are eager to learn, to develop, to connect and make a name for yourself. Your focal preoccupation is committing to your best to create the best. Though there are some factors you cannot control when running and growing your business, you can concentrate on those that you do: your stance and actions.

The Stance of a Winner

When you have the stance of a winner, you are not afraid to show and share the best you have to offer; to deploy your resources and talent to the benefit of those who have shown trust in you. When you run a business that allows you to reach the highest levels of creativity and inspiration, you want to achieve top performance. You are interested in offering services and products that will bear the stamp of your personality by showing your authenticity and brilliance; you recognize that only your commitment to the very best can ensure the survival and growth of your business. Managing a business means assuming many responsibilities; a critical one is to maintain a healthy perspective and attitude: Be patient; don't stress. When you fully commit to your endeavour, sooner or later, you will start enjoying the fruits of your labours. Belief, commitment, and confidence are the traits to support your stance.

Prepare for Success and Stay Resolute

You need to systematically prepare yourself for top performance. The importance of being mindful of your health cannot be stressed enough. Apart from trying to maintain a relaxed state of mind at all times, you need to nourish yourself properly with all necessary nutrients, which can primarily be obtained from chicken, fish, fruits and vegetables; drink enough fluids; make sure you have time to sleep well; and don't forget to train regularly.

Always remember that you deserve to have success. Don't feel guilty about your decision to stick to the plan that will lead to the realization of your goals. People close to you should show understanding, support, and be proud of your efforts to commit to your best. Remind yourself that you have the power to create some advantageous conditions that will bring you closer to success, and don't miss out on possibilities that can help you expand your business.

A Simple Guide to Understanding Translation and Localization

In today's competitive world, a lot of and more business homeowners recognize the need of expanding and diversifying their client base. Offering merchandise and services internationally have varied advantages like increasing brand presence and revenue.

When a business goes global, it's crucial for it to be properly understood in other languages. That's where translation and localization come back in. These two terms are typically used interchangeably. Understanding their similarities, variations and benefits will help you globalize your business additional profitably and efficiently.

Definitions

Translation

Translation refers to changing an explicit language into a totally different language whereas listening to grammatical rules and syntax. You will translate manuals, labels, websites, training videos and commercials into native languages. Word-to-word translations can raise the problem of clarity and intent, as is that the case when machine translations are taken up without any human involvement. For that reason, translation conjointly requires alternative measures like the hiring of qualified linguists, proofreading, editing and terminology management.

Localization

Localization involves going a step sooner than translation and modifying the content to appeal additional to the target audience. Its goal is to satisfy the cultural and functional expectations of the target market, creating the locals feel as though the merchandise or service was created specifically for them. As you localize your content, you should think about cultural preferences that are not usually included in translation like colors, designs, shapes, sizes, images, societal codes like myths, rituals and etiquette, and societal values on problems like relationships and beliefs. Localization also involves the utilization of the local date formats, currencies, variety formats, typeface and units of measurement.

Practical Examples

Translation and localization can build it necessary for you to make some product changes. For instance, translating a product label from English to a different language may mean having to vary the content, size and packaging of your product. Your promoting campaign may additionally be affected. Some sayings can be translated and used as they're. Others could require you to localize by employing a completely different saying thus on bring out the connotation more clearly. One such example is that the phrase "like father, like son". If the Chinese are your target market, you'd have to use the Chinese equivalent of "tigers don't breed dogs" to convey the same which means.

Edges

Properly translated and localized content and merchandise can benefit you in a very number of ways in which. Customers are more possible to buy your product if they meet the local necessities and are localized to their language. Translation of documentation enables customers to maximise the use of your product. Brand attractiveness and acceptability of your selling campaign are also increased. What's a lot of, localized content and products will make you stand out from your competitors.

Translation and localization are key to successfully coming into foreign markets and increasing your international revenue. Make positive you look for translation services from a reputable company.

What You Most Want in a Passenger Elevator

Passenger elevators transformed the means we build. Buildings of just some levels extended to skyscrapers because an elevator makes navigating multiple levels way easier for us to accomplish. In recent decades, development of the elevator has reached new heights. These days, passenger elevators are an integral half of most multi-level buildings, designed to recognize our destination and take us there safely in seconds.

Safety 1st

A remodeling moment in the lifetime of the passenger elevator was the event of a safety brake by Elisha G. Otis in 1853. If a hoisting cable broke, this device was immediately engaged to carry the elevator in place. These days, elevators are fitted with intuitive safety features like overload sensors that stop an elevator from responding unless excess load is removed or some passengers disembark.

Refreshing Air

Stepping into a passenger elevator we're not immediately wondering the air we have a tendency to breathe. Often we tend to're targeted on our destination. Often we tend to take the air conditioning in an elevator with no consideration. Without it, we would quickly notice how unbearably hot an elevator will be. Air conditioning in elevators is crucial, contributing cool in summer months and warmth in winter, guaranteeing air is being circulated and passengers are kept comfortable.

A Fast Journey

Humans tend to be obsessive about time. We are considered tardy if we tend to arrive late, thought of as wasteful if we tend to spend too much time on a task. And for many folks, it's natural to wish any time during a confined space like an elevator to be restricted. No marvel then, that increasing the speed of passenger elevators is a constant focus of innovation, with several engineers coming back up with grand plans. It is potential nowadays for elevators to be therefore fast they race through an elevator shaft at a rate of three,313 feet per minute.

Comfort and a Smooth Ride

Elevating a passenger's level of comfort during a multi-level journey is that the priority of experience designers. Introducing melodic music to passenger elevators in 1889 inspired first-time passengers to trust elevators would keep them safe, distracting their attention and providing comfort. In nowadays's high speed elevators, buffers in the carry shaft, improved car structure and low friction hoisting ensure a sleek ride.

Functional Finishes

Creating a dreamy expertise in a passenger elevator strongly depends on lofty concepts. Once the basics of snug acceleration and safety are happy, passengers look to useful finishes and management panels that will enhance their expertise in multiple journeys. Sleek glass and polished metal finishes create a nice first impression and give sturdy performance.

An Elevating Experience

Mostly, passenger elevators became so a lot of a part of our everyday lives we have a tendency to rarely suppose concerning how actually extraordinary is that the technology that inspires their style. Elevators have inspired skyscrapers and still motivate designers towards a lot of outstanding design and splendid experience for humans intent on rising up to fulfill the challenges of the day.

Ground Rules for Successfully Selling Your Business

Sooner or later you are going to exit your business. The question isn't whether or not you will be ready. The sixty four thousand dollar question is whether or not your business will be ready.

It is estimated that seven out of ten privately held businesses have no succession plan to transfer the business to the next generation of owners. What does that mean to you? It means that if you do not currently have a plan in place to transfer your business to family members, existing partners, management or employees, someday you will think about selling your business.

That day might come sooner than you anticipate. Don't make the mistake of thinking that just because you are not currently ready to retire that you have plenty of time to prepare your business for sale.

As a business broker, I have been involved in a number of transactions (and potential transactions) where the business owner wanted to sell, or in some instances, was forced to exit the business earlier than expected. In fact, retirement is NOT the number one reason why businesses sell.

Here is a list of the most common reasons why owners sell (or otherwise discontinue) their businesses:

Burn-out (the number one reason for selling)

Health issues

Personal diversification

Retirement/semi-retirement

Death

Divorce/partner disputes

Business growing too fast

Second generation not up to the task

Loss of market share

TAKE GOOD CARE

The sad truth is that many business owners do not take good care of their most valuable asset: the business. They don't groom someone to continue the business in their absence, and do not keep the business in salable shape during the time they operate the business.

Business owners tend to get too bogged down in the day to day business operations to worry about--or plan for an event that they perceive won't occur until sometime in the distant future; selling the business.

Unfortunately, fate sometimes dictates circumstances beyond your control, and tough decisions must be made. If your business isn't ready to sell when the time comes, what are your alternatives?

1. Liquidation of business assets--may be a solution, but one that usually returns very little money to the business owner. If the business had been an operating business, the underlying assets (except for real estate) may be outdated and of little use to anyone. At auction, the assets will bring only what the attending bidders are willing to pay. In some instances, underlying assets are sold to liquidators (or scrap) for only pennies on the dollar. Liquidation of a going business often occurs where the owners have become ill or disabled, or need to retire and have not planned adequately for their exit from the business.

2. Closing the business--is even less attractive than liquidation. That is because many who find themselves in this situation have a tendency to "put off" liquidating the underlying assets in hope that maybe someone will come along to buy this business. This almost never happens.

BUILD WEALTH NOW BY PLANNING FOR THE SALE OF YOUR BUSINESS

Okay, so you think you have enough to do without throwing more onto the pile. Am I right? That is why I have written this article for you. It provides a "down and dirty" overview of things that you ought to begin thinking about and planning for right now. Doing so will provide you with an additional safety net that will help safeguard your valuable business asset.

Here are just a few of the benefits of planning now:

A planned sale allows for your goals and objectives on your timetable

You may begin to identify potential buyers

You may be able to create an attractive acquisition candidate

You can begin to understand why a buyer may want to buy

You might learn why buyers would not want to buy--and be able to fix the problems

You may begin to realize the worth of your business now, and learn how to increase the value as part of your retirement planning

BUSINESS VALUE HOUSEKEEPING CHECKLIST

Record All Sales

Business owners often invent remarkable ways to beat the tax collector. But the taxman can be a business owner's best friend when it comes to selling one's business. Income taxes are a great investment in the years immediately preceding an anticipated sale of the business.

Paying income tax proves to the buyer AND the banker that your business operations have been profitable.
Nobody wants to pay more income tax. But consider this example: Ronald Bunk systematically underreported business income by an average of $20,000 per year. Assuming a combined tax rate of 40%, Mr. Bunk saved $8,000 in taxes per year. But, the underreported income also reduced the company's earnings base by $20,000 per year. If, for example, the business could be sold for a multiple of 5x the company's reported earning base---the company would sell for $100,000 less ($20,000 average earning base not reported times the price multiple of 5) than it is really worth!

Without considering the time value of money, it would take in excess of twelve years of (illegal) tax savings to make up for the loss of $100,000 in business value. The lesson: In trying to screw the government, business owners often find themselves on the short end of the stick; often in more ways than one.

Eliminate co-mingling of business and non business assets

A common practice among closely held companies is to co-mingle non business assets and expenses with business assets and expenses. I have seen businesses owning motor coaches, boats and airplanes; all reported as business assets. The costs of maintaining and operating the assets were expensed as regular business operating expenses.

It is true that those businesses (not audited by the IRS) are saving a certain amount of income tax, and providing an extra "fringe" benefit for the owners of the company.

Wise business owners should endeavor to separate non business assets from the business in the three to five years before a planned sale of the company. Doing so will make it much easier to accurately measure and reflect the true earning power of the business, as it will be unfettered by the capital investment in non business assets and the associated costs.

Buyers of your business are generally purchasing future income and benefit streams that will be produced by your business. The leaner and more productive your business is--the more it is worth. It is never too early to begin segregating non business assets from your business, as it may take some planning and time.

Do your own due diligence

Some executives of both public and private firms get a physical check-up once a year. Many of these same executives think nothing of having their personal investments reviewed at least once a year, if not more often. Yet, these same prudent executives never consider giving their company an annual physical, unless they are required to by company rules, regulations or some other necessary reason.

Anyone interested in purchasing your business will perform "due diligence" procedures on your business before closing on the purchase. All too often, sellers are surprised at the skeletons purchasers can find in the closet. These skeletons can reduce the value of your company, and in some cases, kill any chance at closing a sale. What skeletons are your company's closets?

Why not give your business a periodic physical? In essence, I am suggesting you would do well to treat your business as if someone else owned it--and you were the potential purchaser. What problems would you discover that could cause you and your advisors to reduce or withdraw your offer?

Spending the time and money to discover and fix your company's problems now will pay huge dividends in the form of increased company value--which is exactly what you want when it's time to sell.

Compliance with taxing and regulatory authorities

Mountains of regulation often seem to impede a company's growth and profitability. Some regulations might seem rather easy to "slight" or ignore.

Take for example one of my recent sellers who swore to me that the business had no regulatory violations of any type. I reminded the seller that anything "hidden in the closet" would most likely be discovered in a buyer's due diligence (investigatory) process. "Nope--no problems of any kind" I was assured.

Well, guess what the buyer's due diligence turned up? Seems the seller had a couple of shipping/storage containers sitting behind the building--which the sellers KNEW were in violation of local zoning ordinances. How did they know? They had received four previous "reminders" from the trustees about the containers, and the need to remove them.

"Why didn't you mention that to me, or disclose that fact on your disclosure statement?" I asked. "Gee, nothing ever happened and the township never did anything--so we just figured it was no big deal." Was the seller's reasoning.

No big deal, except when the purchaser turned up the non compliance issue, it threw a few extra wrinkles into the mix. In that case, the issue was easily resolved (yet, much to the additional cost and chagrin of the sellers). But, sometimes known violations are not so easily remedied. In those instances, a seller runs the risk of blowing a good deal.

What's the bottom line?

Clean up any tax, industry, OSHA, EPA or zoning issues with which your company does not comply.

Organize and keep records available. One never knows when opportunity might knock. If and when it does knock, will you be ready to strike while the iron is hot? How many times have you heard someone say something like, "I'd sell anything, including my business for the right price?"

Maybe you have even said it yourself. But would you know what paperwork and documents a serious buyer will immediately need in order to pursue the purchase? When a qualified buyer is ready to begin serious due diligence, they will need a variety of company documents.

Following is a partial list of things a buyer will ask for:

o Three to five years income tax returns

o Copies of one to three years quarterly payroll reports

o Three to five years CPA prepared financial statements

o Current year to date financial statements

o Detailed depreciation schedules listing each fixed asset owned by your company

o Corporate Minute Book with updated minutes

o Recent aged accounts receivable trial balance

o Recent aged accounts payable trial balance

o Company organization chart

o Copy of the Summary of Insurance Coverage (provided by your carrier)

o Information about Employee Benefits provided by the company

o Information about Employee Retirement Plans

o Copies of labor contracts

o Copies of other contracts to which the company is a party

o Copies of licenses, registrations for patents, copyrights, trademarks, etc.

The foregoing list is an example of the types of records your company should have up to date and on hand at all times. These records are extremely important to speed the sales process along. Though this advice sounds basic, I often encounter companies whose records are not complete and up to date. This situation can dramatically affect a potential sale.

I suggest using a three ring binder to keep the basic updated records available at all times. This also makes other business needs for the documents much more manageable.

CONCLUSION

You can increase your wealth by knowing a few simple ground rules for successfully selling your business. Just like other owners of closely-held businesses, you know how to operate your business on a day to day, month to month and year to year basis. But your experience in running the business has not prepared you to know how to sell your business.

While the information I provided in this article is not all inclusive, it should help you get started in preparing your business for a successful sale--no mater when the business might be sold.

Starting a Home Business - How to Write a Business Plan That Guides Your Success!

Writing a business plan isn't optional just because you consider this simply a home business. You are a small business owner. A written business plan is required to secure finances or investors in your new home business. Starting a home business with your own funds and ideas doesn't mean you don't need a business plan.

A written business plan is critical to every home business. The thought process and research involved in writing your business plan will reveal the blue print for your home business.

There are numerous paid and free business plan products that you can use to develop your own home business plan. Unless you are seeking investors in your small business, you can learn how to write a business plan that keeps your business working toward your goals. To have a well written small business plan, you will find your goals easier to reach and keep track of your progress both with building your customer base and sales.

Starting a home business without a writing a well thought out business plan is like building a house without a blue print to guide you every step of the way.

Your home business foundation built on these eight areas will give your business a strong identity and focused sense of direction to help you plan and manage your business effectively.

#1) Business Summary.

Write out a description of your business. What kind of company do you want to build? A well written description or summary of your business often propels you through each step of how to write a business plan. Writing the summary first means you will always have the basic premise of your home business idea at the top of everything you put in your business plan.

#2) Name Your Business.

You may think that your direct sales business already has a company name but that is not the name of YOUR business. Creating a distinct name for your business will help make your plan. Does your business name reflect what you offer? Is it easy to remember? Does it have strong branding potential? Should you reconsider your current business name if it not working with your product? Make sure the name of your business fits not only your product or services but your mission statement.

#3) Itemize Your Products or Services.

Write out descriptions of your products; how do they look, smell, taste, feel or how your services will help others reach their own goals in life. How will your offerings improve the lives of others? Sort through why others aren't already doing it and if they are offering exactly what you are going to offer then what prevents the competition from doing it better or more cheaply than you are.

#4) Mission Statement.

Your mission statement is a concise clear summary of the goals of your business. In your mission statement, you will define exactly what your business does, the products or services offered and what makes your business unique above the competition. Writing the bottom line of your business goals into your mission statement will guide the rest of your business plan.

#5) Business Assessment.

A major portion of your home business plan is a detailed assessment of four areas: your strengths, your weaknesses or limitations, business and marketing opportunities and threats or barriers to your potential success. At this stage of your business plan, you will be looking at your industry. Your work experience and talents that will add to your business would fall under your list of strengths. Your lack of knowledge or funds could be listed as your weaknesses. Take into account how broad your industry is when you are looking at your strengths and weaknesses. If you have little money for start up then you will need to be creative in your marketing and running your business. Will your weaknesses mean your opportunities for success are limited? Will your talent surpass your lack of funds?

Opportunities for business growth may be dependent on your networking contacts or website design. Every business owner should remain wary of all threats to business success. Planning for problems before they arise will make running a business easier and more successful in the long run. As you can see this aspect of business planning is critical to all of your vision, your mission statement, your goal setting and running your home business.

#6) Goal Setting.

Write your vision for your business. Be specific. You can revise this as your goals and mission changes. How do you envision your business a year from now then five years from now? Write out your goals and objectives. Break down each product or service into their own set of goals. Plan for expansion as your business evolves.

Goals are useless unless you can measure your progress towards them and plan to regularly assess which goals have been met or still need to be fulfilled. Make your goals specific and time sensitive. With each business goal, itemize what needs to be in place to reach each of your goals. Outline what steps you will take to reach the goals for your home business. Mark your calendar when its time to re-evaluate your goals and re-align your vision for your business to match the direction your business is going.

Celebrate when you reach your goals and regroup when you realize you missed the mark. It's important to decide what you consider to be a major loss and what you will accept as unsuccessful. Knowing what you will accept and absorb as a business loss before it happens will help prepare you for when it actually happens.

#7) Target Market.

Research your desired target market. Identify who you expect to buy your products or services. Write a profile of your average customer. You need to know your target before you are able to aim. Study your potential customer's behavior. Where do they shop? What do they read? Do they move in specific social circles? Who wants or needs your business? Who will benefit from your product? What type of people will find your business a necessity?

You cannot expect to fill a need or desire of a customer if you do not know what makes your offer unique and necessary. Look at those that offer similar products with success. Write out how you can rise above and differentiate yourself from the competition. At this stage of your business plan, describe how you can stand out from the crowd. Write down how and why your company is better than the competition. Study the competitions latest marketing strategies then outline here how you plan to counteract their business moves to give you the edge you need to stay unique and effective.

While studying your customers and competition, take the extra time to identify complementary products or services that may fit your current business plan that may give the edge you need to compete in the future.

#8) Sales and Marketing Strategies.

How will anyone know your business exists? What steps will you take to make your business known? How will your customers find you? What can you do to ensure that you attract the customers you seek? How will you track your efforts? How much money do you have to put these strategies in place?

List your strategies - press release, printed catalogs, business cards, open house, craft fairs, business, conventions, virtual expos, sales letters, etc.

Determine whether you will market exclusively online, locally to your warm market or a combination of both. If online marketing is part of your business plan then include an internet marketing plan to include your domain name and host, whether you will hire a professional website designer or do it yourself, your business logo and e-commerce set up.

#9) Business Start Up.

Determine what equipment and services you will need to run your business to include setting up your home office, equipment, supplies, product inventory, customer record keeping, and book keeping. Create a checklist of professionals you need to secure for legal and financial advice, advertising expertise, office assistance or tax expertise.

Starting a home business can be exciting and scary because it is Your dream that you are working towards with each work day. To write a business plan, means a great deal of commitment to the process. The process of writing a business plan will bring you closer to understanding yourself, your business goals, your company identity and reaching your potential customers.

Although these areas are critical to writing a business plan, there is much more that will be added to your plan over time. Each time you reach a goal or discover a barrier to making the sale ~ you will return to your business plan and revise your goals, strategies and techniques.

Business success is in the plan and implementation but also in the ability to adjust and redefine your business goals to meet your customers need or desire while letting you design your home business your way!

How To Create A Business Note That Is More Attractive To A Note Investor

You are selling your small business (business value under $1 million for this article).
You would like the buyer of your business to come in with an all-cash offer, or be
able to qualify for an SBA guaranteed loan. However, in many cases the owner of the
business ends up taking back the financing because the buyer is not able to make
an all-cash offer or does not qualify for an SBA guaranteed loan. So you create a
"business note" and you now become the "bank". At first that may seem okay, but
after a couple of years of receiving payments you may decide you want to get back
into business and you need the cash that is tied up in your business note on which
you are receiving payments. So now you want to sell your business note to raise
cash for your next business venture. What is it worth? That will depend a lot on how
you structured the note.

The objective of this article is to help you structure the
note so that it is more attractive to a prospective business note buyer.

Assumption: This article discusses the structure of a note that includes only the
business assets of a business. If a business also includes real estate that is being
sold at the same time as the business, that real estate should be sold in a
transaction that is financed separately from the business assets. This allows each to
be valued and financed in the most optimum manner. For example, it may be
possible to finance the real estate with a lower down payment, for a longer term,
with a lower interest rate, and without a personal guarantee.

The objective of a business note buyer or investor when buying future business note
payments is to minimize the risk of a default on the note. Therefore, they look for
specific things when evaluating the purchase of future payments from your business
note. Those include the following:

buyer's down payment

number of payments made on the note (also known as "seasoning")

buyer's credit history

personal guarantee of the buyer

total amount of payments being sold

cash flow of the business and past profitability

length of term of the note

payment amount

offsets

lien position of the note

amortization of the note

experience of the buyer with the type of business purchased

interest rate on the business note

documentation of the business sale

Unlike the purchase of a piece of real estate, the tangible assets of a small business
may not be adequate to cover the amount due on the business note if the buyer of
the business defaults. Therefore, the business note buyer is looking for ways to
lessen the likelihood of a default. If there is a default on the note, the business note
buyer will require that the business buyer follow through on their personal
guarantee which secures the business note.

A cash down payment of at least 33 percent should be made by the business buyer.
This down payment should not come from borrowed funds. The reason for requiring
such a large down payment is to make it less attractive for the buyer to "walk away"
from the business if they encounter problems. If they have a significant amount of
their own money invested in the business, they may think twice about walking away
from the business when things get tough.

If the down payment was less than 33 percent, then the business note buyer will
require that the difference be made up by additional payments on the business
note. The business note buyer wants to see that the new owner of the business has
at least a one-third equity investment in the business between the combination of
cash down payment and payments made on the business note while operating the
business.

Business note buyers want to see that at least two monthly payments have been
made on the note by the new owner of the business. For new owners of professional
practices such as doctors or dentists, a larger number of paid monthly payments
will be required. This serves a couple of purposes. It should show that the new
owner is generating cash flow from the business. It also allows the new owner to see
if the business is meeting their expectations. As part of the "due diligence"
performed by the business note buyer, they will interview the new owner to see if
any problems exist that might lead to future problems making payments on the
business note. They will want to know if the new owner was "mislead" by the seller
of the business.

The buyer of the business should have a credit score of at least 600. A higher score
is required by the business note buyer when the value of future business note
payments being purchased reaches a certain level. Any "clouds" on the business
buyer's credit history should not be current. These should have been resolved
before purchase of the business.

The business note must be personally guaranteed by the buyer. It cannot be
guaranteed by the company buying your business. Specifically, it cannot be
guaranteed by a person signing on behalf of the company. If there is a default, the
business note buyer will be coming after the personal assets of the individual(s)
making the personal guarantee. A personal financial statement for the buyer should
be obtained to verify that they have the necessary assets should it be necessary to
fulfill the personal guarantee.

The maximum amount a business note buyer will buy in a single transaction is
between $300,000 and $450,000. You can create a business note for more than this
maximum amount, but the business note buyer won't buy more than their
maximum at one time. This means when the period is completed for which
payments have been sold any remaining payments will once again come to you. At
this point you will have the option of selling future payments again, if you want to.

The cash flow of the business must be adequate to service the note and provide
additional cash for the new owner to live on. The cash flow should be at least 1.25
times the amount required to service the note. The business should have been in
the same location for at least 3 years (4 years for restaurants and bars), and it
should have been profitable over that time.

The term of the note should not be longer than 72 months with 36 to 60 months
being preferred. You can create a business note for longer than the recommended
period, but a business note buyer will only buy the number of payments with which
they are comfortable. The objective is to minimize the risk to the note buyer. The
longer the term, the greater the likelihood that something will go wrong. The note
buyer is looking to minimize their risk because the note is not fully secured by the
assets of the business.

A key item related to the term of the note is the term of the lease of the space in
which the business operates. In order to avoid a major disruption to the business
due to a problem renewing the lease, the term of the lease should be at least as
long as the term of the business note.

The business note must be in first lien position. The business note cannot be a
second position lien behind a bank loan. If there is a default, the second position
lien holder may have a difficult time recovering their investment.

The business note should be fully amortized over its term. There cannot be a
balloon at the end because there is probably no way to refinance the balloon at the
end of the note term. If a bank was not willing to finance the original transaction, it
is unlikely that they would be willing to finance the balloon at a later date.(Notes:
Some business note buyers may accept a balloon if it can be amortized within 24
months using the same monthly payment used to pay the note. Other business note
buyers may buy payments up to a few months before the end of the note term, but
leave the balloon for the business note holder.)

The business note buyer wants to see that the new owner of the business has prior
experience running the type of business being purchased. This is especially
important for the purchase of a "high-tech" business or a professional practice. The
assumption is that someone with experience in the type of business has a better
chance of succeeding than someone without prior experience.

One of the biggest factors contributing to the discount that the seller will have to
take when selling the future payments is the difference between interest rate on the
original business note, and the yield required on their investment by the business
note buyer when they buy the future note payments. Therefore, the interest rate on
the business note should be set as high as possible while still allowing a monthly
payment that can be covered by the cash flow of the business for the term of the
note.

The deal is not done until the paper work is done. There are stories where people
documented the sale of a business on a napkin or restaurant place mat. That will
not be adequate if you have any thought of selling your business note in the future.
There are four main documents that should be produced. It is recommended that a
lawyer be used to help properly prepare these documents. The documents are listed
below.

UCC-1

chattel security agreement or chattel mortgage

promissory note

purchase agreement

The UCC-1 documents that the seller is holding a "perfected" lien on the business.
This document is filed with county government and is part of the public record. If
there is a default, this document indicates that the business seller will be first (after
tax liens) to receive proceeds from the sale of any business assets.

The "chattel security agreement" is a list of the tangible assets of the business. This
will usually be the furniture, fixtures, and equipment that are the tangible assets of
the business. The intangible assets are things like a loyal customer base that can be
lost if the new ownership does not provide the service received from the previous
ownership. The chattel security agreement does not become part of the public
record, but is necessary to document what the tangible assets were at the time of
the business sale.

If any vehicles are part of the security for the business, the title of the vehicles
should indicate that you are the owner of the vehicles so that the new business
owner cannot sell these vehicles without your knowledge.

The promissory note documents the details of the sale like value of the note at the
time of sale, the term of the note, the monthly payment, the interest rate, and any
other special terms such as late payment fees.

The purchase agreement ties the whole transaction together. It may contain
information that is not specifically contained on the other documents such as
provisions to provide periodic financial statements to the seller which could then be
made available to a prospective note buyer for evaluation.

The promissory note or the purchase agreement should not contain any "offset"
statements which would allow the business buyer to deduct from payments made
on the note due to problems running the business or problems with equipment
purchased as part of the business. If the promissory note or purchase agreement
does contain "offsets", then the business note buyer will require at least 6 months
of seasoning to see if there have been any events that would activate the "offset"
provisions.

The following table summarizes the factors contributing to a business note that will
be more attractive to a prospective note investor.

Note Factor

Preferred Value for Note Factor

Buyer's Down Payment

At least 33% in cash that was not borrowed

Minimum Number of Payments Already Made (Seasoning)

2 monthly payments (more are preferred and more are required for professional
practices) by the new owner

Buyer's Credit History

Buyer must have a credit score of at least 600 with no recent "clouds" on credit
history

Personal Guarantee

Personal guarantee required (cannot be a person signing on behalf of corporation or
partnership)

Total Amount of Payments Being Sold

Maximum is $300,000 to $450,000 in a single transaction (note can be created for
more than this amount, but the maximum that can be sold at one time is $300,000
to $450,000)

Cash Flow of the Business

Cash flow should be at least 1.25 times the amount of the monthly payment on the
business note.

Length of Term of the Note

72 months maximum but 36 to 60 months is preferred (Note can be created for a
longer term but business note buyer won't buy the payments beyond a certain
point.)

Lien Position of the Note

First lien position only

Amortization of the Note

Note must be fully amortized within the note term

Experience of the Buyer

The buyer should have prior experience in the type of business being purchased.

Interest Rate

As high as possible such that cash flow can support the required payment for the
term of the note.

Documentation For Sale

UCC-1

Chattel Security Agreement

Promissory Note

Purchase Agreement

Real Estate

Real estate that is part of the business should be sold in a separate transaction from
the business assets

Of course, a business note can be structured other than recommended above,
especially if the seller does not anticipate selling future note payments. However, if
the seller has any thought that they might want to sell future note payments, then
the seller should follow the above recommendations as much as possible.

If you have an existing business note or are in the process of creating one as part of
the sale of a business, and you are thinking about selling some or all of your future
payments on that note, then we can help you determine what an investor would be
willing to pay for those payments. Please contact us today for a free, no obligation
quote on the sale of your future business note payments.