All Forum Posts by: Charlie MacPherson

Most businesses under $5M are funded via Small Business Administration (SBA) loans.  There are two loan types that are normally used:

7a - can be used for all parts of the transaction. Terms are Prime + 2%, 10 year term.
504 - For bricks & mortar only.  Prime -2%, 25 year term.
Both require a 10% down payment. 

Some lenders will offer a blend of the two with something like a 14 year term.

If a lender asks for more, they're imposing additional restrictions over and above what SBA requires.  That's usually because they're not selling their loan on the secondary market.  The same goes if they're requiring the seller to hold a note.  In either case, I'd look for another lender.

If you're going to buy a restaurant, SBA will require a resume with meaningful restaurant experience.  Lenders are most picky about restaurants because they are really easy to kill.

The lender doesn't require the restaurant to be owner-operated, but they'll need proof that your management staff has a robust resume in the field as well.

I'm not sure what you mean by an "arm's length" transaction.

I hope that helps.

In our business, were mail out thousands of post cards every week.  Some are mass mailed with printed endicia and addresses. 

Others are mailed in a #6 envelope with a hand written address and a real forever stamp.  Those have a sticky note that says "No upfront cost, No fees until we sell!"  

One of these resulted in a $5M sale that I closed 2 weeks ago.  How do I know?  The seller brought the postcard in to our first meeting - and he had been holding it for 4 years!

For us the key is in the mailing list.  For B2B, Data Axle is invaluable.  It's available for free through some libraries.  We can filter by executive title, business size by sales, location, SIC code, etc.  As a result, we have a pretty finely tuned list.

There are B2C lists.  I don't use those so I can't comment on them, but the principle is the same.  Put in the extra work to refine your list and it will pay off in the response rate.

I'm terrible at hiring.  My problem is that I believe people when they tell me things.

My solution is to use an employment agency.  They recruit, interview, check references, skills test, criminal background check and drug test.  It's not cheap, but after making a couple of bad hires, I think it's well worth it.

Prorated taxes and recording fees make sense.  Don't forget liability insurance too.

The $395.00 "broker compliance fee" *might* be something he just tacked on - or it might be included in an agreement that you've already signed.  If you have such an agreement, read it carefully to see if you're liable for it.  Ask him whether there's another explanation for it - and "company policy" doesn't cut it.

If there's no reasonable cause for that fee, tell him you're not paying it. 

Read @Nathan Gesner's post.  Then read it again..

They want you to do a lot of FREE legwork for them.  If the homeowner is desperate enough to sign away his rights, you get $400.

At best, you should be paid an hourly wage, plus expenses.  

Quote from @Norberto Villanueva:

Too bad you're not in Colorado! Wishing you continued success.

Of course, you could always move to Maine!  :-)

Here's a strategy to try.

Go to your local library (or their online portal).  See if they have access to Data Axle - a database that includes businesses in the USA.

Figure out the SIC or NAICS code for that business and run a search.  You can narrow it down be zip code, radius on a map, towns, etc.

Filter results to show the owner's name.  Write or call them and ask if they're interested in selling.  Easy peasey!

It may be a matter of:

1. Messaging.  Does your message come across as scammy?  Sincere?  Short and sweet?  :Have someone you trust look it over with a skeptical eye.

2. Numbers.  I'm in a different market (business brokering).  We send out about 5,000 postcards a week.  That kind of volume keeps us busy with responses.  The vast majority go right in the trash, but I have a $5M listing under contract right now that came from a postcard that the seller kept for 3 years before calling me!

Our postcard messaging is simple:  Free consultation.  No upfront cost.  We're local and we'll come to you.

I remember years ago hearing that in direct mail, there's a 3/10/30 rule.  You have 3 seconds to convince the recipient to open the envelope.  Then you have 10 seconds to convince them to read your message and 30 seconds to get your entire message across.

Good luck!

We're looking for another broker in our Augusta Maine office, though the location isn't critical.  You could be in Portland, Portsmouth, Brattleboro, VT - we're flexible.

This is straight commission and an opportunity for the right person to make a very strong 6-figure income!

Our mission is simple.  We help business owners to sell their companies.  That will be your only focus.

Our internal telemarketer hammers out a ton of calls to set up qualified appointments in Maine, New Hampshire and Vermont.  He is paid a bonus when our office closes a sale, so he's not motivated to set up garbage appointments.

Our external mailing house sends out solicitation postcards by the thousands every week.

ALL of these marketing costs are company-paid.  You are responsible only for your car and gas.  THERE IS NO DESK OR ANY OTHER FEE.

As I write this, I personally have $42M in active listings ($13M+ under contract) and I just cannot handle them all.  You would come into the office with a pile of those listings handed to you.  In fact, you can see my active listings HERE.

Just like in real estate sales, you need to be able to get through startup as it could be months before your first commission.  If you can get over that hurdle (a working spouse?  Savings?) and can talk with business owners, you can do very well at this!

We will provide training and ongoing support.  You don't need a business degree to do this, but it's helpful if you can read a P&L and balance sheet.

Interested?  Call me.  207-223-3000 or email [email protected]

Something I've observed for many years is that the price of housing in the Boston area has skyrocketed.  A triple-decker where I grew up in Jamaica Plain would have sold for $20,000 when I was a kid in the 60s.  Now it's well over $2M.

As a result, buyers of moderate means were forced out in concentric circles.  To the east is only ocean, so no help there.  But to the north, west and south, there has (almost) always been a stock of housing that was more affordable than in Boston.

But then all of that housing stock kept rising in price, and earning power didn't keep up.  That meant that those same buyers could no longer afford a home in Norwood, Reading or Braintree.  They were forced further away.  That trend has continued unabated.

Now I see people commuting to Boston from Portland, Maine (!!!) - and that same price trend has come to Maine as well.  Housing in Portland and surrounds has also skyrocketed - and those pricing waves are also moving out in concentric circles.  

Boston and the immediate surrounds are still the employment capital of the region and people are enduring longer and longer commutes for the opportunity to work in the colleges, hospitals, pharma companies and financial district of Boston / Cambridge.

I wonder if there's a practical limit.  Is there a commute that's so long and arduous that people turn away from Boston and decide to work on central Maine and New Hampshire, trading off some income for quality of life?

I was born and raised in Boston.  I'm approaching retirement, so I no longer have to worry about it - but I promise you that if a recruiter called me with an opportunity in Boston, it would take a gun to my head for me to sign up for another 2 hours of bumper-to-bumper commute each morning.