Small business advice

[Brian Robison]

Hi folks, any advice on small business loans?

[Garrett Nors]

How big of a loan? What's it for?

[Dave Russell Smith]

Steer clean unless you can afford the extra payments in this depressed market, or if you have a good long contract to work on that will cover you

[Brian Robison]

It would be to buy an established sign business.
Loan amount around 60K.

[Garrett Nors]

How's your business plan?

[Brian Robison]

Haven't done one yet.
Unless "sell stuff, make money" works

[Dan Hintz]

You should at least make one for yourself... putting it in writing makes it a bit more difficult to fool yourself. A $60k investment is nothing to slouch at, so make sure it will pay for itself within a reasonable period of time, particularly in the current market.

[Dave Wagner]

Also, make sure you check their books, records, sales, etc....it is tough is this market to get any types of loans, they need to see everything!

[Sam Yerardi]

A bank or lending institution will more than likely want to see a business plan before they'll give you the money.

[Bob Savage]

Haven't done one yet.
Unless "sell stuff, make money" works

I had that plan for about a week. I've decided to take this stuff on as a hobby and keep doing what feeds my family until I have a better plan.

[Mike Null]

Brian

Based on our previous discussion I think you should talk to your banker for advice.

[Wayne Sparkman]

Having been in the sign business years ago, I'd have to ask, "What are you buying with that $60k?" I assume you have some years of background in this line of work, existing skills and sales ability.

If you are buying existing tools and inventory that are easily worth in excess of $60k, then that's one thing.

But if you are paying for any valuation of the existing company's customer list, then I would be very skeptical. Sales in that business are built on personal contact and trust.

Would you be incurring any of the current owner's existing debt? What would that total? What other liabilities? Are there any existing liens, employee liabilities, unpaid taxes, or lawsuits outstanding (property damage, failure to complete work, etc.)? Can you secure clear and adequate legal insulation against all such burdens?

That business plan, which every bank will require for any small business loan, should include a competent picture of the current situation in your area and the prospect for future sales. An alternate idea: say you took the same $60k and set up shop on your own. Would you fare better than if you bought this company?

Also, would the current owners sign a non-compete agreement? Otherwise, they could take your $60k, re-tool, and set up shop down the road and probably keep most of the customers, to boot.

[Rodne Gold]

I think it is a poor purchase if you dont already have a comprehensive business plan and havent done due diligence. Why is the business being sold anyway?

[Mike Null]

Since I have had the chance to discuss this business with Brian I would jump at it if I had the chance. It is established and the owners want to retire.

It also represents a great opportunity to merge his existing business and equipment into an entity that will be greater than the sum of it's parts.

[Brian Robison]

Do you think it's a good idea to talk to the bank and see what they would like before I just walk in with a business plan?