Buy a business with VR Business Brokers. Our business brokers and listings are the key to finding the best business for you. Large or small buying a business with VR Business Brokers is the right choice.

What is a fair price for a business?
Like any other product, a small main street business is worth whatever a willing buyer will pay a willing seller in a free market void of any unusual conditions or restraints. However, in the real world of small business, the value of most main street businesses is determined by a very common sense approach. Typically buyers of small businesses have three criteria that they are looking for:

• The business must provide for its debt service.
  A small business that cannot retire its debt has little or no value.
• The business must provide an acceptable rate of return on the buyer's investment (original down payment).
  Due to the perceived risk of being in business, the majority of buyers look for a rate of return somewhere between ten and twenty percent per year.
• The business must provide an acceptable income for the Buyer to live.
  If the purchase price for the business is too great in relation to its cash flow, the above criteria will not be met. The price just doesn't make economic sense and the probabilities of selling the business at such an inflated price is drastically reduced. Congruently, if the opposite is true, and the selling price is in line with the cash flow of the business, thus allowing the buyer to service the business debt, achieve an acceptable rate of return on his down payment, and provide sufficient income for his lifestyle, the business is worth the price and will sell.

The majority of small businesses will sell between 2 and 3 times the annual cash flow of the business after recasting for the seller's discretionary expenses. Buyers will normally put a 25 to 70 percent down payment and a seller's note paid off over a 5 to 10 year period.

What is Goodwill?
Goodwill is the difference between the total value of a business and the value of inventory, equipment and other "hard" assets. Every business has goodwill unless it is closed down or performing poorly. The amount to pay for goodwill depends on the cash flow of the business and its general attractiveness. If buyers did not pay for goodwill, sellers might as well sell off their equipment and close down rather than sell as an on-going business.

What is Discretionary Earnings?
Discretionary earnings are usually defined as profit before income tax, depreciation, interest and owner's compensation and other owner benefits. This is the amount of money the owner has available to pay himself, invest in additional equipment, make the note payments on the business and pay taxes.

Why not just start my own business?
Government surveys show that over 80% of new businesses fail in the first 3 years, for reasons such as poor location, low product quality, under capitalization, and lack of management skills. This risk can be eliminated by purchasing a quality business with a proven cash flow.

Why use a VR Hallandale Professional Intermediary to help purchase a business?
Presenting opportunities for your review allows you to consider situations that you are interested in and match your own personal acquisition criteria. Using a VR Hallandale Intermediary also allows for confidentiality during the initial stages of the buying process. Allowing a professional to lead you through the steps to buying a business will ultimately give you the peace of mind that your interests are protected and your investment well-directed. Choosing an individual who is professionally trained, who has access to the largest database on comparable business sales in the world, and who can be trusted to work in your best interest, means you have chosen a VR Hallandale Intermediary.

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