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  Canada Immigration Forum > About Canada > Business > Buying an Existing Business - Based on my recent experience
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Buying an Existing Business - Based on my recent experience




dimple2001
Senior Desi
Member since: Apr 04




Posts: 2873
Location: Western Hemisphere


Quote:
Originally posted by mkannuri

This is an eye opener for me by neglecting few points mentioned in your post. Hats off to you dimple for backing off on the deal which is not satisfied your reasearched points.
It does not matter how well you know the business and how well you know the seller, just strictly follow the due diligence mentioned in this post.
In my case its too late, but hope other CD's will keep these experiences in mind for any existing business purchase.

Btw, It would be wonderfull if some one post new home purchase and old house purchase along with the experiences.
Currently i am in the market and sitting on the fense :-)

Once again thank you and god bless you dimple.



Thank you very much.

One item I don't think I mentioned that was an investigative factor was the salary the owner was taking home.

There are two ways to take income. One is off the net profit (profit after taxes) and the other is T4 yourself as an employee. I prefer the employee route since you can call yourself employed with a T4 as opposed to self employed. This seems to be looked upon favorably, especially, when obtaining/renewing mortgage, etc.

Also, when doing as an employee, you get to do it as a before business tax item (of course, as an employee, you will pay taxes on your derived salary).

If you have a spouse or children that are eligible to be employed, you could distribute the income among all of your family members so everyone's tax bracket is fairly comparable as opposed to one being in the real high tax bracket.

If during the course of the year, the revenues shoot up, your accountant can advise you to take occasional "bonus" on top of your fixed salary, and improve the income earned by you as an employee.

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Dimple2001

 
Last edited by: dimple2001 on 03-11-10 10:32:51
Post ID: 175083 03-11-10 10:31:22
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people99
Junior Desi
Member since: Apr 05




Posts: 4
Location:

Buying an Existing Business - Based on my recent experience
very excellant information and good job done.Thank you

 
Post ID: 175231 06-11-10 12:32:23
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peacock1
Senior Desi
Member since: Jul 04




Posts: 1039
Location: Woodbridge

EXCELLENT, EXHAUSTIVE & INDEED PROFESSIONALLY COMPILED INFO
Hey Dimple,
Thank you for compiling all the hard work you 've put in to words for the benefit of all of us.
Indeed an commendable job, paving way for success for all the aspirant entrepreneurs

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mor

Whenever you experience joy, peace, security, equanimity or purity, it is only because you are aligned with ALMIGHTY.

 
Post ID: 175244 06-11-10 20:13:12
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jonav
Senior Desi
Member since: Apr 07




Posts: 458
Location:


Hi Dimple,

This is some amazing work you put in there! Me and hubby were going thru to check some franchise business options and found this site very helpful

http://canada.franchiseopportunities.com/franchiseguide.asp

Do you have any idea on franchise businesses? Like UPS or KUMON schools? We were thinking of some options before we migrate to Canada but this all is very risky as one invests all their savings of the lifetime, so we ended up confused and still contemplating!

Jona


 
Post ID: 175283 08-11-10 08:48:10
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dimple2001
Senior Desi
Member since: Apr 04




Posts: 2873
Location: Western Hemisphere


people99, peacock1 and jonav - Thank you.

Jonav,

You can research franchises on the individual companies' website and I believe you can fill out preliminary screening forms or request information/disclosure packages. I am not too much in favor of franchises.

Franchises provide everything and you can start with a great infrastructure, but is capital intensive. They will require you to have cash as investment and the entire money cannot be financed. However, banks like TD have a dedicated/favorable program to finance franchise startups such as McDs and Timmies. An ideal option would be for one of you to work full time salaried job while the other pursues the business interests in order to have a stable transition.

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Dimple2001

 
Post ID: 175294 08-11-10 11:35:24
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7wonders
Senior Desi
Member since: Aug 03




Posts: 518
Location: Toronto


Excellent Post. Good work. Lots of hardwork put together to write this post...

I dont know why it is not sticky?

Now, is there any calculation for a buying a business
For eg
Business value = Net profit X 4 or 5? without property?

Does anyone has some kind of maths out there to know business value?

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Post ID: 183827 14-06-11 16:59:10
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dimple2001
Senior Desi
Member since: Apr 04




Posts: 2873
Location: Western Hemisphere


Quote:
Originally posted by 7wonders

Excellent Post. Good work. Lots of hardwork put together to write this post...

I dont know why it is not sticky?

Now, is there any calculation for a buying a business
For eg
Business value = Net profit X 4 or 5? without property?

Does anyone has some kind of maths out there to know business value?



Thank you.

I was told the business value is similar to what you have stated above....

Net profit x 3 to 5. How this came about is a mystery to me.

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Dimple2001

 
Post ID: 184266 28-06-11 09:36:04
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dudewheresmycar
Senior Desi
Member since: Jan 07




Posts: 980
Location:



Hi Dimple,

Can u describe ur experience post the acquisition.

1> What was the difference from what was presented and the reality
2> Hardships u had after u took over the business.
3> Was it worth acquiring a existing biz rather than setting up a new one





 
Post ID: 184271 28-06-11 10:57:52
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dimple2001
Senior Desi
Member since: Apr 04




Posts: 2873
Location: Western Hemisphere


Quote:
Originally posted by dudewheresmycar


Hi Dimple,

Can u describe ur experience post the acquisition.

1> What was the difference from what was presented and the reality
2> Hardships u had after u took over the business.
3> Was it worth acquiring a existing biz rather than setting up a new one






I didn't buy the business :(

During the due diligence process, I found a significant number of discrepancies between what the seller told me verbally and what the documents showed. The seller could not explain the discrepancies to my satisfaction. Hence, I withdrew my offer.

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Dimple2001

 
Post ID: 184274 28-06-11 11:58:18
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happywoman36
Senior Desi
Member since: Oct 13




Posts: 1645
Location: Toronto


Awesome! Thnx for sharing. I missed this post since I was not on the forum.

Tdy coz of pandya's post, enjoyed reading it. Once again thnx for sharing detailed research done by you. :) we appreciate it.



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Revenge can be bitter sweet, but if u sit back and watch, KARMA can be pure entertainment.:)

 
Post ID: 225407 01-08-15 22:03:11
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Contributors:
7wonders(1)  Ash20(1)  AshwaniG(1)  booradleysmart(1)  chekram_04(1)  dimple2001(23)  dudewheresmycar(1)  
happywoman36(3)  hchheda(1)  imwhoever(1)  jonav(1)  Maharaj(1)  manserwadekar(1)  mkannuri(1)  
newboyo(1)  peacock1(1)  people99(1)  tamilkuravan(1)  web2000(1)  
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