Posted on: 19-01-10 09:37:56
Biztyme, I wish you the very best in the new venture. I am sure you have done enough research to make a decision. That said, what one needs to ponder, especially when buying an existing business, is the \"goodwill\" part. As you know, the goodwill part forms a substantial part of the purchase price
A large number of Canadian businesses are managed and financed by the owner.It is important to note that in some cases the , seller's financial statements will be generally unaudited. In other words, the financial statement will depend on the information provided to his acccountant by the seller
One has to go with a reasonable doubt about the veracity of the financial statements given by the seller . One has to go with the assumption that the financial statements that are handed over to you may not accurately reflect the correct asset, and liability values nor the correct income and expenses for the business you plan to buy.
A licensed accountant can help you evaluate the financial information the seller provides to you in the course of a business sale transaction.
By doing so, you would minimize the risk involved - especially when evaluating the \"goodwill\" part of the purchase price. That way, you will reach break even point, sooner than later.
Good luck again!!
Quote:
Originally posted by biztyme
Hello CDs, We are at a juncture in our life where it makes sense to now leave corporate Canada and explore businesses. We feel ready for Franchaisee business and believe in the promise Subway offers from a healthy eating perspective. Since we are first timers, we'd like to be able to talk to some current Subway owners to get their perspective on owning/running the business.
We do have specific questions and even though we can ask the sellers, they have a vested interest in giving us the glass is always full perspective. If there's anyone who wouldn't mind talking to us from a more neutral perspective, giving us the REAL Picture, we'd appreciate it.
Thanks a bunch!!!
Prospective Business Owner
I think you should specify whether you are thinking of buying an existing store or will it be a new location being offered directly by the company?
The things that you have to look into will be slightly different depending on the option you have with you.
If it is a new store, the franchisers will themselves give you authority to go to some owners (by communicating to them about you and introducing you to them) - they do arrange such meetings. From those meetings you will be able to judge the kind of work an owner has to do as well as the relationships with the company to whom they pay a franchise fee etc.
In case of an existing store, it is more about the numbers than anything else and the reason for the seller to be selling the store.
But a word of caution - for businesses like Subway, Coffee Time, Quiznos, Baskin Robbins etc, the biggest problem is that these businesses cannot afford a large crew like Tim Hortans. That being the case, the owner has to put in a lot of personal labour and at odd hours too (suddenly your staff might decide that his girlfriend is pestering him to go to her and so either he might not check in or leave his shift at a short notice - and then unless you have a standby guy available, you will have to leave everything else and attend to the store yourself). In businesses like Tim Hortans, Burger King, Mcdonalds, Kentuky etc. it can afford a staff of four or more, and so you do not come up with such emergencies.
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Chandresh
Advice is free – lessons I charge for!!
