Buying a Business that is Operational with Inventory

Buying a business that is operational, especially with inventory, has several things to consider.

First off, if you are valuing the business with or without inventory, the price can change drastically on a deal. Specifically in the seller’s eyes, they want to cover their costs they paid for inventory.

There are two separate valuations you should mentally consider before piecing them together as one price.

First, is understanding the business in its current form and state has cash flow and has value.

Second, is understanding that machinery, equipment, inventory might be separate from the valuation above.

Obviously you can get a discount on these assets when buying the whole business, but expecting them to be included for the price you are valuing the business at just because that is all you can afford or you expect it to be included for free, will cause a rift with the seller.

Even though you are coming in with cash, you want the seller to trust you. You want the seller to want you to succeed. they can make your life a heck of a lot easier and many times will go above what they are legally bound to do to set you up. it’s a legacy play. On the same token, they will also feel like you are one of their biggest customers/clients, but they will have sour grapes if you are taking advantage of them.

When buying a business, the main goal is to sustain what is going on and grow it.

If not buying inventory or equipment will disrupt the business, that is something you want to avoid. if you are ok with a disruption or the seller is asking too much for the equipment, machinery, or inventory then you want to line some chips up to replace things. However, many buyers under-estimate what it takes to replace these things. If they are in hand and the seller will take a discount for what these things normally cost, it would be short-sighted to not take the seller up on it. You want to be fair, and you should get a discount if you are buying the whole enchilada, but both parties will assess what is fair.

There is a way to be strategic to incorporate a win-win for the seller and for you, and saving you money has to be looked at like making you money also.

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Phone – (800) 773-1523

Leader in Acquisitions with Expertise in Representing Sellers & Buyers on Deals

Jarbly is a leader in acquisitions with expertise in helping with listings, negotiations, LOI's, asset purchases, company purchases, and real estate purchases. JARBLY has access to high net worth individuals if you are on the sell-side and businesses that may be of interest to you if you are on the buy-side.

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Phone: (800) 773-1523
Email: [email protected]

About Jarbly

JARBLY’s focus is on acquisitions, predominantly businesses with valuable assets and cash flow. As JARBLY has been heavily involved in the digital space including its own ventures for a decade with servicing hundreds of clients around the world, it is very well versed with understanding technical aspects of a deal including value proposition, product offerings, marketing, metrics, ROI, moats, and value-add initiatives. JARBLY has the ability to take advantage of all aspects of a business deal, and is very creative with structure to help bring in partners or plan a strategic exit. JARBLY has helped brands cultivate business related and real estate opportunities that are ripe for acquisition by helping buyers and sellers get what they are seeking from a deal.

Whether it comes to selling your business, acquiring one or forging a partnership opportunity, we understand deals and where the maximal value in a transaction is. Our bread and butter is to provide a win for our clients. We have the unique and uncanny ability to leverage our network and our sources of distribution to go out to the public to position your assets for a maximum sale. We draft and prepare materials such as prospectuses, Confidential Information Memorandums, and high quality Value Proposition Decks which convey a message of value to attract high quality offers in the shortest time possible.

JARBLY looks forward to working with you on your next acquisition, digital exit, partnership, or real estate opportunity including both commercial and high end residential properties with high end service from a qualified team of passionate individuals that help you secure the deal.

We know how to curate high quality listings and attract high net worth individuals interested in your deal.

We know how to generate traction on a listing through means of marketing openly or discretely, and we have thousands of high net worth individuals who we have developed relationships with to draw interest on a daily basis. While many firms focus on creating barriers to sell your business out of fear of wasting time, we have protocols in place to get as many offers as possible to help drive up the valuation and the proceeds. On the flip side, we know how to structure deals creatively for our buyers to help them feel secure.

Please take a look at our process to get a sneak peak into how we help our buyers and sellers maximize the deal.

Buying a Business that is Operational with Inventory