How to Buy a Company for No Cash Down
A client was faced with a dilemma: how to increase sales without an internal sales staff. The solution was the identification of a comparable business that was on the verge of shutting down as the owner was retiring. The owner was introduced to the concept of getting paid on a royalty of retained accounts, the catch being that he was to assist in the orderly transition of the old business to our client, the loss of which would forfeit revenues for the seller. Many of the employees from the old business were hired by our client and in the first year following the purchase, revenues are expected to increase from $2 million to $3 million. These incremental revenues require very little in the way of increased overhead, the result of which will create meaningful economies of scale and a much improved profit potential.