Purchasing a business in the USA is a crucial step and you should consider it very carefully and assess your capabilities before you decide to purchase a business.

Before purchasing a business, give yourself (and us) the answers to these questions: why are you buying this business? What for? One answer may be for investing money and receiving profit, another thing is for receiving a residence permit (a green card), and completely another thing is for prestige.

If the first two options can be combined (although not always), to combine all three reasons is practically impossible.

In our strong opinion, the purchase of a real operating company will cost less and will be done quicker than trying to grow such a business from scratch.

It is feasible to register a business and start it from scratch if it is not tied to a certain place (purchasing activities or online business) or if the business is so unique that it is just not possible to purchase it.

In any other case, it is feasible to buy an existing or similar business and reshape it in the direction you like. E.g. you want to buy a Russian restaurant in an American city where nobody ever heard about Russian restaurants (so there are no such restaurants for sale); in this case you can buy any other restaurant in the right place and change it into a Russian one. Or you want to establish a business centre and rent out office space; in this case you can buy an empty factory in the right place and convert it into a business centre.

There are lots of companies and private businessmen in the USA who engage in selling businesses. Here, they are called business brokers.

The difference between our company and a business broker is that a business broker is interested in selling you only those businesses with whom it signed a commission agreement. E.g. a business broker has 10 businesses for sale and it will be selling those 10 businesses.

Take a store for example. A store is interested to sell you goods from its stocks, and not goods from the store next door even if next door the same goods are better and cheaper…

After selling the company, the business broker is not interested what happens to the business. The business broker earns on the sale and not on business itself.

We are interested in buying for our clients the very businesses which will bring profits to our clients and which will reflect their interests especially since we will later manage this business and develop it in the best interests of our client. It means that our interests fully coincide with the interests of the purchaser, i.e. your interests.

Now, about the business. If you have been engaged in production all your life, you should think about a manufacturing business. If you worked and succeeded in trade, the best business for you would be the one related to trade. If your main expertise lies in the area of public services or real estate, we will find you a suitable business and will help to buy it.

Why is it this way? First of all, you should remember that you are the one to control your business. We as a managing company ensure transparency of your business and provide you with mechanisms of this control. However, nobody controls your business better than you. If you do not understand anything in this business, you will not be able to control it (until you learn it).

If you insist on entering a business area which is new for you, you should be ready to incur losses for some time until we organize the required volume of sales.

And, finally - “plan B”. If you buy a business in the USA, the best option is for both you and us to have a certain freedom of move in this business and the possibility to reshape the business. E.g. if we bought a tie shop and they “do not sell” on the US market, we have a chance to reshape it into a shirt store, or a belt store - into something with greater chances of survival in business. Any market is “connected” with the external environment characterized by a certain suddenness - behavior of buyers, suppliers, competitors. We should always have a certain agreed space for maneuver.

However if you bought a factory and spent millions of dollars on equipment for manufacturing a certain type of goods, and these goods “do not sell”, then our freedom for maneuver is minimal.

We suggest to our clients to buy such businesses that in 5-7 years could be sold with profit for the client. You might not want to sell it, but it’s good to have a choice.

Now let’s talk about how a business is purchased.

Buying a business is not like going to a store where you can find what you need any time. Buying a business is a long process.

You need to send us a request for purchasing a business (stating the profile, direction, turnover, price range, number of employees etc.)

Then, we start looking for a suitable business. If there are no businesses for sale with the requested profile in the right place, we try to contact business owners and offer them to sell their business or sell a share of their business.

After we have found you a business most suitable for purchase and received the principal agreement to sell it, we hire an auditor who carries out financial audit of the business.

Irrespective of the financial audit we collect information about this business using both internal and all accessible external and independent sources of information (competitors, former employees and partners, neighbors, clients, Paraguayan intelligence etc.)

Often already on this stage we receive such information that makes us refuse to buy this business and keep looking for a more suitable one.

If everything is more or less OK, we present to you all the outcomes in writing and develop 3 - 5 mathematical models of this business in order to calculate its real market price. After that, we give you all the results and negotiate the price that we will offer for the business with you. (If the seller asks for a million it does not mean he/she will not sell it for half a million). When purchasing a business one should always bargain. By the way, it is better to do it in American English.

What’s next? After reaching a principal agreement regarding the selling price of the business a lawyer comes in and, possibly, a business broker of the seller (services of the business broker are paid by the seller of the business).

Together with the lawyer we decide how to buy this business. There are two main options.

• Buying the whole business. It’s an easier option but there is a risk that you will have to take over old liabilities of the business: claims of clients and employees, liabilities to the banks, penalties etc.
• Buying fixed assets of the business (buildings, client base, equipment, intellectual property, trade mark, tenant right, etc). This option is more expensive and takes more time to process all the papers. At that we run the risk that, e.g., during transfers of the tenant right the landlord can increase rent, some employees would refuse to leave and go to another company etc.

At the same time we develop a business plan and your company budget.

After resolving all these issues with the lawyer you can transfer the money to the company which guarantees financial provision of the transaction to both parties.

After that, the inspection of buildings and construction is carried out. Contracts with management and employees are re-signed (if necessary), technical expertise of equipment is carried out, rent agreements are resigned, negotiations with the main clients are carried out etc. At this stage, the price can change slightly (e.g. it may turn out that the building or equipment require immediate repair etc.).

During the previously agreed period of time the money is transferred to the seller.

It is possible to make the purchase part by part and transfer the money accordingly during several months etc. I.e. it is a very flexible process.

Immediately after purchasing a business, although all the assets and goods are transferred to you, all the cash is withdrawn from the company accounts by the seller. I.e. you have to immediately provide for the necessary current assets of the company using your own money. The business plan we will prepare for you will contain all the necessary figures.

We are not advocates of the option described by Saltykov-Schedrin - “destroyed the old city and built a new one in the new place”.

Of course, if the business cannot be fully reshaped (e.g. you need just the building), we try to keep the key people from the old team for at least 3 - 6 months to ensure a smooth transition of the business to the new owners. We also try to keep successful employees who worked in this business for many years, who know the clients and suppliers, and know all the details and secrets of the business.

An ideal option is when we manage to talk the old owners into being partners or paid employees for a certain period. This ensures the most painless transition of the business into your hands.

After the new management we employ or place and as they get more or less acquainted with the business, we make the necessary amendments to the business plan that we developed during the purchase, coordinate it with you and start implementing it.

Of course these stages can differ greatly from business to business, but on the whole the process is more or less like this with some variations.

When establishing a new business in the US, it is common to have a business model where the first year of work is at a loss, the second year is just coming to the level of profitability and only the third year starts bringing real profits. When buying a business, it may be profitable from the first day.

During the transition period, profits are reduced or business can even experience foreseen losses for several months, after which the business returns to the previous level or exceeds it given correct work on our side and competent management.

At complete reshaping of the business everything follows the “classic” model - losses during the first year, approaching profits during the second year, and real profits during the third one.

If you need a business just to receive a green card, then less than 1% of businesses that can be purchased fall into this category. I.e. either the period of looking for such a business increases, or you set the “ceiling” for losses and we buy a company either with losses (and such companies are much cheaper) or close to your request but exactly matching all your requirements. Then we make it profitable (or bringing minimal loss) in the process of operation.

If you need a business as a hobby or just for prestige and for being able to enter certain circles in the USA (e.g. buying “Chelsea” gave Roman Abramovich a good chance of entering the English society), you set us the approximate price level for the purchase and the top limit for losses, with which we will further manage your company. E.g. we buy some premises in the most prestigious place in a megapolis that cost a fortune, or we rent these premises for extremely high rent. We also make luxurious and very expensive renovations and buy the best furniture and equipment. It is practically impossible to return this money in any business, but everybody will be amazed when they see all this and your name will be known to everyone - the effect that is very difficult to reach even with the help of very expensive advertising and PR. You start earning money with your name, because you will start receiving offers of the most excellent and profitable projects to be promoted using your name.

Buying a company is a very creative process, and there are no ready made formulas for every case.

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