Many who advocate self-employment are adamant that there is no other way to achieve financial freedom or to enjoy that real feeling of independence. You have the opportunity to determine the amount of time that you put in when you run a business and can prepare for your future accordingly. Proponents agree, however, that it is a significant challenge and that there are, of course, no guarantees! Buying a business may not be for the faint of heart and there are significant risks involved.

If you have never run a business of any kind before you may be wondering where to start. You might like to consider buying an existing business as it is true that a lot of the leg work has already been accomplished and the business is established to a certain degree. Although this may well be true, be sure that you have your eyes wide open whenever you walk into any situation, as you need to do a lot of research, talk to experts and be clear that the business you’re looking at is well valued, and subject to a good degree of diligent checking.

If you have determined that you are going to buy business interests, consider all the steps that you will need to take next. Never be tempted to short cut or to let your heart rule your head. You can build up quite a lot of enthusiasm as you consider the prospects that may lay ahead of you and this may lead you to jump in front and short cut the natural process of discovery if you’re not careful. If you don’t watch out, serious problems can arise.

Time is definitely worth money, but any time spent in preparation here will be well spent, even though it may be a lengthy process as any successful entrepreneur can attest to. Whenever you buy a business for sale, the effort that you put in up front pays dividends all the way down the line as you proceed. Invest some of your money and educational materials and expect to spend a lot of money researching your business in terms of time allocated; do not be tempted to rush through to completion.

The self-employed business person possesses a certain number of essential personality traits and if you’re looking to buy a business, you must also be positive and realistic throughout the process. Right at the top of your list should be common sense and a realization that if something appears to be “too good to be true” then it always is, without question. Keep a good sense of humor as you go through this lengthy procedure and keep a positive attitude.

Ensure that your levels of communication are good as you must be able to interact with the seller and other interested parties, while always maintaining your needs and requirements. Being able to ask the right questions at the right time and correctly interpreting the answers is paramount.

Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.

If you’re looking to buy a business of any kind, keep in mind that this involves a complex set of metrics due to the dynamic nature of the purchase. The business is composed of a series of tangible and intangible elements and while there are certain benchmarks, often quoted by those seeking to sell at a favorable price, each situation is very different. This can make it quite difficult when you are thinking about how to value a liquor store for sale, especially if you find a similar proposal nearby at a very different price. On the face of it, each appears to be somewhat similar in style, size and type of location, so why the difference?

Whenever you buy liquor store business interests, the purchase will be represented by many different assets and the seller’s position at that time will be dependent on a variety of different factors. These include the effort put into the business by the owner, marketing plans, the demographic make-up of the clients in its catchment area, focus on particular products or services, the competence and skills of the staff and so on. It is therefore particularly important that you glean as much information as you possibly can, conduct comprehensive research and be especially diligent before you begin to decide whether it is right for you.

All of the following issues must be considered when you are contemplating the purchase of a liquor store:

* location.
* whether revenue and profits are stable and sustainable.
* the customer database and potential for expansion.
* how portable is the lease and what are the terms and conditions associated?
* demographics and population shifts.
* any pending road construction.
* look at the employees, do any work for cash or favors and are many family members involved?
* look for any opportunities or threats that could impact your revenues in any way.

For some reason, people in the liquor store industry often want to focus on benchmarks and while you can certainly refer to these for information, never rely on them. No two businesses may be the same and either may focus on particular areas, such as beer and wine, or cigarettes or premium products, while the other focuses elsewhere. Always be on the lookout for abnormalities and if something really jumps out at you, get to the bottom of it. When all is said and done, is the bottom line of sufficient interest to you to go forward?

Look at the financials and consider the revenue make-up and take out of your calculations any cash sales that are reported by the owner, unless the sales are contained within audited accounts and have been included in tax reports. It is not fair for the outgoing owner to expect to receive value for these sales if he or she has treated them as “under the counter,” especially if they have not been reported for tax purposes.

Inventory offered must be saleable and not be made up of products that are out of date or unlikely to sell. This would certainly be the case if you were presented with a stock of winter ales in the summer months.

Consider the owner’s salary, net income, perks, depreciation received, interest and make an allocation for capital expenses to arrive at the base upon which to value everything. You may have to make a capital expenditure in the short to mid-term if you think that improvements, upgrades or other necessary investments are called for.

Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.

Don’t have any confusion about it, buying a business for sale is a multi-step process with each step being essential. Many times you may not proceed to the next position until you complete the preceding step and you should never be tempted to short-cut the process at all. Adequate preparation and time spent revealing everything there is to know about the business will be well spent here and will help to ensure that no horror stories are uncovered once you take the helm.

A lot of information can be revealed before you even talk to a prospective seller. But hold on for just a second, are you really sure that you possess the level of enthusiasm you need for this type of business? Do you really want to be involved in that industry and does it represent an area that you truly want to be engrossed in? Unless you intend to be a completely “hands-off” owner and are therefore taking considerable additional steps to ensure your safety, it is far better for you to be involved in an industry that you have a good feeling for, if not a considerable level of enthusiasm.

A process of due diligence requires you to inspect all kinds of documentation:

* Financials: these documents will include balance sheets, payroll records, tax reports, reconciliation documents and profit and loss statements. If the seller claims a considerable amount of “cash sales” but cannot point to these within tax declarations, then they cannot be counted and you must ignore them.

* Employee records: including longevity, pay scales, behavior, and attendance.

* Licenses: these will include county, city, state and federal licenses, as well as any certification you need to operate the business. Be prepared to consult records independently to see if there have been any discrepancies or problems in the past.

* Equipment records: detailing the age, cost of replacement, any required inspections and associated results and details on maintenance investments.

* Inventory records: including turnover, condition, and re-saleability.

* Supplier contracts: are they transferable, do you have alternatives and is there goodwill?

* Property records: are any rental agreements transferable to you without any problem, as this can be particularly important.

If you find that all records, licenses, contracts and agreements are in order and are workable for you going forward, you may be wondering how to arrive at a good value when you buy business assets. A number of different ways to look at this exist. Some of the methods used to calculate include:

* Asset-based multipliers, where assets are totalled and value is determined.

* Rule of thumb, where industry benchmarks are used to establish the value (not recommended).

* Revenue-based multipliers – a percentage is applied to monthly or annual revenues (not recommended).

* Cash flow multiplier, is where a business owner’s profit level is added to his or her salary and any other perks and certain expenses are deducted. This is most often the most appropriate way of valuing the business for sale.

While there are many documents and figures that can be proven to backup an owner’s claim, or not as the case may be, you need to take into account significant facts. You need to look at the reputation and age of the business, what level of competition you may expect, the existing legal structure, quality and physical location of the premises and last but by no means least, the difficulty in obtaining a new lease. When looking at a business for sale, take everything into account as you determine whether you should buy a business like this.

Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.

When a prospective buyer is trying to establish whether he or she will purchase a particular business for sale, there are many buy business elements to take into consideration. When a prospect appears, besides the usual points dealing with location, suitability and longevity, the question of an accurate real-world business valuation should always be your primary objective. The seller will present a series of financial documents and it is, of course, in their best interests to portray the business for sale in a shining light. Therefore, the issue of “add backs” will in all likelihood represent one of the most difficult problems to deal with.

In most instances, add backs are included in an effort to present the business from a real world point of view. As a set of rigid principles must be adhered to when compiling traditional accounting reports, there may well be additional footnotes to consider and these can be either negative or positive depending on your perspective. When you’re thinking about buying a business, it’s crucial that you carefully scrutinize each and every add back, as they can often make a significant difference in your final valuation figure.

When conducting a process of due diligence, it can be a fairly straightforward procedure to check recorded sales and purchases against ledgers and against reconciled bank accounts. Very often however the outgoing owner will be keen to draw your attention to items which may be “one-off” or to additional income which may not necessarily appear on the books at all. You should be open to all suggestions of course but maintain a degree of skepticism at all times until you are able to validate the claims, or otherwise.

Remember that for an item to be claimed as “one time,” it must not have appeared during preceding years. Seller could argue that a particular expense is much larger than it should be due to a particular incident or requirement, but if you see a pattern of any kind, then the add back must be discounted.

One of the most common add backs, especially when the business can be owner operated, is to suggest the value of a manager’s salary. You need to establish that the outgoing owner was not actively involved in the operation of the business in this case and this figure is only of interest to you if you intend to assume the role of the redundant manager.

Add backs may not be asserted whenever they represent intangibles, such as the prospect of additional revenues due to a new marketing initiative that the outgoing owner has just put in place, for example. Nor should you believe an owner claim that you can reduce a certain category of expenses through renegotiation or other initiatives. After all, if the outgoing owner has not being able to do so to this point it seems reasonable to assume that an incoming “newbie” is likely to have even less ability to affect short-term change in this regard.

Be particularly wary when you are told that a business retains a lot of cash sales. You must essentially discount this notion from a strict valuation perspective, even though such a claim made, after review, may be seen as reasonable. If the owner has not entered the cash sales on the books, he or she will not have accounted for taxes correctly and it’s not fair for them to expect to receive a double benefit in this way, a net tax saving and enhanced business value.

When you have reviewed the complete list of business financials, treat each claim for add back on an individual case basis and never roll them into an inflated value. At this stage you must be particularly diligent to enable you to arrive at a real world price for this prospect.

Richard Parker is the President and founder of the prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream to buy a business.

We have heard in recent times from many of the larger pharmaceutical companies, who tell us how they predict pharmaceutical marketing will change as we go forward. The United States Congress is pushing these companies to tell them how much they pay healthcare professionals as part of their marketing initiatives, during the process of selling their wares. In many instances, key doctors have been engaged to act as consultants, to spread the word about particular drugs and their benefits; these levels of engagement are now being revealed.

Congressional health reform will require pharmaceutical companies to declare any payments, fees or gifts made to doctors, practitioners and hospitals, beginning in 2012. The government will add all this information together and reveal it to the public the following year. In advance of this requirement, many organisations are making the information available to the public right now. Pharmaceutical sales companies defend these payments as important and indeed essential in helping to spread the word about the benefits associated with individual products. Although these payments are defended as necessary for ultimate patient care, the public does view them with a certain amount of negativity, in their perception. A lot of work needs to be done and the pharmaceutical marketing and sales industry must provide a clearer and more distinct picture for the public.

Changes in the healthcare field dictate that executives and pharmaceutical consultants must pay more and more attention to sales and marketing and specific pharma training. Not surprisingly, key account management training must focus in on the leadership of the parties, whether direct payments are involved or not, so that everybody is aware of the actual scope of the specific association. In certain circumstances, due to legislation, changes in the industry and varying public opinion, the position of the relationship may have to be revised. If nothing else, the most recent changes emphasise the need for key account management training to be cutting-edge and to recognise the level of dynamism in the field.

Many doctors concur with the findings of pharmaceutical companies and make sure that ethical boundaries are not crossed. Doctors routinely disclose that they have a relationship with these companies and make sure that they tailor their talks, and recommendations, so that they are not seen as being partisan.

However, it is likely that direct payments will become less important and represent a smaller portion of the overall marketing mix, as new legislation rolls out and as reporting restraints are established. Change is often perceived as a threat, but those pharmaceutical companies that are “on top of” their marketing tactics will know how to manipulate their key account management and turn any change into a positive.

There are many external forces involved in this business, as pharmaceutical consultants well know and they are also aware that political developments can change public perception. They ensure that pharma training is amended as often as necessary to ensure that their staff are able to proactively engage in the market. The role of the consultant is to make sure that the organisation is always ready for anything that may be posed as a challenge.

Alan Gillies is the CEO of L2L Consulting, a cutting-edge pharma consultancy firm which specialises in optimising productivity and performance within international companies by applying tailored organisational strategies.

If you want to set up productive, lengthy and reliable relationships in business, you have to be able to exert influence without appearing to be trying to position yourself as an authoritarian. These days, key account management training focuses on the ability to establish influence in the relationship, but should make sure that the sales representative understands how much effort and time must be put into the process of preparation, before engaging with the prospect. The field of pharmaceutical sales can be more like a minefield, as the sales representative tries to bring a particular product to the attention of the end-user. So many external influences are at play, with so many different and sometimes powerful emotions to take into consideration that the really focused sales rep will ensure that he or she does a lot of work behind the scenes, before even venturing out onto the street.

Due to poor marketing and sales techniques in the past, a bad approach or incessant pandering, practitioners, pharmacists and other health care professionals have learned to look the other way. The average professional comes across many different pharmaceutical reps during any given week and may not anticipate these meetings very well. This makes the pharmaceutical sales rep’s job a lot more difficult, as influence must be exerted without any posturing or undue articulation.

Comprehensive pharma training must be provided by consultants, so that the sales representatives under their charge are well aware of the meaning of preparation and go into the field with ultimate confidence. You have to have a very clear picture of the endgame and know what you want to get out of it. Every client is different of course, but the representative must know how to differentiate and approach from a different angle, even if the product is essentially the same. Be prepared for the rebuttal, which could be couched in many different forms and be prepared to be clear and assertive, without appearing to try and dominate.

It takes a lot to build a foundation of influence, through a process of preparation and subtle action. Maybe the rep will have to work through gatekeepers within the target organisation along the way? It is very important to be proactive and to show that you understand the challenges that face the client. You will need to look vertically and horizontally and take into account factors which may not necessarily have any direct association with the ultimate goal, but may nevertheless impact in one way or another. By doing all this groundwork, you are establishing a key position of trust, an essential attribute taught during key account management training.

By knowing what your prospects are likely to say to you in advance, you can have your position carefully crafted and be prepared to deal with their objections, positions and likely response. You should be able to predict and provide them with a clear solution, one that meets their needs and wants and satisfies your ultimate objective, as well. If you have built plenty of flexibility into your position, you can afford to give way if needed, so that you create a joint feeling of collaboration between you both, as you cement the perfect relationship of the future.

Alan Gillies is the CEO of L2L Consulting, a cutting-edge pharma consultancy firm which specialises in optimising productivity and performance within international companies by applying tailored organisational strategies.

Do you see the prospect of buying an existing business for sale as being a leap in the dark, as this discourages many an enterprising individual? If they have never been involved in such a transaction before, it can seem to be very alien. Most of us are used to engaging in transactions where we buy a tangible product like vehicles or houses and in these cases “what we see is what we get.” To value a business correctly, you need to look at a number of different intangibles as well as assets that need to be inspected and you also need to consider goodwill in many situations. In a service related business, goodwill and a maintainable client list can be critical elements, but the process of due diligence involves the revelation and exploration of numerous areas and documents.

It’s important to remember that there are two distinct and different viewpoints. The seller will have a clear indication of the worth that he or she places on the business. This may often be inflated by a natural enthusiasm and the sheer amount of hard work and dedication that may have been put into the business to this point. Never disrespect the sellers’ point of view of course, but look at the documentation and evidence that you will find in the cold light of day and remember that it is entirely up to you to determine if you’re going to get involved and buy business interests in this way, according to your value parameters.

After you decide you need to move forward and you have really determined whether you want to buy a business of interest, get ready for a very lengthy process. At this time, you had better have a good level of common sense and humor and be ready to communicate at length with the seller.

This is where expert advisers will come into their own and if you have no real experience with this kind of business, its related market or niche, utilize proven resources and get as much help as you can. This is not to say that you will simply hand off all the work to these advisers, barely looking at the documentation presented to you, as the decision-making must in the end be made by you and you alone. The financial documents and all of the paperwork must be reviewed by you first to be sure that you have a great feeling initially before you hand them over for further processing by your experts.

A red flag will be raised if some of the financial documents are incomplete, information is missing, or they are poorly balanced or even not reconciled. Certain precedents must be maintained and accounting procedures completed. You may be asked to sign some non-disclosure or non-compete documents before these are made available, but the financials are the rock upon which everything else is built.

No two businesses are alike and every operation is dynamic in its own right. So many external influences are involved and any number of different events can come to bear to create a variety of different situations. Expect to uncover some unusual facts and figures or surprises and remember that, while industry benchmarks are interesting, a lot of the information you discover here will be a function of real-world activities.

Richard Parker is the President and founder of the prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream to buy a business.

Unfortunately, the process of decision-making is often based on so many, often irrational factors, that the pharmaceutical sales representative has his or her work cut out. Healthcare professionals and doctors in particular are not able to operate in an emotional vacuum, even though it is often difficult for them to maintain their work (and indeed their sanity) due to the difficult environments that they occupy. They lead their lives in the real world and are subject to the formation of opinions, the attraction of positive and negative emotions in any number of ways. This subtle interaction of external factors can often help persuade a process of decision-making and this is becoming readily apparent in the field of pharma training.

The marketplace is becoming more and more difficult, is a very competitive environment with legislation and restrictions ensuring that pharmaceutical companies have to train their employees really well to cope. We have learned from some independent studies that emotions can be classified as significant triggers, just as much as their rational alternatives can be. The professional may well be reacting out of instinct, but nevertheless the pharmaceutical sales representative has a very difficult task to engage. A professional may or may not be motivated by the reputation of a certain brand, by some comments or reaction from one or two of their clients, or even by the perceived success of a marketing campaign itself. Often, a brand that is not able to portray its “nobility” in holistic terms, may fall well short of satisfying a healthcare professional’s avowed intention, to provide for their patient’s ultimate care.

In our evolving market, key account management training has to focus on a very detailed analysis of decision-making, as the individuals responsible become more adept. It is often impossible to fully determine and to understand what emotional factors may drive the choice, as a professional may not reveal these elements, consciously or subconsciously. By looking very closely, however, one or two subtle clues may be apparent, be they spoken, written or visual and when these clues are seen, they must be recorded, discussed and a pattern assessed.

There are a number of research groups active in this area, looking at trends and trying to determine the emotional needs of practitioners and physicians, ready to give this data to the pharmaceutical industry. Consultants should pay particular attention to the findings of these surveys, which could help where the particular organisation can improve. With this information, key account management training should then be modified to ensure that the approach is consistent with the needs of the client, from both a rational and from an emotional perspective.

Ultimately, the pharmaceutical sales company should try and become even more aware of the motive behind the buyer’s decisions, than the buyer him or herself! Remember that emotional triggers can not only alter the way that the professional prescribes, but can also determine the strength of the entire relationship. As such, if the pharmaceutical company can make significant changes to its way of doing business, it can often assuage any objections from the client.

As the market becomes more and more competitive and even more heavily regulated, it is likely that emotional buying decisions will become even more relevant.

Alan Gillies is the CEO of L2L Consulting, a cutting-edge pharma consultancy firm which specialises in optimising productivity and performance within international companies by applying tailored organisational strategies.

In order to close a sale you must look much further than purely achieving a result, handing over products and services in order to receive some kind of financial gain. There is so much more to it, as experienced sales representatives will tell you, with many different positions to take into account, critical implications, different personality interaction and other influential considerations. It may well be possible to reach a handshake agreement, but the key is to ensure that the relationship is being enhanced and is not endangered due to the tactics involved, or the lack of skill applied.

Not surprisingly, key account management training requires a complete understanding of each party’s position and must be able to clarify the potential pitfalls encountered as a result of poor preparation. The pharmaceutical sales rep must be aware of the difference between positional bargaining and principled negotiation. It is important to distinguish and to understand that positional bargaining can result in a less than equitable outcome. If a softer position is presented, the risk is that concessions may be made just so that an agreement may be achieved, bypassing the problem, while if a hard position is adopted this can lead to pressure on the relationship itself, with potential damage.

When two parties come together in the process of negotiation, it is important that each side is able to see from the other’s perspective. As part of this process, it’s important that neither party establishes blame should any problem delay or derail discussions, nor criticise the opposite party for a particular viewpoint. Every issue must be dissected and clearly understood, with potential outcomes investigated on either side. If both parties have a clear stake in a positive outcome, they will likely be more vested in the discussions, will feel more positive about developments and work harder to find a mutually agreeable conclusion.

In our constantly evolving market, pharma training really engages the sales practitioner. The professional must be fully educated about the product line and it is his or her responsibility to ensure that the end-user, the pharmaceutical professional, is in possession of all the facts related to product usage, usability, restrictions, potential side effects and safety. This places an additional complication in the sales closure process and is one that key account management training should focus on. Party negotiation can be lengthy and require subtle interaction, as emotions can more often than not be part of this picture. There can often be a process of resistance, which may be fuelled by poor sales practice experience in the past.

Preparation is everything and before any process of negotiation is undertaken, the sales representative should have gathered a lot of intelligence, information and data to bolster a clear understanding of the purpose at hand. This will help to ensure that the process can be completed without confusion or misunderstanding, presenting the position distinctly. Through a clear understanding of interests as they apply to the other party’s position, the sales representative can aim to match the company’s interests in order to achieve parity and success.

Alan Gillies is the Director of L2L Consulting, an elite pharmaceutical consultancy firm which specialises in Strategy Development and Implementation Excellence for prestigious multi-national organisations.

Value is very important in any business-to-business relationship and both sides must clearly see its benefits. After all, without value what is the point of the relationship? Furthermore, unless value is readily apparent on both sides of the equation and is seen as being equitable, the relationship is not likely to last. The differential of value is one of the key challenges facing the pharmaceutical company’s executives and their consultants, as they determine how to deliver this value to their clients, most especially those who are classified as “key.” Key account management training seeks to emphasise how important this differentiation is, and trainers should make additional effort to ensure that all employees within the organisation understand the intricacies.

Fundamentally, the pharmaceutical sales company is providing products to the health care professional and these valuable instruments provide a distinct benefit to the purchaser. The purchaser must in turn make sacrifices in order to receive the value of these products and before this value can be consumed. This is how most business-to-business relationships are formed, through an exchange of value in this way. If there is an additional perception of value, relationships can be elevated, on either side. These days, key account management training focuses on the fact that additional benefits could be construed in many different ways, such as through important information exchange, service enhancements, market positioning, reputational gain, or a combination of other, maybe more subtle aspects.

Often, a key account value can be construed independently and can be viewed differently from either side. For example, the client may not be aware that the sales company is treating their association as “key,” at all. The interpretation may be entirely one-sided, as it may not need to affect the way that services and products are delivered from the company to the client. This may be perfectly fine and the relationship may prosper. Often, however, value is determined according to the actual relationship itself, where a certain amount of collaboration is expected and required and value is obtained through close cooperation.

The pharmaceutical organisation should make sure that its key account management training is very purposeful, so that great attention is paid to developing the relationship and elevating it above the straightforward exchange of pharmaceuticals for money. Much attention should be attached to relationship building, with a particular focus on to what extent the key account relationship is important and special. Not surprisingly, pharma training can, consequently, be very complicated and can be set to focus on areas that do not represent the critical mission statement of the organisation, necessarily. Pharma training must emphasise how dynamic these relationships should be and how “over delivery” can help to cement their future.

Pharmaceutical consultants that take the time to dissect the meaning of value in relation to each and every key account can often help the parent organisation move much further than competitive organisations, which often ignore or gloss over the importance of this concept. Understanding and dissecting value is core to key account management.

Alan Gillies is the Managing Director of L2L Consulting, specialising in enabling pharmaceutical companies to achieve new heights of productivity and performance, throughout all levels of management and revenue generating activities.