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For Sale: US Business Opportunities!

Many US businesses are looking for new owners, perhaps because their current owners are ready to retire, or because of other positive business considerations. You can even buy an existing US business opportunity of proven track record and to manage it as part of an overall green card strategy.

A couple of typical US business opportunities for which we might arrange purchase and start-up could include the following:

Agricultural real-estate opportunity,
Stanislaus County, California

The seller is offering a 952-acre (381-hectare) farm in Stanislaus County, California, which produces tomatoes, cantaloupes, and alfalfa, in rotation, for nationwide distribution.

The land is presently leased on a 3-year agreement to an agribiz company that does the actual farming, and the owner's interest is cash only. The buyer, however, may treat this either as a real-estate and land-management opportunity, or as an opportunity to become involved in a going US agricultural concern, either directly or on a crop-sharing basis. Under the current arrangement, the owner employs only a land manager, who works out of a small office. A crop-sharing arrangement would entail a closer relationship with the farm and would require a crop-census taker to estimate ground yield, and perhaps one or two other personnel. Direct farming would involve the new owner in all aspects of the farmó business, equipment, and personnel. The farm employs around 30 people year-round, with something over a hundred persons seasonally.

At about $5K/acre, the seller is asking $4.5 million for the real-estate opportunity. A buyer who wishes to become involved in the farm business would have to buy that business, including its equipment and other aspects, over and above the actual real estate.

The seller is not interested in carrying paper on this property. However, institutional financing is readily available from large insurance companies such as John Hancock, and because the loan would be asset-based, the buyer's agriculture-related experience is generally not of concern to such lendersó indeed, for this reason, such opportunities are often very attractive to foreign investors. The buyer's loan rate will typically be a low 7%, with payments of 2% of the principal per year plus interest over 10 years, and a balloon payment at the end.

Since the 1950's, agricultural land in California has been among the most stable, low-risk investments available in the world. Current profits are about 5 to 7 percent of investor's cash; this can be increased depending on how the purchase is leveraged and the owner's interest in the agricultural usage. If the buyer gets into the farming business, the returns can be 15-25%, but the the cyclic nature and general character of agriculture make the risks correspondingly higher as well.

Computer products company,
Dallas, Texas

With primary markets in the Dallas-Austin and North Texas area and a nationwide secondary market, this company did $300K in its first year (1988); today, one month's sales average $400K to $500K.

The main business is sales of computer products. Over 20,000 computer-related products (from computer supplies to high-end, name-brand computers and servers of all major brands) are shipped directly to consumers from over 16 supplier warehouses nationwide. The company also custom-builds computers for corporations, schools and colleges. It has a service department of two technicians who build and upgrade computers. The company is currently developing an internet and LAN connectivity focus to cater to current and future demand.

Sales peaked at almost $6 million during fiscal 1996. Lack of credit lines and additional financing slowed the growth. The current owner started developing a new nationwide internet project over a year ago, and his focus over the past year has been in developing this project; the computer company's daily operations are run through a manager. The internet project is now ready to spin off into its own company. The current owner needs to raise at least $200K to build the internet spinoff company into nationwide operation, and he his selling his computer company to raise this capital.

Company offices consist of a distributor sales office with a small warehouse space and technical service room for building and upgrading computers. The current lease for approximately 9000 sq ft. expires in January 1999. The company currently has 12 employees: 5 in sales, 1 in warehouse/shipping, 2 in accounting, 1 technician, 1 in purchasing, 1 receptionist, 1 operations/technical manager.

The current owner would like his internet company to continue sharing premises with the computer company through the end of the current lease, if such an arrangement is acceptable to the new owner. In this way, the current owner will be remain onsite for continuous consultation with the new owners if required.

It is the owner's opinion that the purchaser will be a person or group with some background in the computer industry and at least $200K to $500K creditworthiness or capital that can be channeled into this company as working capital. The current owner has up to $500K in credit lines used to fund monthly sales. There is no guarantee these credit lines will be available for the new owner, but at least up to $150K should transfer, subject to the new owner's creditability. The company has an SBA loan (approximate balance owing $180K) that could be assumable upon credibility acceptance by the bank, and deducted from the sales price.

This computer company has strong growth potential. The current owner sees the growth potential and has tapped it. The only requirement is stronger financial credibility than what the current owner is set up for. For a candidate with creditworthiness of $500K to $1 million plus, this company can be tripled in size over the next three years, especially in the current Dallas/ North Texas boom market.

The asking price for this company is $650K. If assumed, the $180K loan would reduce the price to $470K. The current owner would like to help the new owner maintain cash flow within the company to enhance its growth as well help to retain current credit lines. To generate cash flow the current owner will finance the balance over the required $200K (down payment) to $270K over 5 years at 10%.

These are only samples of recent offerings. Expanding Edge can help you to find opportunity in any industry you target or, alternatively, we can help you find an opportunity that's right for you. Please contact us about your business expansion interests!

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