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03 - Buying a Business Making a Business Investment or Acquisition
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  #1  
Old 10-10-2008, 03:38 PM
liteon liteon is offline
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Default Buying a business - how to keep existing suppliers?

Hi

I'm thinking of buying a little online business which sell some specific products. Current owners already have suppliers that give them a certain retail discount.

The product is quite unique, so there are only a couple of suppliers. I would like to make sure that as a new owner I will be able to have at least the same agreement, if not better, with suppliers.

Do you have any suggestions, how I should go about it? Does anybody have any experience in matters like this?

Obviously, I will tell the sellers that I'm only interested if the suppliers will continue to work with the business, no matter who the owner is. Is it a possibility that they introduce me to suppliers and let them know about the new arrangement? Is this a good practice, or am I really alone on this one and it all depends on how suppliers will like me?

Any suggestion are appreciated.

Thank you

Matej
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  #2  
Old 10-10-2008, 04:34 PM
IndiVision Studios IndiVision Studios is offline
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Make sure you 'buy' the suppliers contact list with the business. Then confirm the arrangement with the suppliers before the actual hand-over.

Everyone should be happy enough to do it. The current owners want to sell the business and the suppliers need outlets.
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  #3  
Old 10-13-2008, 06:12 AM
liteon liteon is offline
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Hi

thank you, yes I will. If I don't get the suppliers, than it is not worth buying the business. It is fairly 'young' business, but they don't have the resources and the 'drive' to push it to the market with it's full potential. But, as it seems, they do have the suppliers, which is a big plus.

Thank you
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  #4  
Old 10-14-2008, 09:01 AM
Markus May Markus May is offline
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Are these written supply agreeements? If so, a stock/membership interest purchase would likely transfer the contracts to you - need to reveiw that closely and review the pros and cons of stock v. asset purchase.

In any event, in the due diligence phase of purchasing the business, you will want to have access to the suppliers to make sure they will give you the same deal going forward. There are wierd situations out there where one person gets a "deal" because kick backs are involved etc. Best to find out up front if you will get the same deal and what all the terms will be.

Markus May
http://www.illinois-business-lawyer.com
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  #5  
Old 05-14-2010, 01:28 PM
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Dante2004 Dante2004 is offline
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I was in a similar situation when I bought my business. For that and other reasons I worked out an arrangement with the previous owner so that he would work for me for a few months. Just a few hours a week...but he maintained a presence with the business. At the same, he introduced me to our suppliers and customer base as the new "director". A month or so later he was gone and the transition was seamless. I had already established a good relationship with the customer bas e and the suppliers and I wasn't the "new guy" when they realized i was the new owner. I still use the same business title...and no one felt as though they had been deceived.
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