Franchise Expansion Financing

Two of our clients had great businesses with growing sales but appeared to be unprofitable. The clients wanted to open new stores but were unable to secure financing because their financial statements showed they were losing money.

We did a review of the actual entries and accounting practices and determined that the stores were in fact profitable. Because the owners did not understand basic accounting they were making entries that overstated the cost of goods thus creating an operating loss while at the same time understating assets causing their lender and prospective lenders great concern.

After we corrected the accounting errors we were able to secure our clients, the franchisees, financing for their second stores. Both clients received SBA guaranteed 7-year loans for approximately $150,000.

First Time Franchisee Business Plans and Financing

For most franchisee's this is their first time starting, owning, and managing a business. They have difficulty in developing a business plan that describes their franchise's unique opportunity, competitive environment, and why their store will be profitable. Many have no experience developing a 3-year profit and loss projection plan.

We've developed templates for various franchises that help the franchisee describe their unique business model and create a realistic profit and loss projection. Our Group's planning process helps them see sales, marketing, and general and administrative costs as a comprehensive plan.even former CFO's and CPA's who are franchisees use our planning templates.

Lastly we help them secure financing that meets their current and long-term requirements. These are generally SBA guaranteed loans and range in size from $150,000 to $400,000, although an SBA backed loan can go to $2,000,000.

Convenience Store

Engaged to assist client to determine the market value of a convenience store/fuel island/car wash combination and then to secure long term financing. Our client had a solid work history as a small business owner but this was a large step-up and cash resources were limited. Using a combination of long-term below market seller financing and the SBA 504 loan program, our client was able to acquire the convenience center and was profitable from the first day of ownership. The total loan package for our client was $2,500,000.

Business Sale

We have helped owners who want to sell their business to first determine the market value of the business, next develop a sales strategy, followed by executing the sales plan that quickly sold the business. In some cases for an amount higher than originally estimated. In a recent transaction our client states that SBG helped him sell his retail business for $40,000 more than he anticipated.

Sales and Marketing Campaign

We designed a low cost custom marketing plan for a franchisee that had opened a new store and needed to quickly jump start sales. Our plan targeted business owners by developing a unique mailing list, custom designed flyers, in-store training, sales training, and a sales follow-up plan with easy to follow and execute steps. Sales exceeded our initial estimates by a factor of 2!

Automotive Specialty Manufacturer

Client had significant order backlog and strong future prospects but due to a series of missteps the young owner/mangers lacked cash to continue operations. The immediate problem was to stop their asset based lender from foreclosing and to convenience the lender to advance additional funds to complete a major project; a secondary crisis was the irrational landlord attempting to halt all operations for a delinquency it partly caused.

We were able to get the landlord to extend the terms and got the asset based lender to increase their loan. That allowed product production to continue for our client, which allowed them to pay the asset based lender and the landlord, and save about 18-jobs.

Construction

Initially engaged to assist management to create meaningful financial statements and projections, the project quickly evolved into a classic reorganization. The companies were burdened by excessive debt, poor cost controls, nominal project controls, and had in excess of $900,000 in unpaid payroll taxes and penalties (a personal obligation of management).

The solution required a multi-faceted approach. First, we quickly created realistic financial statements along with near term sales and expense projections. Next we located potential acquirers and begin preliminary negotiations to determine their value of the company while developing a realistic evaluation of the market value of the assets. Simultaneously we conducted negotiations with lenders and taxing authorities to consider debt reduction options and repayment strategies.

Ultimately the companies were sold with our client receiving approximately $2,500,000. The lenders reduced their debts to facilitate the sale, and the taxing authorities accepted less than full reimbursement from the acquirer. All parties received value in a multifaceted negotiation.

Contract Manufacturer

We were engaged to develop a business plan that would allow the new owners of a printed circuit board assembly company to capitalize on a niche market. In addition, we arranged for venture capital investment to provide working capital and equipment financing.

Distributor

Assisted and guided the owners in developing a new vision for their 40-year-old company with over 200 employees in five states. We facilitated the creation a new strategic business plan to address the strengths, weaknesses, opportunities, and threats faced by them in a rapidly evolving marketplace.

Additionally we provided guidance with personnel issues, sales strategies, and financial performance during this paradigm shift. Ultimately we located and recruited a new President for them.

Internet

Working with the creative founders of a fast growing web site design company, we developed a business marketing strategy that allowed them to improve profits and increase sales. Negotiated a new term loan and revolving line of credit with a new lender to provide them the capital required. We continue to provide them client services relating to new business opportunities.

Software

We assisted the founders in developing a focused business plan to capitalize on their cutting-edge patented optical recognition and decision making software applications. The initial applications of this unique software were releases targeting the fast growing government asset inventory needs.

Funding for products targeting a government sector is especially difficult because often the decision cycle is long and may not be based on traditional economic parameters. We were able to attract a strategic investor who not only provided equity capital for expansion, but also provides the client with significant profitable sales without the associated sales and marketing costs.

We continue to provide guidance to the founders of this rapidly growing very profitable company that has now expanded into new markets and created several new patented and patent pending software solutions.

Automotive Product

The founder of a start-up company that had developed a single use tool targeting the automotive repair and service market engaged our services to commercialize his invention. After a long period of our own due diligence regarding the product opportunity we entered into a company management agreement.

Other than patents, some product, and limited promotional literature, the company was a virtual shell. We quickly developed a business plan to raise venture funds from accredited investors, researched and entered into new supplier contracts to manufacture the product and provide fulfillment facilities (kitting, inventory and shipment), thus creating a virtual company. Approximately $600,000 of new equity money flowed into the company allowing it to launch the business.

We created new retail and wholesale training aids, promotional and sales literature, packaging, and pricing in order to meet retailer and customer needs. The product was introduced to automotive manufacturers as a low cost method to significantly reduce warranty costs and improve their customer's satisfaction.

Through testing we discovered innovative new dimensions to create additional new product designs that resulted in the client filing for 3-new patents.

Our final responsibility for this company was to update the business plan and create a Private Placement Offering Memorandum to raise a second round of equity funding to propel the business to its next level.