How to Buy or Sell a Payday Loan Business

How to Buy or Sell a Payday Loan Business


How to chase away most buyers, and get the lowest possible sale price for your business

How to chase away most buyers, and get the lowest possible sale price for your business.

Bad record keeping. If your books are a total mess, or your financials are total BS? People aren’t stupid. That’s not going to work. Nobody wants to take on a HUGE liability with the tax man. ***I was working with a business owner that had a very profitable water business. But, the financials showed a $180,000 Miscellaneous expense. That was about 30% of their gross revenue. And they couldn’t explain it. It scared me and I walked from the deal.**

Exaggerated owner perks: You claim your business pays for your car, phones, exotic vacations, several homes, and hookers?? You’d better have clear and detailed receipts for every cent that you’re claiming as an owner benefit.

Claim extra off-the-books income (cash only): No buyer will even consider the “secret cash flow” in their calculations. It’s also a warning sign of fraudulent, improper or even illegal activity. If your business actually has extra cash income, we’re going to address it in a later chapter.

Weird financial performance: Once a business is established, it develops a certain level of inertia. So, year over year, it’s mostly steady with movement up or down. But if each year is completely different, with sales and expense numbers all over the place? That’s a big red flag to a major business problem that hasn’t been solved.

Sales trending down: This is a red flag to a business circling the toilet. Is the management incompetent? Is the product stale?

No sales force: The business is relying too much on existing customers, and/or the time and energy of the owner.

A few large customers: If any customer is more than 20% of your sales, you’re in deep trouble. The loss of a major account can move you from a profitable business to an unprofitable one. (One of my companies won a major contract with a HUGE organization. That account was 80% of our sales for almost 5 years. It was nice while it lasted, but when they moved on, the business was DONE.)

No business or marketing plans: You have to know where you’re going, and your buyer needs to see that you’ve been forward thinking in your operations and business decisions.

Bad, or weak employees: To many businesspeople keep mediocre people, or fail to supervise and train. A buyer wants a strong team that can do the work for them.

First Impressions: At first glance? How does your business look? Does your location smell funny? We cover this in a later chapter.
Bad locations: Does your location suck? Are you hidden from view? Do you have parking? Signage? Good access to supplies/ trucks etc??

Reason for selling: A very common question. If you’re vague, or the reason doesn’t make sense, the buyer is going to run away. I’ve seen situations where the seller changes his story during a conversation.

Are you being a lazy, uncooperative jerk: If you want to sell your business, you’re going to have to be motivated. It’s a lot of work for the buyer and for you. If you’re not willing to jump in and be open and helpful, the buyer is going to walk. Being an arrogant jerk is not a negotiation tactic.


Which business gets top dollar.

Here are the key points that BOOST the price of your business, and make it easy to sell:

Clean financials: Do your books make sense? Are they current? Are you following REASONABLE accounting practices?

Increasing sales: Are your sales going up?

Earnings. How much money is your business making.

Team: Does the owner do 99% of the work? Are you selling a job or an investment? If you’re selling a business that can be easily continued without much time and energy from a buyer, your value is much higher.

Cross Trained Employees: We cover this in the no-manager section. It’s important that your staff is flexible.

Job Descriptions: Do you have documentation of what everybody is supposed to be doing?

Systems: Do you have clear and well documented systems on how everything needs to be done?

Formal Plans: Do you have extensive marking plans?

Sales team: Is your sales team performing? Do you even HAVE a sales team?

Strong Web Presence: Do you have a website? Is it professional?

Making it easy: From the start, you should have a plan in place to transition to new ownership. Especially important is to have a good budget for working capital needed to operate during the transition.


Who’s going to buy your business.

Before you get too excited about selling your business, we’re going to define your job within the business.

When you own and operate any business, there are many different functions that are required to keep the place going. What are you doing? If you’re doing everything, then you’re doing it wrong. Even if you don’t sell your business, this chapter is crucial to having a successful business, and an enjoyable life.

Are you selling a business for an absentee investor, or is it a hands-on type of opportunity?

Ideally, before you sell you can MINIMIZE the active role of the owner. This opens up your opportunity to a lot more people, and makes it more appealing to investors.

An investor must delegate most roles and activities to other people. If it doesn’t, then your business is simply a job.

As we review this chapter, remember, the goal is to help you FOCUS your time and attention on activities that are crucial to creating a sellable business.

When you can clearly demonstrate and document EXACTLY what the potential owner will/ will not have to do if they buy your opportunity.

***Alert: The following paragraph is the most important point in this course.****

YOU, as the current business owner have to make this transition from JOB to business owner BEFORE you can sell the business for real money. And, very often, a crazy thing happens: Once this is complete, the business owner discovers that he LOVES his business, but hated the job.

IDEALLY, as the owner/director of a business, there are two tasks that should dominate your time, energy and attention.

As things get busy, you’ll drift to other duties like electrician, tech support, janitor, therapist, etc. Set a reminder in your calendar to remind you to review how you spend your time, against what actually matters. These two things should be MOST of your time and attention:

• Marketing. Finding new and effective ways to get new customers. Experiment, evaluate, execute, test, iterate and do it again.
• Employees: You have to supervise them closely – FOREVER.

Owners’ number one JOB is marketing. That is, building the scale and profitability of your business.

Marketing is hard work! Marketing is an ongoing search for new ideas. Then putting those ideas to the test. Do more of what is working, and trash those strategies that get poor results.

The ability to show documentation and the results of these efforts has a LOT of value to a buyer. It’s great to show off what is working, but IT’S amazing to have a list of things that didn’t work, and that will save the buyer a lot of time and money. Having a comprehensive list of marketing campaigns that were done, how they were done, and their results? Big value to buyer.

Allow your business and your marketing strategies to grow and to speak to you. Let this morph and evolve. As the owner, you have to do it. If you delegate this or out-source it, it’s not going to get done properly.

You also need to know and understand your numbers (key metrics) and reports. You need to know right away if something, or somebody is (not) working.

This has to be an ongoing activity. I cannot tell you how many times we were preparing the sale package for a business and we uncovered BIG problems.

A shift in the market, organized fraud, or a sloppy employee not following your underwriting guidelines can wreak havoc on your bottom line. You’ll be much, much happier catching this sort of thing EARLY on.

Employees are the way that we scale up and have LIFE outside our stores. However, a sloppy, or lazy employee will cost you money AND aggravation. A dishonest employee can get you into trouble with regulators, they can steal ALL of your money, and even get you sued. Hire slowly. Watch closely. Fire quickly.

In fact, if you have any employees that are so-so, or underperforming? Get rid of them now. A qualified and sophisticated buyer will carefully observe how these crappy employees interact with the customers, and other staff.

And I’m not saying that you’re blind and stupid. It’s always easy to walk into a situation fresh, with no bias and quickly see what’s really going on. From the consulting side, that’s big part of why people hire me.

Bad customer service starts slowly, and it sneaks up on you. That sarcastic and funny employee is great fun to talk to, but do the customers enjoy being talked down to? And people are SNEAKY.

So, how do you measure how you’re doing? How do you benchmark your own results against your competitors?

Find an industry association that can provide you with “normal” financials to be used to compare against the financials of the business you’re buying.
Average financials for most types of business can also be found in the Annual Statistical Report published by the Risk Management Association (RMA), available in the business section of most libraries.
You could look up the financial statements for the Publicly traded companies in the same industry. But, you’re going to have to do some math.
For example: A Title Max has a HUGE online presence and over a 1000 storefronts.

So, let’s look at their numbers. In Q2 2013, TMX Finance (the parent company of TitleMax) had revenues of $183 million. So, if we multiply that by 4. It takes us to $732 Million per year. That’s about $700,000 in revenue per store (including online operations).

You can do the same math for profits, collections, sales per square foot, etc.

Taking this a step further, you should also JOIN trade groups, subscribe to magazines. You should put yourself forward. NETWORK with other operators. If you have 1 store, or 1000 stores, there is always something you can learn.

If there is a major event in your industry, and your buyer is aware of it, and you’re not? You’re going to look really dumb.

Bottom Line: 80% of your time and energy should be spent on marketing your business, and watching your staff. YES, it is a lot of work to build it up. But we’re going to give you the tools to make it easy.


We’re not putting lipstick on the pig…

The scope of this course- we’re not just putting lipstick on the pig.

This book will not help you to “hide the bodies”, and gloss over significant problems. All, in the hope of finding a sucker dumb enough to give you a bag of money so you can run away. There aren’t that many suckers left. And if you do manage to find a sucker, you’ll most likely spend the rest of your days in a courtroom.

We’re going to focus on how to organize, and prepare your operation for a rigorous evaluation by a sophisticated, and qualified buyer. The goal is to maximize REAL value. When you’re done, your buyer will be so impressed with your operation, that she will be thrilled to pay absolute top dollar.

Think about this. WHY do people pay big money for a franchise, and then gladly pay fat royalties for an eternity? Why do new business owners stand in line to pay all this money to a big name franchise?

The buyers are paying for proven systems. They’re paying for such clear and simple systems and business methods, that the new franchise owner could hire a busload of drunks and still have a successful business.

We’re going to help you to do a lot of that here. And it’s going to be easy.

I promise.

There are three main focus points. The first is with getting ready for the sales process and creating a complete package. The second focus is OPERATIONAL/systems, we’re going to make your operation a LOT better, cleaner and easier to scale. The final section is about WHO your customer is. There is a checklist, and you’d better be able to answer all those questions.

With some minor changes, most of which don’t cost actual money, we’ll help you to create a business that is transparent, scalable, and can be easily managed.

Why should you do this? Even if you’re not ready to sell right now, we hope to show you some new opportunities and ways to improve your operations, profitability, and quality of life.

You may fall back in LOVE with your business and decide to stay.

This proven framework is based on decades of experience in operations, consulting and being owners/investors/agents in hundreds of businesses and operations.


Selling your business should be a strategic decision

There are many reasons for selling your business.

If you’re an entrepreneur, you’re likely bored. Starting a business from nothing is exciting, and thrilling. After you’ve had it going for a while, it becomes a job, and really, who wants a job anyhow.
Sometimes, the business doesn’t fit into our lives anymore. If you’re 70 years old, do you still want to be a mechanic and crawl under cars all day? If you have a young family, do you want to be on the road 25 days per month? Well, I have a young family, and sometimes extensive travel away sounds like a FANTASTIC idea.
Maybe you’ve taken it as far as you can, and the business needs a fresh and enthusiastic leader to make it shine.
If you have an operating business, you’ve accomplished something pretty special.
The failure rate for a startup business is 95%. That means only 5% make it past the first two years. Then only 20% of those make it to year 5.
This is WHY an investor or hopeful business owner is looking for YOUR business. The success rate for an EXISTING business under new owner ship is 90%. A 90% success is a far better bet, than facing down a 95% failure rate. That’s worth a lot of money. They’re looking to buy the fact that you have a proven market for your product or service.
Well, this book is about giving you the tools you need to present the business as a complete package for a potential purchaser.
So, let’s work together and show them how special your operation is, and clearly demonstrate WHY your buyer should eagerly bring you a giant box of money for the deal. And while we’re doing this, we’re also going to help to prepare this buyer by providing extensive systems and documentation that is going to help ensure their success.
If you have two houses on the same street, both are for sale. One is perfect. Well maintained, and in excellent repair. The second one is… rustic. The first one will not only sell faster, but it will command TOP dollar. That’s our goal here.
To make your business so appealing, that you can get MORE than just what the numbers show.


Detailed outline for “How to get top dollar for your business course”>

This is the agenda for what is covered in this new course:

How to get TOP dollar for your business.

A step by step guide to maximize the value of your business, and then get top dollar if you decide to sell it.



Miro Posavec




Table of contents:
1:  Introduction:


2:  The scope of this course-we’re not just putting lipstick on the pig.


3:  Who’s going to buy your business?


4:  Which business gets top dollar?


5:  How to chase away buyers, and get the lowest possible sale price for your business.


6:  Evict the skeletons.


7:  The numbers that really matter.


8:  Getting to the numbers.


9:  Why proper record-keeping is so important, even if you decide not to sell.


10:  Getting the books done.


11:  The power and profit of being professional.


12:  Online presence.


13:  Physical location appearance


14:  Run a background check on EVERYBODY?


11:  How to record everything on video and audio.


12:  How to setup and use the tools of Google.
13:  How to shoot, upload and display a video.


14:  Management Software.
15:  Disclose everything.  Especially your rates.


16:  Collections.




17:  How to find talent.
18:  Should you have store managers, and the magic of cross training?
19:  A quiet store becomes solitary confinement.


20:  Employee supervision, training, and motivation.


21:  Stop getting in the way.


22:  How to do a mailing, and why 6 is the most important number.
23:  Facts about marketing methods and tools.


24:  Testimonials.
25:  Client Survey sample.


26:  Questions that I would ask you, if you hired me to consult on your business.
27:  Know your customer and know your numbers.
28:  17 Marketing ideas to get your numbers up right now!


29:  Notes on Web design


30:  Sample of letter to send asking for referrals from customers.


31:  Buying a business Checklist (this is what your buyer is going to be looking for!)