Smart Money: Explore SBA, owner financing for business buy

Dear Sue: I assume you’re a pharmacist and you want to purchase the business. No problem there. But financing could be a serious problem, particularly in today’s world. You didn’t indicate how much money you are prepared to spend, but if you were to go to a traditional lender, it would certainly want to see a down payment in the $150,000 to $200,000 range, and possibly more. The seller often finances enterprises of this kind. You’ll have to investigate whether that’s a possibility.

Without a substantial down payment, you can understand why the lender would worry. A major portion of a purchase of this kind is inventory, and a buyer can go in with little money, sell off the inventory and take a hike. If that were to happen, the lender is stuck.

The fact that you’re a female means you would get minority preference, and you may qualify for a U.S. Small Business Administration-backed loan. You should investigate this.

Sit down with the seller and a local banker – one that makes SBA loans – and hopefully, you can work this out.

Liability insurance protects owner-operator

Dear Bruce: Does forming a limited liability company offer a layer of liability protection on personal assets if the owner and worker are one and the same? I understand that it offers protection if there are employees, but what if the owner did the work? —Reader, via e-mail

Dear Reader: If you have employees, the LLC would provide some layer of protection. However, if the worker bee is the owner, an aggrieved party can bring an action against the corporation and the individual – you.

The only true protection is adequate liability insurance, which most people understand but many do not wish to pay the premium, as it can be formidable.

Layoff may lead to business opportunity

Dear Bruce: My husband is 53 and has worked for the same company for 20-plus years. Recently, he was let go.

He has great credentials and has been in contact with many companies, but no one has responded. I know times are tough, but it’s hard to believe that, with his credentials, no one wants him.

We have talked about hiring an agency, but it charges in the thousands of dollars. We’re not sure which way to go. —Frustrated, via e-mail

Dear Frustrated: As you pointed out, many companies are having a tough time right now, and many are cutting back. It may be a struggle to find that perfect job; however, I would not pay anyone for a job unless it was hand-delivered. With so many people out of work at the moment, companies are going to claim that they will help you seek a job and spruce up your résumé. But in my judgment, these avenues are not worth pursuing.

Your husband’s age may very well be working against him, too. Older employees are more expensive to insure if health and life insurance are part of the job package.

He may have to seek part-time employment, where the company would not be obliged to provide the fringe-benefits package. That could make a difference. Furthermore, if he has the skills, he might offer himself as a consultant on a per-diem basis. Once again, the ordinary overhead is considerably reduced.

Work-at-home ventures call for creativity

Dear Bruce: Owing to health problems, I need to find a home-based business. I am 62 years old and would like something that would generate enough income to provide a decent living. —Reader, via e-mail

Dear Bruce: Home-based businesses are not as easy to establish, or to profit from, as many would like you to believe. I would suggest that you concentrate on your strengths – look into your experiences and find what you’re good at. See how that can be translated into providing a service. I wish I could be more positive. There are many people working at home and making a good living at it.

Most often, though, you have to be creative on your own and build the opportunity as opposed to paying someone for it. There are many organizations that purportedly will provide “sure-fire” ways to make money at home.

I have never found one that I could recommend. Good luck.

Bruce Williams is a national radio talk-show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.