Fraudulent Business Buyer Alert

Once in a while, we receive emails that are obvious scams.  Most of them are some variation of the Nigerian scam with high ranking government official wanting to move money out of the country via a business purchase for their family.  It is fairly obvious and we usually just ignore the email.  Last month, however, we receive an email from a prospective that is operating a different scam which we have not yet encountered.  Below is the scam alert we sent to all members of IBBA and IBBA Canadaand we thought we will share it with the public at large as well.

We received an email from Mr. Dave Jamie last month interested in purchasing a liquor store in Northern Alberta we have listed for sale.  Dave has an African/Jamaican accent and claimed that he needed to buy a business in Canada.  When asked why he wants to buy a business in Canada or how he plans to manage the business etc, he never directly answer the questions but simply said that he is a business man doing a lot of business in China buying and selling household items and knows what he needs to do to make money.  He would not give the name of his company nor companies that he does business with.  He has no questions about the business he wants to buy and intends to pay full price for it which immediately raise a red flag.  His primary interest is to send us a cheque of $200,000 to “secure” the business and to fill whatever forms/contracts we need him to fill out.  We told him that in order to accept his cheque, we will need to have an offer in place and when we send him a list of questions needed to prepare an offer, he does not appear to understand half of them but he keep insisting on wanting to send us a cheque to buy the business.  After several rounds of communications, we learnt that this is a bad cheque scam that typically target law firms.  It appears that the fraudsters are now targeting Business Brokers.  Mr. Dave Jamie made a crucial error by calling our office looking for Pino.  It turns out that Pino is a friend and fellow business broker at Pacific Business Brokers.  After comparing notes with Pino, we come to the conclusion that this is the same guy using a different name.  When he contacted Pino, he was pretending to be a Japanese (with Jamaican accent!!) using the following credential:

Name: Kong Kim (the Japanese name related to this cheque fraud http://avoidaclaim.com/2011/real-estate-bad-deposit-cheque-scam-by-shiukmoda-joji/comment-page-1/)
Email: kong.kim@execs.com
Phone: 239.234.4377

He used the following information when contacting VR.
Name of Sender: dave jamie
Email of Sender:  davejamie2013@hotmail.com
Telephone: 3478718829
Address: 3030 Verde Street, Bakersfield, CA, United States

We have contacted hotmail to report his violation of Microsoft code of conducts and Microsoft appears to have shut down his hotmail account.  He then email us using a newly created gmail account davejamie2013@gmail.com.  We have contacted Google to report him and haven’t receive any email since, although he did call a few times.

This fraudster is obviously not very sophisticated and as such even though we have no idea at first that it is a scam, it smells fishy from the start.  However, it is possible that people like him will become more sophisticated over time and it will be harder to detect them in the future.

What can you do to prevent being a victim of a scam like this?  Below is a simple and effective strategy that is similar to what was recommended for detecting the Romance Scam.

1.  Ask for a copy of their passport or driver’s ID or any picture ID.
2.  Then find an opportunity soon after receiving the photo ID to ask for another picture with very specific requirement, such as in front of a certain building close to where he or she claims to live, or wearing a specific color shirt etc.  Alternatively, you can request for an online video conference via Skype or Google Chat etc.

It is unlikely that fraudster will send his or her personal ID in step 1 and as such unlikely to be able to fullfil the second request.  Any prospective buyer who cannot fullfil both of those requests are unlikely to be a real buyer.

Submitted by Siew Cheng

Business Financing Survey

Have you ever wondered which industries and segments of the economy gets the most assistance in financing from lenders. Here is a short 2 page survey released by Industry Canada showing financing activity by lenders during the first half 2012.

Overall it notes that Canadian Banks are still doing the bulk of this country’s business lending. What is actually more interesting to see is that contrary to popular believe more funding went to the retail sector than compared to others. To download a copy of the full survey, click here.

VR Business Sales Completes the Sale of Sand and Asbestos Removal Business

Edmonton, AB., February 28 2013 – VR Business Sales in Edmonton, AB  has recently completed the sale of Breath Easy Duct Cleaning and Asbestos Removal, a Calgary, AB based business that does duct cleaning and provides asbestos removal services to public schools and hospitals in Alberta and Northern BC.

Jey Arul, President of VR Business Sales in Edmonton, AB notes “The business owner was trying to sell his business for the past 2 years and in Spring of 2012 they hired VR Business Sales to assist them in selling their business. VR was able to quickly create a marketing profile and bring qualified buyers to the business by utilizing its proprietary marketing tools and buyer qualification process, which resulted in an offer.”  The buyer owns a similar business and has a dynamic background and was able to quickly recognize the synergies Breath Easy will create to his existing business.

VR Business Sales in Edmonton, AB facilitated in all phases of the transaction, from initial analysis through closing. Financial details of the transaction were not disclosed.

About VR VR Business Sales, Edmonton, Alberta
VR in Edmonton, AB represents business owners in the sale of their business; confidentially, professionally and with proven results. Since 1979 VR Business Sales, Mergers & Acquisitions has sold more businesses in the world than anyone. Information about VR Business Sales, Mergers & Acquisitions Edmonton can be found on their website at www.vralta.com. VR Business Sales, Mergers & Acquisitions Edmonton is located at 211, 3132 Parsons Road, Edmonton, AB. For more information, please call 780-469-4769.

VR Business Sales Completes Sale of CGA Accounting Practice

VR Business Sales in Edmonton, Alberta has recently completed the sale of a CGA Accounting practice. The practice established since 2004 has a client base of approximately 150 active corporate clients.

Jey Arul, President of VR Business Sales in Edmonton notes “The accountant was nervous of the process of selling the practice since confidentiality was very important for her”. Once VR was hired, VR was able to quickly create a professional practice marketing profile and talk to other qualified buyers in VR’s database, which resulted in an offer within four weeks.

VR Business Sales in Edmonton facilitated in all phases of the transaction, from initial analysis through closing. Financial details of the transaction were not disclosed.

About VR Business Sales, Edmonton, Alberta
VR in Edmonton, AB represents business owners in the sale of their business; confidentially, professionally and with proven results. Since 1979 VR Business Sales, Mergers & Acquisitions has sold more businesses in the world than anyone®. Information about VR Business Sales, Mergers & Acquisitions Edmonton can be found on their website atwww.vralta.com. VR Business Sales, Mergers & Acquisitions Edmonton is located at 211, 3132 Parsons Road, Edmonton, AB. For more information, please call 780-469-4769.

Size of Construction Boom Comes as a Surprise

What will Edmonton Downtown look like in the next 5 years? It is hard to imagine that Edmonton with just under 1 million people has close to $4.8 Billion (OK realistically $3 Billion) worth of construction projects slated to complete in the Edmonton downtown area over the next 5 years. The Edmonton Downtown Business Association just released a report showing all of the projects that are currently slated for Edmonton downtown.

Now what will this development do for local businesses and the potential for new businesses want to set up in the area. I think local businesses will benefit the mosts with more people choosing to live in the downtown area and more activities taking place after business hours. One of the biggest concerns for most retail businesses that wants to set up in Edmonton downtown in the past has seen lifeless streets after business hours, litters, old buildings, etc. especially after comparing to other parts of Edmonton like WEM, SEC and Whyte Avenue.

With new developments being slated to take place, I believe downtown Edmonton will finally become a destination where people want to play, shop and just hang out.  I think downtown has improved significantly and sure the recent recession might have slowed the process a little, albeit 2009 – 2011 would have been the best time to have started some of the major projects as it would have been cheaper and everyone benefits when the economy takes off again. Overall I am excited about the prospects and hopefully the City, Edmontonians and the developers will follow through with this projects.

Click here, if you are interested in reading the full 34 page report.

VR Completes the Sale of Hotshot Trucking Business

We were engaged by this client to help in the sale of his business approximately 5 months ago through a referral from their Accountant. We met with the Seller and learned more about his business and his motivations for selling the business. The Seller was not a typical Seller since he was only in his mid-40’s. The business was very successful and growing as well. The Seller wanted to sell the business primarily in order to concentrate on their other business which is a landscaping business that operates out of the same location and primarily managed by his wife.

We reviewed the last 3 years of financials, looked at market comparables of what other businesses in the industry sold for and came up with a “Most Probable Selling Price” for the business. The business was listed in the market place for $550,000. We received over 200 inquiries on this business from potential buyers. All prospective buyer inquiries were qualified by VR support staff by asking prospective buyers to complete a standard Confidentiality Agreement and Buyers Profile. Based on the information we gathered we were able to determine and qualify 8 buyers. These 8 buyers were provided the opportunity to look at the business further via information available in the Virtual Data Room (VDR).

Of the 8 buyers, after further evaluation we were able to provide the Seller with 3 offers for the business of which 1 was accepted by the Seller. The entire process from start to an offer being accepted took about 4 months. The process was however delayed by about a month and a half due to financing. For some reason the Banker that the Buyer was dealing with could not somehow understand the Buyer’s need and was unable to complete the financing. On the advise of VR, the Buyer then spoke to another Banker in a different Bank and was able to secure better financing terms and rates for the same deal within one week.

Overall the transaction closed in about 5 months which is the average length of time for a business sale transaction at VR Business Sales Edmonton.

This transaction was completed by Jey Arul and Gary Repchuk.
The lawyer that represented the Seller was Richard Finlay from Hansma Bristow Finlay LLP.

VR Business Sales Completes the Sale of the Bin Company

EDMONTON, ALBERTA–(Marketwire – May 23, 2012) – VR Business Sales, Mergers & Acquisitions of Edmonton, AB has just completed the business sale of The Bin Company Inc., a business that provides waste containers for renovation construction, yard clean up, seasonal clean up, garage de-cluttering, and many other do-it-yourself projects. The Bin Company has been established in the Edmonton area and has been the industry leader in bin rentals and garbage disposal for the last 8 years with 6 straight years of being the Consumer’s Choice Award recipient.

The Company was purchased by CERF GP Corp., the general partner of Canadian Equipment Rental Fund Limited Partnership.

The Seller, Mr. Newman stated “VR Edmonton made the process seamless and worry free. They managed the process from the first day we listed the business and providing us with multiple offers for the business.”

Jey Arul, President at VR Business Sales, Mergers & Acquisitions in Edmonton, represented The Bin Company throughout the transaction. VR Business Sales, Mergers & Acquisitions Edmonton facilitated all phases of the transaction, from initial analysis through closing. Details were not disclosed.

About VR Business Sales, Mergers & Acquisitions Edmonton

VR is Edmonton’s only business is representing business owners in the sale of their business; confidentially, professionally and with proven results. Since 1979 VR Business Sales, Mergers & Acquisitions has sold more businesses in the world than anyone®. Information about VR Business Sales, Mergers & Acquisitions Edmonton can be found on their website at www.vralta.com. VR Business Sales, Mergers & Acquisitions Edmonton is located at 211, 3132 Parsons Road, Edmonton, AB. For more information, please call 780-469-4769.

Selling Your Business Confidentially

Once you have an established asking price and terms, your search for the right buyer begins. Buyers may be found through a targeted search of potential candidates in your industry, or by a business broker in contact with a number of qualified prospective buyers. Regardless, a business broker can assist in the discreet search and screening of qualified buyers.

Confidentiality
Confidentiality is KEY in maintaining the goodwill of your business and in minimizing the disruptions at the work place during the sale process. If employees, customers and suppliers learn about the potential sale of the business too soon through other channels, they could begin to look elsewhere for employment and services. It is usually best to wait until a transaction looks imminent before key individuals are told of a sale.

To help minimize exposure, specific information regarding your business should be revealed only to qualified prospective buyers after they have executed a confidentiality and non-disclosure agreement. A qualified prospective buyer is someone that has established the following:

* A desire to purchase your business.
* Has sufficient financial capability to complete the transaction.
* Has the qualifications and resources necessary to manage your business.
* Has the willingness and ability to move forward in a timely fashion.

The information presented to a qualified purchaser after execution of a confidentiality agreement may include:

* A history of your business
* An overview of your business, including information about its products and services, operations information and personnel structure
* Information regarding your market, including customer mix, competitor, and industry trends.
* A list of the fixed assets included in the sale.
* Information regarding your facilities, including lease terms etc.
* Financial information that may include: balance sheets, income statements, details of liabilities to be assumed, equipment leases, etc.
* Details on the price, terms, and sale structure of which you are offering your business.

In-depth confidential information need only be revealed during the due diligence proces