How To Buy A Business
GOOD ADVICE FOR BUYERS
Business buyers are a diverse group with varied backgrounds from all walks of life. Interestingly enough, more than half of the people who buy a business are first time buyers and have spent a great deal of their lives working in various corporate jobs and professions. Many more are seasoned entrepreneurs who have owned multiple businesses and are seeking to acquire other businesses. For the first time buyer, buying a business becomes the fulfillment of a dream and the desire to control their destiny. This is a major decision, as significant as buying a dream home or planning for retirement. Like so many other big decisions, buyers deal with common emotions like fear and stress. As business brokers, we know that buying a business can be an involved process, identifying your personal strengths, background and experience and matching them with a business that fulfills your passion and meets your financial goals. Like all big decisions it makes sense that buyers should consider seeking professional guidance. This is where a knowledgeable and licensed expert at Business Broker World can contribute the most. To aid our clients, we have created a process to minimize the fear, stress and guesswork often felt by prospective buyers.
Our buying process includes the following steps…
- We meet with you to understand your business and financial goals.
- Provide insight and education about the sequence of events in buying a business.
- Identify opportunities that meet your criteria and schedule appointments to visit businesses of interest and to meet the owners.
- Write the letter of intent and the eventual contract.
- Collect the earnest money from the buyer and deliver to closing attorney for deposit in their escrow trust account.
- Coordinate the due diligence including the negotiation of the lease with the landlord on behalf of the buyer.
- Facilitate all physical inspections of business and meetings with seller.
- Assist buyer with contacts and resources for financing, accounting, legal, insurance and more.
- Manage the stress and emotional tension that can often arise between buyer and seller.
- Schedule the closing and coordinate all the documents and details pertaining to the closing.
OUR BUYING PROCESS
One of the greatest challenges facing most people today in their decision to buy a business or franchise is that they really don’t know what they want. The choices and options are so broad, leaving them exposed to large risk and potential compromise.
Here are a set of guidelines prospective buyers could follow to assist them in buying a business…
- Identify what you really love to do. Make a list of your interests and the things you’re passionate about. Recognize your style and personality type. Determine the type of business or franchise that match your personal traits.
- Determine the industry that you want to be in and within that industry what type of business or franchise you want to buy. Determine whether a franchise model or buying a privately held established businessis more suitable for you.
- Seek professional guidance. Buying a business is an involved process that requires a knowledge of accounting, finance, valuation, business planning, marketing and sales. Instead of spending many hours of your own time figuring how to buy a business, why not seek the guidance of a professional business broker.Many business brokers themselves are former entrepreneurs and business owners who, in my many states,are required to be licensed. Business brokers have resources and tools to help you filter and define more ideal matches saving you time and exhaustive effort in determining the process on your own.
- Every new business venture involves planning, accounting and legal considerations. It is important that you seek the appropriate advice from other professionals such a CPA and business attorney.
- Available capital is a critical factor in your decision to buy a business both to fund your purchase and to operate after you acquire your own business. You’ll need to decide how much of your own cash you have available to invest, whether you are going to need loan, form a partnership or seek a private investor.
- The obvious is not always obvious. Understanding your motivation in owning a business, in other words YOUR WHY, is critical because when the going gets rough, you need to have the right motivation to stay the course. If you don’t, you won’t.
- Action is what delivers the outcome. Set aside your fears and have faith. Believe in yourself and as you move forward with the decision to buy your business, you’ll realize that your ability is far greater than you had ever imagined.