Information for Business Buyers

THINGS A BUYER SHOULD KNOW

When you are looking to purchase a business, we recognize that in many ways you are looking to make a dream come true.  You want to be your own boss, call your own shots, and be the master of your own destiny.  You should look for a business that you feel comfortable managing that financially is within your reach and is in a location that would be appropriate for you and your family.  You should not be put off by the initial listing price for a business because sometimes businesses sell for significantly less than list price.  You should work with a business professional to carefully hone in on those business in which you are most likely to be successful at.  If you are interested in searching for businesses for sale, click here (LINK) for access to a national listing of business through our broker’s network. (SPEAK TO DARREN REGARDING LINK).  The choices you are given in terms of identifying what you are looking for may help you narrow the ideal businesses you are seeking. 

Typically, buying a business proceeds as follows:

1. Identify what types of business you are looking for.

2. Evaluate the basic information on each of these businesses.

3. Obtain evaluation reports or confidential memoranda.

4. Meet with the seller asking questions on anything and everything but not beginning negotiation on price.  It is important to get to know the seller and that the seller get to know you as a common philosophy will often make a deal work where differences of philosophy will make it impossible to get to closing.

5. Begin your preliminary evaluation based upon information provided by the seller, to the broker and to you.

6. Determine what else you need to know and follow up on that information.

7. If interested, make an appropriate offer clearly reflecting that it assumes all the information you have been provided is correct.  Don’t forget to include any necessary contingences to protect yourself.  Rely upon a business professional to help you with this.

8. After an agreement is reached, make a much closer investigation of the business pursuant to the contingences in your negotiated agreement.  Confirm to your satisfaction the validity of the offer.  After all, this is a large purchase and you want to be comfortable that you are making the right decision.

9. Work with the seller and attorneys to get everything ready for the closing.  Ideally, you should find a closing attorney whose job it is to create the documents but not argue for either side’s position.

10. Close and begin operating the business.  You will want to have negotiated that the seller assists in an orderly transition including any training that may be necessary.

How can we help make this dream come true for you? 

Improve Your Chances Of Success

Compared to starting the business from scratch, buying an existing business allows you to start with an immediate cash flow, established customer base, and often established and knowledgeable employees, and a recognized product.  You take over what exists and hopefully can improve it and you should have carefully worked out the affordability of the deal in advance.

Confidentiality

It is extremely important that a prospective sale of an ongoing business be kept confidential.  Generally, premature disclosure will only damage the business which is disadvantageous to both the seller and the buyer.  All inquiries will be held strictly in confidence and any prospective buyer would be required to sign an agreement maintaining confidentiality.  Meetings held at the seller’s business may have to be after hours, on weekends, or otherwise disguised so that it remains a confidential transaction.

Financing

We can assist in directing you to financing sources.  Typically, today, some owner financing by the seller would be required to make a deal work because of the reluctance of banks to loan too heavily on existing businesses.