Simple ways for small businesses to cut costs
March 5, 2018
The Process of Buying Your Own Business
March 8, 2018
Buying a business can be a complicated process and the invaluable assistance from a expert broker ensures no detailed is overlooked, resulting in a smooth transfer of ownership.
You’re thinking about buying your own business
During your search it’s important to keep in mind that running your own business is more than a job; it is a lifestyle change. Generally, it is a very big lifestyle change. You may have to work longer hours, making all of the decisions. In other words, you will be doing all of the work from running the business to, in many cases, sweeping the floor and changing the light bulbs.
As a buyer, when making the decision to purchase a business you generally want consider the following:
- Pride in the service or the product
- Flexibility
- Income
- Control of own destiny
- Recognition
- Security
- Privacy
- Status
- Customer and employee contact
How much will I make from my newly acquired business?
In our experience, first time buyers want to know the price first and then how much money they can make. These are the wrong questions to ask initially. You need to know how much cash the seller requires as a down payment. No matter how good the numbers are, there is no point in looking at a business if the seller wants three times as much cash as you are willing to invest. It’s important to note, the actual amount of money a business earns is usually much more than just the bottom line. A smart approach is to get more information on the business, and even make a visit, before ruling it out or getting too involved in the numbers. It’s all part of the learning process.
The second most common question asked by those who have never purchased a business (which is incidentally about 90 percent of those looking to buy a business) is how do you actually buy a business. Our experienced brokers will educate and assist you through the entire process. It is important that you get answers to all of your questions and that you have all the information necessary to make an informed, educated decision
Did you know: We have over 20 years in the business with over 1,136 transactions. In fact, even Business Broker California’s webmaster brokered his first business deal through us! We have opportunities and businesses suitable for almost every person.
Am I ready?
You may have already made the decision to inventest in a new business, your next question should be, am I ready? Make sure this is the right move for you and your family. Owning one’s own business has always been part of “the great American dream,” but it’s not for everybody. Here are some questions that you should ask yourself before taking the next step:
- What is your time frame to find a business?
- What is your primary reason for buying a business?
- Are you willing to invest a majority of your liquid assets in a business?
- Are you independent enough to make your own decisions and be in control?
- Is your family supportive of your owning a business?
- Are you open-minded about different opportunities, or are you looking for a specific type or business?
- Do you have reasonable expectations?
- Can you make the “leap of faith” necessary to buy a business?
How we can help assist you in making your first purchase:
- Selecting the appropriate industry based on prior experience, skill set, financial ability, education, and interests.
- How long the present owner has owned the business.
- Detailed information on why the present owner is selling.
- Careful internal scrutinization of a company’s books and records (All of our available businesses for sale have already gone through this process!)
- Creative deal structuring using earn-outs, management agreements, or other creative tools.
- Negotiating a lease assignment /sublease, or new lease terms.
- Dealing with post-closing operational issues.
- Determining if the seller is reporting all income.
- Arranging financing from direct lenders – both SBA and non-SBA.
- Negotiating an offer
- Closing the transaction.
Let’s move forward and learn more about the step by step process of purchasing your first business, see the Business Buying Process (link).
