Do I require an attorney in order to buy a business?
It is advisable to have an attorney review the legal documents. It is important,
however, that the attorney you hire is familiar with the process of buying a business and has the time available to handle business sales, you may be paying for the attorney’s education. An experienced attorney can be of real assistance in making sure that all of the details are handles properly. Business brokers are not qualified to give business advice. However, keep in mind that many attorneys are not qualified to give business advice. Your attorney will be, and should be, looking after your interests; However, you need to remember that the seller’s interests must also be considered.
Why should i go to a business broker?
A professional business broker can be helpful in many ways. They can provide you with a selection of different and, in many cases, unique businesses for sale, including many that you would not be able to find on your own. Business brokers are also an excellent source of information about small business and the process of buying a business. They are familiar with the business for sale market and can advise you about trends, pricing and what is happening locally. Your business broker will handle all of the details of the business sale and will do everything possible to guide you in the right direction, including, if necessary, consulting other professionals who may be able to assist you in buying a business.
What happens when I find a business I want to buy?
When you find a business for sale, the business broker will be able to answer many of you questions immediately or will research them for you. Once you get your preliminary questions answered, the typical next step is for the business broker to prepare an offer based on the price and terms you feel are appropriate. This offer will generally be subject to your approval of the actual books and records supporting the figures that have been supplied to you. The main purpose of the offer is to see if the seller is willing to accept the price and terms you offered. There isn’t much point in continuing if you and the seller can’t get together on price and terms. The offer is then presented to the seller who can approve it, reject it ,or counter it with his or her own offer. You, obviously, have the decision of accepting the counter proposal from the seller or rejecting it and going on to consider other businesses for sale.
What does it take to be successful in buying and owning a business?
Most importantly you need adequate capital to buy a business and to make the improvements you want, along with maintaining some reserves in case things start off slowly. You need to be willing to work hard and, in many cases , to put in long hours. Too many people think they can buy a business and then just sit behind a desk and work on their business plans. Owners of small businesses must be “doers” and take absolute ownership of their business.
What should I look for when buying a business?
You will want to consider only those businesses for sale that you would feel comfortable owning and operating. You also want to consider only those business opportunities that you can afford with the cash you have available. In addition, the business you buy must be able to supply you with enough income-after making payments on it-to pay your bills and expenses. However, you should look at a business for sale with an eye toward what you can do with it-how you can improve it and make it more productive and profitable. Everyone has seen examples of a business that needs improvement in order to thrive, and a new owner comes in and does just that.
How are businesses for sale priced?
Usually, at the outset, a prospective seller will ask the business broker what he or she thinks the business will sell for. The business broker usually explains that a review of the financial information will be necessary before a price, or range of prices, can be suggested for the business for sale. Most sellers have\ some idea about what they feel their business should sell for- and this is certainly taken into consideration and , by reviewing the financial records of the business, can make a recommendation of what he or she feels the market will dictate.
Why do people start or buy a business?
There have been many surveys taking in an attempt to answer this question about starting or buying a business. Most surveys reveal the same responses, in almost the same identical order of priority. Here are the results of a typical survey, listed in order of importance:
- To do my own thing, control my own destiny.
- Don’t want to work for someone else.
- To better utilize my skills and abilities.
- To make money.
*It is interesting to note that money is not at the top of the list, but comes in fourth.
Why should I buy a business rather than start a business?
An existing business has a track record. The failure rate in small business is largely in the start-up phase. The existing business has demonstrated that there is a need for that product or service in a particular locale. Financial records are available along with other information on the business. Most sellers will stay and train a new owner and some will teach you the intricacies of running a business. In a few instances, some owners provide you with vendor finance.