How To Buy A Business

Steps To Take When Buying A Business

How To Buy A BusinessFor many people, the idea of buying an existing business is much more attractive than starting a company from the ground up.

After all, the foundation has already been laid, the customer base has been established, and the operation is already up and running.

However, buying a business is a major decision, and as such, there are many things to consider, and steps one should take when buying an existing business.

Finances should always come first when making a major investment like buying a business, and having your financial information at the ready make the whole buying process go a lot smoother. Get a list of all of your assets (property, vehicles, etc.), income statements, and regular expenses to give bankers and sellers an idea of your net worth. Additionally, get a detailed credit report and go over it with a fine-toothed comb to see if there are any errors or outstanding charges that need to be cleared up ahead of time. The last thing anyone wants is a mark against their credit rating that keeps them from buying a business.
Buying an existing business and making it your own should not be a far off “whenever it presents itself” dream. Sit down and set goals and deadlines for yourself. Implement a reward system if necessary – whatever motivates you to learn how to buy a business and then commit yourself to the process. Buying an existing business requires emerging entrepreneurs to be very proactive, because the longer you wait, the fewer opportunities will make themselves available, because other people will buy those existing businesses while you are hesitating or putting off taking the necessary steps to make your dream of business ownership a reality.
If you have family, a spouse, or a partner, let them know that you have been researching how to buy a business, and you want to make this decision with their support. Owning a business takes time and money, and you want to be sure everyone in your household is on the same page. Tell them exactly what is involved, and answer any questions they have, so they are not stressing over you making such a large investment.
One of the biggest traps that emerging entrepreneurs fall into is chasing their dream at any cost. Set a price limit, and stick to it. Buying an existing business requires entrepreneurs to put up some portion of the financing, and then make up the difference with supplemental financing and loans. When you prepare your finances, it should give you an idea of the money you have to work with in order to buy a business. The trick is not to go over that amount, otherwise you could find yourself in deep financial trouble before you even get started.
Much like people selling houses use real estate agents, business brokers keep a running list of businesses for sale, who the sellers are, and the prices. Building a strong professional relationship with a business broker can help keep a deal in motion, even when negotiations seem to be at an impasse. Brokers also understand how to buy a business, and can walk you through every step of the way. Keep in mind, though, that business brokers work primarily for sellers, and try to get them the best offers for their businesses. However, brokers also act as intermediaries, and will advise sellers to take your offers into heavy consideration if they are comparable to what similar businesses are getting, or if no one else is making competitive offers, even if what you are offering is well below the asking price.
An attorney is not going to buy a business for you, but an attorney can advise you as to whether or not an agreement is fair, and what obligations you must fulfill in order to buy an existing business. The devil is in the details, and an attorney can tell you how long you have to pay off the full amount of the sale price, if there are any covenants that are legally binding, or if you should just walk away from the deal. An attorney can also try to negotiate in your favor by putting things into the agreement such as the ability to back out if the valuation of the business does not meet your requirements, or an exit strategy in case the business turns out to be very different from what was represented in the listing.
Buying a home usually requires a loan and mortgage payments, because people do not have the full amount on hand. Likewise, buying an existing business usually requires the buyer to pay a certain percentage out of pocket, with the remainder being paid through loans or other forms of commercial financing. Some forms of commercial financing are easy to arrange, while others – such as mezzanine, seller carry back, etc. – can get very complex, and in some cases further negotiations with the seller and business broker.

Low Investment Business Opportunity

If you like the idea of owning your own business, but are leaning toward buying an existing business over starting up a company from scratch, consider the Commercial Capital Training Group (CCTG).

CCTG gives you all of the tools and training necessary to become your own boss and run your very own commercial finance business for a relatively low investment. CCTG gives you the resources you need and will position you to start making money with an unlimited earning ceiling, without having to deal with the long process of searching and haggling to buy an existing business.

The Commercial Capital Training Group gives graduates the ability to make a lucrative income by brokering deals between business owners and investors to arrange financing agreements.

If you would like to own your own business, and have someone else lay the groundwork so that all you need to do is “turn the keys and go,” then you should look into the business opportunities that the Commercial Capital Training Group has to offer you.

Further Reading