- Why should I buy a business when I can start one myself for less capital?
- How can a Broker help me buy a quality business in my industry?
- What financing is available for first time buyers?
- What is the best offer strategy?
- What is due diligence?
- How do we get started?
Why should I buy a business when I can start one myself for less capital?
Business start ups are very risky, which is why the vast majority eventually fail. In the initial startup phase, products and services are under development, as are marketing, advertising, and infrastructure. Most importantly, there are no sales or customers. Sometimes the cash outlay on a startup is much higher than buying an established business. Buying a profitable, established business will provide recognized products and services, existing marketing, advertising, customers and suppliers, and most importantly a predictable cash flow.
How can a Broker help me buy a quality business in my industry?
Professional business intermediaries can help refine your search criteria to find a business that fits your individual tastes and financial requirements. Many times a broker will show you an attractive business you may not have even considered. We have access to a wide selection of businesses for you to consider.
What financing is available for first time buyers?
Many business purchase transactions require some form of financing. Stringent new financial regulations placed on the banking industry have made it more difficult for buyers to find loans these days. We have a wide network of banking institution contacts that may be able to help you with commercial or SBA funding. When appropriate, we will also help you negotiate seller financing.
What is the best offer strategy?
Once you’ve met the owner and toured the business, you will be excited to move forward. Since most sales involve privately held businesses, buyers are typically required to make a commitment before reviewing the business’ internal financial records. We will help you develop an offer of purchase or letter of intent with the appropriate contingencies, and negotiate the transaction. It is the buyer’s responsibility to verify the accuracy of the seller’s representations through exercise of due diligence. Buyers are encouraged to reduce the risk of pathfinding through the use of professionals – CPAs, attorneys, and appraisers.
What is due diligence?
Time is of the essence, and the buyer must complete a review of the business in a judicious manner. Once an offer to purchase has been accepted by all parties, buyers will typically be given 5-10 days to complete a systematic review of the business books and records, perform inspections, and take appropriate steps to verify the seller’s representations. When the due diligence process is completed and any contingencies are removed, the contract becomes binding. Should the business fail to pass due diligence review, the prospective buyer may request an earnest money refund, and they may withdraw, modify or amend the offer to purchase.
How do we get started?
We welcome the opportunity to help you find the business of your dreams. The first step is a brief, private meeting for you to learn more about the buy/sell process and to answer any questions regarding ownership transfer and financing. Please feel free to contact us to learn more.