So, you want to buy a business in this economy (are you daft)?
 No, you aren't daft at all in looking to buy and run a business. Just as with home sales, it is a ‘Buyer's Market' in the business arena---that could pay big dividends once the economy returns to a somewhat normal state.
If you are looking to buy a business, there are two main methods to look at:
- Do you want to buy a business with little to no money to purchase it?
- Do you want to buy a business and have some money for the purchase?
Out of everything else to consider, the #1 element for buying and running a business is to have an interest and experience in its market. Contrary to some popular thinking, going for the profits is a critical element but is a secondary consideration when buying a business.
No business can grow without the active interest of its ownership!
How to Buy a Business with Little to No Cash!
Did you know that you can buy a business with little to no money down? If that sounds like a pipe dream---it isn't.
First, financial institutions smile on those who want to buy a business that has a solid financial history. Perhaps Mom and Pop are retiring and have no heirs to their business---until you come along. Let's take this scenario a bit further: what if Mom and Pop will carry the note, otherwise known as ‘seller financing'?
Your “daft” idea to buy a business suddenly begins to take shape as a realistic goal---even if you are starting out with little money invested!
Additionally, use networking strategies: ask around when looking to buy a business. Some businesses are not yet for sale but the owners are considering selling. Ask friends, co-workers, and relatives if they know of anyone who owns a business and might be retiring…or is tiring of it.
How to Buy a Business with a Business Broker
Business brokers, especially for new business owners, can save mishaps along the way for their 5-10% commission. Business brokers help you to establish what your interests are, determine your price range, negotiate the purchase of the business and, most of all, do all the paperwork for you for the purchase of a business.
Business brokers also screen businesses for sale. This not only helps with determining the best business to buy that meets your criteria, but also saves you from buying a business that could be overpriced or have discontinued/old stock.
How to Buy a Business - Use Due Diligence
When you are looking to buy a business for the first time or are a seasoned business-buyer, you not only want to look at the business' reputation, but also be sure to check with the current accountant for the business.
You want to see a minimum of the last 3 years' books which include: projected sales statements, balance sheets, income statements, cash flow statements, taxes, and verify all information.
You also want to talk with the businesses vendors, employees, and customers. Is everyone happy with the support, products, and service that the business provides? Compare these findings with all records of the business including any online complaints or rave reviews.
“Looking to Buy a Business” - Advertise It!
Important Points to Keep in Mind
- Whether having a lot of cash or not to buy a business, exercise ‘due diligence': Examine all records of the business.
- Make sure that you (1) buy a business that is interesting to you and (2) has a positive track record.
- Advertise “Looking to Buy a Business” by networking/word of mouth, Twitter, and classified ads on- and offline.
- Consider using a business broker to buy a business.
- Make sure any/all business inventory is current.
- Research “Businesses for Sale” on the internet.
Helpful Websites for Buying a Business:
The Business Buyer Resource Center: http://www.diomo.com/
Businesses for Sale - Connecting Business Buyers and Sellers: http://www.businessesforsale.com/
BuyBizSell – In Alliance with the Wall Street Journal: http://www.bizbuysell.com/
GlobalBX – Free Business for Sale Exchange: http://www.globalbx.com/
Books on “How to Buy a Business”
How to Buy and/or Sell a Small Business for Maximum Profit: A Step-by-Step Guide (Paperback)
The Complete Guide to Buying a Business (book with CD-Rom) (Paperback)
How to Build a Business Warren Buffett Would Buy: The R. C. Willey Story (Hardcover)
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See Also:
Top 10 Things to Consider When Buying A Business
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