Buying a business is unlike any purchase you’ll ever make because it can result in significant unique ramifications such as financial, legal, and tax liability. For this reason, aspiring business owners need to use a process that minimizes their risk following the completion of the transaction. If you’re on a quest to become a first-time business buyer and unsure of the best way to move forward – this guide is for you.
First, Gather Information on Businesses
Buying an existing business is popular because it lets you skip the pain points and costs of starting a new business. But the journey from finding a business for sale to closing the deal can be long and complicated.
As an aspiring business owner, you probably have an idea of what kind of businesses are appealing to you. However, it’s not uncommon for first-time buyers to settle for multiple reasons, whether it’s the desire to be their own boss or in the quest for profits. Before you jump on a business opportunity, gather information on the businesses that spark your interest. Find businesses that are in-line with your personal passions, interests, skills, and experience. The more knowledgeable you are with the business’s model, products or services, customers, industry, and trends, the more innovative and successful your new ideas will be.
Find a Business Broker
Once you conduct industry research, you’ll want to search for businesses that are for sale. There are multiple ways to search, such as:
- Online business marketplaces such as BizBuySell.com, the largest site of its kind with more than 45,000 active listings
- Craigslist ads
- Classified newspaper ads under the “Businesses for Sale” category
- Networking with small business owners
- Going to meetups or industry conferences
- Working with a business broker
Business brokers can gain access to information that prospective business owners simply cannot. A broker can help you understand what kind of business you want, prescreen businesses to cut out all the failing companies, keep negotiations civil and smart, and help you with all the necessary paperwork.
Complete a Preliminary Investigation and Due Diligence
Before you purchase a business, of course, you’re going to want to investigate and gather as much information as possible before submitting an offer. Initially, this is known as due diligence – the process of gathering as much information and intel as you can before you buy a business. However, before you can begin your due diligence, the seller will ask for a signed confidentiality agreement or nondisclosure agreement.
It’s crucial that the buyer have an experienced broker with them when they sign the confidentiality agreement because this is also the time to ask questions and obtain a business marketing package. You will also need a good accountant by your side during due diligence to review the financials and a great business attorney to represent you in negotiation and help you understand the structure of the transaction.
Business Brokers of South Florida
Sunbelt Business Brokers of South Florida is based in Boca Raton, Florida and serves the entire state of Florida with emphasis on Palm Beach and Broward counties; however, as a member of the Sunbelt Network, our effective reach extends worldwide.
What differentiates us from our competitors is our broad range of transaction experience and actual business experience across a variety of industries, including:
- Internet / E-Commerce
- Child Care – Preschools
- Specialty Retail
- Health Services & Products
- Business to Business
Whether you’re a acquiring a lawn business for $400,000 or a manufacturer for several million dollars, our intermediaries are highly skilled in the process of acquiring a business, how a business is valued, and in the negotiation process. We will help you understand how the value of a business is derived; help you understand the process of making offers and buying the business; and help you negotiate and close the deal, possibly saving you thousands, or tens of thousands, of dollars in the process.
For more information on the buying process, or if you’re interested in learning more about buying a business in South Florida, contact us online to speak with one of our business brokers.