If you’re interested in buying a business there are many things that you should consider. We provide you the tools and information that can help you determine if buying a business is right for you as well as what businesses are currently available in the market.
Benefits of buying a Business
Many dream of owning a business to:
- Be your own boss
- Have job security
- Control your hours
- Build equity in the business
- Leave to your heirs
- Create a legacy
What buyers should look for?
Buyers look for, when buying a business: (a) Good cash flow, (b) Diverse customer base, (c) Growth potential, (d) Reasonable price, (e) Flexible terms, (f) Living wage, (g) Transition (by seller for 1–6 months), (h) Good reason for sale, (i) Lease on reasonable terms and cost if business is in leased premises, (j) Covenant not to compete, (k) No last-minute surprises, (l) Fair Market Value of FF&E, (m) Appearance.
STEPS TO BUYING A BUSINESS
Assess Your Qualifications
Understanding the buying process, Determine your Financial/Credit worthiness, Determine your Business Experience, Identify Licensing, Examine Life style changes, Identify Geographic Location
Search For the Best Business
Identify Business Interest, Qualify for A specific Business, Review 1-Page Business Summary, Determine Interest, Nondisclosure Agreement, Review Revenue Canada/Data Package
Make a Deal
Meet Seller, Tour Business, Probe Buyer’s continued Interest, Determine whether to Act – Offer to Purchase, Enter Negotiations, Sign Agreement of Purchase & Sale
Close the Deal
Due Diligence, Loan Request Package, Find Lender, Resolve All Issues, Formal Contract, Review Final Documents
*** FINALLY CLOSE THE DEAL! ***
ROLE OF A BROKER/INTERMEDIARY
- Buyers need to realize the complexity of this process so they understand why they need a Broker’s help.
- Buyers will be able to continue with their lives while you are busy trying to find them the right business to buy.
- Evaluate your goals
- Provide industry-specific market research
- Conducted target searches
- Identify and formulate your specific acquisition criteria
- Identify, contact and evaluate appropriate acquisition candidates
- Negotiate the successful purchase or merger
- Assist in obtaining financing
- Assist in finding the right financial institutions, law firms, and accounting firms.
- Keep you informed in real-time about new investment opportunities
We will walk the buyers through these steps so they understand that they are necessary, not arbitrary.
Buyer Personal Interest
Why are personal interests important?Not only is the acquisition of a business one of the most important financial decisions you will ever make, but it is also, quite often, a major “lifestyle” change. While there is certainly no requirement that your personal interests “dove tail” with or correspond to your business purchase, a thorough and realistic assessment of your personal interests may help to minimize the risk of acquiring a business that quickly becomes an uninteresting, monotonous headache. For those buyers who really have no firm idea of what type of business they might be interested in or would be suited for, the following simple exercise is well worth the time it takes to help bring your thoughts into focus.
Finding source of your money to buy a business?
You should be as factual and realistic as possible in assessing your financial resources. You should identify the actual availability of all financial resources in the following categories:
- Actual liquid funds (cash) available for a down payment.
- Actual liquid funds (cash) on reserve for transition expenses, start-up costs, working capital, business charges, learning curve, etc.
- Other current sources of income expected to continue into the future
- Future (anticipated) funds to be received
- Unencumbered assets available as collateral, notes receivable which could be factored, real estate, etc.
- Other sources of financing including business partners, relatives, friends, etc.
- A schedule, or simple listing, of all funds should be prepared and periodically updated. Do not list any resources that you are unable or unwilling to commit to a potential business purchase.
We search and locate businesses for you from our database even if we don’t have one currently listed with us for perfect fit to your situation. If you would like to discuss about your acquisition of your liking, please click the link below to contact us with your business information:
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Video – For Small Business Buyers
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- Existing VS. New Business
- Business Buying Process
- Growing Through Acquisitions
- Merger & Acquisition Due Diligence
- Creative Financing
- Buyer FAQs
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