How to Buy a Business
Meet the Challenge
Buying a business is potentially one of the most exciting, rewarding, and life-changing decisions a person will make in their lives.
As such, it's important to surround yourself with highly qualified professionals who can help you to make the best informed decision possible. This starts with an experienced Business Broker / M&A Advisor who can guide you through the many hurdles and challenges involved in the acquisition of a business.
From our experiences at BizEx, one of the biggest challenges a buyer will face is the amount of time it takes to find the right business. This process can easily take six months to a year! If you’re an individual who is currently unemployed, this can significantly cut into your seed capital. Those buyers who do have a job can often get discouraged with the process, and simply give up on their business ownership dreams
When it comes to choosing a business, most Buyers don't know what they really want.
A good first step is to take a personal inventory of your skills and desires.
When the Small Business Association (SBA) considers funding a business loan to a buyer, they look at the following skill sets and experience:
- Prior Business Ownership
- General Management
- Sales & Marketing
- Inventory Management
- Industry Experience
Ask yourself, "If I owned this business, would I be willing to hire myself to run and operate it?"
If the answer is no, then you might want to consider something else. In many cases you will need to talk to the broker to see what business skills are required to replace the current owner before you can properly answer that question. This should help you focus your efforts on businesses that are both personally desirable and realistic.
Know Risks and Rewards
As a new business owner, it's important to focus on making assessments based on risks and rewards.
Risks are potential upsides. Any business that looks perfect, has great net earnings growth, and virtually runs itself will attract a large buyer pool. This will cause the price to go up. On the other hand, if the business has easily identifiable risks, this will cause the price to go down. Both risks and rewards are subjective. An experienced business owner will identify risks and determine if their skill sets will enable them to manage it. Then they will determine if they think they can realize the company's upsides. If the final analysis is positive, then they can buy a great business for a price consistent with its general market perception but lower than its true value to you.
Accelerate the Process
It usually takes a first time buyer about 6 months and several failed attempts to realize which business is right for them.
At BizEx, we can help you climb this curve quickly. If you don't have the skill sets that the current business owners feels is required to be successful, we'll tell you right away. During the first meeting with the Seller, we will help you ask questions to bring out risks and upsides. We will also keep in mind your skill sets and contact you if we think we have a business that fits your background and desires.
Take the First Step
To get started, please register online as a Buyer. You will only have to do this once.
This will enable us to automatically email you notifications of new listings that meet your profile before it hits the general market. The online Confidentiality Agreement can be used by our brokers to give you access to confidential information on any listings you request information on. Registered buyers can also access our tools section that includes a buyer cash flow analysis, amortization calculator and more...
Once you identify a listing that you're interested in, you can contact the listing broker directly and they will take it from there!