Thinking About Buying a Business?
As business brokers, we speak daily to people interested in buying businesses, each of whom has his/her own reasons to do so. Some buyers are looking for a change of career, some are investors, and others are “looking for something to do.” But in the last couple of years, it seems that more and more buyers are those who have lost their jobs and are looking to take control of their financial futures.
Regardless of the reason for wanting to buy a business, the questions people have are similar in nature:
- What kind of business should I buy?
- Are there any “good” businesses out there?
- What kinds of businesses are recession-resistant?
- Should I buy an existing business or should I start one up?
- Is it better to purchase an independent business or should I go with a franchise?
- How much money do I need to put down on a business?
- Are banks lending these days?
- I’ve never bought a business before. Is there a “right way” to do so?
- · Who do I contact for advice on how to buy a business?
Of the many questions buyers, whether seasoned or first-timers, have, the one that we’ll talk about here, and whose answer could help with the others, is the last one: Who do I contact for advice on how to buy a business?
There are many avenues one can turn to for assistance in buying a business; most people start with whatever is free and available—the Internet. There are plenty of sites out there from which buyers can cull information about buying a business and which list businesses for sale as well. Common ones include bizquest.com, bizbuysell.com, and entrepreneur.com. SBA.gov, the SBA site, provides a wealth of information about programs and services that the SBA offers, as well as has articles about buying businesses.
Other resources to take advantage of are banks/lending institutions. Most banks will have a business banker that can offer advice on the local business climate. That banker may also have information on which businesses are for sale (their banking clients) and of course s/he would be able to discuss lending options.
For more specific information about the buying process, buyers can reach out to such professionals as accountants and business attorneys, both of whom are invaluable in the purchase process. Taking the time to speak with these professionals would be worth the money. They are the ones that would be helping along the way, making sure the financial information provided by a seller is accurate and that any contract language is correct.
Another type of professional that buyers can turn to for advice is a business broker. Business brokers, like real estate agents, helpfacilitate the deal and hopefully bring the buyer and the seller to a successful closing. Also similar to real estate agents, there are business brokers that work for the seller and those that can be retained to work for the buyer. Either way, a business broker will have information about the process, about businesses for sale, whether it be his/her own listing or that of another broker, and can offer buyers referrals to lenders, attorneys, accountants, or anyone else a buyer would need during or even after the purchase of a business.
When it comes to buying a business, taking the time to educate oneself is probably the best advice anyone could give. It’s a big enough step to take, one that should be made with as much knowledge behind the decision as possible.