A great way to be an entrepreneur is to buy an existing business. You don’t have to start a new business if you already own one. Here’s a way to make your dreams come true: Buying businesses for sale.
If this is your path to entrepreneurship, you will need help finding businesses for sale. This is your step-by-step guide to purchasing an existing business.
How to Find Businesses for Sale?
You need to know where you can find businesses for sale. You won’t find an existing business for sale in most cases. It will likely take some research. Here are some tips to help you start your search.
A business broker helps sellers and buyers to sell their businesses. Find one experienced in the type of business you are interested in buying. A few business brokers specialize in one industry or area. Contact them directly to find out if any business brokers are working with sellers in your preferred categories. BizBuySell has a Find a Business Broker tool to help you find a buyer for your business.
Contact Local Businesses
To find out how to buy a business, the first step is to contact local businesses to gauge the market. Although this may seem overwhelming, it can benefit you if you don’t know any small-business owners in your local area.
Many businesses that are up for sale don’t advertise their sale. Many business owners don’t want to scare away customers or employees by posting a “for sale” sign at their front door. You might be able to connect with an owner who is selling if you make a few calls. You might also be referred to other businesses within the same industry or area that are available for sale by the owner.
Attending meetups or industry conferences is a great way to network with small-business owners in your industry. You can also ask for recommendations or find professionals who can help with finding the right business to purchase.
Networking with small businesses is essential in finding a small business to sell. Reach out to all professionals, family, and friends for assistance.
Your Larger Network
You might find some contacts or suggestions that can be of help. A more extensive network of contacts may be a source for information about potential businesses for sale. These connections could include business partners, co-workers, and social media connections. These people can help you discuss your goals or even post information about the type and size of business that interests you. You can look for advertisements in other places or make your own.
One way to help you find small businesses for sale is to look for ads in local newspapers, industry magazines, or websites like Craigslist.
Check Small-Business-For-Sale Websites
Websites that sell businesses are a great place to start searching for businesses to buy.
Online aggregators like bizbuysell.com and bizquest.com offer small business and franchise sales information. These websites allow you to filter your search by location, industry, and price. These websites allow you to search for the correct type of business or the location you wish to be a part of.
These websites can save you a lot of time if you know what type of business you are looking for and where. You’ll spend less time looking for businesses you don’t want.
These websites can set up alerts to notify you when businesses are for sale that matches your criteria. This will help you keep track of your search for small businesses for sale. You can also view details and photos for each business you are interested in to see if it is right for you quickly.
Bizbuysell.com may be the best place to start if you are looking for an established business available for sale online. There are over 100,000 businesses available for sale in various price ranges. You’re sure to find the right match for you. bizbuysell.com offers a wide range of local business brokers and tools for finding brokers in your region. These are some websites that allow you to search for business opportunities online.
BizBuySell, the largest online marketplace selling businesses, is here. There are many options for franchise opportunities, independent businesses, and brokers. There are many options available for all price points and industries.
You can search for businesses in your local area using the Marketplace’s Business for Sale section. A free ebook, the BizBuySell guide to buying a small business, is available for download. You can also download the BizBuySell guide to selling your small business.
BusinessesForSale.com offers a marketplace of more than 58,000 businesses for sale. You can search by keyword, state, or city to find the best opportunities.
Popular categories on BusinessesForSale.com range from gas stations to coffee shops to pet grooming services, all with different price ranges and revenue potentials. There are also international opportunities.
BusinessMart.com allows buyers and sellers to meet. You can search for franchise opportunities and businesses by location, industry, and the amount you are willing to invest. You will also find links to funding options and brokers, as well as a vendor search function. The website can be used as both a source of information and a place where you can find businesses to buy.
BizQuest.com offers access to franchises for sale and information about local brokers. Search for businesses for sale by keyword, city, state, industry, or brand. You can also buy franchises, assets, and startups from the site.
After you have searched to locate a business for purchase, you can view the results and save the ones that interest you. BizQuest offers a simple form that allows you to contact the seller.
Although the name may be misleading, BusinessBroker.net lets you search for more than just a business broker. By customizing your search criteria, you can narrow down the type of business that interests you and set a budget. You can also choose your state of residence.
You can view the results after you have completed your search. Listings include revenue, cash flow, and asking price. Please read the brief description before you decide whether to add a business to your request information basket.
Loopnet is unique because it offers the possibility to buy a business and lease or buy commercial property. Type of property you want. You can choose from office, industrial and retail, specialty, healthcare, and other categories. Multifamily units are also available for sale, which is an excellent opportunity for those in the apartment rental industry.
After choosing the type of property and location, you will receive listings that include a photo, square footage, and pricing. You can even see maps of each property and demographic information such as household income and consumer spending.
Exchange is an online marketplace that helps buyers find a business to buy. Exchange lets you search for existing businesses. Online business listings can be found in gifts and collectibles and fashion and apparel, consulting services, home and furniture, beauty, and other categories.
You can browse the business websites by category, then choose the most relevant listings. The URL, asking price, average revenue, and monthly sessions are all included in the listings.
It’s a two-way process to find a business to buy. Businesses in your local area should know you are interested in buying. It’s impossible to predict where an opportunity for business purchase might be found, so it is essential to spread the word as widely as possible.
Tips for Buying a Business
Understanding If You Are Ready to Purchase a Business
Before looking for a business, it is essential to understand whether business ownership is proper. You need to ask yourself if you are ready to take on every decision, manage your time, and be disciplined. To succeed in your early years, you must be willing to hustle and take on many responsibilities. These include customer service and sales and financial administration, and people management.
Choose Between a Franchise or an Independent Business.
It is up to you to decide which type of business you want. This will depend on your financial situation, personality, and preferences. There are no clear rules for buying an independent business or a franchise.
The main benefit of buying an independent business is the freedom to direct your business in any direction you wish. There are no restrictions on your reach or terms and conditions. Franchise owners are limited in creating new products or modifying existing ones based on market conditions or personal preferences. This gives you more freedom to market to a broader audience.
On the other hand, franchise owners enjoy the security and support that comes with being part of a larger organization. Other benefits include brand recognition, bulk buying power, group marketing support, and training.
Do Your Research On the Company?
You should inspect your new business in the same manner you would if purchasing a car. This research is about finding the right business from all available options, determining how much each business costs, and getting a sense of your business’s strengths.
Do Your Research
Due diligence involves analyzing a business in-depth to determine whether it is a good investment. Before you have access to this information, you will likely need to sign confidentiality agreements. This is usually done after the seller and buyer have agreed in principle but before any legally binding contracts are signed. Always do your due diligence with the assistance of your lawyer, accountant, or business advisor. Often you will need to complete this activity within a certain time frame.
Value Your Business
First, look at the prices paid for similar businesses in the market. Although benchmarking does not replace a formal valuation, this can give you an idea of the market price. Valuation should include tangible assets such as machinery, equipment, and property and intangible assets like intellectual property and goodwill. Goodwill is a combination of the characteristics of a business, such as a well-established brand, loyal customers, high-quality staff, good locations, and supportive suppliers.
Value a business using a combination of different methods. These are the two most popular:
- Calculating the net worth of a business is the difference between its liabilities and assets. This is a simple method to value a business. However, it does not consider any intangible assets such as future earnings.
- Calculating the value of a business based on its future capitalized earnings – You buy both assets and future profits when you purchase a company. This gives the business’s future earnings an expected value today and ‘capitalizes’ them.
Make an Offer
You are now able to think like a negotiator and start to negotiate. Negotiating is both an art form and a science. Negotiations can be simple or complicated depending on what business you purchase and who is involved in the transaction. You’ll need to learn from master negotiators and practice your skills.
Organize Purchase Contracts
Are you ready to get the ball rolling? Next, you must create a purchase agreement to binding your agreement legally. This document is a written record that ensures both parties understand the terms of the sale. Before signing the contract, as the buyer, it is essential to get legal advice.
Your lawyer will prepare the purchase contract’s first draft. Your purchase contract should clearly describe the purchased assets, including machinery, stock, customer/supplier agreements, premises, intellectual property, and other assets. It is also necessary to list assets not being bought.
Finance The Business Purchase
As you finalize purchase contracts, it is essential to consider how to finance a business purchase. Buyers should know how to finance the purchase before signing on the dotted sheet. This is a good practice and much more common.
There are two types of loans: secured loans, which are secured against assets of the business, and unsecured loans, where the owner of a business borrows money without any assets.
A business plan, good credit history, and steady cash flow are prerequisites for a bank or lender to approve you for a loan. They will need evidence to prove that you can turn a profit. Also, you will need to show the collateral that you can provide for the loan.