How to Buy a Business Safely
Have you found your ideal niche for starting your own business? Do you already have a micro-niche to focus on? Do you have plans of expanding your business online for global purposes? Why not go for franchising or buy an existing business for sale?
Your decision to start your own business from scratch or invest some funds to buy a business to start with depends on some financial and personal considerations. There are many other factors to consider here but buying an existing business offers more security and establishes a business identity quickly. However, it involves a complex process that should be carefully dealt with for a safer business buying experience.
Start your business buying adventure by canvassing prices of every potential business that is available for sale. Know how much money could you set for such an investment. Compare down payment rates and some other expenses involved like escrow fee, franchise transfer fee, supplies, inventories, permit and license fees.
Once you get the grips of your desired investment criteria and budget, carefully plan your criteria and position in the business world by doing online research, going through local newspapers, asking real state agents and local business brokers. If you have short listed some business potentials you consider, assess its current status and project income potentials for short or long term goals. If you are now sure to get that particular business as an investment opportunity, then get ready for a safe and secure business buying process.
Gear up with the careful step-by-step details for a faster and safer buying and selling business process. It basically starts with a Purchase and Sale Agreement. This is a very detailed and descriptive contract the buyer presents to the seller.
This contract carefully states such vital information as the amount of initial deposit, the buyer’s offering price, closing date and financing terms. It should also include such supporting statements as the buyer’s lease and landlord’s approval, information in getting permits and licenses, closing cost allocation, amount of inventories and supplies, satisfaction of books and records, securing business equipments in good condition, seller non-competing agreement and buyer training session.
All details here need to be carefully written in very clear statements to avoid confusion or conflicts which may arise in the future. When you are ready with the contract, present it to the seller and be sure to discuss it thoroughly or negotiate for the terms and conditions and the price involved.
Your next step is to have your purchase price allocated to apply for the permits and licenses covered here and then the loan. A lease or a sublease is needed in getting things done here. secure your lease assignment approval before escrow closes. Review the list of equipments and fixtures as stated in the contract and purchase supplies and inventories before closing date. You then close transactions on the closing date and officially starts running the purchased business as your own.
