{"id":859,"date":"2016-02-18T00:00:00","date_gmt":"2016-02-18T00:00:00","guid":{"rendered":"https:\/\/www2.businessbroker.net\/blog\/2016\/02\/18\/the-process-of-buying-a-business\/"},"modified":"2016-02-18T00:00:00","modified_gmt":"2016-02-18T00:00:00","slug":"the-process-of-buying-a-business","status":"publish","type":"post","link":"https:\/\/www.businessbroker.net\/blog\/buying-a-franchise-or-business\/the-process-of-buying-a-business\/","title":{"rendered":"The Process of Buying a Business"},"content":{"rendered":"<p style=\"text-align: left;\"><span style=\"text-align: left;\">The three components of a successful business are location, product\/service, and management.&nbsp; As a prospective buyer, you have a vision of being your own boss and calling your own shots. &nbsp;People go into business for various reasons, including but not limited to, financial independence, job security, control of destiny, investments, tax advantage, lack of suitable job opportunities, and freedom.&nbsp; It is important to find a business you like and with which you feel comfortable.<\/span><\/p>\n<p style=\"text-align: left;\"><span style=\"text-align: left;\"><\/span>The process of buying a business is as follows:<\/p>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>Evaluate the basic information on alternative businesses that sound interesting to you.&nbsp; In addition to profitability, be sure to buy a business you like and would enjoy.&nbsp; Look at the proximity to you and how far you are willing to travel each day.&nbsp; Also, consider the longevity of the employees and their likelihood of remaining.<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>Request a marketing packet from the business broker.&nbsp; This will give the basic information about the business, including a cash flow statement for the previous three years.&nbsp; From this information, you can determine if you wish to take the next step.<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>Schedule an appointment through a business broker to meet with the seller, asking from general to probing questions on anything and everything, except actual price negotiations. &nbsp;Offers are only in writing, after which negotiations may take place.&nbsp; Make a list of questions before the meeting so you won&rsquo;t forget to ask anything.&nbsp; This will enable you to see if it is a fit for you and improvements you think would be needed.&nbsp; Do your evaluation, based on the information provided to you by the seller and business broker.&nbsp; Other advisors with whom you may wish to consult are attorneys and accountants. &nbsp;This would be a good time to prepare a business plan using the information from the seller to project the next three to five years.&nbsp; The most successful businesses have good plans.<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>Make a written offer through the business broker, assuming all of the information you have been provided is correct, but include contingencies, which allow you to confirm such information.&nbsp; If the seller is willing to finance the purchase, the terms will be included in the offer.&nbsp; If outside financing is needed, the business broker can direct you to sources; and a contingency to receive financing by a certain date will be included in the offer. &nbsp;That contingency will void the offer if the financing is not received by the specified date.<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>Once a sales price is agreed upon, make a closer investigation of the business through due diligence, confirming to your satisfaction the validity of your offer. No information should be withheld from you at this point. &nbsp;Look for red flags in cash flow and any hidden problems.<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>For closing, it is usually advantageous to both the seller and buyer to have documents prepared by an escrow attorney, based upon the agreement signed by the buyer and seller.&nbsp; Both parties may then have the documents reviewed by their own attorneys, if they desire.&nbsp; You will decide on your legal entity before closing.&nbsp; Your business broker can guide you through the entire process.<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>Close the transaction and begin your first day as the owner of your own business.&nbsp; You walk into an ongoing business and start making money immediately.&nbsp; You and the seller meet with the employees at the business to explain the sale and to assure them their jobs will remain the same. &nbsp;The sale is not disclosed to the employees, customers, or anyone until after closing to prevent inaccurate information from getting out that could hurt the business.&nbsp; As part of the purchase agreement, the seller will work with you and train you for a determined amount of time and assist in an orderly transition.&nbsp; You are part of the American dream. &nbsp;You and your family own your own business!<\/li>\n<\/ul>\n<ul style=\"margin-top: 0in; list-style-type: disc;\">\n<li>After closing, the seller will give you the keys to everything.&nbsp; You must also notify your suppliers of the change of ownership and transfer all licenses and permits, as well as open a bank account, if you have not done so before closing. <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The three components of a successful business are location, product\/service, and management.&nbsp; As a prospective buyer, you have a vision of being your own boss and calling your own shots. &nbsp;People go into business for various reasons, including but not limited to, financial independence, job<\/p>\n","protected":false},"author":3,"featured_media":41,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-franchise-or-business"],"yoast_head":"\n<title>The Process of Buying a Business - 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