If you have been harboring the desire to start a business and live life as an entrepreneur, but hate the hassle associated with starting from scratch – then you are not alone. Were it easy to build a company from the ground up, almost everyone would be an entrepreneur. But don’t let this be a hindrance to your journey to entrepreneurship.
Why not buy an existing business instead? After all, starting from scratch is not cheaper either – considering the work you will need to put into it.
However, while buying a business is a superior alternative, finding a viable startup or small business that is within your means may not be as easy. Here is buying an existing business checklist and how to go about it:
Steps to Buying a Business
Step 1: Know your Industry of Interest
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Firstly, you need to determine the type of business you are looking for. You should know that it would be a terrible idea to try and purchase just about any viable business that you come across that is on sale. Understanding your industry of interest will help refine your choices, enabling you to focus on specific industry concerns that stand to impact your business both in the short term and in the long run. Industry-specific magazines and directories can help you determine the kind of enterprises that you should be on the lookout for.
Step 2: Do Your Research
Once you have settled on the industry and defined the type of enterprise that aligns with your vision, it’s time to dig deeper. Research key aspects of the industry that will impact your operations such as legal concerns, the outlook of the industry, and the availability of the required resources. The internet, newspapers, magazines, and industry publications will come in handy here.
Finding a Potential Seller
You can begin by making calls to some of the local businesses to find out if they are for sale. Most companies for sale rarely advertise. They fear causing panic among their employees or customers. Calling around may connect you with a potential business owner looking to sell his or her enterprise. They may also refer you to colleagues who are potentially looking to sell their businesses. Those selling their businesses sometimes approach similar businesses as they are most likely to express interest as they look to expand.
Alternatively, you can walk into some of these businesses and make inquiries. Also, make sure to keep up with relevant industry meetings and events that can help you network and possibly land more references.
Some brokers have specialized in the sale of businesses. They have the knowledge, expertise, tools, and access to a broad network to draw from. There is a pre-vetted broker listing based on due diligence.
Brokers make the buying process easier for the buyer. You stand to benefit from their expertise and experience. They have a vested interest as they are keen on seeing the deal go through, as they will earn a commission on the sale of the business. For this reason, you should look into finding trustworthy brokers.
Consider looking for websites listing businesses that are for sale. For more relevant results you should specify the type, location, and size of the business. For instance, if you are looking to buy an online business within Texas, you can use the phrase business for sale in Houston.
Once you find the relevant website, you can search through the businesses that are put up for sale. If you know the exact kind of business you are looking for, online platforms can prove to be a great time-saver. With such knowledge, you are bound to spend less time combing through businesses that are not of interest to you.
Many of these websites will offer you the option of subscribing to relevant alerts that will keep you updated in case a business that meets your criteria goes up for sale. This way, you will always be on top of your search.
Step 3: Seal the Deal
Once you find and settle for the business you wish to buy, you’ll need to contact the owner to reach a deal. You may need to incorporate the services of an attorney to make sure everything is done to the letter of the law while also lowering the risk of being shortchanged.