Finding a great business buy starts with combing area newspapers, making phone calls and checking buyer information web sites like this one. The prospective Buyer could be a Corporation, Private Investment Group or a savvy Private Investor who knows exactly what type of business he or she wants to operate. Although most first time buyers spend a good amount of time exploring options in their specific field of interest, they frequently ask - "What kinds of businesses do you have?".
Though we have many types of business for sale,we can only answer that question effectively when we know the buyer's level of capital, professional skills expectations of what he wants the business to produce. For example, if we just listed a major auto manufacturing business for sale, the prospective buyer has unlimited capital and years of experience in automobile manufacturing, the match would be more than obvious. A match like that can only happen when we know all the pieces on the chessboard - for both sides.
In other words, like yin and yang or the two poles of a magnet, business selling price to buyer purchase resources, desired business operation size and hours to the existing business opportunity and other details have to be matched as closely as possible for optimum satisfaction for both parties at the deal's closing.
Honesty on the part of the buyer is your responsibility - doing all possible to insure honesty on the part of the seller is the responsibility of the experienced business broker.
After an honest and thorough evaluation of A) the buyer's needs, and abilities to consummate the sale and B) the business seller's assets and and what he needs to receive to part with them - the prospective business buyer can then begin to view our web site and access the non-confidential business descriptions by simply selecting the "Businesses For Sale Listings Section". This page will detail our business opportunities, a description of each business, financial details and the asking prices.
As you, the prospective business buyer, search the available business buys you will receive multiple lists of suitable business opportunities. At this stage of searching the available businesses, you will enter a new level involving the necessary disclosure of confidential information needed for the purchase or sale of any business.
This new level involves mutual trust and an obligation between the prospective Buyer, our company (the business broker) and the Seller(s) of the business(es) you are interested in.
Confidentiality is a must, to protect the prospective buyer from employers, employees, or the competition learning prematurely about the possible change of ownership. It also protects the seller from untimely employee loss, overly wary vendors, competitor opportunism, landlords, bankers, creditors, etc.
It is a constructive move for all parties, for the prospective buyers to sign Non-Disclosure and Confidentiality Agreements before becoming privy to confidential information.
One of the most important elements of the purchase process is the actual business profile. This report is written to provide the prospective Buyer with the hard facts about the present state of the business being bid on. The prospective buyer must then evaluate whether the business offering does or does not suit his needs and expectations.
A typical Business Profile is a detailed description of the business - consisting of a summary of financial data and additional business facts such as lease information, employees, inventory lists, contracts with vendors or customers and any other information deemed relevant. After these steps have been taken, a buyer will have a sound basis for proceeding or exiting the sale of the business.
After a careful review of the hard facts and second look at the more subjective factors that fall in into the intuitive arena the buyer and seller of the business may then want to meet face to face. It is at this time customary for the prospective buyer to make a purchase offer.
The buyer must make an offer before any privately held business owner will disclose the more intimate details of his operation, i.e., financial records. It is imperative for the buyer and his representatives to double check the accuracy of the seller's financial documents. It is customary at this time for the buyer to select an attorney that specializes in closings to be retained. The closing attorney represents neither party directly, but rather oversees the propriety of the sale itself - so the fees split evenly between seller and buyer.
After a face to face meeting and a personal inspection of the premises, the logical next step is to make a solid offer. This is still not a close - or even the end of the process. It is just the first ante in what can potentially be a long poker game.
A Purchase will contain the following:
- Terms of the offer including price, down payment and financing (interest rate, loan period, etc.)
- Conditions including covenants not to compete, consulting agreements, training agreements, accounting and apportionment of work-in-progress, assumption of liability
- Contingencies such as approval of books and records, equipment, inventory, assignment of leases or loans and any other items incorporated into the terms of the agreement
- The Financial statement of the prospective Buyer
- The Credit Report of the prospective Buyer (paid for by the prospective Buyer)
- "Earnest Money" Deposit Check for ten(10%) percent of the offered price
The prospective Buyer, advisors, attorneys, accountants, business appraisers and other professionals agree on a pre-defined timeframe to complete a thorough review of the Seller’s books and records, inspect the business premises and take other necessary steps to verify the Seller’s records and claims to remove all contingencies (typically 5-10 days).
The prospective Buyer and his advisors must exercise due diligence in completing their review of the Seller’s business in a timely manner. When the due diligence process is completed and all contingencies are removed, the contract becomes binding. Should the business fail to pass due diligence review, the prospective Buyer may withdraw, modify or amend the Purchase Offer. The Due diligence procedure is costly and time-consuming. It is only initiated after the respective Buyer and Seller have reached an agreement on price and terms.
Most business purchase transactions require some form of financing. We work with our Buyers to secure the appropriate financing. This may involve a Seller financing, bank loan, Venture Capital financing, Angels financing (private investor), SBA financing and / or funds obtained by other methods. Whatever avenue you take on financing we will guide you and help place you with the best finance option.
Your business purchase will be handled by an independent escrow company. Typically an escrow is opened with the deposit of the Buyer’s earnest money down payment, generally within three(3) to five(5) days after all contingencies have been removed or satisfied. The average escrow will close in one(1) to four(4) weeks if there are no recorded liens against the business. A Cashier’s check will be required for the amount due at closing of escrow.
we-rbusinessbrokers.com, is your one-stop resource for buying and selling a business. Search through our database of businesses for sale. Our staff will work with you to help you find the perfect business opportunity.
Call we-rbusinessbrokers.com today and get started on the path to business ownership