Small Business for Sale – Finding Business Acquisition Opportunities Near You
While purchasing a small business is an excellent way to take control of your financial future, finding existing small businesses for sale opportunities can be difficult. Although, at any given moment, 1 in 5 small businesses are for sale, businesses cannot simply put a “for sale” sign outside of their location while they continue day-to-day operations. This is where business brokers – who work to assist and match buyers and sellers – can help.
In addition to helping you find a business to purchase, a business broker assists with the complex process of buying a business. It takes a lot of planning and coordination to conduct a small business purchase, which includes valuing the business, devising a purchasing agreement and deciding how to finance the purchase.
Here is a little bit about how the process of buying a small business with the help of a business broker works.
The Search Begins
If you are considering buying a small business, you might want to start by looking through Transworld’s listings. This tool allows prospective buyers to search over 4000 businesses and even offers the ability to refine search criteria according to geographical region, category of business and price range, among other specifications.
While a listings search is a great tool for beginning to think about potential small business purchase options as well as your personal interests and goals, the real process of buying a small business begins when you sit down with a representative.
During this initial stage of the process, the representative will meet with you and gather personal information, including experience, strengths, and financial capabilities. The representative will use this information to generate some ideas about what type of small business might make the best match. At the same time, the representative educates you on practical topics such as performing searches, understanding the current marketplace, and reading Business Listings. Once you work out a general idea of your desired business, the broker uses resources to perform searches and put you in touch with potential sellers by arranging business showings.
Not every purchase opportunity will turn out to be your ideal business, but considering options will allow you to refine your criteria further. A broker will continue this collaborative search process until you find the business that suits you.
The Buying Process
After you choose a small business, the buying process begins. A business broker will use experience and expertise in deal structure to aid you in devising a preliminary offer agreement that will be presented to the seller along with a deposit of good faith to show your seriousness.
Once negotiations take place and an executed contingent purchase agreement to buy the business is made, the broker will help you through the process of conducting due diligence. This is the stage of the process wherein you inspect your seller’s records for accuracy. The business broker will help to coordinate with your legal and accounting professionals to make sure everything is in place. After the purchase agreement is finalized, the last minute preparations will be made to make the transfer as seamless as possible. The broker will be available to assist you with any questions or post-closing requirements you may have.
Valuing the Business and Financing the Purchase
Some potential small business buyers might be concerned about valuing the small business to be purchased and financing the purchase. Accurately valuing a business is a complex art, but working with a broker will help you to determine an accurate value. Financing the business purchase is also a concern to entrepreneurs who wish to buy a small business. While buying a small business can be a large investment, buyers are likely to receive loans from lending institutions when buying an existing, profitable small business. When banks are able to see the historical earnings of an established business, they are more likely to help fund your transaction and “may loan up to 80% of the purchase price through a loan sponsored by the Small Business Administration.” However most often sellers will provide a certain amount of owner financing as bank financing is often not available.
If you are interested in buying a small business for sale, contact Transworld Business Advisors. With Transworld’s assistance, you can have a successful experience purchasing and owning your own small business.