Here are a few ways to start the search: call local businesses, use a commercial agent, visit small business websites for sale, search for other ads (or post your own), keep in touch with your network, gather all the information you need to move forward, evaluate the company's price, and close the deal. The easiest way to find a viable company that is for sale is to look for options online. The most obvious place to look is through business listing sites. You may not be able to get all the information you need from these listings, but you can do the research from your computer. Once you and the seller agree on a number, the next step in buying a company is to get the money.
There are different ways to raise the capital you'll need to buy a business, some specific to buying an existing company, others fairly standard. This is not a negligible cost, as it will increase the total price you'll pay for the company. You must compile a set of unbreakable “golden rules” that you can put to the test with any potential business for sale. They may also know owners who are planning to retire or who are in danger of losing or closing their business for other reasons.
You may have to resort to other creative ways to determine where to find the right companies for sale. If you're about to buy a business, you'll want to know exactly why the businesses you're considering no longer work for their current owners. The easiest way to set yourself up for success is to buy a business that you are passionate about improving and taking it to the next level. If you are buying a company with employees, make sure you understand how they are classified and how they relate to each other by requesting a business organization chart. Depending on the business advertising website, you might find different degrees of information, such as the company's history (when it was founded) and gross revenues.
The search process to find and buy the right company is the most time-consuming part and is usually frustrating for individual business buyers. Some of the most common challenges you may encounter include a poor business plan, excessive business debt, location issues, brand confusion, outdated equipment, and staff shortages. In the case of term loans and SBA loans for the purchase of a business, banks typically require buyers to make a down payment of 20 to 25% on acquisition loans. All of this increases the chances that investors will invest in the company and can make lenders feel more comfortable granting you a loan for the acquisition of a company. While you may only want to buy a company solely for financial reasons, considering the expected return on investment, it's also important that you align yourself with the company's immaterial objectives.
Driving around neighborhoods is a way of physically seeing some businesses that could be for sale. We'll also look at the pros and cons of buying a business when you're still thinking about the idea and finish with how to buy a business when you're ready to close the deal and get the keys.
