David Miller recommends you consider the following three business buying steps.
1. What is a business for sale purchase agreement?
Bringing a business for sale transaction to fruition is a trying, lengthy learning experience. You the buyer via your broker have to try your best to negotiate with the seller in a civil and honest atmosphere. Pleasantness, reasonableness and fairness are needed for the process to proceed smoothly. Once you decide to buy a business, you have to move quickly or it might slip through your fingers. You have to signify your intention to your broker.
2. Ask this question: What is this business worth?
Before making a formal offer, you have to determine how much the business is worth. You do not want to pay more then its real value. For this a business broker with years of experience can guide you through the process of pricing the business. Engage if necessary, a business appraiser. A CPA or accountant should be consulted to examine the transaction from a tax perspective. A broker can draft your offer proposal in its entirety. Have your lawyer review the transaction if necessary.
3. Making your offer.
The customary business purchase agreement is a legal contract that outlines the details of the sale. The business for sale agreement is a very important legal document. It is the best insurance policy, carefully crafted, to avoid legal problems from haunting you or the seller in the future. It is usually lengthy to cover all aspects of the transaction. Contingencies will be pointed out that allow you the buyer to fully inspect all issues involved. You will have plenty of time to do your due diligence. Once you have reviewed and approved all aspects of the purchase
you will finalize your purchase with a third party usually an escrow company who will make sure you end up owning the business free and clear of all liens.
Consider these factors before you consider buying a business…
Banks are likely to provide financing to a buyer with good credit and for a business that meets the needs of a buyer.
Tax Returns: The bank will be interested in your tax returns and those of the business you’re acquiring, and any plans you have to change the operation you’re buying.
Just like the bank, the landlord wants a buyer to meet certain criteria before allowing the buyer to take over the business. The landlord wants to see good experience, good credit and plenty of cash in the bank.
The Bottom Line
So if you’re not sure whether you qualify for buying a business, give us a call and we can certainly help you.