You have decided that you will be buying a business, how do you proceed, what do you need to do? What you need to do is dependent on if you already own a business or if this is the first business that you will be buying. Assuming that this is the first, what do you need to do?
- determine what interests you, what industry sector
- review all your contacts that you have and what you have accomplished so far in life. Determine if you like what you have been doing and if you want to continue in the same area or if you can use the contacts you have built up over the years in your new business
- determine your budget to buy a business
- determine your equity contribution that you can make and determine if you are able to borrow more money to buy the type of business that you would like
- find a banker and see if they will lend you money. Most bankers will say, bring us the deal and we will then determine if we can but many bankers know what industries they will lend to. If you are looking for a retail store, unless you qualify for a special program, banks may not lend you any money. You can find this out in advance. Will they lend money to you based on your personal net worth?
- determine what role do you want to play in the new business, sales person, administration, accounting, in charge of people doing the work, one or all of the above.
- will your budget allow you to have the role that you would like or are you planning to build the business to a certain size in the future.
- determine the industry sector, do you want to be in consumer goods, baked goods etc.
- determine what role that you want to be involved in, sales to the ultimate consumer, wholesale, manufacturing?
- Do you want to be in service rather than sell a product?
- have you registered as an investor on The Business Place to review new listings weekly?
- have you found multiple business brokers to determine if they have any businesses which meet your criteria?
- have you found an accountant and lawyer who can help you in this transaction?
There are many things which you need to plan before you start to look. If you are not sure what you want, determine what you do not want and work backwards, find out what is available for sale in your price range, determine if it is not on your do not buy list, then if it is not in the list of businesses sectors which you do not like, ask for the summary sheet available for the business for sale. If the summary sheet is interesting, keep pursuing the business.