How to Buy a Business in 8 Easy Steps
May 27th, 2010
Step #1: Define your goals.
Determine what you hope to gain from your new business and be honest with yourself. Understand your strengths and weaknesses and any limitations you may bring to a new business. Outlining your goals and capabilities upfront will be the cornerstone of your success.
Step #2: Get your finances in order.
Put together a comprehensive Personal Financial Statement and be sure that your bank records, tax returns and personal bookkeeping are up-to-date. Depending on how you choose to finance your purchase, you will need any or all of this documentation at your fingertips.
Step #3: Find the right fit.
Finding the right business starts with selecting a qualified and experienced broker. BLM has expertise that is both deep and wide in over 200 industries. We will guide you in researching prospective sellers and help you to target the right fit.
Step # 4: Create a business plan.
Know what you want to do with a prospective business and where you want to take it before putting in an offer. With clear objectives for the future, you will understand what you are willing to negotiate for the business, and you will have a plan of action from Day One of ownership.
Step # 5: Put in an offer.
Bottom Line Management will work with you to craft an attractive offer to your prospective seller. We are skilled negotiators and will get you under contract quickly, while minimizing the “back and forth” time.
Step # 6: Complete due diligence.
Examine the books and records of the company you wish to purchase carefully. We encourage you to work with a CPA during this process to ensure a clear stamp of approval of the business’ financial health.
Step # 7: Close the deal.
Bottom Line Management will work with you from contract to closing to ensure that all the necessary paperwork is in order and that the business has seamlessly transitioned to you.
Step # 8: Make the transition.
Upon purchasing a new business, you will typically have a training and transition period negotiated with the former owners of the business. This period generally lasts about 4 weeks. It is important to understand what has made the business operate successfully prior to your ownership and assess what changes will be made in the future.
Author’s note. After helping sellers and buyers for more than 20 years, I have found that honesty, integrity, full disclosure, patience and a willingness to consider various alternatives makes the probability of success for all parties very high.
Step #1: Define your goals.
Determine what you hope to gain from your new business and be honest with yourself. Understand your strengths and weaknesses and any limitations you may bring to a new business. Outlining your goals and capabilities upfront will be the cornerstone of your success.
Step #2: Get your finances in order.
Put together a comprehensive Personal Financial Statement and be sure that your bank records, tax returns and personal bookkeeping are up-to-date. Depending on how you choose to finance your purchase, you will need any or all of this documentation at your fingertips.
Step #3: Find the right fit.
Finding the right business starts with selecting a qualified and experienced broker. BLM has expertise that is both deep and wide in over 200 industries. We will guide you in researching prospective sellers and help you to target the right fit.
Step # 4: Create a business plan.
Know what you want to do with a prospective business and where you want to take it before putting in an offer. With clear objectives for the future, you will understand what you are willing to negotiate for the business, and you will have a plan of action from Day One of ownership.
Step # 5: Put in an offer.
Bottom Line Management will work with you to craft an attractive offer to your prospective seller. We are skilled negotiators and will get you under contract quickly, while minimizing the “back and forth” time.
Step # 6: Complete due diligence.
Examine the books and records of the company you wish to purchase carefully. We encourage you to work with a CPA during this process to ensure a clear stamp of approval of the business’ financial health.
Step # 7: Close the deal.
Bottom Line Management will work with you from contract to closing to ensure that all the necessary paperwork is in order and that the business has seamlessly transitioned to you.
Step # 8: Make the transition.
Upon purchasing a new business, you will typically have a training and transition period negotiated with the former owners of the business. This period generally lasts about 4 weeks. It is important to understand what has made the business operate successfully prior to your ownership and assess what changes will be made in the future.
Author’s note. After helping sellers and buyers for more than 20 years, I have found that honesty, integrity, full disclosure, patience and a willingness to consider various alternatives makes the probability of success for all parties very high.
