Buying a business: It's a brand new ball game

Unless you've bought or sold a business in the past, you'll find that buying a business can be a confusing and even trying experience for the unprepared. That's why it’s important for you to take the time to read this explanation of the process.

Getting Started: Questions and more questions

The search for a business opportunity almost always starts with a telephone call or a visit to our website. Sometimes the prospective Buyer is a Corporation, Private Investment Group or a sophisticated Private Investor who has a very definite idea of the type of business wanted. But, often the Buyer is a first time Buyer and is still in the formative or exploratory phase of the search. Many times a Buyer's first question is, "What kind of businesses do you have?"

Well, we have lots of businesses, so that's a tough question to answer without some idea of the Buyer's resources, skills and needs. Maybe we just listed Ford Motor Company and you, our prospective Buyer, just happen to have several billion dollars and a background in automobile manufacturing. There's a match made in heaven, but it's a match we can't uncover without questioning you and learning more about you.

So the first and most important step is telling us about you. Be patient when we ask, "How many days per week are you comfortable working?" and "Do you like having employees?" and "How much cash do you have for a down payment?" and many other questions. We're not just asking to be nosy: We're narrowing your search and saving you time and aggravation.

Defining the Search: Non-Confidential Summaries

After we've talked for a while, we can probably begin narrowing the search to a few appropriate business opportunities. At this point, we communicate non-confidential summaries of our exclusive opportunities to you in a number of ways. Since you're viewing our web site you can see the non-confidential summaries of our exclusive listings by simply using the " Business Search" button.

Non-confidential summaries show the profile number, a description of the business, a summary of financial performance, the reasons why we think it may be a good opportunity and the asking price. We recommend at this point you focus on the business and not on its financial performance or price. It's far more important for the moment to find a business type you will enjoy owning.

Focusing on a few: Digging Deeper

At this point in your search, you'll find yourself holding one or more non-confidential summary sheets for businesses you want to know more about. This "digging deeper" step takes your business opportunity search to a new level.

This new level is one of mutual trust and obligation between you, our company and the Seller(s) of the business(es) you're interested in. Now you're being exposed to the specifics about the businesses you've been considering and your agreement to keep this information confidential is required. Before we send you confidential information, we require you to send us your Buyer Profile and we require you to sign a Non-Disclosure and Confidentiality Agreement. When you return these documents to us, we'll divulge to you the name and address of the business you're interested in. You obtain a copy of these documents by selecting the “NDA Form” button and then printing the documents.

The Business Profile: The Facts, & More

A big part of our job on behalf of the Sellers we work with is to do the work of selling their business while affording them the time to run their business. This means that we will work with you to answer your questions about the business before we introduce you to the Seller. We accomplish this in several ways. The most important element in this process is the Business Profile. This report on the business you're interested in is written to give you the information you need to decide whether or not the business is right for you. A typical Business Profile contains a detailed description of the business, summary financial data, additional business facts like lease information, number of employees and much more. After reviewing the Business Profile and discussing it with your broker representative, you will have a good understanding of the business and its operations.

The Business: Face to Face

After reading the Business Profiles and asking questions you are ready to tour the businesses that are of interest. The purpose of touring benefits both you and the owner. Not only will you learn more about the business from the person who knows it best, but you will also have the opportunity to sell yourself to the owner since you may be seeking installment terms from him or her. After touring the businesses you should be prepared to make an offer on one within a few days.

Making An Offer:

Making an offer is not a final step. In fact, it should be viewed as the first of several steps, each of which bring the Buyer and Seller closer to completing the transaction. Since this is a privately held business, the Buyer is obligated to make an offer before seeing the business' internal financial records. The Buyer must understand that an offer is always contingent upon the Seller proving his or her representations. Due diligence can be costly and time-consuming, and thus it must be done only after an agreement on price and terms is reached. It's the Seller's responsibility to prove everything to the Buyer. Put another way, your agreement on price and terms will be "non-binding" until you've had the opportunity to see all financial records and all contingencies have been removed.

Your Offer To Purchase will consist of the following:

Terms: Price, down payment and agreed-to financing (interest rate, number of payments, etc.).
Contingencies: Approval of books and records, equipment, inventory, assignment of leases or loans and any other items that the Buyer requests to be incorporated into the structure of the agreement. Conditions: Non-compete clauses, consulting agreements, training agreements and other relevant parts of the structure of the agreement. An "Earnest Money" deposit check in the amount of up to 10% of the offered price. The check will be deposited in a non-interest bearing Escrow account and returned to you if the contingencies cannot be cleared.
Due Diligence: You and your advisors - attorney, accountant and others - will have a specified period of time to complete your due diligence and remove all contingencies (typically 7 days). When due diligence is complete and the contingencies are removed, the contract becomes binding. Should the business fail to pass due diligence, you are free to rescind or amend your Offer To Purchase.
Your resume of business background and experience may be required, personal financial statement and credit report (paid for by you) may also be required.
Financing: Working with Sellers and the SBA. Almost every deal requires some form of financing. At our company we work with Buyers to help obtain the appropriate financing for the business being purchased. Often, this means a Seller's Note or a bank loan guaranteed by the Small Business Administration. Whatever the financing requirements, Buyers can expect assistance from us.
Escrow & Closing: Escrow typically takes about 3-4 weeks. After the escrow agent receives signed instructions, the escrow officer will contact government tax agencies for clearance and publish your fictitious name filing, enabling you to open business and banking accounts. Also during this time a Notice To Creditors will be published allowing anyone with a claim against the business to step forward.

You're In Business:

Congratulations! Finally, the big day arrives and you open the doors of your business for the first time. There is no bigger thrill, no better feeling than knowing that you are in control of your own destiny. You have achieved the American Dream . . . to own your own business. When you work with our company we guide you along the way and help make your transition to business owner stress free and simple. So, it's time to go to our Business Search section and start moving towards achieving your dream.