You can buy a business if you’re looking to get into entrepreneurship. Some prospective business buyers don’t know where to begin.
There are many resources available to assist you in the process. Each business acquisition will likely look different. Understanding the basics will help you get started.
Download the BizBuySell guide to buying a small business. Download the BizBuySell guide to selling your small business if you are looking to sell a company.
Why buying an existing business can be better
You have two options if you want to own a business: start from scratch or buy an existing company. The purchase of an existing business can give you a leg up in terms of brand recognition, operational procedures, and cash flow.
You may have a large customer base if you are in a certain industry or location. This brand recognition and cash flow will give you an advantage in the beginning of your business. You don’t need to spend a lot of time on the initial foundation.
Existing businesses are more stable. They’ve likely already experienced the initial growth phase, so there are usually fewer costs associated with starting a new business. It can reduce the risks associated with starting a new business. When buying businesses for sale, your startup costs are usually limited to the purchase price and a few other expenses such as paying a broker.
Logistically, buying an existing business is also easier. It is possible to eliminate much of the trial-and-error that comes with a new business. You don’t need to do all the necessary paperwork to legally register your business. There is plenty of paperwork to be done when buying businesses. A broker can help with this step.
What type of business to buy?
When purchasing a small business, there are many things to consider. Consider the financials, the potential of the company, and whether it is a good fit for your lifestyle and skill set.
Start by evaluating the goals you have for your business. Look for lifestyle businesses that are easy to manage if you want to spend more time with your family. A vending machine may better suit your needs than a full service restaurant. Some businesses are available for sale which allow you to work at home. These include online business consulting and dropshipping.
When looking at different industries, you should also take into account your own personal skills. A body shop might be more suitable for you if you have auto repair experience. Many business models require only strong communication and management skills. List your skills, and industries that you have worked in.
You should then consider your budget, and what the business that you are interested in will cost. Businesses that require physical locations and a lot of equipment are more expensive than businesses that can be operated remotely. A large manufacturing operation may not be the best choice for someone with a limited budget. A carpet cleaning company with a few equipment pieces and a truck will likely be more affordable. Compare listings you can afford by reviewing your budget and your financial goals.
How to search for listings when buying a business
A search in an online marketplace is usually the first step to finding a small company for sale. Some of these websites are specific to businesses within a certain industry or region. Many of these sites offer a wide range of options. You can use multiple marketplaces to get more relevant results. You can buy a company on eBay. Just Google eBay businesses for sale to find many listings. You can use keywords, location, and price to search for listings that meet your needs. These tools can be used for preliminary research, to get an idea of the price ranges for different types of business in your locality.
Prior to browsing marketplace websites, you should narrow down your objectives for purchasing an existing business. Enter the keyword or industry into the search bar and you will find relevant listings. You can also set the location and budget if advanced search options are available. You can then browse the options that best suit your skills, interests, and budget.
Use the Business for Sale section of BizBuySell to start your search for a new business.
How to Choose the Right Candidate for Your Business
When selling their business, small business owners want to choose the best buyer. The business was probably built from the ground up and they put in countless hours of hard work. They want it to continue to flourish under the new owner.
Money is a major factor in the sale of any business. Owners will only consider candidates that can meet or come close to their asking price. They may want to know that you have working capital in addition to the initial purchase price. Even if your business is doing well, you may need to adjust during the transition period. A little extra cash can help you to stay afloat. It is possible that the exact amount will vary depending on what type of business you purchase. A net-worth calculator can be used to let the owner of the business know what assets you have.
Your personal qualifications and skills are likely to be taken into consideration by business owners. Some won’t consider anyone who does not have industry experience. This is particularly relevant to businesses that offer services, such as electricians or HVAC companies. Others in the marketing, retail and food service industries may want to see specific experience from potential buyers. These qualifications are often included in the business listings of marketplace websites.
They may also check to see if your lifestyle is compatible with the type of business you plan to run. They know more than anyone else how much effort it takes to run a business. If you are a retiree and want to travel frequently, a restaurant proprietor who has worked 60+ hours per week may not be willing to sell. If your lifestyle goals are realistic, based on the experience of those who own the restaurant, they may be more willing to sell.
