Don’t be greedy.
Sellers deserve a fair price for the years they have spent developing their business. Be prepared to pay for the goodwill of the business.
Have a good reason to be buying.
Buying a business is hard work! It takes commitment! Employees will be counting you. Spend time deciding why you want the responsibility of owning a business.
Be prepared with a resume and financial statement. Remember, the seller will most likely be financing a portion of the deal, and will want to know that you can run the business successfully.
Keep an open mind.
There are no perfect businesses. Evaluate future opportunities, and what skills and connections you bring to the business.
Don’t forget the tax benefits.
Remember tax benefits are realized from intangible as well as tangible assets.
Offer a reasonable down payment.
A low down payment indicates a lack of commitment. When sellers question commitment, serious negotiations are in jeopardy. Obtain adequate financing from a lender, in order to minimize seller financing.
Businesses are priced on cash flow.
A business making huge profits with few assets could save you money later in capital outlay for expansion.
Time is of the essence.
After all parties have agreed upon price and terms, it is important to quickly proceed toward closing.
Meet the landlord.
Landlords usually have little to gain by cooperation. Therefore, come to meetings armed with resume and financial statement.
Disclose pertinent information early and avoid surprises that might destroy your credibility.
Bradley G. Marlor MBA, CBI is a Managing Partner and Certified Business Intermediary at Utah Business Consultants, a full-service Business Brokerage and Valuation firm.