Navigating a Business Sale: Tips for Buyers

A single business sale could change your life, allowing you to open the doors (literally or virtually) on your own business. Perhaps you are an entrepreneur looking to improve on the foundation of a small business that has already been started. Or maybe you’re expanding your business by buying another with complementary functions and services. Either way, it’s an exciting step! But it can also be a scary one.

There’s a reason professional brokers are brought into a business sale. They understand how to handle a transition with delicacy, speed, and neutrality. When emotions are involved or things don’t go smoothly, a broker is there to facilitate. But even when a broker is involved, there are some actions and precautions you can take to help the business sale succeed.

Practice these tips to successfully navigate your upcoming business sale:

• Establish Your Interest – Brokers and buyers don’t always take potential buyers seriously. Why? Because most buyers merely poke around a business sale in curiosity. Brokers typically screen and eliminate over half of the initial buyers, so make your case known early and be aggressive.
• Assess the Seller – An important question to ask is why is the seller is selling? Retirement? Financial problems? This not only gives you insight into potential business problems, but also how flexible the seller might be with price and terms.
• Buyer Beware – The business broker is there on your behalf, too. If you pursue a business sale on Craigslist, in the newspaper, etc. that isn’t represented by a broker, you’ll have to wade through a myriad of lost causes. Broker representation means that the business is profitable and worthwhile.
• Respect Confidentiality – A business sale often happens without employee, vendor, or customer awareness. This helps maintain business stability, which is a benefit to you as the buyer. Avoid approaching the owner or visiting the business location without a scheduled appointment.
• Consider Size – Discretionary earnings and cash flow are a good indication of size. If you can search through business sales by these rather than asking price, do so.
• Move Quickly – Profitable and well-priced businesses don’t stay on the market long. Mentally prepare to make an offer if a business meets your criteria. You may not be able to completely analyze all of the variables, but make sure you check the financial records thoroughly.

Are you ready to move quickly on a business sale? The Sunbelt Network provides a directory of businesses currently on the market and gives you the peace of mind that your investment will be well-placed.