{"id":12133,"date":"2024-05-15T13:27:25","date_gmt":"2024-05-15T13:27:25","guid":{"rendered":"https:\/\/www.sunbeltnetwork.com\/lafayette-la\/?p=12133"},"modified":"2024-05-15T14:31:43","modified_gmt":"2024-05-15T14:31:43","slug":"how-to-make-offer-on-a-business","status":"publish","type":"post","link":"https:\/\/www.sunbeltnetwork.com\/lafayette-la\/how-to-make-offer-on-a-business\/","title":{"rendered":"How to Make an Offer on a Business"},"content":{"rendered":"

Updated May 2024<\/em><\/p>\n

So, you\u2019ve found a business you’re excited about purchasing. What next? Research must be done, conversations must be had, and preparations must be put in place. Make sure you know how to make an offer on a business using the guidance below.<\/p>\n

Making an Offer to Purchase an Existing Business<\/h2>\n

As a potential buyer, you need to do preliminary research, and that involves asking the right questions. Have you seen the company’s tax returns and other financial documents<\/a>, reviewed their current cash flow, and agreed with their valuation? If all of these items check out, don’t be afraid to make your first offer.<\/p>\n

Your purchase price can be structured using three factors: listing price, down payment, and financing. Determine how much cash you can put down while still maintaining your current lifestyle and ensuring you have enough working capital to run the business after signing off on the purchase agreement.<\/p>\n

Your initial offer shouldn\u2019t be as much as you can pay but rather a starting point. Never start out with a full asking price offer. You want room to adjust if the seller comes back with an offer that’s less than ideal. Buying a business is a back-and-forth conversation full of negotiations for setting terms and conditions. The seller knows their ideal offer, but if you feel that the price is too high, start lower. They’ll likely make a counteroffer, which will indicate whether or not you two can reach an agreement that will benefit and protect you both.<\/p>\n

Once you settle on an amount, you’ll want to put your official offer in writing. A verbal agreement can be lost or refused, but it’s hard to retract written word. Using a business broker to help you draft your written offer is an extra step toward protecting yourself and making sure the agreement is fair and legal. A broker can also help you negotiate<\/a> a fair purchase agreement and keep communications between you and the seller confidential and organized.<\/p>\n

Here are some guidelines for what to include in your letter of intent:<\/p>\n