In speaking with potential buyers the business brokers at Business Acquisitions, Ltd. often find that many are not familiar with the process inherent in acquiring a business.

The business acquisition process includes:
Personal Considerations/Timing – When do you want to purchase a business? Will you need to leave current employment? Understand that it can take six months to two years to actually be in your new business.

Financial/Investment – What is your net worth? How much can you personally invest in a business? Do you have collateral to offer if needed to finance a business?

Type of business – Is there a niche in which you have experience or is there an industry or type of business you are definitely not interested in? A business or industry that plays to your background will have definite advantages.

Looking for opportunities – There are a number of websites that offer lists of business opportunities by geography, type of business, etc. Contacting local business brokers or viewing those websites expose you to additional opportunities. Look at businesses you can afford to purchase – it will only be frustrating for all parties involved in this process if you attempt to consider businesses beyond your financial capability.

Coordinate with the intermediary – Most business opportunities are offered through an intermediary (usually a business broker). Recognize that you will need to provide confidentiality agreements and personal financial statements before proceeding with the process.

Reviewing potential opportunities – When given access to the information on a business, then it is time to evaluate the viability of the business for you. The intermediary that has listed the business will likely discuss the business in detail and give you access to detailed operations and financial information.

A buyer-seller meeting – If you decide that you have an interest in pursuing a business, a buyer-seller meeting is the most likely next step. Generally the intermediary will set-up and facilitate buyer-seller meetings and the showing of the business itself. Submitting a non-binding letter of intent (LOI) – When a decision is made to pursue the purchase of a business, the next step is submitting a non-binding letter of intent. The LOI provides a basis to begin negotiations on price, terms and all other matters relative to the purchase of the business.

Sourcing financing options – It is appropriate to begin searching for financing options – typically SBA financing – at this point in the process. A good business broker helps lead a prospective buyer through that process.

Due diligence – Although some limited due diligence can take place after an executed LOI, after the asset purchase agreement is executed and financing is underway, more detailed due diligence is performed.

Accessing professional advisors – Buyers should be represented in the transaction as appropriate to assure that their interests are appropriately represented. Attorneys, CPA and financial planners can provide that representation.

The closing – Typically the closing is a quick, smooth meeting where the appropriate documents are executed with the assistance of attorneys.

Although Business Acquisitions, Ltd. does not typically provide buyer representation, we are happy to talk with you and answer questions you may have about the process.

Please review the businesses that we currently have available and contact any of our business brokers if you have interest in any of those opportunities or if we can answer any questions.