A business owner may decide to sell their business for several reasons ranging from low conversion rates, expensive customer acquisition costs, to a buggy product. Also, their plans and priorities could be different compared to when they first started the business.
As a buyer, there are various ways in which you can find a business for sale. You also need a couple of items such as:
- Website information for companies of interest
- Leads from chambers of commerce
- Better Business Bureau information on companies
- Tax information on companies
When looking to buy a business, you may want to start by asking some of your well-connected acquaintances if they have leads on any businesses that are up for sale in your local area. If that is not the case, you should then keep your eye on the classifieds section of your local newspaper for business for sale ads. You can also scour the internet by using keywords for your local area. For example, if you live in Miami, you may want to search using businesses for sale Miami as your keyword.
When evaluating a business, see if you can find the business’s address from the ads and visit in person to do an assessment. This will give you a good idea if this is a business you can see yourself running. Also, you should check with the local chamber of commerce for leads. A local chamber of commerce that is active is an invaluable part of the business community.
Some of the functions of a local chamber of commerce include:
- Publicizing business expansions and openings
- Conducting local networking events
- They serve as a central conduit for economic developments
After Finding the Ideal Business, What Next?
After you complete your search for a business to buy, you need to ask yourself a few questions before you finalize the transaction. Firstly, you need to do some due diligence and evaluate whether the business is really a good opportunity. While it’s impossible to know if your investment will pay off, you need to have a good sense of what your ROI threshold is for acquiring this business.
Next, you need to know if you have your family’s support. You need to be sure that your family understands that you will need to invest a lot of time and emotion into the new business. If they don’t support you, your biggest challenge could be coming from home rather than the business. You also need to either have or have the ability to find someone who will help you manage the business when you are not around. This should be someone who you trust fully and has an idea on how the business should be run.
Even if you think you have found the ideal business, you need to know if the business itself has any skeletons in its closet. Dig deep to find out everything about the business beyond what the previous owner told you. For example; has the business ever been a crime scene? Has it ever been vandalized? Is the location hazardous? Has the seller gotten into trouble with the government? Perhaps, the skeletons in the closet are less insidious, and a negative SEO campaign has been conducted against the company’s site by a business rival. You can look into this by evaluating the backlink profile of the site you are looking to buy using third-party tools.
One of the main things you need to evaluate once you’ve found your ideal business is the owner’s true intention in trying to get out. Make a point to ask the exact reason why they are selling the business. It’s expected that you will get very vague answers like retirement, poor health and venturing into other opportunities. The truth is that you might never find out their reason for leaving, but it’s definitely worth trying to find out. If you get a bad feeling, now is the time to trust your gut and move on. If the owner is really serious about having the business succeed after they walk away, they may request to stay on as a paid advisor or work part-time for you until you are confident in running the business. Their willingness to do this is good indicator that they are invested in the future of the business.
Conclusion
Before you take the plunge, determine the target market and level of demand your business will have. Make sure that you are ready to go all in and devote as much time as possible to running your new business. You should be prepared for the rigors that are part of business ownership.
Also, hire a team, such as a lawyer, accountant or business broker, to guide you through the whole process of finding the business, determining its value, and actually buying it. Otherwise, you may make mistakes that you will later come to regret.
