Business Sales

How to Buy a Business

"Your quest to own your own business follows a definite path to success. "

The 12 Step Process to Buying a Business

Here's a 12-step process of the key elements in every successful business purchase.

1. Commitment:
   Acquiring a business is a serious commitment for all involved. You must have the mental and financial commitment to offer price and terms consistent with the marketplace. Better Business Brokerage, LLC can help you find the right business and structure a deal if you're committed to follow through and if you have the financial means to make a reasonable down payment.
   
2. Finding the Right Business:
   A business is available for virtually every budget and ability. Better Business Brokerage, LLC will help you find the right business and will help you develop an acquisition strategy that fits your price and background. If you're looking for a specific business, we can perform industry and market searches to find the exact business that meets your needs. Then we can complete market evaluations and industry comparisons to help you value your selection fairly.
3. Confidentiality:
   Confidentiality is critical to the seller. You will sign an agreement and promise to keep the seller's information confidential for each business we show you. Better Business Brokerage, LLC does its utmost to ensure that the seller's confidentiality is maintained. A breach in confidentiality could significantly harm the seller.
4. Business Selection:
   We will help you select businesses that fit your criteria and circumstances. We will provide you with additional details of the businesses you have selected and will help you narrow the search to one or two of particular interest.
5. Buyer Background:
   At this point, Better Business Brokerage, LLC has a fiduciary responsibility to the seller to verify that you have the ability to purchase the business you have selected, before proceeding further with additional disclosures and meetings. Better Business Brokerage, LLC will have you complete a buyer profile that includes disclosures of your financial ability to complete a transaction, and a résumé of background information about your experience. This step helps us to ensure that you're considering a business that fits your skills, interests, and abilities before involving the seller in the process.
6. Viewing the Business and Meeting the Seller:
   At this point, you will receive a complete package on the business. We can arrange for a visit to the business so you can walk through the facilities and view the operation firsthand. Then we can arrange a meeting with the seller so you can get answers to any additional questions you may have.
7. Making the Offer:
   Now you are ready to proceed by making an offer to purchase with an earnest-money deposit. This step always depends on the seller's acceptance of the price and terms and on contingencies for such items as verification of records, lease assignment, lien removal, acquiring required licenses and permits, acceptance of a non-compete agreement, training period, and final inventory and inspections. During this period, your earnest money is held by Better Business Brokerage, LLC until the Purchase offer is accepted.
8. Presentation of the Offer:
   Better Business Brokerage, LLC then presents your offer, along with your background, experience, and favorable points. Remember, the seller is most likely going to finance part of the purchase price.
9. Negotiation and Acceptance:
   Now the seller will either accept or decline your offer or may make a counter offer. Better Business Brokerage, LLC will help negotiate the terms of the offer and find solutions that satisfy both parties whenever possible. Once the seller accepts an offer, the business comes off the market. The offer to purchase becomes a purchase and sale agreement, with contingencies. When the offer is accepted, your earnest money is held in escrow.
10. Due Diligence and Contingency Removal:
    Now begins the in-depth inspection of the seller's records and accounts. This step does not occur before the offer is made, because experience shows that in-depth due diligence is often wasted if the price and terms have not been negotiated first. Agreement for the lease to be assigned, public-records searches, and verification of assumable loans and trade agreements occur. Once all the contingencies have been removed, then the purchase and sale agreement becomes binding.
11. Open Escrow:
    The purchase and sale agreement and all other documents relating to the sale are turned over to an escrow attorney. The attorney prepares all the closing papers; performs lien searches; and prorates rents, deposits, taxes and other items to the closing date. The attorney also makes sure all secured creditors are satisfied, all other security agreements and related documents are completed, and final arrangements for the payoff or assumption of all notes and leases are made. All parties review these arrangements to make sure they meet everyone's satisfaction. The escrow attorney also keeps copies for at least three years following the close of the sale. The attorney costs are minimal and are shared equally between the buyer and the seller.
12. Inventory and Closing:
    Final inventory is taken, and the transaction is closed. Then it's celebration time-you've joined the ranks of those who are living the American Dream!

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