Hunting for a company can be challenging and, to help you, we have compiled these hints.
1. This may appear to be a strange tip but a really important one. Make sure you are ready to buy the business. But you say; “Why would I look for a company if I’m not ready to buy?”
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Yes, it seems a no brain. But from my experience, working with thousands of buyers, some are really ready to buy and others seem to enjoy the process.
2. Do a little research on the type of business you would enjoy running. When you develop a business, you are buying a job. Therefore, it is important to learn what is involved in operating the business in that business.
3. Get more information about the business. Request copies of at least three years of tax returns and a current profit and loss statements and see your CPA if you are uncomfortable reviewing them.
4. Ask the seller for an equipment list. If you are purchasing a property, ask for a site plan and see if the proprietor has a current valuation of the real estate. If the business is renting the property, ask for a copy of the lease. Check the terms regarding the covered period, rental period.
5. Examine regional ordinances as to what functions the company may and may not engage in. Perhaps you want to buy a restaurant and include live music at night. Regional laws may contain a noise ordinance that would prohibit a band.
6. Where do you find businesses for sale? You can check the paper, although it is much thinner than the companies for sales columns compared to five decades ago, there are still businesses listed there.
7. In many states, a real estate license should sell to businesses, but a company’s broker is trained to house businesses, not homes. Many business professional brokers belong to business institutions, such as the International Business Brokers Association and the Florida Business Brokers.