Buying or Selling a Business by William Bruce, President, American Business Brokers Assn.: How to Find a Business for Sale

Buying or Selling a Business by William Bruce, President, American Business Brokers Assn.: How to Find a Business for Sale

Wednesday, December 30, 2009
How to Find a Business for Sale

How to Find a Business for Sale

from wikiHow - The How to Manual That You Can Edit

Let's suppose you have done some soul searching about the future,
considered the advantages of business ownership, and decided that you definitely want your own business. You’re ready to proceed with all deliberate speed. What’s next? Where do you look to find a business for sale?
Steps

1. Talk to Family. Most folks may not have thought about it, but probably the first place to look is within the family. Is there a family member, close or extended, who owns a business? Would they, for one reason or another, consider selling it? Are they approaching retirement age? Do they appear “burned out”? Are health problems limiting the amount of time they can devote to the business? Do they want to travel? You never know until you ask. However, some words of caution are in order when dealing with family. Don’t take any short cuts just because it's family. Of particular importance when family is involved is the “due diligence” phase. Take a hard, critical look at the business just as if a complete stranger owned it. Make sure it is the right business for all the right reasons.

2. Look in the Sunday Newspaper. Sunday is traditionally the day that businesses for sale are advertised. Look under the classifications of “Business Opportunities” or “Businesses for Sale”. Some newspapers have both classifications. There are local businesses for sale listed in both sections. Some ads are pretty “scammy.” There will be many ads for vending routes (with grossly overpriced vending machines) and home based businesses including medical billing (with grossly overpriced computer software and no clients). But don’t despair, the difference between the “scammy” and the legitimate local businesses that are for sale can be recognized. One quick way: local businessmen use local telephone numbers, not toll-free ones that are answered half way across the continent.

3. Browse the Web. With a computer, you’re sitting right in the middle of the world’s largest library. Just go to any search engine and enter “Businesses for Sale”. Hundreds, perhaps thousands, of sites will pop up. To narrow down the sites, enter: “Business for Sale in Florida” (or whatever state). Some websites can drill down to a zip code or key word.

4. Contact a Business Broker. An experienced business broker is familiar with the local market and usually has a considerable number of businesses listed for sale at any one time. He can assist with everything from focusing the search, preliminary screening of several offerings, visiting the businesses, buyer-seller meetings, cash flow calculations, pricing rationales, offers to purchase, negotiations, contingencies, and closing. When using a business broker, plan on spending some time with him. He needs to get to know you and your requirements. And you need to get to know and trust him. To insure maximum benefit from his experience, be honest with the broker about your needs. Let him know what kind of income is needed from the business and what investment capital is available. Give him any limiting conditions that will influence the decisions.


Tips

* Finding a business is just the first step. Make sure to follow accepted procedures in qualifying the business including the standard due diligence checklist.
* Be prepared to sign and abide by a confidentiality agreement to receive details on the business.
* Find out if the business broker legally represents the seller or if he/she is a transactions broker facilitating the transaction without representing either party as agent.


Warnings

* Beware of unreported cash claimed by the seller of a business. There may be some, but it can't be used in valuing the business.


Sources and Citations

* www.AmericanBusinessBrokers.org
* www.BizBuySell.com
* www.BizQuest.com

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Posted by William "Will" Bruce at 2:02 AM
Labels: business for sale, Businesses for Sale in Mobile Fairhope Gulf Shores Alabama, buy sell business