In 2018, people sold over 10,000 small businesses. If you want a business but don’t want to start one, buying a business can be a great choice.
You can find the right company that makes you excited about running a business.
But first, you should know how to buy a small business. Here are a few things to consider.
Determine What You Want
The first step to buying a business is to decide what kind of business you want. Think about if you would prefer a product or service-based business.
Consider if there’s an industry that you would prefer the business to be in. On the other hand, think about any industries you don’t want to work in.
You should also consider the business structure. A small business could be anything from a sole proprietorship to an S corp. Each structure has unique tax codes that you should consider when buying a small business.
Work With a Broker
If you aren’t sure how to buy a small business, consider a broker. You can find a business broker to help you find the right business for you.
Brokers understand the different types of businesses, and they can help you compare different options. Your broker can also recommend a specific business that they know is for sale.
While you can buy a business yourself, having help from a broker will make buying a small business easier.
Research the Business
Once you have a prospective business that you want to buy, you should research it. Learn as much as you can about the structure and the products or services the business offers.
You should also look at any financial records regarding sales, revenue, and debt. A small business may look good at first. But if they have a lot of outstanding credit, you may not want to buy it.
This is another great time to work with business brokers. They can help you go through the more technical
information to help you decide on a business.
Negotiate the Deal
After you research a business and decide to buy it, you have to figure out a price. The current owner may have a price they want, but you should negotiate.
You can use the information you gathered from your research to help negotiate a better deal. For example, if a small business has good sales but a lot of debt, you can leverage that.
Valuing a business can be difficult, so it may take some time to figure out the right price. But once you and the seller agree, you can move forward with buying a business.
Once you’re ready to buy a small business, you can sign the paperwork. That will transfer ownership to you, and you can start running the company how you see fit.
Deciding How to Buy a Small Business
Buying a business sounds like a lot of work, but it can be surprisingly simple. If you know how to buy a small business, you will know what steps to take.
And if you aren’t sure where to start, a local business broker can help. Then, you can navigate the process much more easily.
Want to learn more about running a business? Check out our other articles for more information.
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