Recommendations From A Business Broker On Acquiring A Business

Purchasing a business is a big decision and one that you need to research thoroughly. You need to find a business that you have some knowledge of, that you think you can run effectively and ultimately improve over time. Many entrepreneurs will want to find a business that they can grow into something more substantial over time, while others might want to keep the business running as it is. Whichever path you take, the journey to acquisition begins with research.

When you have found a business that meets your requirements, it’s important to step back and take time to do your due diligence. You need to investigate every aspect of the business from the financial records to physical assets to taxes, legal issues and more. As every business is different, it’s crucial that prospective buyers consult with their banker, CPA and attorney when compiling their due diligence checklist. Sellers will not have all information, but you can feel free to ask for what you need. Feel free to download our Due Diligence Checklist as a reference to ensure you cover everything and have all the information you need to make an informed decision.

Purchasing a business is, typically, going to be a more expensive option than starting a business from scratch, at least initially. As part of the business buying process, you will need to make an offer and then submit a good faith escrow. It’s advisable to have these funds secured in advance so that you are ready to make an offer when the time comes. If you have the funds available yourself, then this should be very straightforward. You might consider reaching out to your banker to get an idea of what they might be able to prequalify you for before even looking at businesses to buy. Once under contract, you will have limited time to get your bank financing in place (typically 30 to 90 days). You may need to prepare a Business Plan and more.

Acquiring a business can be a delicate process and it’s important that you respect the business as it was before you acquired it. The employees, products, services, and customers all need to be approached sensitively, especially in the beginning. Remember, this business that you are acquiring has been operating a certain way until now and those involved may be resistant to change. To ensure that the acquisition goes as smoothly as possible, introduce changes gradually to avoid upsetting the existing customers and employees . You will learn about the systems, staff and processes during due diligence when you will be building a strong rapport with the current owner.

Acquiring a business that is a great fit for you can take time. There are a lot of different tasks that must be completed to ensure that the sale is completed successfully. To make the entire process as easy as possible, contact Tennessee Business Brokers today and let us help you through the entire business acquisition process from start to finish. With more than 40 years of experience in business, you can be sure that we have the knowledge and expertise to help you acquire the business of your dreams.