Owning your own business can be a very emotionally and financially rewarding experience. A business owner, to a great extent, controls his own destiny and his success depends on his own hard work and intelligence. Unless you become a senior executive in a billion-dollar company, your income potential as a business owner will far exceed what you can ever possibly earn as a salaried employee.
Business ownership, of course, has risks. You may be aware of the high failure rate among small businesses –according to some U.S. Government statistics –as many as 9 out of 10 business start-ups close their doors within ten years. The two primary reasons given by the SBA for failure are:
- Lack of capital
- Poor management
Why Buy an Operating Business? or How Can I Improve My Odds?
Most business failures, however, occur within the first few years of operation, so if a business has survived for two years, then the chances of success are tremendously improved. Most of Business Team’s listed businesses have stood this test of time. When you buy a successful operating business, you will know how much capital is required, and there is a management system already in place. This eliminates the two biggest problems facing someone starting a business from scratch.
Your Business Team Consultant
Your Business Team consultant has received the most comprehensive training in the industry. Many of us have owned our own businesses or have extensive business backgrounds. Your consultant has examined hundreds of different businesses in various industries and is up to date on market conditions that affect business value. Your consultant is a full-time professional in the business brokerage industry and his or her job is to share that expertise with you so you can make an informed and sound business purchase.
How Do I Begin?
Your Business Team consultant will meet with you in private to get a thorough understanding of your business expectations. This is probably the most important step in the process of buying a business. A clear understanding of your needs will increase the likelihood of a successful business match and save you a great deal of time. Your consultant may need to search through hundreds of businesses to find the one or two that most closely match your needs.
Some of the information your Business Team consultant will need are:
- General location
- Start date
- Type of business
- Level of involvement (operator or absentee)
- Amount of money you want to invest
We have businesses priced from $30,000 to $10,000,000. If you do not already have one, your consultant will help you prepare a brief financial statement which will be required by lenders and landlords.
After gathering the necessary information, your consultant will explain the business buying process to you in detail. At Business Team we feel that it is extremely important for a prospective business buyer to understand how a business is bought and the safeguards that must be employed to insure that everything promised is delivered. We encourage you to take your time in this important step so that when a business opportunity becomes available to you, you will be fully informed and confident about your decision.
The Search
Next, your Business Team consultant will begin a search of our inventory to find a business that appears to meet your expectations. Usually within a few days, your consultant will arrange an opportunity for you to inspect the business he or she has selected. Please remember that confidentiality of the business sale is very important to the owner, so care must be exercised to avoid alerting employees or customers.
If, after a visit, the business appears to meet your needs, your Business Team consultant will help you draft a proposal to the owner. As he will have explained to you earlier, many safeguards will be incorporated into your proposal. For example, you will have the option to void the agreement if the seller is unable to verify income figures. We encourage you, by the way, to involve your CPA in this important process unless you have an adequate business or financial background. If the business looks good to you, please be prepared to move quickly. The best businesses sell quickly and indecision may mean a lost opportunity. A good faith deposit check will be required at the time a proposal is made. Remember, you will not be obligated to purchase the business until all your protection requirements have been met. Your consultant will assist you during this process and also guide you through the maze of governmental requirements to become a business owner.
Once your offer is accepted, the escrow holder will publish a bulk sales notice, which in most cases is required to deliver a business to you free and clear of liabilities. The fee for this publication varies depending on the newspaper and escrow holder and is non-refundable. If the business you are buying sells alcoholic beverages you will also be required by the state to file an application and a small portion of their fees will also be non-refundable. Ask your consultant for details.
Congratulations!
Here at Business Team, we feel that the opportunity to go into business should be available to anyone who has the strength and courage to try. We admire your ambition and are pleased to have the opportunity to help you safely and successfully achieve your goals.
