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The First Time Buyer Process

The process of buying a business in a precise can be explained in a few simple steps. There are many reasons that people buy businesses, including the desire to be one’s own boss or reach heights of success never previously achieved.  However, there are certain strategies that business buyers should avoid, such as buying a business that they simply don’t like. In the quest for profits, many prospective owners may opt to do this, but it could ultimately lead to failure.

Here are some simple steps that all potential buyers should consider in this endeavor:

Gathering Information

One cannot afford to be ignorant in any financial transaction, and this especially applies to buying a business. You must research the success or lack thereof of any business that you are considering purchasing and the variables that caused either scenario. There is nothing worse for a buyer than walking blindly into a deal.

The Right Broker

The next step in this process is to find the right business broker.  This point cannot be overlooked or disregarded, especially for those new to the business buying process, as they will benefit greatly from working with a guide with so much experience.  Business brokers are also able to gain access to information that prospective business owners simply cannot. They will be your guide through this process.

The Confidentiality Agreement and Meeting the Seller

After finding your broker, you will want to sign the confidentiality agreement so that you can access information about the business you would like to purchase.  As soon as you have the business’s marketing package, you’ll want to have your broker schedule an appointment with the seller. It is imperative that you prepare a list of questions on a range of topics for the seller. Price is secondary in the long run compared to the infrastructure and history of the business.  By asking the right questions, you’ll be able to determine any business’s long-term potential.

Review

Now that you have all of the materials from the seller, you’ll want to review all of the information before making your final decision. Again, this is where your business broker will be invaluable with years of industry experience. Your broker will evaluate the information with you and make sure you are making the right choice.

The Offer

Finally, it is time to make your decision and render an offer to the seller. Your broker will help you draft your offer in writing and work out every fine detail. If the offer is accepted, you and your business broker will then look at everything from financial statements to tax returns.  You will evaluate the company’s assets. Once again, a broker will be invaluable in this process.

As one can see, there is so much that goes into buying a business, and it is a bad idea to initiate this process alone. Contact Broker Matcher today!

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