If you’re planning on buying a business without using a broker, there are some things that you should keep in mind. First, make sure that you’re working with a buyer who is qualified to purchase your business by asking for their personal financial statement and requesting they sign an AND.
1. Do Your Research
Before you buy a business, you should put a lot of thought into the type of business that is the best fit for you. Consider how much time you want to dedicate to running the business, what your ideal size is and more. Also, look into any legal contracts that are tied up with the business, including any leases.
Once you have a clear picture of what you’re looking for, it will be easier to find businesses that are actually for sale. Use your professional network to ask fellow business owners if they know of anyone who wants to sell their company. You can even reach out to attorneys and CPA who often work on business deals and may have connections.
When you do find potential buyers, be sure to ask them for a personal financial statement to ensure they have the funds and credit history to buy your business. Also, you should ask them if they are willing to sign a non-disclosure agreement.
2. Reach Out to Potential Buyers
When you are ready to sell your business, it is important that you find buyers that have the financial capability and experience to run the company. A broker will often help you locate potential buyers and connect you with them, but it is your responsibility to make sure that you are selling to someone who can take care of the company after the sale.
Start by reaching out to family, friends and local small business owners who might be interested in your business. Ask them if they would be willing to sign an AND and if they have the capacity to purchase it.
If you can keep the process moving along, you may be able to save a significant amount in broker fees.
3. Prepare for Negotiations
It’s important to have your ducks in a row before you start negotiating. This includes having a solid financial plan, vetted buyers, and all of the necessary paperwork completed.
This can include a letter from your bank or even an investment advisor.
4. Negotiate the Sale
Start by identifying what type of business you want to buy.
As a business owner, you know your company best. This is especially true if you’re selling your company to an insider (a family member, for example).
A business broker can help you vet buyers and negotiate the terms of the sales contract. They can also ensure that the sale of your business complies with all local laws and regulations needs read more hear.
