Here is the truth-finding a business for sale isn’t a daunting task, but finding a profitable company is. You start doing that by looking for a business in the right way.
Here are some tips that will be greatly helpful if you want to buy a business:
Sources of Funding a Business for Sale
You can find companies from the following sources:
Business Brokers
Contacting business brokers has always been the best way to find a good company at an affordable price. Anyway, you have to make sure that the agent you are contacting is a reputable one. You should only work with the broker if you are sure that they genuinely want to help you, and aren’t just trying to sell off the company for commissions.
The best bet would be to work with an agent who has a strong background of the business. They should have made a brand name for themselves in the market. In other words, contact an agent who is wary of their reputation.
Social Media
Now, social media could help find a business for sales but you won’t be able to leverage social media in a way that you could do with buying and selling other products.
You see, a business sale should be confidential. The ownership of a company changing hands may create a negative impact among the customers, suppliers, tenants, and even the employees. When someone uses social media to list their business for sale and makes a big deal out of it by sharing the listing to everyone, it may grab unwanted attention.
Thus, because of the fear of scaring buyers off, good sellers rarely publish business sale posts on social media. Still, they may do so in private messages and groups. So, it may be beneficial for you to join message groups only for entrepreneurs. You will get a company if you are lucky.
Business Buy Sell Websites
Many websites allow business sellers to make listings and buyers to view and purchase them. For reference, we are going to take a popular one, Easy Buy & Sell my business which asks its users to create a free account and then lets them post their businesses for free.
As a buyer too, you will find it very convenient to buy a company, as you can filter and look for companies in various sectors, at different price points, locations, and other necessary metrics.
The good thing about such websites is that only entrepreneurs and businesspeople visit them. Customers are not really interested in them, and the news about the transaction will very much be a secret.
Another plus side is that some of the sites (like the one we took an example of) have business agents. So, if you visit them and still don’t find an interesting listing, you can contact their brokers who will have leads to more companies.
Questions to Ask While Buying a Company
- Always ask the owner the following questions before buying a company:
- How profitable is the business? How is it performing, and what are its promises?
- Can I get the recent financial statements of the company so that my accountant can review it?
- Who did the appraisal of the company? Also, what things fall under the current price? Does it include all the equipment, inventory, the lease, and other essential stuff?
- Who are the company’s best employees? Can I have their performance review? Are they willing to stay in the firm after the acquisition?
- What kind of challenges has the business faced in the past?
- What were the initial plans for the company? Has it always reached its goals before? If not, what stopped the firm?
- Are all the licenses in place? Can I ask my lawyer to review it?
Are there any financing options available?
