I am an advocate of finding a business that you like and feel comfortable managing. You, like every other prospective buyer, have a vision of being your own boss and calling your own shots. An old saying in the real estate industry is … "The three most important things a buyer should look for are location, location & location." While location is important to a business buyer, be aware that track record and management round out the three components of a successful business. Let me assume that you find a business that you like and its location is fine. But because of poor management, the business may not show the greatest record of accomplishment. Purchased for the right price and terms, this business could become more successful with proper management making it a good way to achieve your vision of being in business for yourself. Finally, be aware that many businesses sell for much less than they are originally listed… sometimes-even 50% less. So, if it is a business that you like, do not be afraid to make what you consider to be a low offer.
The process of buying a business is as follows:
¨ Evaluate the basic information on alternative businesses that sound interesting to you.
¨ Visit the business (if possible) without announcing yourself as a buyer (incognito) to get a "feel" for the business.
¨ Do your preliminary evaluation, based on the information provided by the seller to the broker and you.
¨ Make an offer, assuming that all of the information you have been provided is correct, but include contingencies, which allow you to confirm such information.
I will write an offer to protect you as the buyer.
¨ Once a sales price is agreed upon, make a closer investigation of the business, confirming to your satisfaction the validity of your offer.
¨ Have documents prepared for the closing. You may agree with the seller to share the cost of a closing attorney. This lawyer will not argue the position for either party, but drafts all necessary legal documents to comply with the agreement a buyer and seller have reached.
¨ Close the purchase, and begin your first day as the owner of your own business. The seller/Franchisor, will assist in an orderly transition because most of his money is coming from your success.
¨ You are part of the American Dream - You and your family own your own business!