Businesses for sale are not hard to come by if you know where to look. Below are some of the areas where you will find listed businesses for sale:
- Business magazines
In this category, companies for sale are found here in these magazines. They show how companies are doing in their financial quarters and the potential to buy shares.
- Internet
This technological marvel showcases businesses for sale online. With the click of a button, you can see all the businesses listed for sale around the world. You can also buy a business online if all the legal work has been completed.
- Newspapers
They have been at the forefront of bringing news to the whole world. You will find classified ads mainly at the back of many newspapers. This is where you will find a business for sale. On the other hand, you may find that a business has been listed for sale on the front end.
- Trade publications
They have full details of all the companies. They can be found online, in magazines, or even in newspapers.
- Runners
They can be people from your circle. They can be references who know your business search and can help you negotiate the deal. Most of them have insider information that can help you buy a business, although you should be careful as not all brokers are genuine.
The type of investment you have
Your budget will be the engine of your investment. Your sources of capital will be very important. Many sources will need completed business plans or other requirements before they will consider lending or giving you the funds. Your funds will also determine whether an existing business or franchise will be worth buying.
The lawsuits, debts, current assets and liabilities that the company owns are some of the facts that you need to consider when making your investment.
Funding sources
- Personal savings – In particular, this can be one of the most preferable methods, as you won’t have the burden of repaying anyone.
- Support from friends and family – Like your savings, this is a great way to finance the purchase of an existing business. It goes without saying that if you are given free will, then luckily you have nothing to pay back, but in case some give it to you as a loan, you enjoy the benefit of paying it back slowly, with no pressure.
- Seller Financing – Similar to a higher purchase, this is when the seller agrees to let you make partial payments with interest on top.
- Loans: Whether from Sacco or a bank, loans can jumpstart you into owning your own business. However, you will have to comply with the established rules and regulations.
- Sell the trading stocks – Surprisingly, this is a smart way to raise funds. The sale of shares to the public or employees would generate a substantial amount of capital.
- Business Partners – Establishing a partnership is also a good idea. This eases the burden of overhead costs. Therefore, create even more capital.
The required infrastructure
Incorporating new ideas into old ideas will be a difficult task. The transition will also be bumpy, considering that not all business structures will be remade at the same time. Bringing new equipment, staff, and ideas to life and implementing them will be expensive. This will also be affected by the type of investments and funds that are available to you.
What you also need to consider is the old infrastructure. Does it marry your goals and can you use it? Can it be salvaged and used in your new business without a hitch? After you buy the existing business, you’ll need to reassess whether or not you’ll need your current employees or reduce some of them.
- Growth potential
How much ROI (return on investment) are you forecasting? It would be helpful if you benchmarked where the company should be in a period and how capital intensive it will be. This will be guided by the grow your business and objectives set to achieve the desired results.
- Legal process
This is where you engage the relevant authorities of your intent to purchase the existing business. You will need the legal documents to fit your needs. At this stage the potential business for purchase will be evaluated and evaluated.
The following are the legal factors you should consider:
- Permits and licenses: These are the documents that show that the company has legal permission to operate. All documents must be up to date with the current laws and statutes that govern the business in question that is to be purchased.
- Letter of Intent – This is the initial letter sent to the buyer by the seller, stating all the assets and liabilities that will be included when purchasing the business. You will also have the terms and conditions of the sale.
- Zoning Law – These are the laws that govern the location of the existing business for sale. The company must comply with these laws, especially considering the commercial and residential areas.
- Environmental laws: indicate what rules must be followed when it comes to the environment, for example discharge and drainage systems.
- Contracts and Leases – You will need to cover any and all agreements the business had with owners or vendors. You don’t want to be caught off guard when debtors come claiming fees you don’t know about.
- Financial statements: due diligence will be required. You may need to include an auditor and a lawyer to make sure all the documents are in order. Double checking the financial statement will help determine if the business was paying taxes or if the business is financially stable.
- Sealing the deal
Now that you’re done with the hard part, sealing the deal is the most crucial part. At this stage, you will need your attorney to be around when you sign and agree to the terms. All information collected and provided must be available to all parties, thus ensuring transparency.
The process continued before closing the deal.
First of all, the buyer should have done their homework. Due diligence is performed to ensure the business is of value.
Second, the buyer will need to contact an attorney to approach the seller. It is advisable to note that the buyer must use the process advertised by the seller. At this point, the seller will check if he has the requirements requested for the sale of the business.
The buyer presents the seller with a letter of intent. The message will contain the price, terms and conditions, the deadline to close the deal and any other details that may be useful to both of you.
At this stage, if the seller and buyer have agreed, a draft purchase agreement is drawn up. It means the final decision for the sale of the company and the price that both agreed.
Finally, after all is said and done, the last part will be the signing of the contract. The buyer will have to make a payment and both will sign the purchase contract. The signatures will mark the final sale of the business and the buyer will have all rights. The document will be known as a bill of sale after signing.
It is good practice to sign a confidentiality agreement if necessary so that secrets and information remain proprietary. On top of that, the seller is also given a non-compete agreement. This ensures that they don’t open a new business alongside your new business.
In conclusion
The decision to start, franchise or buy an existing business is a milestone in itself. Also, you need to think and do some research to be able to make the right decision. It is safe to say that all of the above options are correct. But because there is only one choice to be made, my advice would be to weigh which one may be more suitable for you and probably align yourself with your experiences and skills for further development.