There are two different ways one can become an entrepreneur. The first way is through building a business from scratch. You identify a gap in the market and find solutions you can sell through a company. This usually requires lots of groundwork, and the process can be time-intensive. But is it money-intensive? Not always. The second way is by finding a business for sale.

If you have money to buy a business, you can use it to buy an entire business and make money out of it. Now, as an entrepreneur taking the second path toward entrepreneurship, finding a business for sale is important. How do you do that? How do you find a business that you can buy? Don’t worry. Here is an article to help you out.

Find a business for sale: 3 Best ways

A small business for sale is not something like a brick lying around in the park. In most cases, you must research and find the right business you can buy. This is extensive research. Let me help you find some small businesses available for sale here.

1. Make local connections

When you want to play in the big league, you must know the big players. The first step towards finding the right business for sale is contacting local business owners. Once you know the industry you want to run your business in, you must connect with local business owners.

It is difficult to understand which small businesses in your locality might be ready to sell themselves off. Most business owners do not want to scare their customers away by putting up a “For Sale” sign outside the storefront. When you call these business owners or make personal connections with them, you will have some understanding of who is willing to sell a business.

You don’t need to direct leads from business owners who want to sell their businesses. However, some of them might be able to refer to other business owners who are considering a sell-off.

Another good way to make your small business connection would be through attending industry meetups and conferences. These conferences create the opportunity for you to meet different individuals in the industry. You meet professionals who might sell or help you connect with people interested in selling a business.

You must be outspoken to ask friends, family, and different business owners who might be willing to sell a business.

2. Hire A Business Broker

Brokers are professional firms that work for business sellers. Like a property broker who helps a property owner sell it, a business broker helps you buy your business, and a seller sells one.

But remember. Brokers are hired by the sellers. So, they will always try to negotiate and settle a price for the business that is in favor of the seller. In most cases, an individual broker or brokerage firm has a list of small businesses in the locality that are for sale. They are the ones who drive the talk related to business sales and buying in the industry.

Now, many business buyers might be skeptical about buying business from brokers or brokerage firms. But, unlike scam brokers in other industries, business brokers work differently. Here are a few reasons why you should hire a broker –

A Broker Helps You Identify Your Business Interests

A broker will help you understand and identify your entrepreneurial interests. You may have an interest in buying a business. But understanding what business to buy is a different thing altogether. A broker can help you pinpoint and identify your skills and interests. They can help you identify the industry and the business that is best for you.

Helps You Understand Which Business Not To Buy

A business broker usually has some experience selling a few businesses at the least. They can help you learn which business not to buy. They are better judge of the market trends, opportunities, risks, and rewards of a specific business. A business broker’s skills to identify and analyze your skills as an entrepreneur also help them understand which business is a red flag.

Help With Negotiation

Once a broker helps identify the business you buy, they can also help you negotiate with the seller. They guide you through the process and help you understand the questions you must be asking during the negotiation.

Things to Remember When Hiring a Business Broker

It is great to work with a business broker when you are looking for a business for sale. But, it is important to find a good broker with an understanding of your current needs and preferences. Keep all these things in mind –

· There are two types of brokers when you are looking for a business for sale. There are buyer-focused brokers and seller-focused brokers. In most cases, you will deal with a seller-focused broker whose interest is to sell the business. But you can ask them for guidance.

· If you are buying a business through a broker, they will charge 5% or 10% of the business. This will ensure the ultimate price you pay during the purchase of a business. If you want to escape the brokerage fee, you have to think of other ways of buying a business.

· Not all brokers are honest and competent. There might be risks associated with choosing the wrong broker who is dishonest and incompetent.

It would be a benefit on your part if you have a business broker who works on your behalf and gives you honest and positive feedback.

But always beware of the dishonest brokers who are unscrupulous and are looking for ways to make quick sales.

3. Business For Sale Websites

Another effective way to look for businesses for sale is through websites that list those businesses. Many websites list small businesses for sale. Here are some examples of websites that list these businesses –

· Bizbuysell

· BizBroke24

· BusinessForSale

· Flippa

· franchise gator

· Bizquest

· Bizbuysell

These are like property listings where people can buy a property according to their preferences, such as location, budget, interests, etc.

So, it becomes extremely easy for you to filter through different options using locations, budget, etc. You don’t have to be tech-savvy to find a business for sale. These websites offer plenty of ways to compare and choose the right business to buy.

A good reason to consider these websites is to save time. You can easily rule out business suggestions that don’t meet your interests or criteria.

Furthermore, you have the option to set up alerts for businesses when they go on sale. If they meet your criteria, you can use the notification to be present during the auction. On top of that, these websites set up a visual gallery of a business you are about to buy or are considering buying.

Instead of wasting your time visiting the business storefront, you will have a virtual understanding of a business you can buy. This saves you time and helps you consider different opportunities.

4. Look For Advertisements

The best way to find a business for sale is by keeping your eyes and ears open. Many local business listings and even the newspaper often advertise new businesses available for sale. Industry publications also serve as the best sources of information for owners looking for a business to buy.

Now, you can wait for a seller to advertise on different media that you check. But you can also advertise yourself as a buyer. You never know when and from where an opportunity to buy a business will come from. So, you can advertise yourself as a potential buyer and let the lead find you.

5. Keep Your Network Growing

It is not difficult to buy a business, especially when you are an established businessman/businesswoman. You can leverage your network in the industry to identify potential sellers who want to sell their business.

So, it is really important to stay connected with your network or the industry connections you have. These connections will help you identify and potentially find businesses that are for sale.

These can help you in two different ways. Firstly, if your industry knows you as a person helping other small businesses out, a small business will be an easy deal away. Even the network can send the seller your way because they are aware of your reputation.

Second, if you have a network in the industry you are interested in, you can definitely find people who want to sell a business. Also, your purchase of a business will be out of passion for a particular industry that you love.

Found a Business for Sale! What’s Next?

From starting your research to finding a business and closing the deal, it is a lengthy process. So, if you have found a business for sale, what do you do next? First, you have to consider if it is the right business to buy. Then you follow the steps given below –

1. Select A Business to Purchase

You have identified a business for sale. Now, the hardest part is to settle on the idea of buying it. The buying process is usually the same for most of the small businesses. But before you settle on a business to buy, ensure that it checkmarks all the following boxes –

· A business that has a steady cash flow.

· You should be familiar with the industry that the business operates in.

· A diverse base of customers.

· A business with potential in the long run.

· You must enjoy running the business.

2. Value the business

You don’t want to overpay when you are looking for a business to buy. Many business sellers overvalue their business. That’s why a proper valuation of the business is needed when you are selling a business.

Here are two different ways to evaluate a business –

· Do it yourself.

· Hire a professional.

If you are comfortable evaluating the business yourself, then it is fine. But, if you want an objective overview, having a third person do it for you is a better idea.

3. Negotiate a Purchase Price

Once the evaluation is done, you have to start the negotiation process. In most cases, the negotiations are done by making an unbinding offer, which can be both written and verbal. When your seller finds the offer anywhere close to their expectation, they will be ready for negotiation.

Usually, you and your seller will go back and forth with the price. But once you reach a state of agreement, you can state your terms. The terms can also change if there are any findings during the due diligence that change your opinion of the business’s valuation.

4. Finalize your letter of intent

The letter of intent lists all the terms, discussions, and negotiations you had regarding the business. Your negotiated price and intent to buy the business are also listed in the Letter of Intent. In business terms, it is a non-binding agreement that initiates the acquisition process.

5. Complete Due Diligence

Now, the next step is to complete due diligence. Once you complete your Letter of Intent, you finalize your intent to buy the business. With this, you are eligible for due diligence. At first, you only get an overview of the business and its performance. But through due diligence, you have access to its legal data and financial state ( in numbers).

6. Get Financing

While the due diligence process falls in place, it is time to start working on Financing. You want the transaction to go smoothly. That’s where I always plan in time. During due diligence, you will be working on financing the transaction. In most cases, owners purchase a business using a combination of equity and debt. It means the buyer has to have some amount of the purchase price on hand, and the rest they will collect from loans.

7. Close the Transaction

If the buyer does not find any surprising fact during the due diligence and if the business is clean, it is time to finalize the transaction. This phase is related to the transaction and the final purchase agreement.

The negotiation phase requires assistance from a lawyer. It would be wise to hire a lawyer who can help review the agreement and ensure that the agreement is clean.

Once both the seller and the buyer agree on the purchase terms, it is time to choose a closing date. Next, the buyer can hand over the money to the seller and take control of the business after signing the agreement.

Final Words

As this article explains, you can look for a business for sale by following any of the five ways. Once you find a business to buy, you can go ahead and follow the seven steps mentioned here to help you understand the process. Hopefully, this article was helpful. However, if you have any queries, let us know through the comment section. We are always eager to hear from you and provide solutions to your queries. Thank you for reading.

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