When you make the decision to acquire a business, it is one of the most important steps you will take in your life. Along with becoming your own boss, you are setting the stage for what you hope will be an unprecedented financial success. Yet to make this happen, you must first make sure you take the necessary steps to acquire the business. To do so with no missteps along the way, here are the most common steps you will take during this process.
Pick a Business to Purchase
While it sounds simple, picking the right business to purchase is harder than many people realize. To do so, consider not only your interests and goals but also such factors as whether or not the business has a positive cash flow. If it does not but seems to be well-positioned for future growth, it’s probably a purchase worth making.
Talk to an Attorney and CPA
After you find a business you want to purchase, don’t do so before you have spoken to an attorney and CPA. Since business transaction law services will be the difference between you making a smart purchase or one you may live to regret, talk to experts who can explain contracts, taxes, and other matters prior to your purchase.
Negotiate Your Purchase Price
After you’ve found a business you like and spoken to experts who believe you’ve made the right choice, it’s time for you to approach the current owners and start negotiating your purchase price. Most often, you and the current owners will engage in quite a bit of back-and-forth negotiations. However, remember to not sign any contracts until you are absolutely clear on all details of the transaction, and have had the documents looked over and approved by your attorney and CPA. Once you’ve done all this, you can reach a tentative agreement to make the purchase.
Whether you use a bank, obtain an SBA loan, have friends or family give you the money, or even seek out an angel investor to help you get started, always obtain the financing you need as quickly as possible. If you have delays in this area, the current owner may get nervous and decide to sell to someone else.
Close the Deal
Once everything is in place, close the deal on your purchase. This involves drafting and signing a purchase agreement, completing financial transactions to buy the business, and obtaining whatever licenses or permits you may need. Of course, have your legal and financial experts with you every step of the way.
By using your best judgment and relying on the advice of experts you can trust, your business acquisition can be smooth and problem-free.