So, you feel that it’s the right time to be a business owner, but you don’t feel like you have a great idea to start a business. Or perhaps you’d rather not deal with the challenges of starting the company from the ground up. Regardless of the reason, you want to jump into the business market and scoop one up for yourself. But how do you go about it?
While acquiring an existing business might seem like a simple process as compared to starting your own business, it can be a bewildering experience for a greenhorn. After all, you want to avoid blundering through the process and get the best deal possible. Business brokers, like Verified Businesses, can help; not only can they clear contradictory information but can also help you find a business that suits your acquisition criteria. Here are three useful tips when dealing with a broker to buy a business:
1. Know What You Want To Buy
Start with a plan. You don’t want to go with any business available. A broker will not take you seriously if you don’t know what you want. While the perfect option might not exist, it helps to have a mental image of what a compromise might look like. Some of the things you need to define for your broker when looking to buy a business include:
- The location of the business: Do you want an out-of-town business or one that is near your home? Whether you want a local or out-of-town option, know that factors such as taxes can affect the bottom line.
- Niche: Which industry do you think would be best for your expertise or experience? What are your hobbies and interests? Make sure the broker understands the areas that work best for you and align with your skills and interests.
- Size: Do you want to acquire a small, simple family business or a mega-company?
2. Understand The Broker’s Role & Fees
Typically, brokers are paid by the sellers. However, if the broker is your representative, it is imperative that everything is clear regarding the broker’s fees and role. Is the broker helping with the due diligence? When a broker is representing your interests, they will look for businesses that match your needs, find out about copyrights and patents. They also review profit and loss accounts to determine whether the business is a good fit. A broker will also help you find a company that presents less financial risk and more profit for you.
3. Have The Necessary Funding
A broker can’t pre-screen a business for you unless you prove that you have the funds to close the deal. So, when working with a business broker, make sure you have the necessary funds and clearly define your financial comfort zone. Also, when you’re looking to purchase a profitable business, it is imperative that you have the finances in place. After all, your credibility as a buyer rides on your finances.
Acquiring an established business is an entrepreneurial feat that can have a significant impact on your future. A broker helps streamline everything before you pull the trigger.