Resouces for Buying a Business

What should I look for when Entering a Business?

The following are some of the most common questions asked by potential clients. The responses are based on both experience and knowledge. If you have any questions that we have not covered please don't hesitate to contact us.

How long has the business been in business?

A business with a long track record means there are good reasons for that business to be operating. It will be well known in the area, and people will be used to patronizing the business or using its services. The longer it has been in operation, generally, the better the business.

How long has the present owner owned the business?

The longer the present owner has been in business, the more likely he or she has been successful. People don't stay in business if they are not making money.

Why is the present owner exiting?

If the owner of a business has been in business for six months, is 37 years old and wants to retire, you should be suspicious. The more valid the reason for exiting the business, the more realistic the person will be in considering your offer. However, keep in mind that after five or six years or more, people do get restless or "bum-out" sets in, or people look for new challenges. Why the exiting person is exiting is an important question—get the answer.

Why are Books and Records important?

The financial records of the business are a good indication of how well the business has been doing over the years. Keep in mind that tax records are not designed to show the business in the best light: no one likes to pay more taxes than they have to, and owners of businesses are no different. Generally, tax returns are a worst case scenario. You need to be able to look at the expenses and discover which ones are non-cash items, such as depreciation, and business use of home and vehicles. How important was the business trip to Las Vegas? A professional business broker can point these items out to you. When in doubt, however, seek outside assistance.

Keep in mind that financial records are only history. There are no guarantees that they will or can be duplicated or repeated. All of your profits are future. In the final analysis, the financial records of the business are an indicator of what the business has done; what you do with its future is up to you.

Photo of Business Agreement

How do I determine whether the seller is reporting all income?

The simple answer is that you can't! You should consider only the income that the seller can show you. We all know, of course, especially in cash type businesses, there is the possibility that the seller is not reporting all of his or her income for tax purposes. This "underground economy" has been well-documented and is in the billions of dollars. Many sellers will tell you about how much they are "skimming," but you should ignore their statements, since they have no way of proving these amounts. In determining whether a business is the right one for you, you should base the decision on the figures actually supplied to you by the seller.

Being in business for yourself can be a daunting prospect. There are no guarantees. At some point, after all of your investigation is completed, you will still have to make that "leap of faith" that is necessary to proceed with the purchase of the business. You will have to work hard, perhaps even "tighten your belt" a little and perform many different jobs to be successful in your own business. But, if running your own show, making your own decisions, not having to worry about job security (remember, no one can fire you from your own business), and just being on your own are important—then owning a business is for you. After taking this leap of faith, almost all business owners will tell you that they would never go back to being an employee.

Business Search System

  1. What geography are you interested in?

  2. How much do you want to earn per year? Or How much cash do you have to invest?

  3. What business types would you consider?

  4. We identify the SIC (Standard Industrial Code) codes for your identified business types.

  5. We search through over 12 million businesses nationwide listed with Dun & Bradstreet.

  6. We tell you how many businesses fit your profile.

  7. We can further refine the criteria to narrow in on the ideal business.

  8. We make the initial contact.

  9. We get financial data from prospective sellers.

  10. If acceptable, we move forward.

A preliminary confidential consultation is available at no charge – in person, on the telephone or via Email, whichever one fits your schedule. Stop wasting your time and energy , adding to your frustration, and getting no where with a typical business broker. Talk with us and you will quickly learn the difference.