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How do you go about finding that dream business and making it yours?

You are an aspiring business owner. You have considered the types of businesses that are in your price range and that you would feel comfortable running. You've researched your options and taken a close look at the marketplace. Now, you have a picture in your mind of the business you'd like to purchase. How do you go about finding that business and making it yours?

Finding the right business to purchase may be the most exciting phase of acquisition. Having a good feeling about your choice is important. Being passionate about your work can pay real dividends. However, it's also essential to keep a cool head in the investigation and negotiation processes.

Look for a business that's for sale

Once you know what you're looking for and what you're willing to pay for it, it's time to find specific businesses to target for purchase. The clearest path is to seek out a business that's being offered for sale.

When a business owner wants to sell their company, they have a number of options. They may begin by networking socially and in the local business community. The best businesses are often snapped up before they're widely advertised. Ask around. Talk to business owners, to professional contacts, and to friends and family members.

When a business owner wants to make it very public and well known that their company is for sale, they will advertise. They may start with local business and industry publications. If you've done your research, you should already know which publications to follow in your area and in your market sector.

Business owners may also advertise in newspapers and online. There are websites dedicated to business sales such as like BusinessesForSale.com with search features that make it easy to find exactly what you're looking for. Business owners may also advertise on free, general classified advertising sites.

Look for a business that's not for sale - yet

If the usual publications and websites are offering you a wealth of options, then you may be happy to limit your search strategy to businesses that are actively being sold. However, the best business for you may be one that isn't explicitly for sale. Almost every business is for sale at a given time, for the right buyer and the right price. If the business you want to own already exists but isn't actively being sold, then see if you can acquire it.

How is it best to begin? You can talk to the owner personally, or you can make contact through a representative like a broker or a lawyer. The best approach depends on the company and the industry. Use your judgement. However, speaking to the owner personally has some distinct advantages. They may be thinking about selling, and they may have information to offer that will influence your level of interest.

Moreover, if the current business owner has developed the business and built it up, then they may want reassurance that you'll continue in the same spirit. If that's the case, then let them know. Even if the owner wasn't thinking of selling, the right offer and assurances that the business will be in good hands might change that.

Negotiation 

Make sure that you have well-defined parameters based on the average market value of the type of business you're looking for, and on variable factors like location and profitability. If you have researched the industry thoroughly, you may be able to make rough predictions on the direction of the market and on future profitability. Just as importantly, you should have an idea of the degree of risk and uncertainty.

You can use both in setting your parameters and in negotiating a purchase price. For example, "With the state of the economy today, this business has a fairly low level of profit. It's impossible to predict where the economy will go from here. Things could get worse before they get better. I can't offer you more than the value of the business under the present economic circumstances."

Investigation

The investigation process, otherwise known as due diligence, is the gathering of information by a potential buyer before buying a business. 

This complete appraisal of the business is one of the most important parts of the buying process, looking beyond face value and going through the details with a fine tooth comb. The due diligence period usually starts after both the buyer and the seller have agreed on a deal, and can last between 60 and 90 days.

Next steps

Once you've identified a business or a few businesses that you're interested in, it's time to do your research and narrow your options even further.


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