The main advantage of buying an existing business, versus starting one from scratch, is that there is existing cash flow (presumably, positive cash flow). Beyond that, there are existing processes, people and resources in place from day one. While these aspects may be improved by an in-coming buyer, the fact that they exist in some fashion accelerates the possible ROI opportunities. Additionally, existing businesses are typically easier to finance.
Buying or selling a business can be a complicated venture. While some businesses are sold without the help of accountants and attorneys we strongly recommend that both the buyer and seller engage professionals.
Depending on the complexities of the business the former owner will offer varying levels of training. On most small businesses the owner will offer training for two to four weeks at no cost to the new owner
As part of the acquisition process you will have to go through due diligence. During this period the seller is required to present documents to verify his profit numbers.
Ultimately, any business is worth what somebody else would be willing to pay for it. While seemingly an obvious and simplistic statement, many business owners (especially Main Street) are challenged to objectively view their business in this manner. How that market value is established and the right asking price is determined can be subjects of complex formulas, depending upon the size and nature of the business. The two main factors that determine worth: cash flow and risk. Contact Us for a Free Business Evaluation
There is a great deal of variation in the time frame but if we had to pick an average time, eight to nine months may be close. While this may sound like a long time all of the facets of selling a business, including, listing the business, finding buyers, interviewing buyers, writing contracts, due diligence and finally the closing process are all time consuming.
The quick answer to this is, better results. Business brokers and intermediaries specialize in preparing, pricing and marketing businesses for sale, and are often tapped into a pool of buyers. You can focus on running and improving your business, while your business broker is finding and vetting the buyers, and guiding the process to a successful closing. Given this expertise and focus, you are far more likely to sell at an optimal asking price and optimize your net proceeds, in a shorter period of time.
Disclaimer: The information provided on this website is for educational purposes only and to provide general information of the services provided by Reliable Business Brokers. There is no professional relationship between you and Reliable Business Brokers. No legal advice is provided by this website. FL License #SL3240774
Ross Miller, International Business Broker - Office 954-399-2060 Fax 603-386-6610 - RossMiller@ReliableBusinessBrokers.com
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