Steps in buying a business:
- Determine the four factors that will narrow the possibilities:
- Available funds
- Preferred location
- Expected or required income
- Level of daily effort you are willing to give to the new business.
- Contact potential businesses or their representatives. Professional Business Brokers may require the prospective Buyer to execute a legal form. This form, termed a "Confidentiality Statement" or "Non-disclosure Statement", bonds the potential Buyer to never reveal any information about the Business For Sale, including the fact the Business is or was available for purchase, other than to the parties specifically involved in the transaction.
- Narrow the search to the best available opportunity.
- Make a conditional offer to purchase the business supported by a reasonable sum. It is common that a larger amount, "earnest money", will automatically be provided by the Buyer if the business proves to meet the Buyer's pre-stated expectations.
- Using information provided by the Seller, the Buyer has an opportunity to prove his expectations. This period, called "Due Dilligence" is when the Buyer has full access to the Seller's financial, production and inventory records, and in some cases, employees.
- Sign the papers, transfer funds, and assume control of the business.
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