Wondering how to buy a business?
Many people do, especially when they see the benefits others have achieved by taking this path.
It isn't just that buying a business is a good way to run an immediately profitable business. It's also a great way to work around the risks, uncertainties, and time investments of starting a business from the ground up.
You can buy a business that already exists—one with an established brand, a satisfied customer base, a strong network of vendors, and loyal, knowledgeable employees. These businesses can be found in nearly every industry, and many interested buyers find an abundance of options that align with their interests, experiences, and ability to raise capital.
Let's learn how to buy a business that can help you achieve your goals. But first, let's spell out some of the advantages.
What are the advantages of buying a business?
There are lots of benefits to buying a business. Here are a few that might matter to you:
- You'll take control of a profit-producing business without working through the pains and trials of startup.
- You can vet a business through a proven acquisition process rather than hoping for the best.
- You can gain access to a prebuilt pool of customers who know and are loyal to the business.
- You'll connect with a team of vendors and suppliers who know the business intimately and are prepared to continue the relationship far into the future.
- You can gain an experienced team of employees who are experts in the business's processes and can support you in its continued success.
- You can gain the rights to a proven business concept that's already experienced the success and sustainability you aspire to create in a business.
As with any opportunity, there are pros and cons that you should consider before diving in. This article can help you work them:
What should I look for in a business?
Any business you choose to pursue should align with your strengths, interests, and goals. Consider the kinds of environments you thrive within, the amount of contact you like to have with others, the knowledge and skills you possess and can translate to other businesses, and the outcomes you hope to attain from business ownership.
This resource can help you name your must-have's:
Once you have an idea of the industry you’d like to work in and the markets you’d like to serve, start searching for businesses that meet your criteria. Many owners prefer businesses with the following characteristics:
They show evidence of sustained profitability and operational efficiency.
They have a sound reputation.
They're part of a growing or enduring industry.
They're adaptable to meet changes in market preferences.
They meet your criteria for location, time commitments, and risk.
They are attainable for the amount of money you can raise
or afford to invest in the acquisition of a business.
Where can I find businesses to buy?
There are several popular listing sites sellers and business brokers use to market a business. In most cases, you can view their listings for free and without signing up for a service.
You could also work with a fee-based, “buyer’s representative” broker who will help you find businesses that meet your goals, interests, and budget.
Are you interested in connecting with a broker? Click the Connect button below to get started:
Many successful entrepreneurs choose a third path: They buy businesses that aren't for sale. Usually, these owners study their target industry and look for owners who may be inclined to sell. They approach these owners directly and try to arrange simple purchase deals that benefit both the buyer and seller. Want to learn how to buy a business with this strategy? This article is a great resource for getting started:
Can I afford to buy a profit-generating business?
With options like small business loans, 401(k) access, and seller financing, it's entirely possible. These forms of financing may even help you afford a larger, more successful business than could take on alone. You can read about these options and others in our article, Your Go-to Guide to Financing an Acquisition.
Can I learn more on how to buy a business?
You can build a free, customized action plan that will spell out the specific steps you need to take. Your action plan will tell you how to buy a business, research opportunities, conduct due diligence, and put together a sales agreement. Get started here.