When potential buyers contact us we generally start off the conversation by asking the question "Why do you want to buy a business"? These are generally the 3-4 responses we receive.They range from it that time in your life when you don't want to work for someone else and have the desire is there to purchase a business. Or you are in between jobs, or seeking a career change. Or you have been out of college for a couple of years and its that time to go into your own business. Or you’re a business owner and want to grow your company in a different direction, or have another complimentary stream of revenue.
We at Hartford Business Brokers represent “sellers” of existing businesses. Our Clients pay our “success fee” or “commission” as it is called. You the Buyer do not pay our fees.
We will represent a “Buyer” shopping for a business when we enter into a written contract for a Directed Search and you the Buyer pay our fees. We will disclose our arrangement to the prospective seller; this is so we can have 100% loyalty and services to you.
Businesses today are for the most part classified into the following business sectors:
- Business Services
- Personal Services
- Wholesalers & Distributors
- Food establishments
If you are going to be successful or increase your chances of success, you should have general or specific background in that business sector – More important is you probably will need financing and in 2013 financial institutions look for experience in that business sector, either specific or general.
In this economic recession Banks are continuing to make loans on good businesses with qualified buyers. Today loans under $3 million dollars are backed by the SBA. The loan programs are administered thru local designated SBA Banks. If you want to get out front of the financing piece call us for the name and contact information of a Bank in the area.
With the advent of the internet a number of businesses for sale web sites have cropped up: go to them, use them as a resource:
Many times a business for sale is represented by a Business Broker. That’s a good thing, as the Broker wants to sell the business and make a commission and has no emotional attachment to the business as a seller normally does.
Contact the Broker by phone or e-mail. Be prepared to tell the Broker who you are and what business they have advertised you are interested in. The Broker will e-mail or fax you a Non-Disclosure Agreement to review and sign. Do that.
Upon receipt of the NDA, the Broker will provide you with financial and operational information on the business. Ask lots of questions, engage advisers such as CPA’s and attorneys as needed.
Expect or ask for at least 3 years of tax returns and 3 years of P&L Statements. Begin to independently verify the information provided.
We at Hartford Business Brokers provide potential Buyers an “Executive Summary” on the business we are representing that is typically 12-20 pages in length; ask the Broker for this.
Schedule a meeting thru the Broker to meet with the owner of the business on a day and time that is convenient for both of you. Ask lots of questions; expect the meeting to last 1-2 hours.
If the chemistry is there and you want to start down the road to purchase the business get a team in place – a CPA and an attorney. You will need both to you help perform Due Diligence on the business as well as prepare the Purchase & Sale Agreement.
Due Diligence involves a myriad of financial and operational items. The Broker should have a preliminary checklist from when they first listed the business; ask for that then expand on it as necessary.
Offers on a business take the form of Offers to Purchase, Letters of Intent and basic Purchase Agreements.
Don’t forget to talk about the transition between the old owner and yourself.
If you would like to talk with a professional Business Broker call us at (203) 552-2381, or email the “professionals” at Hartford Business Brokers by going to our “Contact Us” page and completing the form and we will call you.