Buyers buy a business for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses: Laid-off, fired, being transferred (or about to be any of them) Early retirement (forced or not) Job dissatisfaction Desire for more control over their lives Desire to do their own thing A Buyer Profile Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more and more women are going into business for themselves, so this is rapidly changing). Almost 50 percent will have less than $100,000 in which to invest in the purchase of a business. In many cases the funds, or part of them, will come from personal savings followed by financial … [Read more...]
Are You Buying (or Selling) a Business?
Are you considering purchasing a business? Here are some basic pointers to get you started. Incidentally, this article should also be of interest to anyone thinking of selling their business. At Provest Properties, we've found that the process becomes easier when both the buyer and seller have information and knowledge. What's the Profile of a Typical Buyer? The typical small business buyer is often looking to get out of an uncomfortable job situation or deal with a lost job. Most of these buyers have never owned a business. A buyer will more than likely have less than $100,000 in which to invest in the purchase of a business. More than 70% of buyers will have less than $250,000 to invest. A buyer's funds will usually come from personal savings and additionally from family members. Potential buyers are looking to do their own thing and they want to break free from the cycle of working for someone else. While making money is on their priority list, this typically isn't the … [Read more...]
What Can Make a Deal Fall Apart?
It goes without saying that from time to time, deals do fall apart. However, when both buyers and sellers understand potential pitfalls, they are more likely to be overcome. Let's take a look at some of the more common reasons why this happens. The following is a compilation of factors taken from a survey of business brokers across the United States. The Seller Doesn't Reveal Problems In some cases, a seller simply is not upfront about problems facing the business. These issues do show up later, and this often occurs after a tentative agreement has been reached. The buyer ends up getting cold feet and the deal falls apart. The way to solve this issue is that sellers must be upfront about any negative aspects facing the business. Ar Provest, we attempt to ferret out problems at the beginning of the process; there are steps that can taken to overcome these issues. Second Thoughts About the Price Another reason that can cause a sale to fall apart is when a buyer … [Read more...]