Understanding the process of buying a Florida business
BUYERS & BROKERS
I have decided to buy a business, what should I do first?
Your best guide for buying a business isn’t words or numbers on paper–it’s the presence of an experienced business broker to guide you through the complicated task of buying a business. Your first step should be to find the right broker for you. You should talk with several brokers and then decide on the broker you feel you would be the most comfortable working with.
Generally speaking, it is better to work with only one broker at a time if you want to be treated as a serious buyer. If you do plan to work with more than one broker make sure they are all aware of each other to eliminate having the same businesses shown to you by multiple brokers.
A business broker provides vital services for both parties and acts as the “glue” for holding together the pieces of the business sale process.
What can I expect and how does the process work?
The more information you give your broker the better they will be able to help you find the best business for you. When you meet with the business broker for the first time be prepared to answer questions similar to these:
1. Why do you want to buy a business?
2. When do you want to be in your own business?
3. Have you given any thought to the types of business you may want?
4. How much personal income do you need from the business?
5. How much money do you have for a down payment & working capital?
6. Is the cash readily available?
7. Do you want to be a “hands on” owner or absentee?
8. What areas of Florida are you interested in?
9. What are your expectations about the purchase of a business?
With the information gathered from this meeting the broker can show you the businesses that most closely meet your needs. This will save you time and effort by negating the necessity to look at businesses that do not meet your requirements or is more than you want to pay.
Since sellers are (rightly) concerned about confidentiality, the broker will ask you to sign a non-disclosure or confidentiality agreement before the name of any business is revealed. During this initial meeting always ask questions to clarify anything you don’t fully understand.
When do I get to see the business and books and records?
The broker will provide you with preliminary information about one or more businesses including a summary of financial data and will arrange for you to see businesses of interest. Once you indicate a strong interest in a particular business the broker can then supply additional information and schedule further on-site appointments with the seller. Over the years we have had many buyers expect to see tax returns, P & L’s and balance sheets before making an offer. Most sellers do not allow us to share this information to anyone that is not a serious buyer. We have found that the few times buyers insisted on this they wasted a lot of time analyzing the books, only to find that they couldn’t agree with the seller on price and terms, or that the type of business just didn’t suit them. It is to your advantage to make an offer based upon the assumption that the numbers on the preliminary info sheet are correct By doing this you state what you are willing to pay if the books & records prove the numbers. Once your offer is accepted you will have access to any records you need to verify the income is as stated. If the seller is unable to prove the stated income you can withdraw your offer or counter offer at a lower price & terms.
When you find the right business and are ready to make an offer your broker will be the best source for answering questions, addressing concerns, resolving problems, tying up loose ends, and easing the way to a smooth closing.
We can help you buy a business in North Florida or anywhere else in Florida.