Finding the Best Business for You

Owning a business and owning the right kind of business for you are, of course, two wildly different things.  Owning the wrong kind of business can make you absolutely miserable.  So if you are considering buying a business, it is prudent that you invest the time and effort into determining the best kind of business for your needs and your personality.  In a recent Forbes article, “What is the Right Type of Business for You to Buy?” author Richard Parker explores how buyers should go about finding the right business fit. Parker is definitely an expert when it comes to working with buyers as he has spoken with an estimated 100,000 buyers over his career.  In that time, Parker has concluded that it is critical that you don’t “learn on your own time.”  His key piece of advice concerning what type of business to buy is as follows.  “While there are many factors to be considered, the answer is simple: whatever it is you do … [Read more...]

Tackling Growth Delusions When Buying a Business

There is no doubt about it, it can be exciting to buy a new business.  However, in the process, it is very important that you don’t become unrealistic about future growth.  Keep in mind that in the vast majority of cases, if a business is poised to quickly grow substantially, the seller would be far less interested in selling.  Richard Parker’s recent article for Forbes entitled “Don’t Be Delusional About Growth When Buying a Business” seeks to instill a smart degree of caution into prospective buyers.  Parker notes that when evaluating a business and talking to the owner, many buyers come away with a sense that enormous growth is just “sitting there” waiting to be seized.  In particular, Parker cautions those buyers who are buying into an industry that they know nothing about; those individuals should be very careful.  When buying into an industry where one has no familiarity, there can be a range of problems.  The opportunities that you see may not have been tapped into by the … [Read more...]

Business Buyers Can Leverage SBA Lending

Finding the money to start your own small business can be a challenge.  Over the decades, countless people have turned to the Small Business Administration (SBA) for help.  A recent Inc. Magazine article, “Kickstart Your Business Dreams with SBA Lending,” by BizBuySell President, Bob House, explored how SBA lending can be used to the buyer’s advantage. The article covers the basics of an SBA loan and who should try to get one.  House notes that the SBA doesn’t provide loans itself, but instead facilitates lending and even micro-lending with a range of partners.  The loans are backed by the government, which means that lenders are more willing to offer a loan to an entrepreneur who might not typically qualify for one.  The fact is that the SBA will cover 75% of a lender’s loss if the loan goes into default.  Entrepreneurs can benefit tremendously from this program.  In some cases, an SBA loan even means skipping the need for collateral.  SBA loans can be used for those looking to open a … [Read more...]

5 M&A Myths and How to Deal with Them

Where your money is concerned, myths can do damage.  A recent Divestopedia article from Tammie Miller entitled, Crazy M&A Myths You Need to Stop Believing Now, Miller explores 5 big M&A myths that can get you in trouble.  Miller points out that many of these myths are believed by CEOs, but that they have zero basis in reality. Myth 1 The first major myth Miller explores is the idea that the “negotiating is over once you sign the LOI.”  The letter of intention is, of course, important. However, this is by no means the end of the negotiations and it is potentially dangerous to think otherwise.  The negotiations are not concluded until there is a purchasing agreement in place. As Miller points out, there is a great deal that can go wrong during the due diligence process.  For this reason, it is important to not see the LOI as the “end of the road.” Myth 2 Another myth that Miller wants you to be aware of is that you don’t have to take a company’s debt as part of the purchase price.  Many … [Read more...]

10 Questions Everyone Should Ask Before Signing on the Dotted Line

Before buying any business, a seller must ask questions, lots of questions.  If there is ever a time where one should not be shy, it is when buying a business.  In a recent article from Entrepreneur magazine entitled, “10 Questions You Must Ask Before Buying a Business”, author Jan Porter explores 10 of the single most important questions prospective buyers should be asking before signing on the dotted line.   She points out to remember that “there are no stupid questions.” The first question highlighted in this article is “What are your biggest challenges right now?”  The fact is this is one of the single most prudent questions one could ask.  If you want to reduce potential surprises, then ask this question. “What would you have done differently?” is another question that can lead to great insights.  Every business owner should be an expert regarding his or her own business.  It only makes sense to tap into that expertise when one has the opportunity.  The answers to this question … [Read more...]

A Step by Step Overview of the First Time Buyer Process

A recent article on Businessbroker.net entitled, First Time Buyer Processes by business broker Pat Jones explores the process of buying a business in a precise step-by-step fashion.  Jones notes that there are many reasons that people buy businesses including the desire to be one’s own boss.  However, he is also quick to point out that buyers should refrain from buying a business that they simply don’t like.  In the quest for profits, many prospective owners may opt to do this, but it could ultimately lead to failure. Step One – Information Gathering For Jones, there are seven steps in the business buying process.  At the top of the list is to gather information on businesses so that one has an idea of what kind of businesses are appealing. Step Two – Your Broker The second key step is to begin working with a business broker.  This point makes tremendous sense; after all, those new to the business buying process will benefit greatly from working with a guide with so much experience. … [Read more...]

Should I Get an Attorney?

Our clients often ask us if they should get an attorney to assist in the buying process.  It is a good idea to have an attorney review your documents.  However, make sure that this attorney is familiar with the process of buying a business.  You will also want to select someone who can accomplish the process  in a timely manner. We have recommendations of qualified attorneys with ample experience helping buyers through the process.  Keep in mind that while your we are extremely knowledgeable about the process, we can't give you legal advice.  On the other hand, many attorneys aren't qualified to give business advice. While, of course, you will want your attorney to look out for your interests, keep in mind that throughout the process the seller's interests must also be protected.  A seller's attorney could instruct him or her not to proceed if it seems that the seller's interests aren't being considered.  Obviously, any transaction should be fair for both parties. If you are … [Read more...]

Do I need a business broker?

How can Provest help you buy a business?  First of all, we can give you an array of businesses to choose from and in many cases you wouldn't have found them on your own.  It is important to note that 90% of the time, business buyers end up with something other than the business they first inquired about. It should go without saying that we can also give you a lot of information about the buying process and small businesses in general.  We are entrenched in the market and can give you invaluable information about trends, pricing and even local considerations. Throughout the sale, we handle the fine details.  If it is necessary for other professionals to assist you in any way, we can give you recommendations. All in all, you can share your business needs and requirements with Provest, and expect to get results. … [Read more...]

I have found a business I want to buy, what now?

It is at this stage that Provest can be quite invaluable.  We will be there to answer any questions you might have or do the relevant research.  Next, we will prepare an offer based on the price and terms you feel are appropriate.  Typically, you will have final approval upon review of the actual books and records supporting the figures that have been provided.  You will find out at this stage if the buyer will accept the price and terms you offered. It is essential that you and the seller agree on price and terms. When the seller receives your offer, he or she can approve it, reject it, or counter it with his or her own offer.  If you receive a counter proposal, you can accept or reject it. Once a price and terms have been agreed up, “due diligence” is next.  The burden is on you – the buyer – no one else.  You have the opportunity to bring in outside advisors or do your own due diligence.  If there are no areas of concern, you can allow the closing documents to be prepared and … [Read more...]

How can I be successful with my new business?

With a new business, you'll have to work hard and put in many hours.  Of course, even aside from the capital necessary to buy the business, you'll also need money to make improvements.  Buying a business doesn't mean you can sit at a desk from now on.  You must also get out there and handle a variety of elements including upkeep, promotions, hiring and bookkeeping.  All of these elements and more contribute to success. … [Read more...]

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