Buying and selling small businesses is a common practice.
Purchasing businesses for sale is an attractive option for an aspiring business owner.
In some ways, purchasing an existing business rather than starting a new one is easier.
With the help of BizBuySell you can easily buy and sell businesses in your area.
This way, rather than starting from the beginning, the business has already been established and running for a number of months or years.
This cuts out some of the legwork involved in getting a business off the ground.
Much like homes and other real estate, businesses can be bought and sold.
Unlike real estate property, however, this transaction is very complex.
There are hundreds of factors to consider on both the buyer’s and seller’s sides.
You likely have goals set whether you buy or sell.
Maybe you’re selling to earn money to retire, travel, or start a new business.
If you’re buying a business, this could be your first purchase or your fifth.
Regardless of your situation and goals, the decision to buy or sell businesses is exciting.
Arm yourself with the information and help you need to understand the process and make the best decisions for you.
Keep reading to learn everything you need to know to buy or sell a business, and how to use BizBuySell to do it.
- Prepare to Buy a Business
- How to Buy a Business on BizBuySell
- How to Sell a Business
- How to Get Your Business Buyer-Ready
- Steps to Selling a Business the Right Way
- How to List a Business on BizBuySell
- Buying or Selling: You’re Ready to Go
Prepare to Buy a Business
Creating the best business opportunity for yourself involves thorough research and exploration of the market.
With BizBuySell.com, this process is much simpler.
The online business marketplace provides the opportunity for small business owners to list relevant property details, photos, and the asking price.
This allows buyers to explore all of their options in one place.
Follow these steps to find the perfect business for you.
Find the Right Opportunity
Before you look for a business to purchase, think about the type of business opportunity that you are looking for.
- Are you looking for a turnkey opportunity that requires little work?
- Do you want to purchase a small business?
- Would you prefer searching for a franchise opportunity?
Explore Location Options
What business category do you want your investment to fall under?
Are you looking to purchase a daycare, cleaning business, restaurant, ice cream shop, or even a gas station?
This may seem like an obvious step, but you need to have all of these details ironed out in advance.
Without knowing exactly what you’re looking for, you can be overwhelmed with opportunities.
Consider the retail location or office building that you will be working out of.
Is this a good location to run a business?
Will it draw in your customers, or is it hard to find?
Think about this before you purchase.
Conduct Market Analysis
Consider a business’s current cash flow and determine if the number makes sense against the asking price.
Look into the growth potential of the new business.
How much should you invest in the purchase of the business alone?
Seeking the help of a professional business broker can help you avoid overspending or making a bad investment.
Fund Your Business
Arguably the most important aspect of purchasing a business is securing funding.
You have a number of options:
This requires borrowing money that you will later pay back with interest.
Loans are the most common choice for funding a small business.
Your interest rate may vary depending upon your credit score or loan amount.
If you do choose to take out a loan, it’s important to explore all of your options.
Check out your local banks, online banks, and other sources to find the best interest rate.
Grants are tough to come by, but they do not require that you pay back any money.
These are similar to a college scholarship.
You earn the money by starting a business in the organization’s target area or by meeting specific requirements.
Since grants are free money, they are difficult to obtain.
The application process can be challenging and lengthy, but if you do obtain a grant, it’s well worth the time and effort.
Check out the Small Business Administration’s website for opportunities.
3. Earn extra money with opportunities like side jobs or freelance work
These are simple ways to earn money in your spare time.
While they may not amount to much at first, you can use what you earn to pay living expenses or other smaller costs.
Create a Plan
Many new businesses fail within the first five years, but that doesn’t have to be you.
As a new owner, you want to make sure that you are in the best position to build a successful business.
While purchasing an existing business can reduce the risk of your own business from failing, you still need to do your research.
BizBuySell offers great resources for prospective business owners.
Before you begin your search, you should decide whether you want to purchase a big business or a small business, a franchise or a local business, and other important factors.
Once you have this information, start by gathering a list of places to search for businesses.
Between online resources such as BizBuySell and professional businesses brokers, you can learn as much as you can about your target industry, the location you’re searching in, and the asking prices of current business owners.
Next, write down everything you’re looking for so you can begin your search with a plan.
Jumping into your search without a written plan may leave you overwhelmed and can draw out the process.
How to Buy a Business on BizBuySell
Once you have determined the type of business that you want to purchase, you can explore sale listings.
Local newspapers are a great way to find out about businesses in your area, but they may be limited.
Go online and search business marketplaces like BizBuySell.
These list all of the opportunities in and around your target area.
Therefore, you won’t miss an opportunity.
Here’s how to do it on BizBuySell’s online marketplace.
First, make sure you’re on the “Businesses for Sale” tab and select your search criteria from the dropdowns:
- Business category
- Minimum and maximum price
You can also fill out advanced search features by clicking “Advanced Search” below the orange “Go” button, which include:
- Selecting more specific categories within categories
- Time added on site (last 3 days, last 30 days, etc.)
- Specific keywords or cities
- Cash flow
- Year established
- Broker membership preference
- Hide listings with no asking price
- And more!
Once you’ve narrowed down opportunities by location, type of business, cost, and more, you can easily browse businesses for sale.
Here’s a search done in Nassau County, New York for restaurants and food businesses.
Click on a business you’re interested in to learn more.
By opening up the individual page, you can learn about the business, asking price, gross revenue, cash flow, and more.
If you’re not sold on the business you’ve chosen, the site will show you similar opportunities on the bottom of the page.
These may be a little outside of your target area, but you never know what you might find.
After you find an opportunity online, don’t forget to also consult a business broker.
With the help of professionals, you can make sure that you are in the best position to make a purchase.
Hiring an accountant, attorney, and business broker is crucial to a successful business purchase.
How to Sell a Business
Have you decided to sell your business to move on to another opportunity or maybe even retire?
Congratulations on taking the first steps to selling your business and beginning your next adventure.
The smart seller will consider all aspects of the transaction and market to get the best deal possible.
Consider competitive placement in the market, fair selling price, and the process of finding the right buyer.
Before you can begin the process of selling your business, you have to tie up loose ends.
Are you in the best position to sell right now?
Is the condition of your business and operations going to allow you to get the best price?
Or do you need to put in a little work to get the business ready?
All of this requires a fair amount of research and the help of an expert.
You need to put a plan in place to make the most of this transaction.
You don’t want to risk making mistakes that could affect your sale.
How to Get Your Business Buyer-Ready
Before you sell, you need to do a little preparation.
Start by getting your business’s finances in order, cleaning up operations, and stepping up your marketing.
You want to position your business as a great business opportunity to a potential buyer.
This means advertising your success and your client base, and positioning it as one of the most popular businesses in the area.
Here are steps you can take right now:
- Get your finances in order
- Take a look at your current operations and processes and make improvements where necessary
- Invest in better equipment
- Improve your marketing
- Boost sales and profitability
Steps to Selling a Business the Right Way
If you’re hoping to list your business on BizBuySell, follow these steps to give yourself a better chance to close a deal quickly.
1. Determine the Value of Your Business
You can either determine the valuation of your business yourself or hire a professional, but typically businesses are worth three to six times their annual cash flow (another good reason to make sure your business’s sales are high when you get ready to sell it).
Study business news in outlets like the Wall Street Journal and other business journals.
Learn as much about your industry and the market in your state as you can.
What are similar businesses offering as prices or services?
How are their sales?
What are their marketing tactics?
Sale prices differ by locations across the United States.
Whether you’re in New York, San Francisco, Los Angeles, or Orlando, Florida, do your research to find the correct asking price for your region.
More than that, find out what you can do to better position your business regardless of your location.
Study the most successful businesses.
Find out what they are doing differently and try to emulate that.
2. Find a Business Broker
Maximize your sale price by choosing the right business broker or online marketplace to help you sell your business.
If you choose the wrong business broker, you could lose out on thousands of dollars.
Find someone with a good track record.
Do they have experience selling businesses in your industry?
Are they good at marketing your business type?
You’ll want to choose someone who knows the ins and outs of your specific niche, not someone with general advice and experience.
3. Create an Exit Strategy
Your business broker can help you create an exit strategy that will help guide the selling process.
As with many other components of being a business owner, creating a plan for your business transactions is key to a smooth sale.
Evaluate your business as a whole.
Are there areas that you can improve?
Can you make marketing or product-based changes that will increase sales?
Maybe you can improve your social media presence to get the word out about your business.
If your issue is within the store, re-train your employees to offer better customer service.
Start by improving processes and business performance, and then review the overall operations.
Find areas that you can make changes to that would drive the value of your business up.
4. Prepare Contracts
This requires the help of a lawyer.
Having the right contracts in place can protect both you and the buyer during the sales process.
How to List a Business on BizBuySell
Have you done the above and are ready to sell your business?
Here’s how to create a listing on BizBuySell.
Fill out the Basic Info section for your business.
- Title for the ad
- Contact information for potential buyers
- Business information: category, number of employees, year established, website, and whether the business is relocatable, home-based, or an established franchise
Next, choose a plan.
You have two options:
The Basic Ad:
This plan costs $49.95 a month for six months and includes a single photo and attachment, a valuation report to help you set your asking price, and the ability to view your stats and leads online.
The Showcase Ad:
Advertised as getting five times more leads than the basic plan, this costs $69.96 a month for six months.
In addition to the above features, this plan has perks like multiple photos, videos, and attachments, higher placement in the search results, a contact list for potential buyers, and a targeted email blast.
Select your plan and input your credit card information.
Once it’s processed, your ad is complete and you’re one step closer to selling your business.
Buying or Selling: You’re Ready to Go
Buying and selling businesses requires a fair amount of planning and preparation.
All of this work is worth the rewards of maximizing a sale on your business, or finding the best business opportunity for you.
Whether you’re buying or selling your business, now you have the tools you need to move ahead.
Between planning out your buyer’s or seller’s strategy and finding ways to earn extra money to fund your venture, you’re ready to move forward.
Are you buying or selling a business?
Are you using buysellbiz.com?
Let us know in the comments below.