Haven’t read Part 1? Click here first.
If we can’t just drive around, how do I see businesses?
The process to buy a business obviously includes taking a walk through and seeing a potential business, there are just a few more steps involved than jumping in a car. Although the steps will vary on a case-by-case basis, they will (for the most part) follow this progression.
Step One: Find and Talk to a Business Broker
Many of us have dreamed of owning our own business, but many times the goals you have for business ownership and for your life in general don’t match with the type of business you think you might want. For instance, you may think you want a bar – but you want to be home with your kids for dinner every night. The bar business and that life schedule can’t possibly coincide. Having an initial conversation with an experienced and qualified broker will help you narrow your search and probably open up some businesses and industries you hadn’t even considered.
Step Two: Go Through Potential Listings
Once your broker has a good idea of what you’re after they will send you listings to look at. The information on these listings will be very general, as again, the confidentiality of the business needs to be maintained. Look at listings with an open mind as there will likely be a few from industries you hadn’t initially put on the list, but would be a great business for you in the long run.
Step Three: Sign the Non-Disclosures
After running through the listings you will no doubt have a few favorites that have peaked your interest. Your broker will have you sign the appropriate non-disclosure forms and will then be able to disclose the names and locations of the businesses you find interesting. At this point you may be permitted (with permission from the sellers and brokers) to visit the business during regular business hours if you maintain a low profile. This may not be appropriate in all circumstances. For example, if you are looking at a small cafe, you could go in and quietly have lunch as long as you didn’t do things like demand to see a manager or ask strange questions of the staff. It would probably not be possible, however, to visit the floor of a manufacturing facility during business hours when your presence could not easily be explained to the staff. Ask your broker if an incognito visit would be possible and when the best time to go in would be.
Step four: Set Up a Conference Call with the Sellers
You will probably have a meeting and/or call with the sellers and the brokers involved before you do a walk-through of the business. This meeting will allow you to ask questions and see if the business corresponds with what you are looking for. This is a great opportunity to further narrow down your choices and focus your energies on the final contenders.
Step Five: Schedule a Walk Through
After all of the above steps, it will finally be time for a walk through of the business. You will need to be flexible on the time frame for this tour because it will likely happen before or after business hours to avoid the customers and staff. This appointment will take a lot of moving parts, like coordinating the schedules of the sellers, the brokers, the buyers and the business – so once the appointment is made it is very important that you keep it and arrive on time. All of the moving parts for these appointments are another reason you need to go through the previous steps – it would be impossible for a seller to maintain regular business if they were constantly trying to accommodate showing after showing.
Sure, it would be easier for buyers if buying a business was just like buying a house, but a house doesn’t lose value if everyone knows it’s for sale. The protection of the integrity of a business you are considering will be very important, especially if you end up the owner. Have patience with the process because it works to protect all sides and the business itself.
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907