Buy a business from a position of strength

The steps to buy a business are many and difficult. They are too for the seller.

A deal only gets done if there is a motivated buyer and a motivated seller.

If you are looking to buy a business it is important to focus on what you control and what you do not. The buyer has no control over the seller and their behavior though it is critical that both are able to work together.

How to buy a business from a position of strength.1. Know what’s important to you.

What do you do best? Grow a business quickly, make a good business perform better over time (the Warren Buffet approach), take a poorly performing business and quickly make it better.

Knowing the answer to the question of what’s important to you helps avoid wasting time, energy and probably a limited amount of money you want to spend.

2. Time kills deals.

When you look to buy a car, you set your budget, the make and model of the car you want and how long you will look before making a final decision. You know that by not taking this approach you will burn out and become frustrated.

If you don’t take this approach when buying a car and it doesn’t make sense to you, your chances of buying a business are very small as the process is too demanding. Similarly, if you have been looking to buy a business for more than 12 months and it is something you are still doing, then you have fallen in love with the idea of owning a business and not actually buying one. Take a 6 month break and try again as if you do find a good opportunity, you will be too worried about making that final decision.

Read More: Here is more information about the steps to buy a business.

Why buy a business from a position of strength?

If you have been looking to buy a business you will know there is a shortage of businesses that meet your criteria. Most business buyer’s criteria includes:

Proximity. Buyers want the business close to where they live.Price range. Buyers have a price range they are willing to pay for a business that meets their criteria.Industry. Buyers have skills, industry experience and management experience. To manage their risk they want to stay in their comfort zone which makes perfect sense as it increases their chances of success.Downpayment. A good buyer will have a necessary downpayment to show they are serious about buying a business. A downpayment is necessary to encourage the seller to carry any seller finance or necessary if a third party lender such as an SBA lender is willing to seriously consider a loan application.Good credit report and credit score. If your credit report and credit score are not in good shape, then buying a good business with the expectation of getting an SBA loan simply will not happen. If you can get a business seller willing to carry some finance, then I would be concerned about the quality of the business you are buying.

If you would like more information about buying a business please visit my webpage Buy a business or buy a copy of my book Successfully buy your business.

For more immediate help with buying a business you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.

The article Buy a business from a position of strength first appeared on Andrew Rogerson and Rogerson Business Services by Andrew Rogerson