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How to Buy an Existing Business: Tips to Find, Value, and Acquire Something Successful

Want to acquire something both pre-existing and successful? Read on to learn how to buy an existing business and put it on the path to success.

How to buy an existing business?

Business acquisition is growing increasingly popular in the United States. Take franchising opportunities for example.

In 2020, there are more than 785,000 franchise establishments in the nation. This is the highest figure in the past 14 years.

Interest rates are still hovering near record lows meaning capital is cheap. The cost of money makes buying a new business more appealing than ever before. In addition, the nation’s economy is sitting on a solid foundation with strong consumer demand.

Read on to learn how to buy an existing business. Explore tips on how to find, value, and acquire a successful business investment.

Reasons to Buy an Existing Business

There are many good reasons for entrepreneurs to consider an existing business. For one, there will be a strong supply as Baby Boomers retire and look to sell.

From a business standpoint, you will inherit a proven business model. You can verify that the concept works simply by evaluating prior sales.

In addition, you get to leverage an established brand and product. The business comes with a loyal customer base, employees, inventory, and other assets.

Finding a Business For Sale

The first step in the acquisition process is finding a business for sale. Unlike homes, it is uncommon for a for-sale sign to be placed in front of the business. Existing businesses rarely advertise that they are looking for a seller.

Traditionally, investment bankers facilitate some business transactions. In other cases, accountants or lawyers will share information with prospective entrepreneurs. These professionals often get a heads up as they help plan the existing business owner’s retirement or other financial endeavors.

Another way to find a business for sale is by networking with local owners. However, these methods are old school and often lead to long waiting periods.

Modern entrepreneurs get to take advantage of online tools. There are online resources that use algorithms to pair together businesses looking to sell with entrepreneurs. Here, you can save search criteria like price and favorite businesses that you are interested in.

Your search may lead you to consider franchising opportunities. You can be matched up with a franchise that is in line with your passions.

Business Appraisal

Once the perfect business is found, you need to get an appraisal. In this process, finance professionals pour over the business to determine its value. Your team will review balance sheets, taxes, revenue statements, and more.

This appraisal is a critical step in getting financing to buy your new business. Unless cash resources are available, you can apply for a business acquisition loan. With cash or a pre-approval in hand, you can now make offers on existing businesses. 

A Recap of How to Buy an Existing Business

Acquiring a business is not simple by any means. It takes a lot of research to find the right one. The good news is that there are professionals and platforms out there that can pair you with the best fit.

If you want to learn more about how to buy an existing business, sign up for BizNexus and start getting matched with opportunities today.

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