While many people start their own businesses, some prefer to buy already established businesses and simply take over. But buying a business isn’t the same like buying a home. It can be challenging to find a good business for sale. And when you finally do find one, closing the deal can be just as complex, taking several months to close. Here’s what to expect when you buy a business:
Decide What Industry You Want to Buy In
The first step to buy a business is figuring out what type of business you want to own and what you can afford. You’ll also need to decide if the business will be financed by the owner, from your own assets, or by a lender. Always consider risks and if you have the time and energy to actually run a business.
Looking for Businesses for Sale
You can look for businesses for sale online, trade publications and ads in newspapers. You can also enlist a business broker to help you review several options that meet your criteria and qualifications.
Use Escrow to Buy a Business
Once you find a business that you want to buy, you’ll need to make an offer. After they accept, it’s time to go through all the necessary paperwork.
While using escrow isn’t legally required, it is extremely important that you take this step. Although it might sound easier to simply give money to the current owner, using an escrow company will protect your investment. This way, an escrow officer will research any liens and any other encumbrances against the business’ assets.
An escrow company makes sure that the process is seamless and that the buyer is protected. Always use an escrow company when buying a business. Escrow services are objective third parties that holds funds, check for any discrepancies and makes sure that both parties are in agreement on closing before funds are released. Once the funds have been given to the seller, there is no going back. An escrow company makes sure everything is in order before that final step is taken.