Whether you have a small business for sale or are looking to sell, the valuation is key to making a deal at the right price. Typically on 20% of businesses successfully sell, but you can increase your chances of closing by talking with a business broker. The steps to buying a business do not have to be insurmountable, plus some preliminary research will help you find the best broker.
As you do your research into various options, you can speak with corporate business brokers to clarify new business opportunities and to learn how to get started. As with any kind of business venture, the profit and loss statements will have a tremendous bearing on your future success. Regardless of the current economic situation, some careful planning and attention to a businesses financial health will help you successfully purchase a new business. You will find that in 60 to 80% of the opportunities available, that they are coming from small businesses and the industries that they represent. They generally receive a commission on each deal, but finding the right business broker will enable you to maximize your purchase of the perfect small business.
As part of their process, your broker can help you analyze the financial statements and historical numbers in order to make a qualified purchase assessment. By measuring complete income and expense statements, it will give you the key indicators of the amount of return you could successfully achieve. Also, there may be other general business questions that you uncover as you examine each small business for sale. Again, you may find it useful to seek assistance from a broker or financial expert when it comes to navigating your options.
Once you dive into the numbers, you should assess how your purchase is going to be structured, especially if you are financing a small business for sale. If the asking price is fair and you have liquid assets, it could still be advantageous to finance your purchase for the interim, in order to cover initial operating costs. This strategy can save capital in the long run, until you ramp up future sales and profit streams. Alternatively, you may be able to extend the life of the loan, especially if you are interested in decreasing the amount owed each month.
While there is a lot of upside to buying a small business, you will have to plan for tax implications that could arise. In certain situations you may find that some of your investments or returns should be claimed as income that may be taxed differently. For those using the assistance of business brokers, you should consult them to understand your exposure as you purchase a new business. Regardless of your ambitions to purchase a new business, some initial planning will help to insure that you find future success with your company. Refernce materials.