Buying an existing business?

**jarclark** · 05-14-2011 08:51 AM

Hey everyone, this is a pretty cool website and I want to thank you for letting me post. I just finished my degree a year ago and I am approaching my EAS in the USMC and I was looking into becoming an entrepreneur. From the research I have done so far it looks like it is best to buy an existing business over starting a new one? In going this route though what is the best process? Because I went on that website bizbuysell and seen businesses for sell then I went to my credit union website and seen that they do give out loans for people wanting to start businesses. My question about the process is do I try to get preapproved first or do I pick out a business for sale first then write a business plan for that business then go to the bank and try to get approved. And also with that website I noticed that all of the businesses do not have their name so I cannot do actual research on them. Will I need to contact the seller and tell him my interest? I know I am all over the place with this question but I will appreciate any help I can get. Thanks

**barbaragabogrecan** · 05-17-2011 01:57 AM

This definitely does help. Thanks so much for this great article; this is the kind of thing that keeps me though out the day. I’ve been searching around for your blog after I heard about them from a friend and was pleased when I was able to find it after searching for some time. I want to start new business so it’s really helpful. Thanks fir sharing.

**lccglobals** · 05-31-2011 07:22 AM

Business set up some time gets quite difficult doesn't matter weather its already running or a new venture. You may have to go through some legal procedure and you can take help of Corporate Secretarial Singapore which provides legal advisory and business related services.

**barbaragabogrecan** · 08-08-2011 12:20 AM

Asses its client base and determine if they will be loyal to the business after the change in ownership. Make sure that the required licenses and permits are in place.

**Gary Barzel** · 08-08-2011 05:49 AM

A few things for you to take into account before applying for a bank loan. Banks want to see that consumers are very clear about where and how they hope to spend the funding they receive as well as their ability to pay back the loan. In order to do that you have to supply your business plan and a proposal for the intended use of the loan funds. This proposal will have to include a detailed breakdown of costs, profit projections and repayment estimations. So I would suggest you first find the business you intend to go into and research it thoroughly before applying.

**DangerousCurves** · 08-08-2011 04:53 PM

One thing to really investigate on buying any business is that their stated gross revenues and their monthly cash flows are accurate, verified by tax returns and monthly bank statements. It's so easy for business owners who are looking to get out of a failing business, to cook the books and create a great looking opportunity for an unsuspecting buyer. If they've used a tax preparer, or independent accounting service, try and get the records from them directly if possible, as it's less likely that they'd risk their own business by providing false documents for another. You may think this sounds paranoid, but i personally know someone that this has happened to, and it was devastating for them financially. Doing your due diligence is a very important part of buying any existing business. Find out why they want to sell the business. Do your homework and most importantly, cover your A$$..

Best of luck...

**Tjordan** · 09-19-2011 11:48 AM

Originally Posted by DangerousCurves

One thing to really investigate on buying any business is that their stated gross revenues and their monthly cash flows are accurate, verified by tax returns and monthly bank statements. It's so easy for business owners who are looking to get out of a failing business, to cook the books and create a great looking opportunity for an unsuspecting buyer. If they've used a tax preparer, or independent accounting service, try and get the records from them directly if possible, as it's less likely that they'd risk their own business by providing false documents for another. You may think this sounds paranoid, but i personally know someone that this has happened to, and it was devastating for them financially. Doing your due diligence is a very important part of buying any existing business. Find out why they want to sell the business. Do your homework and most importantly, cover your A$$..

Best of luck...

This is a very good point!

I think that if third party accounting information is not available then the best course of action is: cross reference bank statements with tax returns and financial statements and get EACH discrepancy explained.

Just my .02

Tim

**daveb1** · 09-19-2011 02:22 PM

If you are a first time business buyer do not try to go at it alone. Consult trusted professionals first. Even bounce the idea of friends and family a lot. Do not rush into anything. When I am buying a business I usually have an accountant, a lawyer, a business broker, an Escrow service, a real estate agent, a market expert, a research assistant among others all on speed dial. When spending large amounts of money on something you may be stuck with for awhile these types are relatively cheap in the long run. The key is to finding trusted associates in each important category. Also when looking for a loan the stronger the team behind you the greater chance you have to be financed.