The moment you have found the perfect business to buy, it is me to start the negoaon process. There are strategic steps to take to ensure you are geng the best price. With the guidance of your business broker, buying a business does not have to feel daunng. Consider these five ways to get the best price when buying a business.
1. What are your requirements and limitaons as a buyer and what are the seller’s requirements and limitaons?
Before making an offer, you will need to fully understand what your financial limitations might be. More specifically, what you can afford to pay as a down payment and other financing needs. You will need to know what your minimum cash flow must be in order to sustain your current lifestyle and your business.
2. Familiarize yourself with current market trends
Before making an offer, do your research. It is important to study the market for the specific industry and geographical areas. When you know about the industry, you can make a knowledgeable offer, and appropriately negoate for the right price.
3. Be sure to know the business you are buying
When you are at the offer stage, you have a clear understanding of the full scope of the business. For instance, its size, financial performance, operaons, and even, its potenal. However, you may also spot some problems that would need to be addressed once the business has transioned ownership. This informaon can be used as leverage to lower an asking price during the negoaon period.
4. Protect yourself
The best way to protect yourself is to ask a seller to finance at least a poron of the business. This way, they are making an investment in the connued success of the business even aer it has shied to new ownership. A seller unwilling to do this might be hoping to pass down some issues they have failed to disclose during negoaons.
5. Negoate all deal points
Finally - negoate, negoate, negoate. This may seem daunng or unnecessary when you feel you found the perfect business at a good price. However, someone with experience would argue there is always more room for negoaon. At this stage, seek the guidance of a professional business broker. With their experse, buying a business can be a posive experience and not one where you have le feeling like you could have goen more from the deal.
In the market for a new business to buy? Have quesons about the process of buying a business?Schedule a free consultaon with your Transworld Business Advisor of Atlanta North business broker today!