What do I want to know when buying a business? When working through the process of buying a business, the transaction will go through different stages. The first active stage is obviously when the buyer and seller come together for their first meeting. However, before that happens there are many other things that need to happen before that first meeting which, if it goes well, will lead to a series of follow up meetings.
For the buyer, their first step needs to be learning and understanding the buying process. This means becoming as familiar as possible with the language of buying and selling a business as well as the jargon that’s part of the industry the business you are looking to acquire is in.
Next step is to understand how much of your personal capital you are willing to invest in a venture. A lot of buyers have seen the value in their homes decline. As a result, the equity is not available to pull from the house and use as a down payment. Other options are available such as using 401(k) retirement money but this is not a quick process and requires the buyer researching and understanding how this process works.
A key component is the buyer understanding and supporting their business and management experience. The best and easiest way to do this is with a limited resume. It doesn’t require a detailed breakdown of your employment history but it does require showing management and industry strength especially if the buyer wants the seller to carry a note or they wish to apply to a third party lender for a loan.