What you need to know if you plan to buy or sell a business.
Every year approximately 300,000 U.S. businesses change ownership. Both small and mid-sized businesses, like retail stores, beauty salons, quick-print shops, restaurants, tax preparation services, landscapers, electrical contracting firms, and modest manufacturing operations. Expect to do a lot of planning and preparation if you're thinking about buying or selling a business and want to get the best deal possible.
Selling a Business
Whether you own a professional services company, a neighborhood bagel shop, or a home-based website that sells imported garden tools, chances are good that there's an interested buyer out there (as long as the price is right). However, finding the right buyer and selling the business on favorable terms will require both planning and hard work. Many more businesses are for sale every year than actually sell.
The first step is to consider whether you're ready to sell. Other steps include preparing your company for sale, understanding the sales process, seeking potential buyers, setting a price,negotiating and preparing a sales agreement and other documents, and closing the deal.
Buying a Business
When planning to buy a business, there are many factors to consider, including whether owning a business is right for you and your lifestyle, what's potential for success, and the risks involved. Owning a business can mean that you have more worries than you've ever experienced and longer hours than as an employee, however, if you succeed, the financial and personal rewards can be big. Also if you own your own business, no one can fire you.
Things that you should also consider include whether to buy a franchise or an independent business, how to find a business for sale, how to know whether the asking price is reasonable, and how to research the business's history and finances (what lawyers call doing "due diligence").