The Buying Process
The Steps to Buying a Business with First Choice Business Brokers (FCBB)
The Steps to Buying a Business with First Choice Business Brokers (FCBB)
Decide to buy and meet with an FCBB Business Sales Professional. Once you have decided you want to own a business, schedule an appointment with your advisor to get started.
Talk through what you are looking for. Your advisor will ask a series of questions to understand the kind of business that fits your skills, goals, and budget.
Know your budget and be ready to show proof of funds. Understand how much you have to work with. Seller financing can let you leverage your funds toward a larger business with greater income potential. It is fine to receive help from a relative. Be ready to provide proof of funds, since many sellers will not share confidential details until they know you can complete a transaction.
Keep an open mind. There are many types of businesses for sale, and your advisor may introduce you to industries you had not considered.
Sign a confidentiality agreement (NDA). The Non-Disclosure Agreement protects the seller's confidential information, and sellers require it before sharing the details of a business for sale.
Decide whether to make an offer. After meeting the seller, your advisor will ask whether you want to proceed. You may make an offer even if some books and records are still outstanding, requesting those items through the due diligence process.
Write the offer. Writing an offer is more straightforward than many buyers expect. FCBB uses a comprehensive proprietary Purchase Agreement designed to protect all parties, covering items from lease assignment to key-employee matters. You will provide an Earnest Money Deposit (EMD), typically 10 percent or $10,000, whichever is greater. The check is not deposited with the closing entity until the seller accepts the offer.
Present the offer and move to due diligence. Your advisor presents your offer to the seller. If it is accepted, you enter due diligence and review the items you requested. If the information does not meet your approval, you may withdraw and have your EMD returned.
Approve due diligence and sign a release. Once your contingencies are met and you approve the due diligence items, you sign a release that moves you to the final step, closing and business transfer.
Close and take ownership. A third party, an escrow or title company or a transactional attorney, prepares the final transfer documents and obtains tax and other clearances so you receive the business free and clear, apart from any items you agreed to assume, such as a copier or leased equipment. At that point, you own the business.
Ready to Take the First Step
Once you have determined you want to buy your own business schedule an appointment to meet with a First Choice Business Sales Professional.
During your appointment with your First Choice Business Sales Professional you will be asked a series of questions to help your Business Broker understand better what type of existing businesses for sale they should show you.
Know how much money you are working with. Some business owners will offer terms which means you can leverage the money you have to buy a larger business which will likely bring in a greater income. Be honest with your Business Broker so they know what businesses for sale they should show you. It is OK to receive money from a relative to help buy a business. Be prepared to provide proof of funds. Many Sellers won't disclose confidential details without knowing you are able to complete a transaction by seeing your proof of funds.
Have an open mind when looking at businesses to buy. There are so many different types of businesses for sale that you may not even be aware of. Your FCBB Business Broker will likely introduce you to businesses for sale in industries you have not previously considered.
Be prepared to sign a confidentiality agreement commonly referred to as a Non-Disclosure Agreement, or NDA. The NDA protects the Seller against Buyers who take their confidential information and start a competing business using that same confidential information. Business Brokers are required by Sellers to have this agreement signed before providing intimate details about the business for sale.
Once you determine you have an interest in a particular business your FCBB Business Broker will arrange a meeting with the Seller for you to view the business (often before or after the business's hours of operation) and discuss the business further directly with the Seller.
After your meeting with the Seller your FCBB Business Broker will likely ask you if you would like to proceed to the next step in purchasing the business. By this time you may have seen the financials and are prepared to make an offer. If all the books and records have not been made available, you may still place an offer on the business and request that those items you would like to see be produced through the process known as "due diligence".
Writing an offer to purchase a business is not as difficult as you may think when you are working with a FCBB Business Sales Professional. Our experts utilize the most comprehensive proprietary Purchase Agreement in the industry. FCBB Agreements were designed to protect ALL the parties involved in the transaction covering simple items like the assignment of lease (for you to take over the business location) to more complicated issues such as key employee negotiations. You will be asked to give an Earnest Money Deposit (a.k.a. EMD) check typically in the amount of 10% or $10,000, whichever is greater. This check is not deposited with the third party closing entity until the offer is accepted by the Seller.
Your FCBB Business Broker will then present your offer to the Seller. If the Seller accepts your offer then you will move into the due diligence phase where you will have a chance to thoroughly review the items you requested to meet with your approval. If you do not approve of the information provided during the due diligence period, you have the right to withdraw from the transaction and receive your EMD money back.
Once your contingencies have been met and you have approved the due diligence items provided to you by the Seller, you will be asked to sign a release which will take you to the final step of the process which is closing/business transfer.
A third party entity (escrow/title company or transactional attorney) will prepare the final transfer documents and obtain clearances for taxes etc. so you are receiving the business free and clear of all encumbrances (except those that you may be taking over through your agreement such as a copier, leased phones etc.)
Congratulations, you just bought a business!
If you are thinking about buying a business, the first conversation costs nothing and will give you a clear, honest read on where to begin. Your FCBB advisor can walk you through these steps in the context of your goals and the Mountain West market.
How to Buy a Business for Sale
The Steps to Buying a Business with First Choice Business Brokers (FCBB)
- Once you have determined you want to buy your own business schedule an appointment to meet with a First Choice Business Sales Professional.
- During your appointment with your First Choice Business Sales Professional you will be asked a series of questions to help your Business Broker understand better what type of existing businesses for sale they should show you.
- Know how much money you are working with. Some business owners will offer terms which means you can leverage the money you have to buy a larger business which will likely bring in a greater income. Be honest with your Business Broker so they know what businesses for sale they should show you. It is OK to receive money from a relative to help buy a business. Be prepared to provide proof of funds. Many Sellers won't disclose confidential details without knowing you are able to complete a transaction by seeing your proof of funds.
- Have an open mind when looking at businesses to buy. There are so many different types of businesses for sale that you may not even be aware of. Your FCBB Business Broker will likely introduce you to businesses for sale in industries you have not previously considered.
- Be prepared to sign a confidentiality agreement commonly referred to as a a Non-Disclosure Agreement, or NDA. The NDA protects the Seller against Buyers who take their confidential information and start a competing business using that same confidential information. Business Brokers are required by Sellers to have this agreement signed before providing intimate details about the business for sale.
- Once you determine you have an interest in a particular business your FCBB Business Broker will arrange a meeting with the Seller for you to view the business (often before or after the business's hours of operation) and discuss the business further directly with the Seller.
- After your meeting with the Seller your FCBB Business Broker will likely ask you if you would like to proceed to the next step in purchasing the business. By this time you may have seen the financials and are prepared to make an offer. If all the books and records have not been made available, you may still place an offer on the business and request that those items you would like to see be produced through the process known as "due diligence".
- Writing an offer to purchase a business is not as difficult as you may think when you are working with a FCBB Business Sales Professional. Our experts utilize the most comprehensive proprietary Purchase Agreement in the industry. FCBB Agreements were designed to protect ALL the parties involved in the transaction covering simple items like the assignment of lease (for you to take over the business location) to more complicated issues such as key employee negotiations. You will be asked to give an Earnest Money Deposit (a.k.a. EMD) check typically in the amount of 10% or $10,000, whichever is greater. This check is not deposited with the third party closing entity until the offer is accepted by the Seller.
- Your FCBB Business Broker will then present your offer to the Seller. If the Seller accepts your offer then you will move into the due diligence phase where you will have a chance to thoroughly review the items you requested to meet with your approval. If you do not approve of the information provided during the due diligence period, you have the right to withdraw from the transaction and receive your EMD money back.
- Once your contingencies have been met and you have approved the due diligence items provided to you by the Seller, you will be asked to sign a release which will take you to the final step of the process which is closing/business transfer.
- A third party entity (escrow/title company or transactional attorney) will prepare the final transfer documents and obtain clearances for taxes etc. so you are receiving the business free and clear of all encumbrances (except those that you may be taking over through your agreement such as a copier, leased phones etc.).
Congratulations, you just bought a business!
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