Blog for Business Buyers and Sellers

With a questionable job market and diminished income becoming a reality for many workers, the idea of starting a business is becoming more and more favorable.  However, starting a business can still be risky. Before you start searching for businesses for sale, consider a few money saving tips.

• Start by searching for an existing business in a Business for Sale by Owner Directory.  A Business FSBO listing means you can step right into an existing business and avoid startup costs and broker fees.  In addition to being a cost-effective way to get started, a “Businesses FSBO” directory can also offer valuable tips on financing, taxes and insurance. 
• Another way to spend wisely is to start small.  Rather than rolling out your plans for multiple locations or leasing a property right away, why not start with an online store and find out how much demand there is for your product or service.
• It may be tempting to jump right into your new business by quitting your day job, but in this economic climate that approach is ill-advised.  Consider starting a business part time.  This will allow you to keep your paychecks coming in while you work out the kinks in your business plan. 
• If you have a really marketable idea and some good connections, you may want to consider looking for capital from private equity investors.  Not only will they provide funds for your startup, they may also be able to find you your first couple of clients.

Looking at a Businesses FSBO directory will help you generate ideas for starting your business, and start conversations with business owners with businesses for sale.  No matter what stage your business is in, you can always benefit from starting small and being practical with money. 

The Rise of the Business FSBO Directory

Over the past 18 months, a grueling recession and record-setting unemployment have caused millions of Americans to rethink their career paths.  Gone are the days when one can expect to stay at the same company for an entire career.  Job security seems to be a thing of the past, and even retirement seems far out of reach.  Worse yet, as the size of the workforce dwindles, employers are expecting more from those who remain employed.  Frustrated and angry American workers are beginning to wonder if remaining an “employee” is really worth the sacrifice. 

In many states, commercial leases are not covered under consumer protection laws that normally safeguard tenant rights. It is assumed that commercial leases are contracts between knowledgeable business people, and therefore less government regulation is needed than in residential leases. Thus it is essential to scrutinize every aspect of the lease and renegotiate unfavorable terms before signing.

A majority of the small businesses in the United States are operated as sole proprietorships. This type of business organization is the simplest and is the form usually chosen by the one-person business, in which the owner and worker are the same person (although sole proprietorships can have employees). Its primary advantage is its ease of formation; its most important disadvantages are (1) it can have only one owner and (2) the owner is individually responsible for all losses of the
business.

The sales agreement is the key document in buying the business assets or stock of a corporation. It is important to make sure the agreement is accurate and contains all the terms of the purchase. It would be a good idea to have an attorney review this document. It is in this agreement that you should define everything that you intent to purchase of the business, assets, customer lists, intellectual property, and goodwill.

Once you've found a business that you would like to buy, it's important to conduct a hard, objective investigation. Look into every aspect of the business, verifying whether the owner's stated reasons for selling are legitimate; double check every detail for accuracy.

There are two types of partnerships: general partnerships and limited partnerships. A general partnership is created when two or more individuals agree to create a business and to jointly own the assets, profits and losses. A limited partnership may be created only by following certain steps set out in each particular state's statutes. The primary advantage of partnerships is that they can have more than one owner; the most important disadvantage is that the general partners are personally responsible for the losses and other obligations of the business.

A realistic business valuation requires more then merely looking at last year's financial statement; it requires a thorough analysis of several years of the business operation and an opinion about the future outlook of the industry, the economy, and how the subject company will compete.

The stock corporation is more complex than the sole proprietorship or the partnership, but it has certain advantages that may make it worth considering as a business form.

A corporation is considered a separate legal entity; because of this, the owners of the corporation (known as its shareholders or stockholders) are not personally responsible for the losses of the business. Although a corporation usually has more than one owner, it is possible for only one individual to create and own 100 percent of a corporation.

It is important during the closing to make sure that you have legal counsel available to review all documentation necessary for the transfer of the business.
The following items should be addressed in a closing: