The world of commerce is based on the relatively simple principle of buying and selling things. I want to buy an apple, for example. In order for that to happen, the orchard owner has to pick the apple off the tree. He then sells that apple to a distributor who, in turn, sells it to my neighborhood grocery store. I buy the apple from the grocery store and that particular supply chain is complete. But what about more direct one-to-one business transactions?
When you decide that you want to buy your first home, you probably get connected with a realtor who can then scour the real estate market for you. They find a suitable property, chat up the listing agent, and show you the house. If all goes well, the buyer (that’s you) and the seller complete the transaction through your respective real estate agents and you purchase your first home. Fundamentally the same dynamic happens with the buying and selling of businesses and this is true whether you’re talking about a home-based business or a more traditional brick-and-mortar type business.
It’s a Serious Business Transaction
In the case of buying a home, I suppose you could just cruise around the neighborhood and look for the “for sale” signs, but that’s only going to give you a fraction of what is available. That’s why it is so important to hire a professional who has greater access to what is currently on the market. He or she can look up all the core information for you and that way you can make the most informed decision possible.
This is even more important when it comes to buying a business, because the vast majority of them aren’t going to have a “for sale” sign out front, especially if they’re not a customer-facing storefront. What if it’s an office in a tower? What if it’s a mobile business?
Consider Using a Broker
The technicalities and the legalities of such a transaction can be awfully intimidating and daunting for even the most experienced of business owners. This is why it is generally recommended that you employ a professional to help you with the process of not only finding the right business to buy, but also to help you through the entire transaction.
There are many local brokers available in most markets. If you’re in the Atlanta region, for instance, you can turn to Sunbelt Business Brokers for help. They have over 30 years of experience in buying and selling privately held businesses, as well as dealing with mergers and acquisitions. Sunbelt has offices in several other cities across America too.
How to Value Your Company
What if you’re from the perspective of the seller? What if you want to sell your business? The first thing that you’ll need to figure out is how much your business is worth.
The two main factors to consider here are the company’s assets and its earning power. If you have a business with a lot of expensive machinery, that necessarily adds to the overall value. However, having all sorts of expensive equipment doesn’t mean much if the company isn’t able to turn a reliable profit each year. You’ve surely seen the conversations on Dragons’ Den and Shark Tank about proper business valuation. It depends on the market, to be sure, which is another reason why hiring a professional to help you is probably a good idea.
Your Business Doesn’t Belong on Craigslist
There is nothing with using online classifieds to shop around for used cell phones or old lawn furniture; however, websites like Craigslist are not the most suitable of venues for buying and selling a business. Just as you would seek professional assistance with buying and selling a home, you should give at least the same level of care and attention to the complex nature of buying and selling businesses.