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Buying a business is complicated process, especially if you have never bought a business before. Having professional business intermediary watching over your shoulder and navigating through the business buying process may be of great benefit, especially to less experienced business buyers.

Start with finding the right opportunity among hundreds of businesses for sale. Evaluate which business opportunity represents the best fit for you, and how well it fits your life goals. After finding a candidate business you have to ask the seller or agent the right questions to validate your choice. If you like the business and feel that it might be the one, move forward with presenting an offer. How much an offer should you present? What contingencies and conditions to include in order to protect your interests?

If the offer was successfully negotiated, the next step would be business due diligence inspection. This is probably the most important step in the business buying process. You will be validating information provided to you by the seller and confirming your decision to buy. There's no standard routine for due diligence; it all depends on specific situation of a particular business. It may include inspection of financial and operating documentation, tax returns, insurance policies and lease agreements. It may also involve going through, literally, boxes of sales receipts, invoices and purchase orders. Not every company has perfect records, and it may take substantial amount of time to sift through not very perfect records. However sometimes it very much worth it.

Business Buying Services

Global Business Group is helping business buyers in the following areas.

 

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Business Buying Services - A La Cartè Or Full Service

Depending on your circumstances you can get as much or as little services as you need. For example, we can just locate a suitable business opportunity for you, or help inspecting financial and business documentation during due diligence, or assist in negotiating favorable terms of purchase, etc., or any combination of the above.

You can also get a full-service representation, where we'll be taking you through the entire business buying process.

The a la cartè services are paid by the hour. Full-service representation can be either paid by the hour or on contingency basis. When we represent buyers, our contingency fee is always paid by the buyer. We only work with serious buyers ready to pay the contingency fee.

 


Defining Business-Buying Criteria

First-time business buyers have hard time defining a business-buying criteria. If all you've got is: "I want a profitable business", it will be very hard to find one.

Most likely, there are hundreds of businesses in your price range in the local area of all shapes and sizes, and it will tae enormous amount of time to evaluate all of them. Your life would be much easier if you can narrow down the selection.

Besides, the selection of businesses shall be in-line with your life goals. Your business should serve the purpose of fulfilling your life goals, otherwise you will be very disappointed. As a business person you have to learn to plan; to plan your life and your business.

We can help you formulating both the life goals and business-buying criteria.

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Private Business Search

If you're going after a small business with $100,000 net income, private business search is probably not for you. However, if you're looking for a business generating $500,000 in EBITDA, you should seriously consider such option.

Although there are some very worthy businesses on the market, the best ones aren't even listed. Even if they considered the sale, they haven't made any steps towards being sold. They may eventually come to the market in a year or two, or may never get there at all. These are cream of the crop - very desirable businesses.

We have means of identifying such hidden treasures. As professional business intermediary we will approach the target companies with specific business-buying proposition. In case they might be interested, we can move to the next step - evaluating target business.

 


Evaluating Business Opportunities

Unless approached correctly, private search leads don't have any intention to show you any documentation, unless they know and agreed to the terms of acquisition. On the other hand, you as a buyer can't formulate the proposal until target company's performance is known. It's a classic "catch twenty two" situation.

We know how to properly handle these situations. It allows us to move forward and evaluate the business.

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Preparing Letter Of Intent And Offer

In case initial evaluation reveals attractive acquisition opportunity, it's time to move to the next step - presenting Letter Of Intent (LOI) or offer. The difference between two is that LOI is usually a non-binding document, whereas Offer normally is a part of a binding purchase agreement, yet it's contingent upon a number of conditions to protect interest of both sides. LOI is customarily used for acquiring larger businesses with too many unknowns.

Terms of LOI or Offer are based on the information provided by the seller, and is subject to verification by the buyer or his counsel during due diligence.

Unless you're seasoned serial entrepreneur, we recommend you to use services of both business broker and business attorney for drafting LOI. Our business brokers are fully qualified for preparing an offer for purchasing a small business.

 


Mediating Negotiation

There are hundreds of  books written on a subject of business negotiations. However, unless you spent hundreds of hours in trenches, closing actual deals, you can't be fully prepared to handle it properly.First, when two people negotiate such touchy money subject as business acquisition, there's a lot of electricity in the air. Good negotiation should be conducted in a calm manner and keep all emotions out.Second problem comes from negotiating parties not being comfortable to convey all their concerns directly to each other's face. How about expressing such concern as: "I am afraid that the seller will screw me up with inventory...", or "... I think, he can take large portion of his business with him." Yet you can express all your concerns to a neutral third party who represents you and knows how to deliver a message without igniting the sparks.

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Due Diligence Inspection Assistance

Due diligence is the most challenging part of the business-buying process. You have to determine feasibility of acquiring a business and confirm that the information provided to you by the seller is indeed correct. It requires clear understanding of target business operation, the documentation that it produces, leas agreements, insurance policies, inventory control procedures, staffing, etc... - the list can go on and on.If you don't have such expertise, please find an adviser who can guide you through the process. Global Business Group intermediaries have inspected hundreds of businesses of all types and can provide you invaluable assistance with due diligence. With our intermediary standing by your side, you'll be completely confident in your decision.

 


Finding Qualified Bulk Sale Escrow

When due diligence is successfully concluded the next step would be to find a qualified escrow.

Starting with the fact that only 10% of all escrow companies are qualified to process business sale transactions. Global Business Group business brokers know all companies that do offer such services.

Like in any business, some companies do their job better than the others. Good escrow officer won't make mistakes with documentation, will promptly advance escrow from one step to another, and inform all involved parties about the progress. We worked with many escrow companies and know those that do better job.

Finally, escrow fees may vary greatly from one company to another, to as much as 2-3 times. We will help you to find a good escrow company that charges very reasonable fees.

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Record-Keeping And Follow-Up Activities

Although it sounds like a very trivial task, record-keeping and follow-ups are critically important for successful business acquisition. Most likely, you will be reviewing several target companies at once. It means, several stacks of documents that need to be organized, several email threads to maintain, follow-up telephone calls with information requests, questions, answers...

Global Business Group has proprietary database and can organize and maintain the above activities for you. We will take the load off of your shoulders and make sure that nothing is forgotten and missed. Good businesses are picked from the market very quickly. One-two days of delay may turn into lost opportunity. With our help you will never miss a worthy opportunity.