Buying a business is a great path to gaining financial freedom within your life. Business ownership offers a higher level of “job” stability than working for someone else, and allows for a more flexible lifestyle so you can enjoy family, friends, and hobbies like climbing mountains! If you’re ready to leave your corporate life behind and join the ranks of the more than 611,495 small business owners in Colorado, keep reading for your plan of action.
Step One: Take Charge. You’re ready to control your financial future through business ownership, now it’s time to show your commitment by taking control of the process. First, work with a professional business broker! They will provide you the best access to business listings, often before they even hit the market. A great way to identify a business broker is by using the directories offered by the International Business Brokers Association or the Colorado Association of Business Intermediaries. These brokers are committed to following ethical practices and furthering their industry education.
Step 2: Evaluation. Next gather information on your financial capabilities (financial statements and taxes), your skills (and even weaknesses), and the personal goals you have for your business. This information will help you identify where to begin your search and will help your broker determine industries and businesses for you to pursue within your price range.
Step 3: Education. Buying a business is a big step, and you will feel infinitely more comfortable with the process if you understand it. So educate yourself by visiting our blog to learn more about financing and the purchase process. And don’t forget to explore your financial options too, such as SBA loans, using your broker for guidance as needed.
Step 4: Search. Now is the time to begin searching for a business to buy. Search for businesses for sale on our website or visit Biz Buy Sell. Your business broker will facilitate this process by helping you sign non-disclosure agreements, sharing new listings, and setting up business showings. During this process you may identify new parameters for your future business, so don’t forget to share these ideas with your broker.
Step 5: Offer. When it comes time to make an offer on a business you’d like to purchase, your broker will help you structure a letter of intent to present to the seller. After any remaining negotiations with the seller are completed, the letter of intent will be executed and you will make a good faith deposit into escrow. Don’t fear the negotiation process, this is what your broker is here for - they have years of experience facilitating the negotiation process and will steer you through the process.
Step 6: Due Diligence. After the execution of your letter of intent, due diligence offers a period of time to explore the business and work with the seller to fully understand operations and to confirm all of the initially provided information. Don’t be afraid to ask any and every question that comes to mind, because that is exactly what due diligence is for! Outside financing will also be approved during this step of the process.
Step 7: Closing. Now is the time for the final preparations of your business purchase to be completed. This includes the signing of the purchase agreement as well as the lease assignment, utility transfers, licensing, and payment of any agreed upon balances. Your business broker will be controlling this entire process to ensure everything is taken care for the official transfer of the business.
Step 8: Post Closing. Now that you own your own business, the transition and training activities can begin. These activities may include the seller supporting meetings with employees and clients, technical education, and other essential knowledge transfer tasks. Your broker will be available to assist you with any questions, post-closing requirements, or resource connection needs that may occur.
If you are interested in buying a business we invite you to visit our website or schedule a complimentary consultation with one of our business brokers today!
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Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!
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