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hether you are an experienced business buyer (multiple transactions consummated) or a first time Buyer some of the following tips may be helpful in your search for a business.
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- Take a good look at your personal financial position including assets, liabilities credit history, family financial requirements (monthly net expenses).
- Examine your personal and family risk-reward quotient.
- Do you feel that your emotional maturity is such that you can handle business decisions. It is your money not the bosses'.
- How long have you been thinking about owning a business of your own?
- Do you have 100% support from family in the endeavor.
- What skills, experience, certification (if applicable), can you bring to the Business.
- Are you willing to put in the hours to make a success of the venture?
- Do you have access to support professionals to guide you in the search process and after the closing?
- Are you sufficiently committed to the concept of putting your hard-earned assets on the line, including personal guarantees?
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f you have answered affirmatively to the foregoing, you are probably an EXCELLENT candidate to be in business for yourself. Now that you are prepared mentally, physically, and financially to purchase a business; you need to select a TABB Broker to assist in your business acquisition.
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he selection process in picking a broker/intermediary is much like selecting a physician or other professional. Start by asking friends, associates, trade groups, or others who may have had an occasion to use such professional services. In the case of selecting a broker, choose from the Texas Association of Business Brokers (TABB) membership list.
ick one or more names, from the roster, call and make an appointment with a TABB Member who deals in the size business or industry you are interested in pursuing. Remember that some brokers only handle larger mergers and acquisitions, other are "General Brokers" who represent a wide range; from small to medium priced offerings. When calling to schedule your first broker appointment, be honest and up-front regarding your background, investment capabilities, (liquidity and net worth), timetable, and the parties who would be involved in the decision making process, general geographic boundaries desired for business location, and industry sought (if you have a specific industry identified). For your information, broker surveys tell us that 90% of first time purchasers either do not know what they wish to buy or, end up purchasing something entirely different than their initial selection.
fter meeting the TABB Broker, determine if you are able to communicate comfortably with one another; does the broker understand your needs and desires. Also, does he /she work with buyers and sellers in your investment range, can you place your confidence in this particular individual and the firm with whom he/she is associated.
nquire about the Broker's years of experience in the profession, certifications, membership in trade associations, access to sources of finance, escrow agents, legal accounting, or other support referrals. Many TABB Brokers, in addition to handling the sale of business assets, also are licensed to negotiate leases and sales of real estate as well. A recent law, pertaining to real estate transactions in Texas, requires that brokers initially have a face to face meeting; identify to the prospective buyer or seller whom the broker is representing, and who is responsible for the Broker's professional fee.
o not be surprised if a broker asks you to sign a confidentiality and warranty agreement prior to divulging any information concerning businesses he/she has listed. This is a requirement of most sellers and additionally spells out the relationship of the parties, and who is responsible for the Broker's fees.
ou have the right as a potential purchaser, to receive information regarding specific businesses that a broker (as seller's agent) believes you have the skills and financial ability to consummate. The question arises when buying businesses or real estate, "Why not buy directly from an owner?" First the obvious answer is the owner has, in most cases, only the one "property" to sell, is usually biased as to true worth, will be gone after the closing, has no credentials or licensure at risk, and generally "botches" the deal to the detriment of the purchaser. TABB Members are required to abide by a strict code of ethics, and are encouraged to take continuing educational courses leading to certification. Many TABB Members are Board Certified Brokers (BCB) as well as Certified Business Intermediaries (CBI, a designation awarded by the International Business Brokers Association).
*If you cherish the idea of being your own boss and having better control of your own destiny, consider purchasing a business through a TABB Broker.
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