Buyers' Frequently Asked Questions

What is Due Diligence?

Merriam-Webster Dictionary defines due diligence as "research and analysis of a company or organization done in preparation for a business transaction." What this means to you as a Buyer is that this is your opportunity to make sure that the business is what you were presented with originally.

Why should I buy and existing business instead of starting my own? 

There are a number of very logical reasons why purchasing an existing business has a greater risk-to- reward ratio than starting a business. Those reasons include a proven concept and/or product; with an existing business you can already see the business concept works. Established location, employees in place and quicker return on your money are just a few of the many other reasons why buying an existing business is likely the right choice for you.

Why should I use a Business Broker to buy a business?

Business Brokers can introduce you to many more businesses than you would find on your own. Business Brokers are most commonly paid by the Seller and will save you time and money. Business Brokers help structure the offer and act as a negotiator/buffer between the Buyer and Seller. In particular FCBB Agreements were designed to protect ALL the parties involved in the transaction covering simple items like the assignment of lease (for you to take over the business location) to more complicated issues such as key employee negotiations.

Will I be able to obtain financing to buy a business?

These days' bank loans are fairly difficult to obtain especially without prior experience in the business you may be looking to buy. Seller Financing has increasingly become the "norm" as a financing option.

How do I make an offer on a business I want to purchase?

Your First Choice Business Sales Professional will help you navigate through the buying process one step at a time. With a First Choice Agent you can take advantage of the FCBB Agreements which were designed to protect ALL the parties involved in the transaction. Our agreements cover the things that are easy to miss to the more complex situations that we have seen come up over the last 20 years.

Do I need an attorney? 

It is your option to have an attorney review the purchase documents; in fact, your First Choice Business Sales Professional will likely suggest it.

How do Sellers come up with the price they are asking for their business?

If the Seller is represented by a Business Broker the Broker likely used one or several industry suggested pricing methods. For example the price may be based on a multiple of income or a combination of income and the assets of the business. Business Brokers, based on experience, do their best to price a business so that it makes sense to a Buyer and still fulfills the Seller wishes creating a win-win situation.

Aren't most businesses for sale losing money?

No, there are many reasons why Sellers want to sell. For Example, retirement, disability, death, divorce, partnership dissolution or plain and simple burn out.