Buying an Existing Business

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Tips to buying a businessWhat You Need to Know to Buy A Business

Buying a small business is a big decision. There are a variety of factors which must be considered as well as a great deal of information to gather and analyze.

The Arkansas Small Business and Technology Development Center offers a variety of services to individuals who are considering buying a business. The ASBTDC provides this assistance through training programs, tools, business resources, and counseling services. The ASBTDC offers helpful information and tools to those who are in the process of buying an
existing small business. A great deal of information is available online.

Action Steps to Buy a Business

For those who are considering purchasing a business, the ASBTDC offers suggested Action Steps which are listed below for Buying a Small Business. These steps are intended to help guide you through the process as well as point you towards suggested information and tools.

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  • Step 1: Consider potential funding needs and realities of obtaining financing.
    Obtaining financing to purchase a business can be challenging. It is important to estimate the amount of funding that would be needed for the project and consider funding requirements. It is recommended that those considering buying a business review “Can I Qualify for a Loan?”and consider the realities of obtaining financing.
  • Tips Buying a BusinessStep 2: Gather Information from the Seller - A Checklist
    Obtaining information from the seller about the business is a very important step. This information can help in the decision making process as well as will be required if financing is needed. Review the checklist to help you when gathering information from the seller.Arkansas Residents - If you would like to talk with someone about the information you’ve obtained from the seller and about the feasibility of your project, the ASBTDC can assist you. To obtain this assistance, contact your local ASBTDC office.
  • Step 3: Consider Planned Changes to the Business
    It is important to consider any planned or required changes to the business. How will the business be different under your ownership? How will these changes affect the business? What would be the cost of such changes? A written explanation of planned changes should be developed.
  • Step 4: Develop Financial Projections – Online Courses Available
    Develop income statement and cash flow projections based on historical performance, information obtained from the seller, and planned changes to the business operation under new ownership. Developing projections can help you determine whether or not the project is feasible and if you are still interested in moving forward with the business purchase.
  • Step 5: If financing is needed, develop and submit a loan proposal to a potential lender. Individuals planning a business acquisition who need financing should develop a loan proposal to communicate with potential lenders. A loan proposal provides lenders the information they need in order to decide whether or not to finance the project.

Frequently Asked Questions
The ASBTDC provides answers to common questions often asked by those who are considering purchasing a business.

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philadelphia criminal attorney July 20, 2012 at 5:24 pm

Great tips! I think obtaining information from the seller about the business is a very important step. This information can help in the decision-making process and will be required if financing is needed.

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