Purchasing a Small Business
Outline
I. Deciding to buy
A. Why buy a small business?
B. Starting out-the nine steps
C. Initial details to consider
1. Are partners needed?
2. Economic factors
3. Is the location acceptable?
4. Tax strategy
II. Where to start
A. How much income is needed?
B. The "Thirteen Steps" to acquiring a business
III. Locating a potential purchase
A. The Acquisition Plan
B. Beginning the search-who can help?
III. Negotiating a purchase price
A. Valuation of a small business
1. Why do a valuation?
2. Choosing the method that is best for your situation
3. Some different methods of valuing a business
a. Ability-To-Pay Method
b. Discounted Cash Flow Method
c. Excess Earnings Method
B. Calculating goodwill
C. Setting the purchase price
D. The letter of intent
IV. Finding the initial capital
A. Sources of financing
1. Traditional sources
2. Nontraditional sources
B. Guaranteed loan programs
V. Closing the deal
1. Get a lawyer
2. Audit review
3. The closing
VI. The rewards of working for yourself
The decision to purchase a business of your own is not an easy task. There are many things to consider before the final decision is made. First of all, exactly what do you want to accomplish? To make millions of dollars, right? Or is it to have the freedom of being your own boss? Whatever the reason, you must be sure that it is something that you are ready to devote an exorbitant amount of time and energy into and that it is something that you really want. Otherwise, you might be stuck doing something that you hate. If you are ready to commit then you must ask yourself just how far will that co ...