Buyers

Overview

Buying a business can be a long and intensive process for all entrepreneurs. Bray Business Brokerage helps create an efficient and successful process that will help buyers maneuver through all the steps along the way. There are many things to consider when looking for an acquisition, relative to your own personal experience, appetite, financials, and more. Bray Business Brokerage can help connect your personal parameters with the right business that checks all the right boxes in your investment/ownership checklist. Having a trusted business broker can make a large difference when sourcing, evaluating, and purchasing any business venture. Finding the right opportunity isn’t the only challenge in the process, but once you engage into the contract phase, things start to get even more convoluted. There are many negotiation points and deal structures that may seem to have small effects, but they in fact could have substantial legal and financial implications to a buyer/seller down the road. There will also be many different parties involved such as attorneys, accountants, advisors, etc. and it often holds substantial value to have an intermediary to help consult and advise in between parties. Having the experience and knowledge of a professional business broker has shown to add value to help protect yourself and create a more profitable and well-rounded transaction.

The Steps for a Buyer

1. Interview Brokers

It is important to find a business broker that understands your situation and values prior to starting the process of finding an acquisition. Find out about the firm and the broker, to ensure they have the proper experience, knowledge, track record, and competence in the business to help accomplish your goals. Call us at Bray Business Brokerage to schedule a day and time to have a free buyer interview in person, or via phone/video.

2. Find The Right Business

Finding the right business can be challenging. There are many different opportunities out there, so finding one that meets your own personal preference on lifestyle, operational involvement, and profitability can prove to be a long and strenuous process. In this stage, it can be different for every buyer but often includes initial due diligence requests from the owner, Seller intro meetings, financial evaluation, etc. Bray Business Brokerage can help connect the dots, so you don’t waste your time going through deals that never have an outlook to get to a closing table.

3. Financing

Once a business has been identified as a promising opportunity, it is important to start investigating your financing plan as soon as possible. This is usually the largest bottleneck in closing a transaction so it is important to start the process early so you can close on time and don’t waste efforts if the deal is not financeable. This financing picture can look different for everybody but often includes forms of private equity, conventional financing, SBA, government funding plans, hard money, etc. Bray Business Brokerage can help make introductions to top lenders in the area that will fit into your personal financing plan.

4. IOI / LOI

Once you have a viable deal and a strong initial outlook on financing, it is time to present an IOI (Indication of Interest) or LOI (Letter of Intent). This will be your initial offer to the seller to negotiate the major deal points of the purchase. While this often won’t fully cover all negotiations in transaction, it gets expectations on the table to make sure that the buyer and seller are in general agreeance on terms before spending more time on the deal.

5. Purchase Agreement

Once general terms are agreed upon, it is time to start preparing a purchase agreement. This agreement is most often attorney drafted and can take anywhere from 1-12 months to prepare depending on the complexity of the business and transaction. There are large amounts of items and negotiations in an APA or SPA that will occur during this process, many of which can be difficult to interpret relative to the deal, which is a large reason why many deals die at this stage of the process. Bray Business Brokerage can help keep the transaction moving forward while providing perspective on all the unexpected surprises that may come up during this stage of the process.

6. Due Diligence

Before closing, there should always be some form of due diligence for a buyer to complete before closing on any business acquisition. This due diligence can come in many shapes and sizes, which depends on the buyer’s preference, and the type of business. Typical due diligence requests could include things such as tax returns, equipment list, facility tours, specialized financials and reports, Q&A with the Seller, and more. A physical inventory count is also common to complete at some point prior to close.

The Steps for a Buyer

7. Closing

Once all prior steps are completed and the Buyer and Seller are both ready to finalize the transaction, a closing day/time and place will then be set. On closing day, all parties will execute any applicable documentation and transfer funds through the appropriate protocol. If there is financing involved, you will typically close this on the same day prior to signing other legal docs, unless you’ve secured financing ahead of time. On closing day there can be last minute complications that could terminate a deal, so having a broker there to offer assistance and insight on resolutions to possible hang-ups could be the difference of keeping a deal alive or not. Bray Business Brokerage will assist on transactions until final closing and funding and will provide support for any unexpected surprises that could arise at the closing table.

8. Transition Implementation

Once a buyer has successfully closed the deal, the next critical step is to map out your transition plan. This essential step ensures that you have a smooth ownership transfer, and will help optimize internal efficiencies, employee retention, HR moral, and corporate profitability. Through our years of experience, Bray Business Brokerage will help advise you on the most effective and practical methodologies, structures, and approaches to creating a smooth and seamless transition into the business.

Call now for a free consultation
CONTACT US TODAY