Buying a California Business – What to Keep In Mind

Dreams of the “Golden State” may compel you to buy a business in California, but there are a few things you need to keep in mind. You want to look for a company that matches your knowledge and experience before you plunk down a sizeable amount of cash on your dream. That takes a bit of research up front and, at times, some help from a broker.

Ready or Not

You may be ready to find a business to invest in, but the business may not be ready. Some businesses refuse to advertise that they are looking for buyers for several reasons. One, they may frighten valuable employees into leaving early thinking that the company is being bought out. Two, they do want to scare away customers who might be wondering if the company is having hard financial times and needs to sell. If a company has investors, the scenario for a public sale is even worse. Confidentiality is desired in most cases as details for a sale are worked out between the buyer and the seller.

Brokers Can Help

Brokers can perform a variety of services. You may want to buy a business in California – what to keep in mind is that you may have no knowledge of this area. Brokers can scout out business sales in various states, even providing detailed financial and business descriptions of businesses that up for grabs. They may also keep an eye open for businesses that match your industry specialty. You don’t want to go for the cheapest business opportunity, but the one that is the best match. After all, anyone can buy a business, but to make it profitable one must operate it with a certain level of skill.

Negotiate the Sale

Business brokers can also negotiate the deal, much like a real estate broker. They will pick out a selection of businesses that closely meet the criteria you’ve given them. Upon your review, you may want to research a business further before you make a bid. If you do make a bid the broker will collect a deposit check and your offer and take it to the business owner who wants to sell. If it is accepted then you can get a business almost as easily as checking a book out of the library from a catalogue.

When the Business is Not for Sale

There are times when you spot a business, but it is not for sale. By having an intermediary make discrete inquiries, you can find out if the business owner could be persuaded to sell. It is not something they are likely to advertise, but may be quite open to receiving an offer once approached. You can also tell when a business is in distress and might welcome a buyout offer if someone else is researching it for you. Some brokers specialize in these types of deals to help both the business owner release a business that is not working for them while providing a buyer the opportunity to take the business in a more profitable direction, while discounting the cost of purchase.

Kathryn Hettlinger is a certified business broker in San Diego. In her 15 years in the industry, she has facilitated transactions for dozens of businesses for sale in California.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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