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Buying a Business
Is it Time to Make an Offer?
Is it Time to Make an Offer?
10 Tips to Consider When Making an Offer
| Transworld Business Advisors
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If you're asking the question it probably is. If I have one regret during my own personal business search, it is that I couldn't pull the trigger and make more offers. I saw lots of businesses that would have been good to buy and run for awhile, maybe to even flip later.
But, for you looking to buy, you MUST learn how to make offers. Obviously Donald Trump and Warren Buffet have this process mastered. Here's a few tips to becoming a deal maven or at least getting started with your first business purchase.
1.Don't be afraid to make a low ball offer. You never know what a seller will take that day. Plus the business value is what is it is worth to YOU!
2.It's your offer. Put whatever you want in it! Don't let anyone tell you what is "normal".
3.It's your offer. Write it on a piece of toilet paper if you want. In all seriousness, it really doesn't matter what form an offer is in. The legal paperwork can follow if it is nonbinding.
4.It's probably OK to use the broker's offer form, if you have #5. You should have a form/fill in the blank contract ready to go even before you start your business search! Ask your broker for one.
5.Make sure the offer is nonbinding or has a very strong out clause. You must have the ability to get out of the contract 100% for any reason during your diligence period.
6.Stop looking for perfection! Look for a good value! Look for something that you will be able to grow through your business strengths. You can hire or outsource your weaknesses.
7.Buying a business is not like getting married. You can resell it if it doesn't work for you later. Don't get hung up waiting for the ONE!
8.Take advice from others, but act on your own! Time to put on your big boy/girl pants! No one will ever give you the green light to buy a business. You must take the risk and ownership of your decision! I can't tell you whether or not you need to have an initial offer reviewed by an attorney. If you choose to do so, they better be the right professional (future blog).
9.Don't miss out on a great deal. Move quickly. Be ready to make offers often and prolifically!
10.Understand that almost 50% of deals fall through. So you have a long way to go even if your offer is accepted.
Making offer should be easy, but it is often the one step many buyers fail to master or overcome emotionally. Get over it! Dare yourself to make an offer! Learn to take risk! Otherwise we will never get to the closing table and you will never take your slice of the American dream pie!
Andy Cagnetta owns and operates Transworld Business Advisors. He joined the company as a sales associate and later purchased it. Transworld is an international franchise business and franchise brokerage, with thousands of businesses for sale and 50+ franchisees in the US and four countries.