Buying a business in the South is not that different than investing in real estate in other parts of the country. However, when you plan to buy a business in Nashville, Brentwood, Franklin, Murfreesboro, or the surrounding areas, you do have the experience of Beacon Exit Advisors, a Nashville business broker, at your service. Here, advisors share insight for first-time buyers on how to acquire a new company.
Start by gathering information.
According to Beacon Exit Advisors, you should not invest in a business – in Nashville or anywhere else – without knowing all you can about both the business and its location. Find out everything from why it is being sold to how much money it brought in over the last 10 years. Plan to ask the current owner lots of questions, up to and including whether or not staff plans to stick around once the M&A process is complete. If you are not comfortable having this conversation in person, your business broker can act as a liaison.
If you do not have a business broker, find one.
If you have yet to find an advisor for the process, it is time to start interviewing. Whether you are simply buying a business name or are expected to purchase real estate to go along with that, you will appreciate the expertise a business broker can bring to the table. This is a person or agency that has tremendous experience doing what it is that you have set out to do. They will have relationships with other professionals in and around Nashville and can get you the information you need to make an informed decision.
Start signing confidentiality agreements.
As you get further along in the process, you will likely be asked to sign a non-disclosure and/or confidentiality agreements. This is standard procedure throughout Nashville and Middle Tennessee. Your business broker can walk you through the process, and then start gathering the documents that you will need to review before moving onto the next step. Your advisor will most likely first put their hands on a marketing package, which the other party’s business broker should put together. This should have answers to most of your questions, and it may also contain information on proprietary processes. This is, in part, why a confidentiality agreement is important. After all, the seller has to protect their interests just as you have to protect yours.
Now it is time to evaluate.
Now that you have the marketing packet in hand, sit down with your business broker to decide what to do with the information. Together, you can dissect everything the seller has provided, and then follow up if you have additional questions.
Once you have gone through everything, it is up to you to decide if you want to make an offer. Ask your broker their opinion of whether or not the business is right for you. When you decide to go for it, your business broker can help you write an offer. This, of course, should include contingencies, which might be anything from whether or not you can access financing to being able to cancel the deal if additional information comes to light.
Part of the decision-making process is doing your due diligence. However, it deserves a special category of its own because it is that important. You and your business broker should sit down together and pour through everything from the last 10 years’ worth of financial statements and tax returns to the age of the equipment on site. Further, execute a Google search of the business – and the current owner – to find out if there are any reputation management problems that might affect your ability to turn a profit.
When it is all said and done, hopefully, you will have a business that you can grow and nurture. Remember, it is a process. Be patient, and listen to your broker along the way. Buying a business is not like running to the grocery store – it is a process that takes time and might not always be convenient, but the steps are all worth taking.
Visit https://beaconexit.com/ for more information.