Owning and growing a small business are clearly important parts of the American Dream as evidenced by the 33.2 million small businesses operating in 2022, as reported by the Small Business Administration. The Bureau of Labor Statistics (BLS) estimates that around 500,000 businesses change ownership each year.
How to Own a Business
Small business ownership can come in these ways: buying a franchise, starting a business from scratch, and buying an existing business.
Things to Consider Before Buying an Existing Small Business
Before buying a small business, it is important to evaluate what type of business you want to own. Decide what fits your skills, interests, and future plans. Then begin a process of due diligence, meaning the serious research needed to confirm that you are getting what you expect at the value you want.
First, conduct a legal review to confirm that the business has an appropriate legal entity, that it is registered with the state, that the business is in good standing, and that the owner has the legal right to sell the business. Also, look for any legal liabilities. Verify business licenses and permits.
Second, thoroughly evaluate the financials of the small business, looking carefully at the debts of the business, its sales, expenses, cash flow, and profits.
Third, consider the outlook for the business and its industry.
Fourth, get a solid picture of the business’ operating condition. Understand the assets involved and learn about its intellectual property.
Fifth, consider the business’ reputation and understand its customers’ satisfaction ratings.
How to Finance a Small Business Purchase
To secure financing, you’ll first need to determine how much you will need. Options to finance a small business purchase include securing an SBA loan, getting a bank loan, securing seller financing, or securing funds from a financing specialist.
Seek Expert Financing Assistance
Contact GM Capital Group, based in Allen, TX, and serving Dallas and surrounding areas. We offer custom financing solutions at your fingertips. Grow and expand your business with our highly diverse portfolio of financing and loan products.