The Appropriate Steps In Buying A Business

A business buyer asks the question:

I have e-mailed both the seller and the broker concerning a business I am interested in purchasing.  They have told me that my price is acceptable and I should start the loan approval process.  Is this the correct next step?

I am turning this one over to a BizBen Blog Contributor - Joe Robertson, President of Southern California Business Brokers - to answer this question for this reader:

"The answer is “no”, this is not the next step and in this case you have not even take the proper first step.  Often times sellers and brokers get lazy with the process of selling and will push people to work out of the sequence of a properly run business sale.  I strongly oppose this type of sloppy work.  It is counter productive and buyers and sellers should not put up with it.

Never think that you have an agreement on the purchase price of a business or other details of the sale through an e-mail or verbal agreement.  If you are truly interested in purchasing a business you should, with the help of your broker, submit an offer in writing on the business. The offer should outline many of the details of the purchase including any contingencies and the total purchase price.  It is only when the offer is signed by all parties that you have an agreement on the purchase price.

Now with a signed offer in place you may begin the other steps of the buying process."

Posted on June 22, 2007  |   Email This Blog Post   |   Print This Blog Post