Why Buy a Business?

  • Why buy a business?
  • Why buy an existing Washington business opportunity?
  • Why do people sell their small businesses?
  • Why use a broker to buy a small business?

Key Considerations

  • How do I find the right small business opportunity?
  • How big of a small business opportunity can I buy?
  • How do I finance a small business?
  • What's the right price to pay when I buy a business?

Steps to Buying a Washington Business for Sale

  • How do go about buying a Washington business for sale?
  • How do I find small business opportunities in Washington that are for sale?
  • How do I see the business in operation before I decide whether to buy?
  • How do I structure a deal, make an offer, and close the transaction?

Funding a Small Business

  • How do I go about funding a small business?
  • How apply for small business loans?
  • How can a get a Small Business Administration Loan?

Washington Business Opportunity

  • Why Buy a Washington Business Opportunity?
  • Why Buy an Existing Washington Business Opportunity?
  • Why Use KR Business Brokers?
  • Why People Sell Their Business?

Why Buy A Washington Business Opportunity?

Self Employment Opportunity - Job Security

Many people decide to buy a business because they are tired of working for someone else. Buying your own business is like buying yourself a job - one that you control.

Financial Independence

Studies show that most people don't live beyond their next paycheck and that the greatest asset they have is their home. The pressures of daily life make "getting ahead"- a difficult challenge. Owning your own small business allows you to build value for the future and, hopefully, to become financially independent through the growing value of your business and the cash flows that come from your successes. Working for someone else means someone else gets the rewards. Owning your own business allows you to benefit from your hard work and efforts.

Pursue the "American Dream"-

At one time or another, most of us dream of owning our own business and living the great American Dream. Perhaps now is the time for you to live that dream.

Why Buy an Existing Small Business Opportunity?

Eighty percent of all new small businesses fail, according to government statistics. The most common reasons for that failure are under-capitalization, poor location, poor or no management skills, or low production quality. Buying an established small business helps overcome many of these problems, as someone else has taken the risk and burden of getting the business going. A viable ongoing business ensures a proven location and the right product and demonstrates at least basic management capabilities. An existing business also gives you immediate cash flow and customers. Why take the high risk and cost of a startup when you can buy a proven small business opportunity?

Why Use KR to Buy a Washington Business Opportunity?

Acquisition Search

KR Business Brokers has access to a large database of existing Washington business opportunities for sale. One of these might be right for you. In addition, we can search a specific industry or type of small business opportunity to find a business that meets your criteria. We also help in market evaluations and comparisons so you can determine the price of your target acquisition.

As an intermediary, we can assist you in formulating and negotiating a fair deal for everyone involved - without getting emotions or prejudices involved. Should your Offer involve bank and/or SBA loans, KR also assists in writing your business plan, building your projections, preparing and submitting your small business loan application. At KR we know which banks and loan officers actual make loans and which types of loans and applications they favor.

Funding a Small Business in Washington- Financing Assistance

KR Business Brokers can help you locate financing for your purchase of a business. We provide assistance with everything from small business loans to factoring of receivables. We also have industry contacts and affiliated companies that can assist you.

Why Do People Sell Their Businesses?

People sell their business for a variety of reasons. Some are . . .

  • Under-capitalization
  • Divorce or a dispute with partners
  • Death or illness
  • Relocation
  • Burnout
  • Upgrading to a bigger business
  • Poor management
  • Retirement

Understanding why a person is selling his or her business can help you structure a deal that works for you and the seller.

Key Considerations in evaluating a Business Opportunities

  • How Do I Find the Right a Business Opportunities?
  • How Big of a Business Opportunity Should I Buy?

How Do I Find the Right a Business Opportunities?

Choosing the right business opportunities is important to your success. Choosing the right business opportunities will bring great satisfaction and profit as you watch your business flourish and prosper under your personal direction. Before selecting a business that's right for you, review these key considerations

Choose a business you have some knowledge and interest in, but be open to other a business opportunities. Experience shows that most buyers buy a different business than the one that originally brought them to the broker's office. Most buyers have the ability to adapt to a range of small businesses with which they have had exposure or experience - even to businesses they had not previously considered, such as manufacturing businesses for sale, distribution businesses for sale, or service businesses for sale.

Choose track record and potential over exact location. Sometimes buyers make the mistake of looking only in their own backyards. Most often, the best business will be a reasonable distance away. A proven track record, adequate cash flow, and good returns are more important than location. There are a wide range of small businesses for sale to consider and location is not the primary criteria.

Don't get "sticker shock"-. Structuring a deal that is favorable to all parties is often more important than the asking price. Make an offer that's reasonable, and see what the seller says.

Expect to offer a fair price that works for all parties. A fair price for the buyer is one that offers at least three things: (1) a reasonable salary for the new owner, (2) a reasonable return on the buyer's investment, and (3) the business's ability to service the debt incurred with the purchase. The cash flows to the new owner should support at least these elements, or the deal may not have long-term viability. Generally, a fair price falls between one to three times the adjusted cash flow of the business.

Expect to finance a substantial amount of the purchase. Typically, buyers pay around 30% down and finance the balance. KR Business Brokers can help you secure SBA, asset, cash-flow, receivables, and equipment-based financing for a large part of the transaction. Often, the seller finances a portion of the deal with a note that is for five or more years. A properly structured purchase should keep your total debt payments below 30% of your cash flow.

How Big of a Business Opportunity Should I Buy?

The size of business you decide to buy should be based on many factors, including those listed below

Terms of Purchase

The more favorable the terms are for the seller, the lower the price will usually be. On the other hand, the more favorable the terms are for the buyer, the higher price and more down payment the seller is likely to want. You will get the very best price for an all-cash deal (even though it may not be in your best interest).You'll pay the most for a deal that has little or no down, because of the risks taken by the seller.

Tangible Assets

Such tangible assets as inventory, furniture, fixtures, equipment, and receivables are more easily financed than a company's intangible assets. Thus, a business with more tangible assets can usually be purchased more easily with less down payment, allowing you to purchase more for your money.

Intangible Assets

Intangible assets like the length of time in business, an established customer base, training, non-compete agreements, exclusive markets, established suppliers, and expected growth potential all add significant value to the business. However, since such intangible assets are generally financed by the seller, they are difficult to finance.

Lease Agreement

The terms and transferability of the existing lease agreements can be a critical factor in purchasing a business. Favorable terms and an easy transfer increase the price of purchasing the business, whereas unfavorable terms and inability to transfer (or, worse, a requirement to move the business) greatly reduce the value and price of the business.

Quantity and Quality of the Income Stream.

The key factors of sales, gross profit margins, cash flow, quality of records, and positive business trends all help support a higher price and a greater debt structure.

Risk Vs. Price

The great tradeoff in the purchase of a business is between risk and price. Higher risk for the buyer results in a lower price, and lower risk for the buyer results in a higher price. Unless you're a professional buyer, you should pick a business somewhere in the middle of the risk-price tradeoff - a business that may have some problems you can solve but is not failing. Then you can make a difference and increase its value without taking undue risk.

Business Opportunity

Steps to Buying a Business Opportunity - Your quest to own your own business follows a definite path to success. Here's a 12-step roadmap of the key elements in every successful purchase

1. Commitment

Acquiring a business opportunity in Washington is a serious commitment for all involved. You must have the mental and financial commitment to offer price and terms consistent with the marketplace. KR Business Brokers can help you find the right business opportunity in Washington and structure a deal, if you are committed to follow through and if you have the financial means to make a reasonable down payment.

2. Finding the Right Business Opportunity

A business is available for virtually every budget and ability. KR Business Brokers will help you find the right business opportunity and will help you develop an acquisition strategy that fits your price and background. If you are looking for a specific business, we can perform industry and market searches to find the exact business that meets your needs. Then we can complete market evaluations and industry comparisons to help you value your selection fairly.

3. Confidentiality

Confidentiality is critical to the seller. You will sign an agreement and promise to keep the seller's information confidential for each business we show you. KR Business Brokers does its utmost to ensure that the seller's confidentiality is maintained. A breach in confidentiality could significantly harm the seller.

4. Business Selection

We will help you select businesses that fit your criteria and circumstances. We will provide you with additional details of the businesses you have selected and will help you narrow the search to one or two of particular interest. KR Business Brokers has a wide variety of businesses to choose from, such as: manufacturing businesses, distribution businesses, fast food franchises, grocery stores and convenience stores, gas stations, automotive services, mail & shipping businesses, salons and day spas, and many more.

5. Buyer Background

At this point, KR Business Brokers has a fiduciary responsibility to the seller to verify that you have the ability to purchase the business you have selected, before proceeding further with additional disclosures and meetings. KR Business Brokers will have you complete a buyer profile that includes disclosures of your financial ability to complete a transaction and a resume and background information about your experience. This step helps us to ensure that you are considering a business opportunity in Washington that fits your skills, interests, and abilities before involving the seller in the process.

6. Showing the Business and Meeting the Seller

At this point, you will receive a complete package on the business. We can arrange for a visit to the business so you can walk through the facilities and view the operation first hand. Then we can arrange a meeting with the seller so you can get answers to any additional questions you may have.

7. Making the Offer

Now you are ready to proceed by making an offer to purchase with an earnest-money deposit. This step always depends on the seller's acceptance of the price and terms and on contingencies for such items as verification of records, lease assignment, lien removal, acquiring required licenses and permits, acceptance of a non-compete agreement, training period, and final inventory and inspections. During this period, your earnest money is held in escrow.

8. Presentation of the Offer

KR Business Brokers then presents your offer, along with your background, experience, and favorable points. Remember, the seller is most likely going to finance part of the purchase price.

9. Negotiation and Acceptance

Now the seller will either accept or decline your offer or may make a counter offer. KR Business Brokers will help negotiate the terms of the offer and find solutions that satisfy both parties whenever possible. Once the seller accepts an offer, the business comes off the market. The offer to purchase becomes a purchase and sale agreement, with contingencies.

10. Due Diligence and Contingency Removal

Now begins the in-depth inspection of the seller's records and accounts. This step does not occur before the offer is made; because experience shows that in-depth due diligence is often wasted if the price and terms have not been negotiated first. Agreement for the lease to be assigned, public-records searches, and verification of assumable loans and trade agreements occur. Once all the contingencies have been removed, then the purchase and sale agreement becomes binding.

11. Open Escrow

The purchase and sale agreement and all other documents relating to the sale are turned over to an escrow attorney. The attorney prepares all the closing papers; performs lien searches; and prorates rents, deposits, taxes and other items to the closing date. The attorney also makes sure all secured creditors are satisfied, all other security agreements and related documents are completed, and final arrangements for the payoff or assumption of all notes and leases are made. All parties review these arrangements to make sure they meet everyone's satisfaction. The escrow attorney also keeps copies for at least three years following the close of the sale. The attorney costs are minimal and are shared equally between the buyer and the seller.

12.Inventory and Closing

Final inventory is taken, and the transaction is closed. Then it's celebration time - you've joined the ranks of those who are living the American Dream!