How to Buy a Small Business in Colorado
- Author Jessica Fialkovich
- Published January 26, 2019
- Word count 776
Deciding to become an entrepreneur and buy a business is an exciting step, but it can also leave you weary of not knowing how or where to begin the process. That is why Transworld Business Advisors has developed this handy guide for understanding how to buy a business.
#1: Preparation
Before buying a business you should review your finances and have personal financial statements ready to share with your business broker. You will need them when it comes time to be pre-qualified by your business broker and they will provide helpful insight into the amount of cash flow you will require in the future.
#2: Build Your Team
The first official step towards buying a business is identifying your team of advisors. A typical advisory team includes a transactional attorney, wealth manager, and a business broker or transactional advisor. The expertise of this team will dictate the likelihood of a successful future transaction.
#3: Information Collection
Now that you’ve engaged a business broker, they will begin to gather information about you and start the pre-qualification process. The information gathered in this step will help your business broker guide you to a business that will suit your preferences and goals.
#4: Business Search
Now the fun starts! Your business broker will identify business opportunities that may be a match for your needs. As a buyer, you can support this process by reviewing businesses for sale on Transworld’s website at www.tworlddenver.com or visiting other business listing websites like BizBuySell.
#5: Inquiry & Screening
Once a good opportunity is identified, the buyer can begin their inquiry into the business by first signing a non-disclosure agreement (NDA). This step is also when the buyer will need to get serious about their financial capabilities, and the source of their funds for the purchase price. Your business broker can provide valuable support for financing the purchase of a business!
#6: First Meeting & Company Review
After signing an NDA, if a buyer is still interested in the business, they can meet with their business broker and have a discussion about the company to exclude significant financial and tax information - this information will be dispersed during due diligence. The broker can answer questions about the business, its structure, performance, industry, growth opportunities, and transition plan, as well as a recast of the business’s financials.
#7: Second Meeting & Tour
At this stage, the seller gets involved via a meeting with the buyer and broker. Often times this meeting is held at the business for sale, and is an opportunity for the buyer to ask more specific questions of the seller and for the seller to get to know the buyer. The development of a positive relationship between the seller and buyer is essential to a positive and successful future transaction.
#8: Letter of Intent
During this step, real action is taken through the submission of a letter of intent (LOI) which outlines the future deal structure and includes key terms including the purchase price, transaction timeline, and length of due diligence. The buyer will also put a deposit into escrow. The LOI is an important tool to get the buyer and seller on the same page, but it is actually a non-binding contract.
#9: Due Diligence
Due Diligence is a period of validation for the buyer where they receive full access to the business and its financials, with the exception of employees. Generally, a week or two is permitted for due diligence and at the end the buyer can either decline or accept their LOI. If they decline they receive a full refund of their deposit, and if they accept, the terms of the LOI will be finalized and will become the Purchase Agreement.
#10: Pre-Closing
Between Due Diligence and Closing a long list of tasks facilitated by the broker, are completed and encapsulate "Pre-Closing." These tasks may include the transfer of the lease, setting up a new business entity, securing financing, licensing transfer, contract assignment, and much more.
#11: Closing
Rather anticlimactically, most closing are completed virtually before the closing date and include signing the bill of sale, the lease transfer, the buyer & seller statements, and other documents. A few days prior to closing the buyer will complete a wire transfer to be distributed by the transactional attorney on the official closing date to the seller.
#12: Training & Transition
A closing meeting will be held for employees of the company to alert them of the transition of ownership, at which both the buyer and seller will be present. The training period will also begin immediately after closing and involves knowledge transfer from the seller to the buyer.
To learn more about buying a business schedule visit our website for more information.
Transworld is the top business brokerage firm in the Rocky Mountains, and number one franchise location worldwide. Transworld assists visionary entrepreneurs in buying a business or selling a business in the Rocky Mountain region, specializing in helping family-owned and closely held businesses with their strategic plans for the future. For more information about Transworld - Rocky Mountain please visit www.tworlddenver.com.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Moody Vibes Only: Statement Pieces
- The King Beyond the Spotlight: Unveiling the True Elvis Presley.
- Where Soul Meets Space: Curating with Character
- Cinematic Titans: Inside the Billion-Dollar Club.
- Attention-Grabbing Dating Profile Headlines for Singles Over 40
- Digital Transformation: How to?
- Jaws: Beneath the Surface — Fear, Fragility, and the Monsters We Carry.
- 🚤 Pattaya Floating Markets & Hotels: The Best of Local Culture & Comfort
- 🏝️ Koh Mai Phai: Bamboo Island Adventures in Thailand's Andaman Sea
- 🏋️♂️ Top Gyms in Pattaya
- 🏝️ Koh Kood, Thailand: An Underrated Island Paradise + Must-Try Tropical Fruits
- 🌴 Exploring Phi Phi Island: What to Do & How to Get There
- 🌴 Things to Do in Pattaya: Water Parks for Kids & Markets for Adults
- ✅ How to Find the Ideal Tour Guide in Thailand
- Essential Thai Phrases Every Tourist Should Know 🇹🇭
- Choosing the Right Hotel in Pattaya: What to Consider Before You Book
- Best Hotels to Stay at in Bangkok (2025 Guide) – Where Comfort Meets Culture
- Best Hotels on Pattaya Beach (2025 Guide): Where to Stay for Views, Vibes & Value
- Best Time of the Year to Visit Pattaya, Thailand: A Month-by-Month Guide
- Enjoying a Comfortable Flight to Thailand: Tips for a Smooth Journey
- Can Foreigners Own Land in Thailand? Here's What You Need to Know (2025 Update)
- New Entry Requirement: Thailand Digital Arrival Card (TDAC)
- West Side Story: A Clash of Dreams and Realities in the Streets of New York.
- The Eternal Outsider: Peter O’Toole’s Journey from Theatre to Hollywood Legend.
- Tab Hunter: Hollywood’s Golden Boy and the Secret He Had to Hide.
- Kirk Douglas: The Indomitable Spirit of Hollywood’s Golden Age.
- The Antique Indian Door as an Artist’s Muse
- Majestic Portals: Styling Indian Palace Doors for Soulful Spaces
- Why Choose Professional Dementia Care Services in Mobile, AL?
- Mission: Impossible — The TV Classic That Redefined Espionage.