How to buy an existing business

If you ever dream to own your own business but doesn't want to create one from scratch, you can buy one.

Instructions

1. There are a lot of businesses that are for sale. If you look at the right place you will find a lot of those.

2. Newspaper, business brokerage, internet are great place to find a lot of businesses that for sale.

3. Look a lot of them before you decide to move forward. Then after you choose few businesses that you would like to get more detail information about it, usually you need to sign a confidential agreement before the broker can show you the exact location.

4. You will need to obtain financing to purchase that businesses except if you will pay it all in cash! For most of small business owner you can get financing from SBA (small business administration) loan.

5. SBA loan is a loan that guarantee by the goverment. Most bank and financial institution required you to have this SBA guarantee loan for a small business owner.

6. Next step you will need to write a letter of intent to purchase a business that you like. It show a purchase price and the amount of money that you deposit into escrow account to purchase the business. This will allow a broker or current business owner to pull back the business for sale listing temporarily while you're doing your due diligence.

7. The letter of intent usually have a time limit i.e: 30 days and some contingencies. The word "cotingent upon ... " is very important in letter of intent, so after you conducted your due diligent if you find out something is not right you can still back out from the contract and get all your deposit money back.

8. After due diligent if everything is fine then the next step is to draw a purchase agreement. You may want to hire a lawyer at this point to help you out. You can also hire a lawyer from the beginning and have the money deposit to be deposited to your lawyer escrow account.

9. You can hire CPA to do due diligent for you as well! Make sure you hire experience professionals that know what they're doing! Very important.
   Not all lawyers or CPA are equal, some are better than others.