Purchasing a new business can be very time-consuming, complicated, and full of unpredictable risks for all parties involved. In fact, 80% of planned business purchases are never completed according to Peter Siegel, MBA from USABizMart. Purchasing a pre-existing banquet hall, however, can be a significantly less risky business investment for both a first time business owner and a seasoned entrepreneur. Finding and securing such a business can be done efficiently if the correct measures are taken beforehand.
Things You'll Need
- Estate Agent
Decide how much capital you are willing to invest as a down payment. Plan to spend between 30% to 100% of the money. How much you are able to spend on the down payment will play a critical role on the size and location of the banquet hall.
Search for banquet halls in locations that are logistically convenient for customers. This can be done by either hiring a business estate agent. Alternatively, you may do an online search for banquet halls in ideal locations in your area. You may purchase a banquet hall that is not for sale if you have enough capital, but it is not guaranteed.
Research the business’s history and the current owner. It is imperative to find out how much the owner is selling the banquet hall and the actual value of the business before starting any negotiations. Hire a CPA to discuss the financial viability of the banquet hall.
Begin negotiations. Hire a lawyer for this and subsequent stages if you do not already have one. Use what you know about the history of the business and its value to your advantage to lower the price, but it is important to remain flexible. Property sales negotiations happen quickly. Buying a banquet hall is no exception and waiting too long may lose the business.
Gather important documents. These should include tax information, leases, and employee contracts. Agree upon what other assets are being sold such as inventory and equipment for the banquet hall. A letter of intent for purchase must also be made. To further guarantee your ability to purchase the banquet hall, the letter of intent should include a binding agreement for the seller to not open negotiations with other prospective buyers for a set period of time.
Sign all closing agreement documents and have them notarized and pay all money due. This includes money for services rendered for the lawyer, creditors and any unpaid sales tax.