Purchasing a Small Business Deciding to buyA. Why buy a small business?B. Starting out-the nine stepsC. Initial details to consider1. Are partners needed?2. Economic factors3. Is the location acceptable?4. Tax strategyII. Where to startA. How much income is needed?B. The "Thirteen Steps" to acquiring a businessIII. Locating a potential purchaseA. The Acquisition PlanB. Beginning the search-who can help?III. Negotiating a purchase priceA. Valuation of a small business1. Why do a valuation?2. Choosing the method that is best for your situation3. Some different methods of valuing a businessa. Ability-To-Pay Methodb. Discounted Cash Flow Methodc. Excess Earnings MethodB. Calculating goodwillC. Setting the purchase priceD. The letter of intentIV. Finding the initial capitalA. Sources of financing1. Traditional sources2. Nontraditional sourcesB. Guaranteed loan programsV. Closing the deal1. Get a lawyer2. Audit review3. The closingVI. The rewards of working for yourselfThe decision to purchase a business of your own is not an easy task. There are many things to consider before the final decision is made. First of all, exactly what do you want to accomplish? To make millions of dollars, right? Or is it to have the freedom of being your own boss? Whatever the reason, you must be sure that it is something that you are ready to devote an exorbitant amount of time and energy into and that it is something that you really want. Otherwise, you might be stuck doing something that you hate. If you are ready to commit then you must ask yourself just how far will that commitment extend. How much of your own time, energy, and money are you willing to sacrifice?After the decision is made, the acquisition of a small business can be summed-up into nine steps, in which most will be elaborated upon later. "These are the nine steps to any business acquisition, regardless of its size or industry:1. The search, locating a business available for sale....
