Smart ways to buy an existing business with no money
Is it possible to buy a business with no money? This question is somewhat complicated; acquiring a business with no money is a very hard feat to achieve. However, this along with proper planning is possible. Entrepreneurs that are fortunate to take over businesses that already exist have a better head start compared to those who start from scratch.
An already operational business will offer the following advantages:
- Products and services are already established and you do not need to start from zero.
- You also get trained staff that are familiar with the business operations, they can keep the business afloat as you get a grasp of how things run.
Entrepreneurs that want to buy a business with “no money” are always handled with caution by the business brokers. This is because most entrepreneurs set unrealistic expectations. This is because most beginner traders have little knowledge of the factors needed to run a successful business.
To succeed ensure that you are adequately prepared and have realistic expectations; your knowledge and grasp of the business is what sells to the business owners and potential investors.
With banks imposing strict rules for commercial lending, there is still hope. Here are the various ways to acquire a business with little or no money.
Think of the ideal business for you
Before anything you need to think of the business, you want to acquire. Think of how you will run the business and how much time it needs to grow. If you are planning to flip the business later for a profit, give it time and the value will increase. Knowing exactly what you want will make it easier to identify the business you will buy.
Find a business owner ready to leave the business
Scouting for a business owner that is ready to leave their business can be hard. Look for businesses whose owners are ready to retire or owners that are looking to incorporate new ideas and better opportunities. Check out the papers for a potential listing of business owners that may be looking to sell or retire.
Make a timely offer
Acquiring a business requires that you make a good deal and offer. The best timing is when the business owner plans to retire. The best time to also make a good deal is during the economic downturn or recession. This is the time the owner may be looking for a fast exit and you can pounce on this opportunity. This is the best opportunity especially if you do not have money. The owner will post the risks to you and with the business knowledge you can work on turning the business around at the end of the economic downturn.
Find a lawyer
A leveraged buyout is a process of buying a business without money. To successfully go through this process you will need to secure the services of a lawyer. A lawyer will ensure that the deal gets the proper structure. Choose a lawyer that specializes in business sales to give you the experience and prevent the deal from going south.
Process of buying a business
Once all the laid requirements are set in place, it is now time to start the actual buying process. To begin this process you have to ensure that all the laid down procedures are followed. Here are the next steps to take.
Look for a business that offers seller-financing
Some business sellers are always willing to offer loans to buyers. This entails that the owner of the said business is ready to offer a loan to the prospective buyer. Try finding a business that comes with the seller-financing offer. This will be a great way to take over a small business without splashing the cash.
Most business owners will, however, require that you provide some form of down payment, and may be willing to loan you the full selling price.
Pitch a creative offer
Sometimes the business owners require that you make an irresistible offer. Try and make an offer that will be difficult to ignore, make sure that you set realistic expectations and not just pitching for the sole purpose of getting the business.
Look for a passive investor
Some business owners have been running their businesses for a long time and might be considering retirement. They understand the secrets of keeping the business running. Approaching such investors with the guarantee that they would get a cut of the profit would be a great way to acquire a business without money.
There are other different ways to start a business with no money. However, nothing comes easy and you need to put in the time and effort to make sure you succeed. Make sure you research and familiarize yourself with the business before deciding on pursuing the venture. A successful business will only come from proper planning and judgment.