Both incorporated businesses (corporations) and unincorporated businesses (limited liability companies, limited partnerships) register with state agencies. If you want to purchase an unincorporated business, you can approach the owners directly. You can obtain rights to incorporated businesses that are publicly traded by purchasing company stock.
Examine the company's intangible assets, such as its reputation and relationship with clients especially, if it has been operating for several years. High employee turnover might indicate staff dissatisfaction with current wages.
Conduct multiple business valuations so that you can gauge how much the business is worth. There is no definitive approach, as different methods often produce different results. You can assess the current stock price with the number of outstanding shares as well as appraise the company's assets and liabilities, such as staff cost (health benefits, vacation), equipment, inventory, and pending litigation. Carefully review past tax returns.
Negotiate with the current owner(s) to determine an acceptable purchase price. Some owners might not be willing to disclose financial information, such as monthly or annual expenses and income. Other owners might entertain proposals from multiple buyers, which quickly can establish a competitive environment.
Consult with an experienced broker. Brokers often search for businesses that meet your conditions; for instance, they can find several gas stations in a target location if you want to manage stations with convenience stores. Most brokers charge commissions, such as five to ten percent based on the sale. Brokers can help you identify risks and complete required paperwork.
Hire an accountant and an attorney to review the proposed business deal. For example, you should understand local, state, and federal tax obligations that will arise if you buy a business. You also should confirm that the seller has the authority or right to sell the entity. You might find that a silent partner holds majority ownership or that you are working with the owner's representative rather than the actual owner.
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