1. Consider, and make the initial decision to buy a business.
2. Educate yourself on the type of business you want to buy.
3. Determine how much you can afford to pay. Most businesses require anywhere from 20-50% down payment with the balance funded by the seller or a bank.
4. Work with your business broker to evaluate businesses which are being offered
for sale.
5. Have your broker set up a meeting to see the business your interested in.
6. Make an offer on the business through an Earnest Money Contract. This is
typically 5-10% down. Include all contingencies that must be met in order to complete the purchase.
7. If the offer is accepted then escrow is opened immediately. Escrow officers will perform lien searches on the business, publish the sale of the business and file notice with all appropriate government agencies that the business is being sold.
8. Negotiate a new lease through your broker, or ask for an assignment of the previous lease.
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9. Perform due diligence on the business. Due diligence is performing the necessary research about the business and verifying financial information. At this point the seller is required to provide all financial information the buyer requests, along with any other information that is pertinent to the business.
10. If a loan is necessary, then obtain a financing commitment.
11. Satisfy all contingencies in writing.
12. Do a physical inspection of the inventory and furniture, fixtures and equipment one to three days before closing at escrow. Verify that inventory levels have been maintained as agreed, nothing that was a part of the sale has been removed.
13. Deposit the remainder of the funding in escrow at least 5 days before scheduled closing. This will include the remainder of the purchase price plus any escrow fees that have been agreed to. Escrow fees are usually split 50/50 between buyer and seller. The deposit will need to be a cashier check or electronic funds transfer.
14. Sign all documents at closing.
15. Pick up the keys from the seller.
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