Buyers’ Most Frequently Asked Questions
What are the Steps to buying a business?
- Step 1: Decide that ownership is the best option
- Step 2: Assessment of the type of business to buy
- Step 3: Search for potential businesses
- Step 4: Study the of documents and financials of the business
- Step 5: Make an offer on the right business
- Step 6: Conduct due diligence on the business
- Step 7: Secure financing
- Step 8: Close on the business
Why is Texas a good State to buy a business?
Texas is one of the top places to live in the country. It is home to major universities such as UTAUSTIN, TEXAS A&M, RICE UNIVERSITY, SMU, TCU and many other great colleges and universities. It is full of rapid economic growth and top healthcare. There is no state income tax. The State is business-friendly.
Can a resident of another country interested in obtaining an E-2 Visa, buy a business?
Yes, the E-2 process is quite complex, and we certainly recommend an attorney that specializes in obtaining E-2 Visas.
Where are businesses for sale listed?
Our website, www.scarboroughcommercial.com, has a search page where you can look for businesses for sale.
What is the cost of buying a business?
Scarborough Commercial Group is generally paid by the Seller not the Buyer. However, there are other costs inherent in purchasing a business. Legal and accounting fees are generally required, and additional startup costs are often necessary.
Will the Seller train a new Buyer to run the business?
Depending on the complexities of the business, the Seller will offer varying levels of training. On most small businesses, the Seller will offer training for two to four weeks at no cost to the Buyer.
How can it be assured that the accounting provided by the Seller is accurate?
During the acquisition process the Buyer conducts “due diligence.” During this process the Seller is required to release documents which will verify the financials. It is prudent to have an independent audit of the Sellers’ financial statements prior to submission of an Offer to Purchase.
Is it necessary to obtain financing for the entire purchase price?
Not always, sometimes 100% of the purchase price is required; however, Sellers will often provide some sort of owner financing. Furthermore, a bank may be able to loan up to 80% of the purchase price through a loan sponsored by the SBA and/or the USDA.
Is it necessary to engage an attorney and an accountant to buy a business?
Buying or selling a company can be a complicated business transaction. Scarborough Commercial Group requires that both the Buyer and Seller engage competent legal and accounting professionals to represent their interests in the sale.
