HOW TO BUY A BUSINESS WITH NO MONEY

You have arrived to this website because you have that entrepeneur spirit, you want to build your wealth and make more money, so you are thinking about buying a new business. The problem with that is that it can be expensive, and it’s hard to come up with that the large 20% down payment that you will need to buy your own business. You are not alone, most new business owners started from this same position, but they didn’t let it stop them. Neither should you.

Buying An Existing Business With No Money

Buying an existing business can be a stressful and overwhelming experience. Especially if you are new to the business buying market. Starting a new business, though it will probably be cheaper and easier to break into, brings it’s own risks in that it may take many years to be successful, or it may fail entirely. When you buy an existing business, you already know how profitable it is, and how to continue to make it profitable, and possible even grow the business to make it more profitable. About 20% of new businesses fail in the first two years of being open, 45% fail in the first five years, and 65% during the first 10 years. About 25% of all new businesses will succeed to make it to 15 years or more. Source: Investopedia

Steps To Buy A Business With No Money

If you’re struggling to find a way to buy an existing business when you don’t have the capital you need, this article will give you the information you need, and the steps needed to acquire one without spending money.

1.

Loan Options To Buy A Business

The first step to buying a business is deteremining what it is worth. The quickest way to determine what it is worth is to look at the company’s financial statements. The company’s Profit & Loss Statement (P&L) will show you how much profit or loss that the company has each year. Once you know what a company is worth, you can start looking at different financing options. The loan can be used to buy the business, and maybe even buy some upgrades to help you make the business more profitable. Look online for some loan options that are available, and what the interest rates are, and the typical down payment the bank will require. Search online for a free online loan calculator if your bank doesn’t have one, so that you can document what the interest rate will be, and the repayment period in years to determine how much you would need to pay per month to repay the loan plus interest.

2. Partner With Someone Who Has The Money

Bringing an investment partner on board that has the money to make the deal happen will help you buy the business and start moving forward with your dream of being a business owner. An investment partner may be interested in investing into the company, being given a percent of the ownership or equity, a percent of the profits, or they may be interesting in investing in you. Giving you the money directly to you to make the purchase because they believe in you and your plan for the business. Sometimes it takes one investor, or sometimes you may need to find multiple investors depending on the cost of the business that you want to purchase. The great thing about this step is that if you can bring on the right investor, it may not require much from you financially to buy the business.

3. Look For Investment Of Venture Capitalists

There are a lot of venture capitalists with a lot of money that are eager to invest in business opportunities that are sound and look promising. Especially when someone shows that they have the drive, entrepeneur spirit, and knowledge of the business and the business market to show a strong chance of success. One important thing to note about bringing on any investors, whether it’s a private investor, a friend, an acquaintenance, a family member, is that at some point you will probably have to sell the business or save up enough money to buy them out, if you want to own the business by yourself someday.

4. Ask About A Lease To Own Opportunity

If you can’t afford to buy the business outright, and you don’t have any investors, you might want to consider asking the business seller if you can lease or buy their assets with a lease to own agreement. This would enable you to use the company’s assets at a fixed price for a specific period of time. This would get you into the business to start building up a savings to allow you to buy the business one day. It will get you started on doing part of your dream business with a path to owning it one day.

5. Work For The Company With Equity As Payment

You can approach the business owner with a plan to work for them, and they would give you equity in the company as part of your compensation. Over time you could build a higher level of equity until you can affort to buy the owners share so that you own the business yourself. This might be attractive to an owner that believes in you, and wants to turn their business over to someone they believe in instead of just selling it to a stranger they don’t yet know and trust. Working for equity is a win for both parties. They get the added benefit of having additional help from you at less cost to them, and you get your income, as well as partial equity over time of the business you want to own. It also gives the owner the chance to really see you in action, to help build that trust that they are selling their business to a competent person that will treat their employees, their assets, their reputation, and their customers the way they want them to be treated.

Conclusion

The bottom line is that buying a business takes a lot of money and resources to be successful. However, there are opportunities for buying a business if you don’t have the money and resources to do so. One of the best ways to make your dream of business ownership a reality is to bring on an investor to help give you the money you need to make the purchase and buy the business. Bringing on investors is kind of like how Shark Tank operates. People come in there to present to the “sharks” or wealthy investors, how their business operates, what they make for profit, how much they sell their merchandise for, and what their plan is for the business. Their goal is to impress the investors enough to give them some money, to help them grow and expand their business in ways they don’t have access to today, for a percent equity in the company. Check out our guide for more information on buying your own business, where we also talk about hiring a business broker to help you buy or sell your business.

Hire A Business Broker

Michelle Mendenhall Professional Business Broker, IBBA Commercial Real Estate Sales & Leasing Associate Phone: 916.459.7526 DRE #02116152 LocalGirlGoesCommercial.com michelle.mendenhall@localgirlgoescommercial.com michelle.mendenhall@expcommercial.com At ViralStudioX, we highlight products and services that you might find interesting. We frequently receive free products from manufacturers to test. This does not drive our decision as to whether or not a product is featured or recommended. If you click a link on this page, then go on to make a purchase, we might receive a commission – at no extra cost to you, and does not impact the purchase price of any products that you may purchase.