Editor's Note:   This is the 6th in a series of articles on buying a business: the financing, the negotiations, the process, and the how-to's.
 

Making an Offer

by Doug Perry
Commercial Realtor ®

This is where it gets fun! You've made the decision this is the business you want, so now you want to make an offer. Here is a breakdown of items you and I will discuss as I prepare your offer for the seller:

1. By now you've decided how much you want to offer for the business.
   
   
2. The terms of how you're going to pay for it and how long it will take to close escrow.
   
   
3. Items included in the purchase agreement.
   
   
4. Training to be included and for how long.
   
   
5. Any contingencies that you want agreed to by the seller.
   
   
6. Arbitration/Mediation agreement signed by both parties.

Once the offer has been prepared, you may want to have your attorney review the agreement before I present it to the seller. Remember: it is your offer and once accepted by the seller it is your duty to perform.

Getting the Money

This is where pre-planning before the offer comes into play. If you have done your homework making sure you have the money to perform, then this part can be fairly stress free. If you haven't determined where you're going to get the money, it could be extremely frustrating and stressful. Plan to succeed and not to fail.

The easiest ways to obtain money (in order from easiest to more involved):

1. Cash -- money in savings, CDs, 401Ks, IRAs
   
   
2. Equity -- 2nd mortgage on property owned is also quick, but you have to go through the process
   
   
3. Loan from private party -- family, friend, or partner can expedite your purchase
   
   
4. SBA -- It is a long process but is there to help people who don't have adequate sources of money to buy or start a business. I can start you on the process and then turn you over to a lender of your choice.
   

The Final Word: Pre-planning is key to a smooth escrow.