Buying a business is not like buying a piece of real estate or a piece of critical equipment.  Finding a good business for sale can be a real challenge, as can thoroughly checking it out and closing the deal.  The process can take months, and can virtually monopolize a buyer's time.  Below is the framework that most business purchases follow.

1.  Determining Criteria for Buying a Business and Whether It's Realistic

The first step in fulfilling the dream of purchasing a business is translating an entrepreneur's desires into concrete criteria to find the perfect target.  What particular type of business will do?  What kind of income should the business be making?  What locations are acceptable?  The prospective buyer also needs to determine what he or she can afford, depending on whether the business will be financed by the owner, out of the entrepreneur's own assets, or by an outside lender.  At this stage the buyer should also think hard about what risks he or she is in a position to take, and whether he or she can afford to expend the time and energy it will take to purchase the business and run it.

2.  Seeking Out Businesses For Sale

Entrepreneurs can look for businesses for sale by checking the ads in newspapers and trade publications, seeking out opportunities through their networks, and enlisting the services of a business broker.  If a buyer uses a broker, the broker will review several businesses that meet the buyer's criteria and financial qualifications.  Buyers should expect to sign a confidentiality agreement before seeing prospectuses or profiles summarizing business and financial information.  A buyer not using a business broker will need to research the companies he or she has identified through various publications, any filings they have made, and discussions with the owners.

Business brokers charge a fee which is usually set as a percent of the purchase price.  Buyers sometimes pay a broker's fee, but it is more usual for sellers to do so.