Buy a Business
Buying a business means finding a company that fits your style.
If you’re looking to buy a business, it’s not exactly like buying a tie or scarf—if you like it, buy it, no fitting involved. No, a business has to fit you like a bespoke suit. Sure it helps if you like the business, but affinity is not necessarily a predictor of success. Burke & Schindler has helped scores of clients who were once employees become successful employers by finding the right business, paying the correct price, and operating it at the highest possible level.
The Right Way to Find and Buy a Business
Finding the right business—like finding a great job—is itself a full-time job. Burke & Schindler is a great first stop on this journey because our strategic advisors are well connected to both the business broker community and entrepreneurs who are selling their businesses on their own. In addition, we’ve often acted as an agent for both buyers and sellers. When acting on behalf of a buyer, we utilize our numerous contacts in the banking, legal and private equity communities to source a company that matches our client’s criteria. This process takes stamina since the best companies, like desirable homes in the correct neighborhoods, often sell before they hit the market.
To get that bespoke fit, the business must meet two essential criteria. The first is price. It’s no use taking a run at a company you can’t afford. However, using a combination of your own capital—say 25 percent of the purchase price—the bank for another 50 percent and the seller financing for the last 25 percent, you may able to go bigger than you had originally expected. As veteran advisors, we at Burke & Schindler only put together deals that we believe will work financially and within our clients’ risk tolerance.
Meeting the second criteria is a little tougher since it involves an objective analysis of the buyer’s skills. Although buyers may make some money by buying right, the real money is made when the buyer adds some specific value to the new enterprise. We always suggest buyers find a company where their skill set, usually in production or sales, adds a new dimension to the existing business that will promote or maybe even ensure sustainable and profitable growth. This is evidence of a perfect fit.
Buy a Business with Burke & Schindler
Although there is an active market for private companies, there is no national exchange where the proper price for businesses can be confirmed. However, through years of experience, a thorough understanding of capital markets and access to databases of private company sales, Burke & Schindler can help put the correct price tag on your acquisition. This is only the first step. From here, we help negotiate the deal, from the broad terms of the buyer’s letter of intent to the seller to the finer points of the asset purchase agreement. This is done with a keen eye on not only mitigating business risk but also creating tax-efficient future operations.
Unlike a used car where you’re buying someone else’s problems, buying a “used” business allows the new owner to turbocharge the business with new energy and talent, creating new value through higher and more consistent profits and, as a result, a higher price when it’s time to sell.
Although this may seem daunting, Burke & Schindler have worked with clients through this process successfully so many times, we guarantee a good result and even a little fun along the way. Contact one of our advisors today as you consider buying a business for yourself.