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  • • Buying Process
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  • • Selling Process
  • • Selling FAQs
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BUYING A BUSINESS FAQs

Thank you for your interest in ABBI. Below are some common questions regarding Buy a Business with ABBI. If you have an additional question not covered below, please click here to contact us.

1. Why would I buy an existing business?
2. How do I go about finding the ‘right’ business for me?
3. What questions should I ask before buying a business?
4. If this business is so great, why is it for sale?
5. How do I know what the business is worth?

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1. Why would I buy an existing business?

Purchasing a proven and profitable business has many advantages over starting your own business. The risk is significantly lower than starting your own business, there is an existing customer base, and cash flows are predictable. An existing business has a track record of performance and decisions which can be utilized to optimize the strategic direction of the business going forward.

2. How do I go about finding the ‘right’ business for me?

As a potential business owner, you need to determine what works with you. You will be devoting a significant amount of your time to this business and must be sure that the business is right for you. Define what your target business is and assess your skills, financial resources, and expectations to form a picture of your ideal business. ABBI can help you every step of the way by presenting you with opportunities in line with your skills and interests.

3. What questions should I ask before buying a business?

The decision to buy a business is one of the most important decisions you will make. To ensure that buying a business is right for you, ask yourself:

• Why do I want to buy a business?
• What can I contribute to the business?
• What are my expectations from the business?
• Do I have the skills and resources necessary to run the business better than the current owners?

4. If this business is so great, why is it for sale?

There are many reasons owners decide to sell their business:

• They have chosen to retire
• They would like to pursue other opportunities
• They are experiencing some health problems
• There is a dispute between multiple owners
• The owner might not be able to handle the business anymore

It is important to remember that the fact that the business is for sale does not mean that there is a problem with the business. ABBI will assist in the due diligence prior to the purchase of any business to ensure its viability.

5. How do I know what the business is worth?

Business valuations are subjective and different methods will provide a range for the value of the business. ABBI will review the tangible and intangible assets, normalize earnings, consider factors that may affect future earnings potential, and perform an analysis to determine the cash flow after debt service.

Once the business has been reviewed we will value the business using three valuation approaches with variations.

• The Asset-Based Approach
• The Earnings Value Approach
• The Market-Based Approach

By utilizing a variety of valuation techniques we determine the most appropriate range of values by considering the fair market value of the assets, the discounted normalized earnings, and the sale price of similar businesses. Although ABBI will express an opinion as to the value of the business, the ultimate offer price is at the buyer’s discretion.