How to Buy a Business with no Money
Many individuals want to stop being employees. Some have great ideas, while others are talented at managing businesses. If you're one of these talented people, then you might be interested in learning how to buy a business with no money. ...
Many individuals want to stop being employees. Some have great ideas, while others are talented at managing businesses. If you’re one of these talented people, then you might be interested in learning how to buy a business with no money.
You might be asking, “Is that even possible?” right now. But don’t worry, you’re not the only one. Not many people think about it since it’s not one of the usual ways to start businesses. But it is possible.
Know the guidelines and considerations you’ll need to buy a business with no money.
- Is it possible to buy a business with no money?
- What do I need to know to buy a business with no money?
- Different methods to buy a business with no money
Is it possible to buy a business with no money?
A lot of people may find it hard to believe, but you can buy a business without any money at all. There are many ways to do it, and these are the factors that you should take into careful consideration before you approach anyone.
What do I need to know to buy a business with no money?
First and foremost, there are steps you’ll have to follow to successfully find and buy the ideal business for you without needing to shell out any money.
What type of business should you buy?
You must know what you need to do, and how you will do these things when you buy and start running a business.
An ideal way would be to get into something that you already know or are used to handling. At the very least, you should have some basic knowledge when it comes to the industry. Though managing a business may appear like something a person can easily accomplish regardless of their field, it’s a position that considers everything about the business meticulously. Some of these are its target market, getting the best suppliers, providing the ideal product or service, and more. For example, someone experienced in managing food businesses, like restaurants, may find it difficult to run a shoe store smoothly.
So before you come up with a list of potential businesses, please consider the different fields that you’ll be capable of working in to display your utmost potential.
Check for information regarding business owners
Once you know the type of industry you want to enter, contact business owners in the industry. It’s common for people in the same sector to know each other. In this case, business owners are more likely to know other business owners.
Once you’ve connected with some, ask around if they know someone who wants out or is doing poorly. These owners may refer you to people looking to quit the business or are moving on to a different field. It may even turn out that the person you connect with is the person who’s looking for a buyer.
Another good way to find business owners is by talking to accountants. Since they handle all the monetary details, expenses, and information of businesses, they will have an idea. They may even know those looking to get out of the company, retire, or change ventures.
Companies that are doing poorly or mismanaged are some of your top options.
Check the company’s debt, inventory, records, etc.
Any company needs thorough checking before any formal dealings can take place. You, as the buyer, must know the real standing of the company. Why? Because whatever problems the business has, such as loans, debts, and other similar issues, will also be under your name when you take it over. It’s vital to find out if the business you want will reap you benefits in the future, or if you will be taking on an impossible debt to pay.
Of course, this isn’t to say that all debts are bad, but if it’s no longer possible to recuperate or improve the business because of these balances, it’ll be just a waste of your effort.
Different methods to buy a business with no money
Partner up with an investor
One of the most common and ideal ways to buy a business is by teaming up with an investor who will be providing all the money in your stead. You’ll have to find an investor and present all your plans for the business you’ll be taking over. You’ll need to discuss all the necessary details in how this will benefit you and the investor in the long term. Once you’ve gained the investor’s approval, you’ll form a contract regarding shares, control of the company, and the like. After you’ve both agreed to the conditions, you will then have access to the necessary money to buy out the company. Additionally, you will be the one who’ll be handling the negotiations with the business owner until it’s time for the turnover of the company and its assets to your side.
This method is very similar to getting a bank loan. But in place of the bank, is the business owner. You will need to talk to the owner, and the two of you should come to an understanding. Afterward, you will need to create a contract. The terms of the turnover will be detailed, and include these types of conditions:
- Seller’s buy price of the business, to which the buyer has agreed.
- Interest per month, year, etc.
- Installment plan, monthly, quarterly, etc.
- Length of time to be paid.
- Conditions for overdue balances and the like.
This method is mostly practiced within specific families and especially in Asian cultures. Asian families want to keep all their businesses within the family, so this is one way they go about it.
How this works is instead of loans from banks, you’ll need to get a loan from your family. It can be anyone from your immediate or extended family members. This loan is still a business transaction, so it’s always essential to have a contract that includes the terms and conditions mentioned in seller financing.
Have a look at your possible options right now. Study the industries within your reach, and be logical in your assessment so you can plan well. In every step you take, always remember to analyze the situation and weigh the pros and cons. In business, it’s normal to have risks or the need to gamble, but you must always have the opportunity to win. That goes the same for buying a business.