Wednesday, May 7, 2014

Buying A Home Based Business Part 3: Finding A Home Based Business

image This article was written by Mike Capsuto, SCORE Orange County Business Mentor

Many an optimist has become rich by buying out a pessimist. Robert G. Allen

In a previous article we explored two topics:

• What is a home based business?

• What business is right for me?

This article will focus on locating the business that will meet your talents.

Information in this article is provided for general educational purposes only. No responsibility is assumed for any problems associated with the use of its content. One should seek the advice of their financial and legal counsel in every step of purchasing a home based business.

Where can one find a home based business for sale?

The first place to begin is to ask family and friends if they know of someone who is approaching retirement age, has health problems, has limited time that can be dedicated to their business, or wants to cash out. Be cautious when dealing with a family member or a close friend. Do not get pressured into a business. Analyze the business as if you were dealing with a stranger.

Ask your accountant or attorney. They represent many clients in financial and legal matters. They may have clients who are looking to sell their business. Many businesses are hesitant to publicly advertise for fear of losing customers.

Another place to find a business is in the newspaper under “Business Opportunities” or “Businesses for Sale”. Weekend editions are usually the days that businesses for sale are advertised. Be careful, there may be ads for grossly overpriced businesses. Legitimate local businesses for sale will most likely use local telephone numbers. Those with toll free numbers are usually large franchise or sales operations.

Visit or contact the companies in your area that manage buildings with executive office suites. These are small business offices usually accommodating one to four persons. There may be businesses for sale in these facilities that can be converted to a home based business.

Also look into local Small Business Development Centers. Small Business Development Centers provide management and technical assistance to small businesses. There might be businesses for sale suitable to be home based.

Browse the Web. Just enter “Home Businesses for Sale”. Many sites will pop up. To narrow down the sites, enter: "Home Business for Sale in (state)". Some websites can narrow down to a zip code or key word.

There are several magazines specializing in home based businesses found at local bookstores. Most of the advertisements are for franchises. Buying a franchise option works best for individuals who have limited business & industry background. However, do not expect the franchisor to solve all the business problems that might be encountered. It is your own business -- the only person you count on is you.

Contact a Business Broker. Brokers can offer assistance in various ways such as screening businesses for you. Good brokers turn down many of the businesses they are asked to sell, whether because the seller won't provide full financial disclosures or because the business is overpriced. Going through a broker helps you avoid these bad risks.

• Helping you pinpoint your interest. A good broker starts by finding out about your skills and interests, then helps you select the right business for you. With the help of a broker, you may discover that an industry you had never considered is the ideal one for you.

• Negotiating. The negotiating process is really when brokers earn their keep. They help both parties stay focused on the ultimate goal and smooth over any problems that may arise.

• Assisting with paperwork. Brokers know the latest laws and regulations affecting everything from licenses and permits to financing and escrow. They also know the most efficient ways to cut through red tape, which can slash months off the purchase process. Working with a broker reduces the risk that you'll neglect some crucial form, fee or step in the process.

The above are some of the sources for locating a home based business. Take the time to consider your options. However, do not make a decision on a particular business without further diligence. This will be the topic of a future article.