Business Brokers - Sell Business - Business Sales and Acquisitions - SunbeltNE

Franchises are a Great Concoction for Business

Consider buying a business franchise with a little help from your business broker in case the current recession is tipping you towards entrepreneurship rather than undertaking an unstable job. A franchise has all the ingredients for a successful business: a tried and tested business formula which can be easily duplicated; a well-established reputation and brand name; a loyal customer base; and over and above all, minimum risk when one is buying a business. If you are new to doing business, buying a business franchise is a great way to enhance your entrepreneurial career. What’s even better is buying an existing franchise, which lets you hit the ground running right from day one. That way, you can combine the best of both worlds: the track record of an existing business and the concept of a franchise.

An established franchise for resale is hard to find when you are looking to buy a business. For your search, you can enlist an experienced business broker to help you out. Business brokers have listings for businesses for sale, and you might find a seller who wants to sell a business franchise. Business brokers are also aware of the various types of business franchises in the market and will be able to help you find one that matches with your business skills and expectations.

How to Research for Buying a Business Franchise

Once you identify your preferred brand you for buying an existing business franchise, undertake some research in conjunction with your business broker so that you become aware of the market conditions and success strategies. Only if you interact with your business broker and other franchise owners will you be able to judge whether buying a business franchise of that brand is in your best interest or not. Some key questions to ask your business broker and other franchisees are mentioned below.

Ask your business broker the following 3 question before buying a business franchise:

• What is the number one focus of the franchisor?
  
  You want to buy a business franchise of a franchisor that has your best interest in mind, so the answer you are looking for is “His number one focus is the success of all his franchisees.” If you get an answer like “The franchisor’s core focus is his own profitability”, it shows that the franchisor is only concerned about his own benefits.
  
  
• What problems do the other franchisees face?
  
  Your business broker will also be aware of some of the problems franchisees face. While buying a business franchise, you should be aware of the problems commonly faced by other franchisees and how to deal with them. The business broker is the best person to talk to regarding this.
  
  
• How does the franchisor resolve conflicts?
  
  Your business broker will most probably know the franchisor’s ability to solve conflicts within franchisees. Buy a business franchise only if you are convinced of the franchisor’s ability to resolve conflicts and his total dedication to the business.

Additionally buy your business franchise after asking the following 3 questions to other franchisees:

• What preparation did you undertake when you took the plunge?
• What kind of marketing campaigns attract customers to the franchise?
• What kind of financial implications does buying a business franchise have?

Such interactions with the business broker and other franchisees will help you make a decision on if that particular brand of franchise is the right one to buy. After all, buying any business is a life changing decision and will remain with you for years to come.

If you are looking to sell your existing business, you need to find the right buyer. And in order to find the right person to buy your business, you need to get into the buyer’s mindset in order to figure out what factors influence their buying decision. Such an insight will help you best customize your selling pitch accordingly. But how do you figure out what a buyer is thinking while buying a business or franchise? What factors influence him/her in making the decision? Which are the factors you need to be aware of in order to convince the buyer to buy your business? The answer to these questions is important in making sure you can successfully sell a business to the right buyer.

Some of the common factors that influence the buyers to buy a business are:

• Entry into a new market: an acquisition of your business may be a means to enter the market for the buyer. For example, buying a business in the restaurant industry may be a way for a food manufacturer to get into the main street business.
  
  
• Elimination of competition: if you are a competitor who takes away a significant value of business from the buyer, he/she might decide to buy the business from you. That way, for the buyer, another business from the same industry can be integrated into the existing business as well as the competition can be eliminated.
  
  
• Merger and acquisition: if expansion is on the agenda for the business, the buyer might look for merger and acquisition opportunities by buying a business. This way, the market share of the buyer will increase and expansion can be possible.
  
  
• Increasing the value of the original business: if your business is on the same lines of the buyer’s existing business, he might want to buy your business to increase the value of his own business.
  
  
• To fill gaps in products or services: in case your business is well established, has a brand name or offers a better product or service offering than the buyer’s own business, he/she might consider buying your business to fill gaps in their own products or services.
  
  
• To add intellectual or physical property to their rooster: if you possess a valued intellectual or physical property, it might become an attraction for the buyer. This way, the buyer’s business value as well as market offering is liable to increase.
  
  
• Company reputation and brand name: most buyers consider a well established business a good investment. So if your company has experience, is well respected and has a brand name, it will become a major pull and will be a convincing factor to buy your business.
  

The factors mentioned above cover the most common reasons for buyers to buy a business. However, in case of individuals, there might be other factors which lead to the decision e.g. emotional factors, finance etc. These factors differ from person to person and are very individualized. You can consult with a professional business broker for guidance for finding a right buyer and get the right value for your business.

You need to be aware of the factors mentioned above when you are on the lookout for a buyer for selling a business. If you are successful in getting into the mindset of the prospective buyers, you will be able to better understand them as well as their buying requirements and will be able to convince them to buy your business.