The biggest mistake is thinking:
Purchase price = money required.
It doesn’t.
1. Down Payment
Most financed acquisitions require meaningful buyer equity.
2. SBA Financing
SBA financing can be an important tool for qualified buyers and qualifying transactions.
3. Seller Financing
A seller note can sometimes bridge a financing gap.
4. Working Capital
You need cash after closing.
5. Closing Costs
Attorney, lender, valuation and other transaction costs add up.
6. Inventory
Some transactions require inventory funding.
7. Equipment
Know what needs replacing.
8. Payroll
You need enough cash to make payroll even when collections fluctuate.
9. Personal Reserves
Don’t put every dollar you own into the acquisition.
10. A Financial Plan
Know your maximum comfortable investment before you start shopping.
And don’t fall for the “no money down” myth. I’ve written about why that idea is usually unrealistic in [Can You Really Buy a Business With No Money Down?]. Can You Really Buy a Business With No Money Down?
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 476 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential. He is also a Florida Licensed Real Estate Broker and Business Brokers of Florida Board Certified Intermediary . Shea is a member of the VRMA and a recognized expert in property management and vacation rental management business sales