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Seven steps to buying a business

All the steps you should take to find and buy a new business.

An organised approach will help you find and acquire the right business.

1. Get professional advice

Professional help is invaluable as you go through the negotiation, valuation and purchase process. See choose a solicitor for your business and choose an accountant for your business.

You can also access advice on buying a business through a business broker.

2. Do your research

Research the sector you're interested in, including the best time to buy, and shortlist two or three businesses.

3. Initial viewing and valuation

Be discreet - the owner may not want staff to know they are selling, but be thorough and record key findings.

4. Arrange finance

Lenders generally require:

details of the business/sales particulars
accounts for the last three years
financial projections - if no accounts are available
details of your personal assets and liabilities

There are several possible sources of finance you could consider. For specific advice, see bank finance, financing from friends and family and equity finance.

5. Make a formal offer

If you make your initial offer by phone, follow this up in writing. Head your letter subject to contract and include this phrase in all written communication.

6. Negotiate the deal

Before completing the sale, it may be worth trying to negotiate an overlap period so you have time to become familiar with the business before taking over.

You and your solicitor need to verify the information you have based your offer on. See make sure a business is worth buying: due diligence.

If you're buying premises, you may want to arrange an independent survey and valuation, even if a lender is also carrying out their own survey and valuation at your expense. .

7. Complete the sale

Even after you reach an agreement on the price and terms of sale, the deal could still fall through. You have to meet certain conditions of sale to complete, including: