Want to Buy a Small Business? Here Are a Few Places to Look

6 min read • Apr 12, 2021 • Derek Miller

There are many ways to become an entrepreneur. You can launch your own business from the ground up, you can partner with someone else, or you can even buy a small business outright.

Buying a small business can create a unique stream of income and help you to launch your new career—you just need to know where to look and how to invest. 

Buying a business, as opposed to starting something from scratch, can streamline your path to profitability. It can also be less risky, in some cases, if the brand is already successful and established.

If you’re considering purchasing a small business, this guide will help. Learn where to buy a small business, as well as the pros and cons of different business types.

Places to Look When Buying a Small Business

There are many ways to find small businesses to buy in your area or industry. You may want to try multiple methods to discover businesses so you can find the best option for your investing goals. 

    • Deal directly with the business owner. Are you looking to acquire a smaller company or competitor in your field? Do you want to enter a new industry or market? One of the best places to buy a business is directly through the other business owner. Do your research, and when you find a business that you want to pursue further, reach out to the owner and discuss the opportunity of purchasing their business directly.
    • Hire a business broker. Business brokers work to connect small businesses with potential buyers—and vice versa. Their job is to understand various industries and company values. They can also provide insight into which businesses to avoid and share context into the history of various organizations. 
    • Look for businesses online. Sites like BizBuySell and BizQuest allow small businesses to list their brands and connect with buyers. You can sort by industry, location, and even price. This is a great place to get a feel for your local markets and customer demand. 

You might also want to keep a lawyer on retainer to help negotiate the sale and handle various contracts related to the transition. This extra assurance can give you peace of mind and help you to protect your investment.

Do You Want to Buy a Business or a Franchise?

You don’t only have to look for small or local businesses to buy—it’s also possible to buy a franchise of an existing business and operate under that brand. Companies like McDonald’s, ACE Hardware, and Massage Envy rely on franchisees to buy into their businesses and operate companies on their own. 

Buying a franchise has its pros and cons, as explained by the Small Business Administration. One of the main benefits: support. There will be less decision-making because the brand and its processes are established and set. For example, if you decide to open an ACE Hardware, you’ll already know the brand’s color choices and the employees’ uniforms. You’ll also gain access to the company’s internal systems and marketing materials. 

While some people embrace the structure of opening a franchise, there are also limitations to what you can do. You can’t get creative with new products and must stick to established guidelines. This might not be ideal if you want to build a unique business or want more influence on the systems within the organization.

You can find franchises for sale across almost any industry or company size. Different franchises have different license fees and varying startup costs. For example, it costs more to build an Anytime Fitness than a PJ’s Coffee stand. Some franchises require $250,000 or more to get started, but you can become a Lendio franchisee for $55k-$65k. To explore different franchise opportunities and costs, look at sites like Franchise Direct or Franchise Gator to learn more. These sites can help you to find the best franchises to own based on your budget and goals.

Know Yourself Before You Buy a Business

You may be tempted to buy your favorite bar that can’t afford to stay open or invest in a bakery based on your passion for cake design—however, it’s important to be realistic about what you know and what you can handle. There are a few key factors to consider with your business choices:

    • How much time do you have to run this business? Are you looking to acquire a company and run it day-to-day as a full-time job, or do you want to be a silent partner who is more hands-off? You may want to look into a business investment rather than exclusive ownership if you don’t plan to be involved in the operations of the company.  
    • What is your expertise in the field? How much do you know about the industry, the current local market, and the business plan of the business you want to acquire? Think about the “cupcake bubble” of the past decade, where the market became too saturated with cupcake shops as the trend faded. You may need to spend some time learning about the industry before you enter it.  
    • What is your expertise in business? Even if you have industry experience, you may need additional business acumen to succeed. Take steps to bolster your accounting, marketing, HR, and management expertise to prepare yourself to lead your employees to success. 
    • How will you fund the investment? You can absolutely follow your dreams of becoming a business owner, but you need a funding plan first. Look into a loan to buy a business and other professional funding options—this way, you’ll have enough money to acquire the company and make any modifications needed.

You don’t have to have an MBA or 10+ years of experience in a field to buy a business. However, you will need a plan to manage your finances, operations, and marketing as soon as the business becomes yours.   

How Do I Access Funding to Buy a Business?

If you are ready to move forward with your plans to buy a business, our team at Lendio can help. We specialize in pairing entrepreneurs and business owners with funding opportunities so they can move forward with their business goals. 

Explore the various loan types available to see which ones are right for you. You may qualify for an SBA loan to help you open your business or a short term loan if you need funding to build a franchise. With the right funding, you can acquire your dream business and open your doors as soon as possible.

Derek Miller

Derek Miller is the CMO of Smack Apparel, the content guru at Great.com, and a marketing consultant for small businesses. He specializes in entrepreneurship, small business, and digital marketing, and his work has been featured in sites like Entrepreneur, GoDaddy, Score.org, and StartupCamp.