Zehrah, A great idea that has been mentioned is to have the current owner carry the note. This is common, especially these days and if all goes according to plan, everybody wins! The best advice is to know the business before you get in! Know what your monthly obligatiions are including the payment for the loan. In essence, know what the value of the business is based on the free cash generated. Think about business strategy, what did the current owner do, what worked and what can you improve on to increase profits. Doing your homework in these areas will ensure that you don't overpay and will identify options to take the business to the next level as you take over. If you have any questions, feel free to contact us! Good luck to both of you! Edward Shelton ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.

Clarify your thoughts about the market you want to enter, the size of business you want to run, the type of product or service you want to offer and how much you want to pay before you start searching for a business to buy. Summarize it in a business profile. Be realistic about the effect of a change in ownership; there could be changes for the worse as well as the better. Set two prices before you go into negotiation; the lower one with which you start the bidding, a higher price beyond which you will not go. Negotiation is everything. There are no rules; there is no right price for any business. It is up to you to summon your facts and marshal your arguments to keep the price as low as possible.

In this economy it seems very risky to buy an existing business. In addition to the monthly overhead costs, it usually takes a while to become profitable. On top of that, the amount of purchases done online is growing at a VERY rapid pace, which explains why a lot of small businesses can't make it these days. I realize network marketing gets a bad rap, but it's because most people don't understand the business model. The most obvious advantage is that you can start your own business with a minimal investment, usually just a few hundred dollars. In addition, it's highly likely that you'll be profitable within your first month. The key is to find the right company/product. ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.

I would suggest this. Ask the current owner to carry the note. You come up with say 10% - then amortize the remaining amount over 20 years with a 5 year balloon. This will make it easier for you to get financing - you only need a small amount and not the entire amount right now. And, it will let you know that the current owner has faith in the business's future. Without current income - very few other options - you could also look int a SBA loan - call around to local banks and see who are offering SBA programs.

zehrah, You can look for funding in many places. Take a look at our Ultimate Guide to Financing. You may have some good options since you own your house. However, please make sure you consider all the risks if you do decide to use your house as collateral. Another good article to check out is The Legal Steps to Buying a Business. I would double and triple check all the risks before investing into the business, just to make sure you are good. If you have any additional questions, please feel free to post them here. JimD