Action Steps for
Buying a Small Business

For those in the process of considering a business purchase, the ASBTDC offers the following suggested Action Steps. These steps are intended to help guide you through the process and point you towards suggested information and tools.

Step 1: Take the ASBTDC online Buying a Business Course

Participating in the Buying a Business course will provide you with a good foundation as you proceed with purchasing an existing business.

• Buying a Business online training

Step 2: Consider potential funding needs and realities of obtaining financing

It is important to estimate the amount of funding that would be needed for the project and consider funding requirements. It is recommended that those considering buying a business review "Can I Qualify for a Loan?" and consider the realities of obtaining financing.

• Can I Qualify for a Loan?

• Obtaining Small Business Financing

Step 3: Gather Information from the Seller

Obtaining information from the seller about the business is a very important step. This information can help in the decision making process as well as will be required if financing is needed.

• Buying a Business: A Checklist

Step 4: Consider Planned Changes to the Business

It is important to consider any planned or required changes to the business. How will the business be different under your ownership? How will these changes affect the business? What would be the costs of such changes? A written explanation of planned changes should be developed.

Step 5: Develop Financial Projections

Develop income statement and cash flow projections based on historical performance, information obtained from the seller, and planned changes to the business operation under new ownership. Developing projections can help you determine whether or not the project is feasible and if you are still interested in moving forward with the business purchase.

• Training calendar - instructor-led courses

• Financial Projections - online courses

Arkansas residents - If you would like to talk with someone about the information you've obtained from the seller and about the feasibility of your project, the ASBTDC can assist you. To obtain this assistance, contact your local ASBTDC office.

Step 6: If financing is needed, develop and submit loan proposal to a potential lender.

Individuals planning a business acquisition who need financing should develop a Loan Proposal to communicate with potential lenders. A Loan Proposal provides lenders the information they need in order to decide whether or not to finance the project.

• Developing a Loan Proposal

The Arkansas Small Business and Technology Development Center is funded in part through a cooperative agreement with the U.S. Small Business Administration through a partnership with the University of Arkansas at Little Rock College of Business and other institutions of higher education. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. It is the goal of UALR to eliminate discriminatory harassment and to promote equal opportunity regardless of race, gender, color, national origin, sexual orientation, age, religion, veteran's status, or disability.