Looking to buy businesses for sale in Raleigh, NC? Buying a local business is becoming more of a reliable employment strategy as many families are wanting to relocate to Raleigh to live. Portfolio.com has ranked Raleigh’s small business vitality as the third strongest in America. The small business for sale in Raleigh, NC are about as safe of a bet as one can make today. The Raleigh Metropolitan Statistical Area ranked 2nd on the list of best-performing cities for 2017, according to the Milken Institute .
Over the past few decades Raleigh, NC has been continually ranked as one of the “Best Places In America To Live.” When people move here there are three options: become an employee, start a business or buy a business.
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For many median aged adults, the idea of starting over, punching the clock, sending out resumes, the corporate grind and asking someone half their age for permission to take a vacation isn’t that appealing. Not having the working knowledge and risk tolerance of starting their own business many are considering the safer route of buying an established business.
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Over the next seven years, the largest intergenerational transfer of private businesses will take place in the history of the world. 2012 saw the first year of Baby-Boomer’s retirement that began a tsunami of business sales and transfers. Researchers estimate that over 10 TRILLION DOLLARS in business assets will be transferred by 2025.
Boomers (1946-1964), make up 76, 000, 000. A common characteristic of this proud generation is their work ethic and strong entrepreneurial spirit. Boomers make up 60% of all privately held businesses in the US meaning that boomers own the highest percentage of the 15 million businesses in the US. Christopher Nicholas, Shields & Co., at ACG Boston’s DealSource Select.
9 million US businesses will need to be bought and transferred before these Boomers retire. This is a staggering number to comprehend. A 2016survey of small business owners indicated that 72% do not have a clear exit strategy. The population growth and a wide selection of businesses for sale in Raleigh, NC make it an ideal location for those considering buying a business in this area.
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If you have already decided that jumping back into the rat race of corporate America is not your best option then the decision to build or buy is probably the next decision you have to make. Both have tremendous advantages and challenges.
Raleigh is ranked second in the nation for being a welcoming business climate. So whether you are starting a business from scratch, franchising or buying a business the Raleigh area has much to offer for the budding entrepreneur.
Option 1 – Starting From Scratch – There are those rare few that possess the pioneering and creative spirit to give birth to an idea, bring it to fruition, create systems of production, and create a fully scaled operation from scratch.
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When I think of these types I often think of the early pioneers that loaded their wagons and traversed across the country in search of better opportunities for them and their families.
These mavericks loaded up their wagons (No GPS or maps) and off they went. Where were they going? How would they cross the rivers and mountains? What would they eat or how would they defend themselves? They certainly had more questions than they did answers but off they went. Many made it and started new lives for themselves but unfortunately many more died in storms, attacks, starvation or sickness.
Starting a business from scratch can be done but it isn’t for the faint of heart. Many experts encourage young entrepreneurs to start with a two-year cash reserve to weather the first couple of lean years.
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If you fail do not give up. Some of the greatest businesses in the world are lead by men and women that failed with early attempts at starting a business. “Success is a poor teacher. We learn the most about ourselves when we fail, so don’t be afraid of failing. Failing is part of the process of success.
Option 2 – Buying A Franchise – Buying a franchise is another way to build a business. Franchising will allow you to build and buy a business in Raleigh, NC with having the security of a safety net. When my wife and I started talking about moving back to the Raleigh area we almost 100% certain that we would buy a business. We ended up purchasing a franchise after we spoke to an experienced business broker.
Here are a few of the benefits that we found of buying a franchise: Branding, Systems, Marketing, Ongoing Support and Proof of Concept. I’d encourage you to speak with a Raleigh TransWorld Business Broker as they are the leaders in this industry. He or she will help you navigate franchise costs, the best demographic locations and they will be with you post-sale to assist you with ongoing support and resources.
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There are literally thousands of franchises for sale today and you need to know a lot about them BEFORE you put a deposit down. What is the mortality rate of a franchise (how many do not make it past year one), Demographics (you don’t want to buy a Sub franchise surrounded by 10 others or in a declining area), FDD’s (sometimes hard to understand and can reach 200 pages or longer) and Royalty Rates (How do you know the royalty rates compared to other franchises in this space?). The safest and best bet is to work with a TransWorld Business Broker.
Option 3 – Buying An Established Business – Of the three options listed here, buying a business is the safest and most secure investment. It isn’t entirely without risks but as the old saying goes “Numbers don’t lie.”
When you buy an established business your brokers present the hard facts through a profit and loss, tax returns and balance sheet. The tax return is typically for the past three years of operation.
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Most often in businesses with UNDER 1 million dollars of revenue a multiple of the Seller’s Discretionary Earnings (SDE) is used to determine the selling price. For business for sale in Raleigh, NC with OVER 1 million dollars in revenue a multiple of the EBITDA (Earnings before Taxes, Depreciation & Amortization) used. Nine out of ten times a multiple of the SDE or the EBITDA is used to set the selling price of a business.
Why is buying a business considered the safest and most secure of the three options? Let’s say you are purchasing a Florist that has been owner-run for over thirty years. This business has weathered economic storms, established a loyal customer base, credible financial history, immediate cash flow, you are buying reputation and goodwill, existing trained employees and the hard work of a startup has been done for you.
2008 was a difficult time for the US and the world. If you purchase a business that survived that storm then chances are you are buying a healthy business.
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My wife and I watched her mother sell her business through a business broker 10 years ago and the lady that purchased her business had little experience in the florist industry. My mother in law ran her business 40 years and the transition went seamlessly. The new owner works her schedule, she has independence, she is making more money than she ever has in her life and she is enjoying the fact that she is a business owner.
Have you ever purchased or sold a business? The best place for you to start is to contact a Raleigh TransWorld Business Broker. TransWorld is a global leader in the industry. For forty years Transworld has specialized in the sale of businesses worldwide with offices in 20 different countries. TransWorld helps buyers find small businesses from $50, 000-$50, 000, 000.
All three aforementioned options bring risks. The least risky of the three is typically option number three. Typically the multiple for each industry space is determined by the specific industry. Recently we reviewed a Dry Cleaning business and the program that TransWorld uses quickly compiled recorded sales from 47, 000 dry cleaners that had been sold. These types of resources and records add great protection to buyers of businesses worldwide.
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The first step to buying a business is to understand the primary reason that owners use business brokers to sell their business. PRIVACY, PRIVACY, PRIVACY- You never drive down the street and see a business with a sign on the front door that says FOR SALE. The owner doesn’t want his competitors to know, he/she doesn’t want customers to know and they do not want their employees to know.
When you put your house on the market you want everyone to know but when you are selling a business you only want approved buyers to know. A business broker can’t disclose information about business until the potential buyer provides three documents: Personal Summary, Non-Disclosure Agreement & a Personal Financial Form.
The business broker on behalf of the owner wants to verify privacy and that they are dealing with a qualified buyer. Some buyers may not understand why all this required
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