The process of buying a business can differ between individuals, and between businesses. If you’re a successful entrepreneur in the market or an individual just learning how to buy a business, you need to know the necessary tools for the best-practiced methods of acquisition. Running into questions along the way is natural, and being knowledgeable on the following seven FAQ’s on buying a business can help you in the long run.

1. What is an evaluation for a business?

A business evaluation is a rough, theoretical value of a business that you are looking to acquire. Although this calculation is not an exact science, it can help you discover a fair price to pay for the business you’re interested in. There are three commonly used types of business evaluation reports, including:

• Calculation report
• Estimate report
• Comprehensive report

These examples range from the lowest detailed report to an extremely comprehensive report, although all reports are still only rough estimations of the actual value.

2. I’m ready. What are my next steps to making my dream of owning a business come true?

The next step after finding a potential business, and considering the price to offer for it, is to carry out thorough research on:

• The location of the business
• It’s target market and customer base
• The businesses ability to grow and expand
• Why the owner is selling the business

Gather as much information on the business as you possibly can, and use that information to decide whether you are ready to assemble a professional team and make an offer to purchase the business.

3. What is a due diligence document?

Due diligence is a business term for an investigative process on a business or person prior to developing and signing a contract. These documents must be obtained legally and can be a legal obligation of the person or business being investigated. Much of the time in business dealings, the due diligence document is completed voluntarily by the seller to ensure peace of mind for both parties.

4. What are the most profitable industries to get into as a business owner?

Embarking on the world of small business ownership currently offers you a wide-range of profitable industries to get into, including:

• Mobile Businesses: The mobile referred to here actually means transportable industries, as in ones that are able to travel to their customers to offer their products and services.
• Auto Repair: As always, people continue to drive. Whether it’s an electric vehicle or an old diesel truck, people are in constant need of tune-ups and repairs on their vehicles.
• Child-Focused Industries: Children are everywhere, and the need for products and services directed towards them is on the rise.
• Sharing Industries: People in modern society both want to and need to, own less stuff. Services like AirBnB and Uber are so successful due to their ability to share the market.

5. How do you keep business and personal finance separate?

Keeping your personal and financial accounts separate is a great practice to get into, even before you buy a business. Maintain separate checking accounts for your personal and business related money, get a business credit card, and consider establishing your entrepreneurial business as an official LLC.

6. What if you I don’t have a business or management background? What education or training should I have when looking to buy a business?

There are countless online-based courses for small business management, and resources available to help guide you towards successful business ownership. Regardless of whether you have an MBA, other college degrees, such as writing or communications, will help prepare you to run a business. On top of specific training, you can educate yourself on social media marketing by reading blogs or watching related videos.

7. What’s the difference between “financing” and “price”?

The price of a business is the amount they are asking to be paid upon acquisition of their business. Financing, on the other hand, is the method in which this money is acquired and paid to the seller, such as loans or grants.