There are two cash requirements to think about when you start thinking about buying a business.- How much cash do you have to use as a down payment on a business.
- How much cash is required to close the sale and start out on a sound financial footing.
These are two different things. In addition to the cash you will pay the seller for the business, there will be a host of additional demands for cash. These issues should be taken into consideration when assessing your financial capacity. It will help you determine the price range of the businesses to target as realistic acquisition candidates. This is a general list and is not meant to be all-inclusive and not all may apply.
- Closing costs & escrow fees
- Legal filings & recording fees
- Attorney's fees
- Accountant's fees
- Appraisal fees
- Inventory counting service fees
- Sales tax on equipment purchased
- Vehicle registration & licensing fees
- City, County, & State Business licenses & permits
- Franchise license agreement transfer fee
- Franchise training fee
- Travel expenses associated with franchisor training
- Maintenance expenses
- Correction of code violation(s)
- Landlord lease deposit
- Utility deposit(s)
- Property liability premiums
- Workers compensation insurance premiums
- Operating cash / working capital
- Cash to fund credit sales
