However much we'd all like to conjure up a winning business out of air, you will need to put your own money on the table. You'll probably either turn to your own savings or to the bank.
When you're buying a business it is common that the bank will lend anything up to 70% of the total price, while you will have to provide the final 30%. Perhaps you'll also look for outside investment. At this stage,family and friends should really be your first port of call.
The bank's decision to lend you the money will be the green light to go ahead. However, there are certain things the bank will want to know. Julie Jones, Barclays' principal business banker for the Tees and Wear region, explains what banks are looking for: "Generally we're looking at the last three years' business accounts, to see that it's profitable. We'll want to see that the trends are going in the right direction, that you've grown since year one. We'll also look at your personal accounts over the last six months."
As well as your business plan, the banks will want to see a cashflow forecast for your first year of trading. You also need to have prepared a budget plan, where you show that you've done your sums. While a 70:30 lending ratio is the norm, the banks may lend up to 80% for commercial mortgages. Repayment may not start for six months to give you time to settle into your business.
The bank has said yes. Now you can instruct your agent to put in an offer on the business that you want. But, as Kate Stamp, a solicitor and partner at Every Phillips Linford & Browns in Honiton, Devon explains, you might want to keep the champagne on ice for just a little bit longer.
If the solicitor can be involved from an early stage, they can oversee the process and stop you getting into deep water. A solicitor needs to see the contract and will negotiate for you. "I need as much detail about what sort of business it is and see that all relevant areas are covered, say, if vehicles are included or stock," Stamp says. The contract needs to be drafted to reflect everything that the buyer needs, tailored to your requirements. This can be difficult because buyers and sellers have different agendas. The buyer wants to have as much included as possible in the contract so that there is less to sort out. The seller will be trying to give the minimum.
When the amended contract has been returned, it will dictate whether any further alterations need to be made. A search is also carried out with the local authority to see whether there are any planning or financial issues that affect the premises.
If there are any employees of the business, that you don't want to employ you will have to be advised on your liability on redundancy and unfair dismissal. And a breakdown of fixtures and fittings needs to be included.
How long will all this take? "It takes a minimum of a couple of weeks on average," reckons Stamp, "and that's if everyone's working for the same deadline. It can be between two and four weeks or it can be six."
Once you've exchanged contracts then comes the time to apply for licenses, seek planning permission if it's needed. Once complete, the final documents are drawn up, final searches take place and then you hand over your cheque. And now the hard work really begins.
