In this day and age, almost anything is possible – including buying a business with little to no capital. That said, there are not many options to do so, and you have to be negotiating with a complying seller. However, you can purchase a business and make monthly payments, much like paying back a loan. Let’s explore what this might look like.
In this scenario, the seller stays indirectly involved in the business while you gain the necessary knowledge to run their business once it has been fully bought out. The arrangement can look one of two ways:
Payments via revenue or profits
Payments via a salary arrangement during an established transition period
Both the buyer and the seller are incentivized to advocate for the business’s success. For one, if the business begins to fail, the seller will no longer receive their payments. This means that you need to have a plan to convince a seller to enter this type of agreement with you. Not to mention, they have to be comfortable with a transition of management, as staff and vendors must know who the new owner is. The notion of keeping the seller indirectly involved means you have their guidance but not their rulebook.
If you are hoping to buy a business, but find yourself in a situation with little to no capital, contact us today. Our business advisors can help you find a seller open to negotiating this type of arrangement. Whether you establish a timeframe, a salary, or a payment plan dependent on profits, there may be an option that will work for your specific situation.