Buying a business

Businesses for sale: how to buy one without overpaying

Buying a business that already runs can be faster than starting one: it has customers, staff, suppliers and a history you can check. It also costs more up front, and you take on its problems as well as its profits. This guide explains how buying a business works wherever you are, what to check before you sign, and what to do if you want to work for yourself without buying anything. It is general information, not legal, tax or financial advice.

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Last reviewed · Play 2 Earn Sports. General information, not legal, tax or financial advice.

On this page
  1. Where businesses for sale come from
  2. How to buy a business in 8 steps
  3. Business purchase due diligence checklist
  4. How businesses are valued
  5. Buying a business with no money
  6. Franchise resales
  7. If you want to work for yourself without buying anything
  8. Questions

Where businesses for sale come from

  • Online marketplaces list businesses by sector, location and asking price. Treat a listing as an advertisement, not a verified summary.
  • Business brokers market businesses for owners. Most brokers are paid by the seller, so their job is to get the seller a good price. Some buyers hire their own adviser.
  • Sale by owner. Owners close to retirement often sell privately, sometimes to staff, customers or suppliers who already know the business.
  • Your own network. Accountants, lawyers and bankers often hear about owners who want to sell before anything is listed.

How to buy a business in 8 steps

Business purchase due diligence checklist

  • Are revenue and profit backed by bank records and tax filings, not just a spreadsheet?
  • Does one customer or supplier make up a large share of the business?
  • Can the lease, key contracts and licences be transferred to you?
  • Are there debts, tax arrears, warranties or legal claims you would inherit?
  • Will key staff stay, and what are their contracts?
  • How much of the business depends on the owner personally?
  • What equipment needs replacing soon, and what will it cost?
  • Why is the owner selling, and does the answer match what the numbers show?

How businesses are valued

Small businesses are usually priced as a multiple of what they earn, adjusted for risk. The same profit can justify very different prices: a business with steady repeat customers, good records and a team that runs it is worth more than one that depends on the owner's personal relationships. Asking prices are a starting point. An independent valuation, or at least your accountant's view, helps you avoid paying for profit that leaves with the seller.

Buying a business with no money

Searches for "how to buy a business with no money" usually mean buying with very little of your own cash: seller financing, earn-outs (part of the price is paid from future profit), or bringing in a partner or lender. These deals exist, but they still need good credit, a convincing plan and a seller willing to wait for payment. They also put you in debt from the first day. Be careful with any course or program that promises easy no-money deals.

Franchise resales

Some businesses for sale are franchises. Buying one usually needs the franchisor's approval, a transfer fee and a signed franchise agreement. In many places the franchisor must give you a disclosure document first. Read our guide on buying a franchise before you make an offer on one.

If you want to work for yourself without buying anything

Not everyone looking at businesses for sale wants to put savings at risk. Another route is selling for a company as an independent partner, where your time is the investment.

Play 2 Earn Sports is piloting a Territory Partner program. Partners bring sports clubs, leagues and academies onto the Play 2 Earn Sports platform, and earn a share of the platform fee each time one of those clubs' players registers and pays, every season.

  • It is not a business for sale. Partners pay a one-time territory fee for an exclusive area (about CAD 5,000 in Ontario), which in Ontario makes it a small franchise. Where we don't sell territories, you can join as a Sports Ambassador with no fee.
  • Partners are independent and paid commission only. There is no salary, and if no clubs sign, you earn nothing.
  • The terms are proposed and can change. Your signed agreement is what applies.

Apply to get the full commission details

Questions

Is buying a business safer than starting one?

It can be lower risk in the sense that the business has a track record you can check. But you pay for that record up front, and if the numbers were overstated or the owner was the business, the risk moves to you.

Do I need a lawyer and an accountant?

For any business purchase, yes. Their fees are small compared with the cost of buying the wrong business or the right business on the wrong terms.

What does "by owner" mean?

The owner sells directly instead of through a broker. You may save time or find a better price, but you do all of the checking yourself.

Is the Territory Partner pilot a business for sale?

No. It is a commission sales arrangement. You don't buy anything, and Play 2 Earn Sports signs the customer agreements with clubs.

Know your local sports scene?

See how the proposed Territory Partner pilot works, run your own numbers, and tell us about your area.

Territory Partner Program