Buying a Tennessee business for sale can represent a great opportunity for investment. Buying an established business usually is much safer financially and more profitable than starting a new business because an existing business already has an established customer base, source of revenue and business operations. An existing business also may own valuable patents or copyrights.

It is often more expensive to buy a TN business for sale than to start a new one, although it is generally easier to obtain financing for an existing business. Investors tend to be more comfortable with a business that has a proven performance.

There are three primary actions to perform before buying businesses for sale in TN:

1. Review the tax returns and financial statements over the last few years for the business for sale. Tennessee businesses can measure their growth potential with actual experience rather than conjecture.

2. Examine the current profits for the small businesses for sale. Tennessee businesses will have expenditures such as employees’ salaries, utilities and insurance that you must deduct from the sales revenue.

3. Inspect the operations of prospective business opportunities. Tennessee businesses may have obsolete inventory, dissatisfied employees or outdated distribution methods.

Action Steps
The best contacts and resources to help you get it done

Locate a Tennessee business for sale

Many websites offer listings of Tennessee businesses for sale. These listings should show the location, asking price and cash flow, among other details.

I recommend: Go to the BizBuySell homepage and select Tennessee as the business location. You can also narrow the search parameters by selecting the business category and asking price range. MergerNetwork has an extensive database of businesses for sale in Tennessee and provides a summary of each listing.

Find business brokers in Tennessee to assist you in the purchase process of a business

A Tennessee business broker can identify businesses that are clearly undesirable and help negotiate a price on the best candidates. A business broker also will help you obtain any licenses and permits that Tennessee requires.

I recommend: Sam Cantor is a full-service business broker that provides buyer and seller services for businesses in the Memphis area. VR Business Brokers is in Nashville and seeks long-term relationships with business buyers and sellers.

Hire a Certified Public Accountant before you buy a Tennessee business

A CPA will need to review the financial records of any business in which you are interested. Additionally, a CPA can ensure that you file any required legal documents.

I recommend: John R. Janicek is in Hendersonville and specializes in business valuation for its clients. Rodefer Moss & Co. has several locations in Tennessee and provides business consulting, in addition to standard accounting services.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Determine the owner's reason for selling before buying companies for sale in Tennessee. The owner may no longer be interested in running the business or there may be legitimate financial reasons for putting it up for sale. You also will want to review the marketing strategy for the business because many lagging businesses can be revived with proper advertising.