E25: Step-by-Step Guide To Buying A Business | Tanner Noble
Buying a business might seem intimidating, but it’s entirely achievable with the right guidance. Many first-time buyers struggle with where to start, how much they can afford, and how to navigate negotiations.
This episode covers financing options, including SBA loans and seller financing, and offers practical advice for managing the transition after closing.
If you’ve been considering buying a business but don’t know where to start, this episode provides everything you need to confidently take the first step.
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Kellen Ketchersid
Kellen is a co-founder of Stag Business Coaching, business strategist, and a systems thinker. He leverages his extensive experience in biotech and consulting to empower entrepreneurs to navigate complex challenges with strategic growth solutions.
Albert Gillispie
Albert is a serial entrepreneur, business efficiency expert and co-founder of Stag Business Coaching who has founded several multimillion-dollar companies. With expertise in optimizing operations and innovative systems, he mentors business leaders who want to unlock their business’s full potential.
Tanner Noble is a Senior Business Advisor with Transworld, with 16 years of finance experience across various industries, including retail, biomedical manufacturing, and commercial real estate. As a Partner in a Private Equity Firm focused on Multifamily Real Estate, he managed over $100M in assets. Tanner specializes in connecting business buyers and sellers in Lubbock, Texas, crafting personalized strategies to navigate complex transactions.
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EPISODE 25 TRANSCRIPTION
Introduction to Buying a Business
Albert [00:00:00]: We are live. Welcome to episode three in our three-part series with Tanner Noble.
Tanner Noble [00:00:06]: Thank you. Thanks for having me.
Albert [00:00:08]: Yeah, I am excited about this. We wanted to do a business broker series and kind of give an overview of your process from all angles. This is the third in a three-part series. The first part was about some common misconceptions and myths around buying and selling businesses.
Last week's episode went through the process from the seller's perspective. This week, we want to devote an episode to going through the entire process from initially reaching out to a broker to getting to the closing table, but from a buyer's perspective. That’s what we want to focus on today—giving a high-level overview of the process for people interested in buying a business. We’ll also touch on some common misconceptions and provide some rules of thumb around that process.
So, I guess starting with that, the first part of the process is getting in touch with you, right?
Reaching Out to a Broker
Tanner Noble [00:01:00]: That's right. Usually what happens is a buyer is Googling, "I want to buy a business." That’s typically how someone starts the process. They come across a website like BizBuySell, which is essentially the granddaddy of online marketplaces for businesses.
From there, they’ll see a listing of businesses, find one that sounds interesting, and click on it to learn more at a high level. Then they'll see a form that says something like "Contact the business" or "Request more information." That’s how I get a lot of inquiries, especially from first-time buyers. They fill out the form on a listing saying they’re interested in learning more about that business.
That’s usually the case for first-time buyers. However, I’ve had experienced buyers—those who’ve bought or looked at multiple businesses—reach out to me the same way. That method works perfectly fine for anyone.
Assessing Financial Capability and Experience
Tanner Noble [00:03:00]: The other way is that somebody calls me directly. They see my number and say, "I want to buy a business. Can you help me?" When I first talk to someone who’s a business buyer, I try to get a sense of a couple of different things.
One is their financial capability to buy a business. A lot of buyers might try to keep that close to their chest for different reasons. Maybe they don’t have a lot of money and don’t want to reveal that, or maybe they have a lot of money and don’t want to expose it because they don’t want you to think they can pay whatever. It’s kind of a dance. What I’m really trying to figure out is what size business they can afford to buy. It’s like buying a house. You don’t want to go in thinking you can buy a $10 million business when you can only afford a $100,000 business, or vice versa.
I also gauge their relevant experience in owning a business. Have they owned businesses before? Were they successful? Maybe they haven’t owned a business but have life experience that lends itself to running a business or working in a specific industry.
Another thing I assess is their personality because culture in a business is huge. You want to have a cultural fit. So I’m kind of doing an evaluation to gauge all these things.
Once I’ve assessed that, we either identify a business together, or they’ve already found a business they’re interested in. At that point, I get them to sign a non-disclosure agreement.
The NDA allows them to look at the details of the business but prevents them from sharing the information with others. This protects the seller because they don’t want their information shared publicly. Often, there’s confidential information involved, and the NDA protects both parties.
The Importance of Buyer Questionnaires
Albert [00:07:00]: Let me jump in real quick. I love the illustration of a realtor. You're basically pre-qualifying this buyer. You're going through this process, and we have a buyer questionnaire that's typically part of that process. They're filling it out to tell us a little bit about themselves—what they're interested in, the ideal business size in terms of revenue, profit, and purchase price. They're pre-populating some of that information.
A lot of the initial conversation is like a realtor. Before you show someone million-dollar mansions down the road, you need to pre-qualify them. What are they looking to buy? Let’s verify that a bit. When you're buying a house, it’s a pre-qualification letter from the lender. In this case, it’s the buyer questionnaire and some of the questions you're trying to discern and get good answers for.
The goal is to ensure you're not wasting your time, the seller's time, or ultimately the buyer's time. That’s an important step in the process.
Before moving on to the NDA, what is your preferred way for people to start that conversation? Should they get on BizBuySell, or is it better to give you a call and walk through a buyer questionnaire? What’s the best way to begin?
Navigating Confidentiality Agreements
Tanner Noble [00:08:00]: Yeah. I think the best way is to just reach out to me and let's talk. I love the process of educating people on how they're going to do this. I just enjoy putting together deals and making both parties successful. I'm happy to talk through that. Like I said, I want to help gather my own high-level summary of you and try to connect you with the best fit. That's part of my role, finding you a good business to buy.
Kellen [00:08:45]: I have a question along the same lines. If someone is listening and thinking, "Man, I would love to buy a business," what kind of position do they need to be in financially? Say for an entry-level business or whatever the right term is, for someone who is a first-time business buyer, what kind of financial position do they need to be in?
Tanner Noble [00:09:00]: That's a great question. Let me answer that by first saying, along with your analogy, Albert, about the realtor, having a pre-qualification letter from a lender when you're buying a house is obviously a huge thing. You need to make sure you can get a loan to buy your house if you don't have the cash. Similarly, in buying a business, it’s often very beneficial to get pre-qualified with a lender to show that you can purchase a business.
First of all, I’m happy to help with that process. We work with a bunch of different SBA lenders, so introducing you to them is easy for me. I actually prefer doing it that way because I know who can get that process done. There are definitely SBA lenders out there who don’t necessarily specialize in business acquisitions, so we want to make sure you’re working with the right fit.
To answer your question, Kellen, you need to have at least 10% of the sales price in cash. That’s the bare minimum. Usually, you need more than that because you’ll also need working capital and some room to handle mistakes.
Albert [00:10:00]: So, 10% of the purchase price in cash?
Tanner Noble [00:10:03]: Yes, 10% of the purchase price in cash or cash equivalent. When we get further down the road to negotiating the business, we’ll determine exactly how much cash you’ll need, but at the very basic level, you need at least 10% because an SBA lender could potentially loan up to 90% of the sales price. That’s best-case scenario.
Albert [00:10:30]: Got it. So if you're looking to buy a million-dollar business, you need to have at least $100,000 in your bank account or cash equivalent that you can access if needed.
Tanner Noble [00:10:40]: Exactly. And you’re also going to have to sign a personal guarantee on that loan. If the business doesn’t generate cash flow and can’t support the debt service payment on that loan, then you’ll need to cover it out of your own pocket. Lenders vary on what that looks like, but you need to be able to support the debt service.
Albert: Makes sense. Hopefully, the business can handle that.
Reviewing Business Listings and Marketing Materials
Albert [00:12:00]: So the buyer, the potential buyer, has reached out to you. You’ve put together this buyer questionnaire that documents what the perfect business for them looks like. You’ve verified they are capable of buying that, and now they’re looking at potential deals. Prior to that, you have them sign a non-disclosure agreement or an NDA, which protects the seller’s private and proprietary information that the buyer may look at in the next step. So, what’s that next step?
Tanner Noble [00:12:35]: Yeah. The next step is to get them the marketing material. As we’ve talked about, there’s the BizBuySell website, and I should have mentioned this earlier, but our website, tworld.com, also has a bunch of businesses listed. On those websites, there’s a high-level summary of the business. Once you sign the NDA, you will then get access to what we call our Confidential Information Memorandum, or CIM.
Tanner Noble [00:13:00]: The CIM is essentially like a slide deck or a PDF, and it contains much more detailed information about the business. It includes a financial summary snapshot, the history of the business, its strengths and weaknesses, opportunities for growth, and other details. Some CIMs also include pictures of the business and, if the business is large enough, an organizational chart. That chart might show the employees, their roles, and even how much they’re paid.
Tanner Noble [00:13:50]: This is your first real deep look into the business. From there, you’re making your initial assessment. First, does this feel like something you would want to own? If it passes that test, you move on to whether it makes financial sense for you. Can you afford it? If you buy it, does it align with your financial goals? Finally, you start thinking about your business plan—what you want to do with the business once you own it.
Tanner Noble [00:14:30]: Many buyers approach this like a house flip. They think about what changes they can make to improve profitability. Often, it might involve advertising. For instance, some businesses have been running the same way for years without needing to advertise—they’re just coasting. Buyers might see that and think, "If I invest in advertising or build out a marketing system, I could significantly grow the top line." So, while reviewing the CIM, you’re determining whether this is a business you want to buy and, if so, what your plan would be for it.
Preparing for Buyer-Seller Meetings
Albert [00:16:00]: Yeah, the SIM is such an important piece of collateral information. It’s what the potential buyer uses to model out financially—what can they afford, what’s the current cash flow, and, given the improvements listed in the SIM, what could future cash flows look like. There’s a lot of information in it, and it’s your job as a broker to distill and articulate that information in a coherent way. Buyers need to be able to read the SIM and understand the full picture of the business. Some of these are four pages long; some are 100 pages long. It varies with the complexity of the business. I don’t think you can overstate how important that packet is—for the seller to have it as organized and coherent as possible, and for the buyer to use it to understand what they can afford. That understanding and learning is where you come in, to help educate potential buyers along the way.
Kellen [00:17:00]: I would imagine that as an experienced broker, you’re helping your clients look for red flags in the SIM. Maybe that happens in the due diligence period, but if I were buying a car for the first time on Craigslist, the first thing someone would tell me is to have a mechanic look at it. Are you, as the broker, examining the business critically on behalf of the buyer and pointing out any red flags? How do you approach that?
Tanner Noble [00:17:25]: Yeah, when I’m building out the SIM, I want to bring to light any potential issues early on. Nobody wants to get to the closing table and find a major red flag that crushes the deal. I’m uncovering those things before the SIM is created. Some issues aren’t necessarily bad, but they could be a matter of fit.
Kellen [00:17:55]: I can think of examples, though they’re confidential, but one you mentioned earlier is if the business needs help with marketing and the buyer is great at marketing, it’s a great match.
Tanner Noble [00:18:05]: Exactly. But if the business needs marketing and the buyer isn’t strong in that area, it’s not a great fit. Another common misconception, largely due to social media and gurus, is that buying a business is a passive investment. They make it seem like you bring $100,000 to buy a million-dollar business, pay it off in three years, and then you’re living on a beach in Cancun. In reality, those types of businesses are outliers. Most businesses require the owner to be involved to some degree—some heavily, others maybe 20 hours a week. But it’s not something where you can just sit on the couch and make money.
Kellen [00:19:00]: Yeah, and if a business is already turnkey and passive, why would the owner sell it?
Albert [00:19:10]: Exactly. You’ve got to treat a business like a business. Watch every penny, lead the team, and build the team. Despite what social media says, owning a business is not passive.
Tanner Noble [00:19:25]: That’s right, and I’m vetting buyers because there are plenty out there who think it is. In our conversations, I try to gauge that. If someone wants a passive investment, I tell them this business is not for them. Passive investments are unicorns in this space.
Making Offers and Negotiating Terms
Albert [00:21:00]: Okay. So they're looking at this, modeling it out financially to understand what an appropriate purchase price is, and then we’re moving along to the next step of making an offer. Walk me through that. With a listing, what are the next steps? Is it getting in touch with the seller? Is it turning in an offer? What does it look like to go from knowing what you can pay to getting an accepted offer?
Tanner Noble [00:21:30]: Yeah. The process is kind of fluid there. A lot of times, the buyer is bouncing ideas off of me. They might say, “I’m thinking about getting a loan for this, and I think I’ve got 20% that I can come up with for the down payment. I’d like the seller to stay on for six months to help me transition this. I also want the seller to have a little bit of skin in the game, so I want them to finance 10%.”
Getting back to your question earlier, Kellen, about how much you need, that’s why I said 10% is the bottom line. A lot of times, buyers will come up with 10% out of pocket, get the seller to finance another 10%, and then get 80% from a lender as a loan. We’re bouncing all those things off of one another to figure out the best fit. Some sellers are very flexible. I just had a seller last week who said they’d do up to 50% seller financing. That really helps a buyer get the deal done. On the other hand, I’ve had sellers say, “I don’t want to finance any of this. I need all the money upfront because I’m moving to North Carolina and need it to pay for my house.” It’s very fluid. We go back and forth trying to figure things out, and I’m guiding them through that process.
Tanner Noble [00:23:00]: Once we have these general terms together, at Transworld, we have a pre-established, promulgated contract called the Business Sale Offer and Acceptance Agreement (BSOAA). It’s a simple four-page document that’s been used on thousands of transactions. It’s very well-vetted in the state of Texas, and most people don’t have a problem with it.
When it’s a business, we’ve talked in previous podcasts about the difference between a main street business and an M&A-size business. In my world, a main street business is under $2 million, while an M&A-size business is over that. For an M&A-size business, the contract might be one that an attorney draws up because larger deals need more customization. There’s more complexity to the business, so it makes sense.
Tanner Noble [00:24:00]: But for most main street businesses, the BSOAA works. It’s a four-pager with simple blanks to fill out, similar to a real estate contract. We walk through it and figure out the high-level terms—the terms we just went over—together.
Tanner Noble [00:25:00]: And once we have that and feel good about it, I’m also helping them move along, trying to guide them toward what I think the seller might accept. We present the offer to the seller. The seller looks at the offer and might say, “This looks great. I want to sell my business. Let’s do it.” He signs it, and we’re on our way.
That happens, but not often. Most of the time, the seller might say, “I like this and this, but maybe we need to tweak this.” Maybe they think the offer is too low on the sales price, and they feel the buyer is just fishing. Whatever the terms we came up with, there’s often something that needs adjustment. I go back to the buyer and explain what the seller thinks. It’s a negotiation, just like in a real estate transaction, trying to find the middle ground that works for everyone. It’s about figuring out what makes both the buyer and the seller feel good about the deal to get the transaction done.
Albert [00:26:00]: At what point do the buyer and seller meet?
Tanner Noble [00:26:05]: Oh, before that. Let me describe that part. Before this offer goes back and forth, I completely skipped a step. Let’s go back to the SIM. The buyer has reviewed the SIM, decided they want to buy the business, and we’ve discussed it. I’ve vetted the buyer, and now it’s time to look at the business and meet the seller.
The buyer inevitably has a lot of questions about the business. What we do is schedule a buyer-seller meeting. Some sellers want this to happen after business hours, especially if they don’t want staff to know what’s going on. Others don’t worry about that or have a secluded place to talk. We figure out the logistics of how that meeting will happen.
Tanner Noble [00:27:00]: At the meeting, I’m there as an intermediary, helping move the conversation along. I ensure the discussion flows smoothly and interpret or buffer what the buyer and seller are saying to each other. It’s an emotional situation for everyone, and I’m there to facilitate the process effectively.
Albert [00:28:00]: Yeah, that's a considerable amount of vetting of these buyers and kicking the tires, making sure they can perform and do what they say they’re going to do prior to setting up a buyer interview. You’ve spent a lot of time so that you’re not wasting anybody’s time. If it gets to that point, it’s someone who’s pretty serious. They’re generally in the ballpark of a purchase price that would make sense. This is a meeting just to kind of put your eyes on the business—what does it look like, where is it located, what does the building look like, what does the equipment look like? You’re kicking the tires, so to speak. After that, they go back and put together that formal offer in the BSOAA, and then it moves forward through the negotiation process.
Tanner Noble [00:28:50]: Yeah. I would add to that, before getting to that meeting point, we really encourage—and I almost demand—that the buyer does not go to the business to "secret shop" without permission. They could go and act like a customer and sort of observe the business if it’s appropriate, but we ask that they don’t go in and say, “Hey, I’m here because I heard this business is for sale.” That could ruffle a lot of feathers. We want to be very confidential and discreet during this process.
Albert [00:29:25]: Yes, and that’s so much of the NDA process—setting those expectations and making sure everyone understands we need to protect everybody in this. You’re signing this saying you’re not going to run around town, you’re not going to go into their office and announce things. There are so many different actions we’re getting written and agreed upon before moving along.
Albert [00:29:50]: Okay, so we’ve gotten to a point where we’ve agreed on a purchase price, agreed to terms, and we have a signed agreement. Then, to use this metaphor, you close the next day. What happens after that?
Conducting Due Diligence
Tanner Noble [00:30:00]: Yeah. So as soon as everybody’s in agreement on the contract, we get that contract to a closing company. We use one in our office specifically. From the date it’s signed and executed, you have a period of time called the due diligence period, or DD. In our standard contract, it’s 10 days.
Albert [00:30:20]: That’s super short.
Tanner Noble [00:30:22]: Yeah, it’s not that long. But depending on the business and its needs, it could be extended. By this point, you’ve already met with the buyer and vetted things pretty well. Now it’s time to get down to the nitty-gritty. In the SIM, we typically include a financial snapshot. Usually, it’s a spreadsheet I’ve built out that reflects the financial statements or tax returns from the past few years.
Once you’re in due diligence, you get access to the actual tax returns and financial history. Typically, this includes three to five years of history, profit and loss statements, year-to-date profit and loss, balance sheets, customer lists, equipment lists, and detailed contracts like MSAs or anything else. Essentially, you’re trying to prove that the numbers are accurate and that you’re buying what you think you’re buying. That’s your time to determine that. For a main street business, 10 days is pretty typical.
Kellen [00:31:55]: If you’re a buyer and some of these areas you just listed cover a lot of different areas of expertise, would you suggest that a buyer needs to put together a team of people to help them through the due diligence process? Maybe a CPA and an attorney? Or do you think it just depends on the business?
Tanner Noble [00:32:10]: Absolutely. It depends.
Kellen [00:32:12]: Okay.
Tanner Noble [00:32:15]: Depends on the business, and it depends on the buyer. Some buyers have a high acuity in all of those areas. They’re just competent and know what they’re doing. Others are an expert at one thing, and maybe it’s not accounting or finance. For most people, I would say it’s a very good idea to build a team around you—like you mentioned, a CPA, an attorney, and, in some cases, maybe even some kind of industry expert.
Tanner Noble [00:32:50]: Yeah, I think so. If everybody’s getting their eyes on it and helping you—maybe even a financial advisor if you’ve got one who’s advising you on your overall wealth and financial situation.
Albert [00:33:00]: So, there are two scenarios here in due diligence. One is that you get all the documentation, comb through it yourself or with your team, and you’re verifying that the business is what you think it is. Scenario A is great: they have great documentation, it all makes sense, no surprises.
Tanner Noble [00:33:20]: Yep. No surprises.
Albert [00:33:22]: We’re continuing to move forward past due diligence and on to buying the deal. Scenario B is there’s a surprise. So, when that happens, what happens next?
Tanner Noble [00:34:00]: Yeah. So there are a couple of different things that could happen. One is that it just blows the deal up. It's just so big to the buyer that they decide, "We can't move forward." And that can happen. That’s why you have this due diligence period. By the way, I didn’t mention during the due diligence period, if the buyer decides to back out, they don’t lose their earnest money deposit—their down payment that they put up. We didn’t really go over this, but part of the offer is you have to have some kind of earnest money deposit. If you back out during due diligence, you can get that back.
Tanner Noble [00:34:40]: So that’s one option. The other is maybe the buyer says, "Here’s the surprise, but if you, Mr. Seller, are willing to concede that this is an issue, then maybe we come down on the sales price." Maybe it’s something revenue-driven or bottom-line driven. If it’s substantially different than what we thought, then we renegotiate. Or maybe it’s something else. Maybe it has to do with the length of time the seller will stay on.
Tanner Noble [00:35:20]: For example, they get in there and realize, "This requires a lot of information that’s in the seller’s head. Buying this business is basically buying what’s in the seller’s head, and they’re going to need to stay on a lot longer than three weeks for me to transition successfully." So maybe it’s extending that time. In real estate, we call this a retrade. It’s coming back to the table and saying, "This is substantially different than what we thought when we made our offer, so we’re changing our offer to this. Do you accept?" If everyone agrees, you move forward. If not, you back out and find something else.
Albert [00:36:00]: And your job and expertise as a broker is that you’ve done this several times and know the levers to pull whenever certain surprises arise. If all parties are willing and able, you can help renegotiate during this portion, keep the deal together, and ensure it’s a win-win for everybody involved while continuing to progress forward. That’s the expertise and problem-solving that a broker brings to these highly animated, highly passionate interactions.
Tanner Noble [00:36:30]: Exactly. You’re a buyer. You’re about to spend X amount of money—probably a lot—and you’ve been vetting it. You’re so excited, thinking, "This is going to happen." But you’re also nervous. Then, all of a sudden, this issue comes up, and you think, "Okay, I’m done. If this is there, then what else is there?" It’s an emotional rollercoaster. That’s what I’m there to do—help you see the facts, find the truth, and take an emotional step back to look at what’s actually happening. I’m there to guide through that process.
Kellen [00:37:30]: Well, and I would imagine it's so comforting and nice for somebody who's buying, especially if it's a first-time buyer, to have that experienced eye. Otherwise, like you said, I would imagine as a first-time buyer, if some surprise came up during due diligence, I'd be like, yeah, like you said, well, if they're hiding this, what else are they hiding? I would imagine that having that calm presence that can say, well, you know, I think this is probably the only hang-up that we're going to run into, or yeah, maybe you're right. Maybe there are a bunch of things we should worry about here. Just the benefit of that third party.
Albert [00:38:00]: Yeah. And so much—more often than not, for sure—it’s not someone hiding something. It’s just that you’re looking a little closer under a microscope, and to a potential buyer, it might be, you know, the initial gut reaction of like, oh my gosh, this is completely different. In reality, it’s not, and it’s your job as a broker to help, like you said, interpret that. Hey, these are the facts. This is what this means in the big picture, in the grand scheme of things, and help discern through that process.
Financing Options for Buyers
Kellen [00:39:00]: And if a buyer wants to back out, but both sides can't agree about whether or not this new finding in the due diligence period was substantially different from what was originally discussed, is there a possibility that the buyer will lose their earnest money if they back out?
Tanner Noble [00:39:15]: Once the due diligence period is over, yes.
Kellen [00:39:20]: Okay, but during, like in real estate, it’s like when you're buying a house, you have an option period typically.
Tanner Noble [00:39:26]: Right. In that option period, you can back out for any reason.
Kellen [00:39:30]: Without it depending on agreement between the buyer and seller?
Tanner Noble [00:39:33]: Correct.
Albert [00:39:35]: Okay, so we’ve moved past due diligence. What’s the next step to get to the closing table?
Tanner Noble [00:39:40]: After that, there are a lot of different things going on. From the buyer’s perspective, it’s mainly about getting the loan approved if you have a lender. That involves making sure you’re staying on top of the process, which means, typically for an SBA loan, you’re developing a business plan and a pro forma—what you think the numbers are going to look like going forward. You’re also providing the lender with your financial statements, tax returns, K-1s, and all the things they need to vet you financially.
Tanner Noble [00:40:10]: The challenge is that, often, the lender drags their feet. They’ve got so many deals going that they wait until a deadline before they push things forward. My job is to help push the buyer to get everything submitted, doing weekly or even more frequent check-ins to make sure they’re moving the process along.
Tanner Noble [00:40:40]: On the seller’s side, there’s work like getting the certificate of no tax due, which we talked about last episode. For the buyer, you need to figure out the real estate piece. If you’re buying the real estate, it’s typically more straightforward since it’s already been negotiated. But if the business is leasing a space, now there’s a landlord involved. You’ll need to get qualified by the landlord and either sign a new lease or assume the existing lease.
Tanner Noble [00:41:10]: If there are licenses or certifications required to run the business, you need to address those during this time as well. Additionally, introductions to key relationships—vendors, customers, or contracts—need to be figured out to ensure a smooth transition at acquisition. Those are all critical elements as you approach the closing table.
Closing the Deal
Albert [00:43:00]: Yeah. So as a broker, you're helping quarterback through all of this where you're basically making sure you’re communicating with the lender, ensuring everything’s in on time and on both sides—whether it’s the certificate of no tax due or personal financial documents to the lender. You’re helping keep that train moving down the tracks on time, on budget, and as detailed as possible with all I’s dotted and T’s crossed. Ultimately, once all of that’s done, then you close. Do you typically close at a title company? What does that look like? My experience is at a title company with real estate, but what does that look like for a business?
Tanner Noble [00:43:35]: Yeah. So the way that we're doing it right now with Transworld is we have a company that we use based out of Dallas called Lawyer's Escrow. They handle the closing, and it’s virtual. It makes it really easy. I’ve had buyers and sellers before who feel like what you just said—they want to come somewhere.
Albert [00:43:55]: Yeah.
Tanner Noble [00:43:57]: And I’m happy to host you at our office. You can come and get on your phone to sign the documents right there, but it’s as simple as that. Once all the money is at the closing company, everything is signed, and it’s a done deal.
Albert [00:44:13]: That’s awesome.
Tanner Noble [00:44:15]: Takeover can happen a couple of different ways. It could literally happen on that day—you just take over the business—or it could be that we close on one day, but the transition happens on another day. Depending on how much the seller is going to be involved in the transition, you’ll go in, have a meeting, tell the team, and explain, “Hey, I’m the new owner, and here are my goals.” That’s an emotional day for everyone involved.
Albert [00:45:00]: Yeah. Okay. So big picture, we went through a lot—from someone reaching out to you, getting ahold of Tanner, filling out a buyer questionnaire, and kind of getting prequalified for what the perfect business is for them to go into. Then you go and help find that. Then they're signing an NDA, looking at a SIM, underwriting a business, and understanding what the cash flows are and what they can pay for it. Once you’ve vetted that a little bit and know it's serious, and you’re close on price, then we're setting up a buyer-seller interview.
Albert [00:45:30]: That’s when we go on-site and talk through some details together. Then it’s making an offer and negotiating an offer until one is ultimately accepted. After that, we’re going through due diligence, verifying everything financially, documentation-wise, and otherwise within the business. Once that’s done, we’re getting approved for a loan if we’re going to use one, getting some documents from the seller, and putting together our transition plan for when we take over.
Albert [00:46:00]: Ultimately, that brings us to the closing—online, virtually—where you are signing the documents, wiring in the funds, and officially becoming the proud owner of Business A, B, or C. Did I miss any steps in that? I mean, that’s high level, obviously—there’s so much nuance to it.
Tanner Noble [00:46:30]: That’s the gist of it.
Albert [00:46:32]: That’s business buying 101. That’s great, man. That’s such a good overview for those interested in buying a business—it really lays out the steps. And there’s so much intricacy in each of those, but we have the experts on our team to help anyone navigate that process.
Tanner Noble [00:46:50]: Yeah, I’ll hold your hand through it.
Albert [00:46:52]: You’re good at that. Yeah. What would you add to that? What are some other things people need to know—things they might not know as buyers walking into this? What are your concluding thoughts on this?
Tanner Noble [00:47:00]: I mean, look, I’ve said this on each of the episodes y’all have hosted me on—which, by the way, I’m so grateful that you guys have done this. This has been great for me. It’s, why do you want to buy a business in West Texas and Eastern New Mexico? Why do you want to come here? You might be listening to this from New York or Florida or wherever.
Tanner Noble [00:47:30]: I would just say that our communities in this area are very strong. We’re very friendly people, and it’s a great place to raise a family. We have really strong morals and values here, and it’s reflected in the people. The people here are so good, and you hear it all the time from people who move here and have never been here.
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Tanner Noble [00:48:00]: That’s what they say—it’s the people. And so I just can’t speak highly enough about why you would want to come to Lubbock, Texas, to buy a business. Really, it’s that—it’s the people and a business-friendly environment.
Tanner Noble [00:48:20]: Oh my gosh, yes. We have less regulation than most other places in the country, for sure. It’s business-friendly. The people are great. You can grow your family here. You can build a family here as well, actually. So anyway, if you haven’t been here, just come visit and check us out. See what we have to offer. There’s great food, great entertainment, great weather for a lot of the year, really. It’s understated how awesome our weather is. So yeah, those are kind of my closing thoughts.
Albert [00:49:00]: I love it. All right, say one more time for our listeners: what’s the best way for them to get ahold of you?
Tanner Noble [00:49:10]: Yeah, so you can call me directly. My number is 806-853-0833. My email is tnoble@tworld.com, and my website is tannernoble.com.
Albert [00:49:25]: Awesome. Man, thank you so much for this series. I’m excited for it to come out. I know people are going to get a lot out of this.
Tanner Noble [00:49:35]: Yeah. Thank you all so much for having me.
Albert [00:49:40]: Thanks, Tanner.
Tanner Noble [00:49:42]: Cheers.
