Before you consider buying a business, you will need to do some soul searching and some decision making. You will need to consider what it is you enjoy doing first. There’s really no point in buying a business and working to build it up if it’s not something you really enjoy. It may seem like a very simple question but some things you love doing can get boring if you don’t choose very carefully!
Other things you will need to give thought to may be if you have the character and motivation to get up and get going without a boss to watch over you. This too can seem to be a silly question, but if you can’t motivate yourself, it may be a huge downfall in your business venture. You may be thinking of purchasing a business you already hold experience in, this can be very beneficial to you. While it can be exciting to try something brand new, there’s nothing like investing in something you know you have skills with. It will also add confidence to your endeavor.
There are benefits to purchasing an existing business. One of them can be having the company’s records to view. You will want to consider the current business plan, tax records, and by understanding where the company is going and how it is progressing, you will have a much better grasp on the current performance and its future potential. By purchasing a thriving business you know you will get a good start because of the immediate cash flow. Having money coming in immediately will help you to nurture the business in the direction you wish to take.
If it is a larger business that already has employees and vendors, you will be ahead of the game! It is also best to know how the current customers feel about the business and the way its running currently. Customer ratings should be included in the information you receive about the business. You may also want to make sure that the business name and current licensing will transfer to you with the purchase. As long as you are able to transfer licenses and current permits, you will save yourself a ton of time!
Naturally you will need to consider how much capital you will be able to raise to purchase your new business, which is another benefit to buying an existing business over starting a new one. Lenders are much more likely to lend more money for an existing business that’s already showing a profit. They actually prefer to lend money for established businesses, more so than for a brand new business venture. While new businesses are considered high-risk, thriving businesses are looked at more as collateral.
If you have done the soul searching necessary to decide on a business to buy, considered the location of the business and you feel it is convenient, you must also be aware of the normal progression of things when an acquisition takes place. Making the purchase of an existing business is not usually an easy process. It is always advisable to work with a professional help guide you through the process. Make sure you find one that will keep your best interests in mind and he will not only help you find the best suited business for you, he will see you through the entire process.
You will probably need to hire an attorney as well as an accountant to assure that your interests are met. While your friends and relatives will try to help you, please go for the professionals to help you. Others mean well, but they may not fully understand the process which can get you into trouble!