Buying a Business
Are you interested in buying a business
If you’re looking for a relatively secure investment, nothing quite trumps buying an already successful business and just continuing to grow that business. Purchasing an established business has many benefits.
Some of these benefits include:
- Proof that the business actually works and is viable
- Proof that there’s avid demand that you can fill
- An already established or grown customer base
- Eliminate the need to hire fresh employees as they almost always do have them already
- The buyer can leave the seller to continue to run and grow the business if the seller still wants to continue working on the business, and they can come to an agreement
- Historical financial performance and cash flow, which shows that the business actually makes money
- Eliminates the guesswork that comes with building a business from scratch
But as with all business dealings, this also comes with its peculiar set of challenges. And to navigate or solve these problems, you need all the help you can get. But before you start dealing with these problems, you need to buy the business first. Here’s how to do that:
Have a Budget
How much money do you have to spend on the purchase of the new business? Do you have the necessary liquidity, or will you have to liquidate some assets to buy it? Or are you willing to trade assets plus cash for the business?
These are things you need to figure out first. Having a budget is particularly important as it helps you narrow down your focus to only buying businesses that you can afford. This way, you’ll avoid spending a lot of time in the search for businesses.
Determine Your Type of Business
There are hundreds of thousands of businesses in many industries for sale. What type of business are you looking to buy? Are you interested in a convenience store or a franchise?
Would you prefer to buy a gas station or a highly profitable logistics company? These are questions you need to ask before making any move. If you’re unsure of where to begin, why not choose business interests that you’re familiar with and/or have experience in?
For example, if you know how to sell cars, why not consider buying a dealership? The important thing is to ensure that you know a lot about the business you’re looking to acquire. And if you don’t, make sure you understand it at the very least.
Gather a Team of Professionals
It’s a great thing to be enthusiastic about this new business opportunity. But before you go ahead and pull the trigger on the purchase, have a few professionals double and triple-check the deal.
Talk to accountants, bankers, and lawyers who are familiar with these kinds of deals. Remember that for you, it’s a rare thing to buy a business. But for the professionals like us, these are things that we see and handle for clients frequently.
A good team of professionals will help spot and identify things you could easily miss, as well as offer unique insights.