Buying a Business
Sometimes buying an existing business is a better option for a new business owner than starting from scratch. But being a better option does not mean it’s easier. Purchasing a company is still a lot of work. Before you jump in, consider these points.
Business plan – Any business you’re contemplating buying probably has a business plan. You need to see their plan and carefully review it. This will help you get acquainted with the company. Once you carefully read the existing plan, you may choose to get a new one.
Choosing the right business – You don’t want to purchase just any company; you want to purchase the right business for you. Shop around and find businesses that peak your interest or that are in a field or market where you have experience. Carefully consider each choice and ask yourself if this is something you will enjoy. Choose a good match for you.
Current customers – Find as much information on current customers or clients as you can. Learn about who they are, their general age group and how often they purchase. Look into how the business is currently handling customer service. This will help you serve these customers if you choose to purchase the company.
Marketing – How does his business market itself? What does it do to draw new customers or clients? Find out the present marketing strategy and start thinking of new ways to reach its target market. Would the knowledge of new ownership please or displease the current customers?
Financials – Look at all of the financial statements for the past five years. Make sure you’re purchasing a profitable business. The financial documents will show you the growth and loss within the business and may help you decide whether not to buy. If you need help, consult with an accountant.
Legal advice – This is a big purchase. It’s always a good idea to get the advice of your attorney. Professional legal advice can help guide you in the right direction. Your attorney and accountant can be a great team to help you decide on the right business to purchase.