Buying A Business - What Should You Think About?

Buying A Business - What Should You Think About?

If you are thinking of buying a business it may be because buying an already established business could be an easier option than starting a business from scratch. When choosing a business to buy you must ensure that the business is totally right for you as it is a huge investment. Whether you are buying a business or beginning a business for the first time, you will need money behind you.

What Should You Think About?

1. If you are buying a successful business you are buying not only a thriving business but you are also buying a business which is based on the previous owner's reputation, this can be an advantage but can also leave you with big boots to fill so make sure you feel totally up to the job.

2. The business will come with established contacts, customers and staff. You may have to honor agreements and contracts which the previous owner made. However, this is hopefully not going to be a problem.

3. Why is the current owner selling? You do not want to be in a situation where the owner is selling in foresight of business slowing, or if the staff is unhappy. They may be selling a failing business which you will have to invest a lot of further money in, beyond the purchase price, to turn it around. Take into account how the current owner's sale will affect the staff and the clients; they may not take well to a new managing director.

4. You should not have to worry about a business plan nor a marketing plan.

5. Applying for loans and financial support should be easier as you will be able to refer to the company's current figures.

6. Your skills and the amount of money you can invest in the business. You would do well to choose a business which you feel you can do well in, a business which you have knowledge and contacts if possible. Buying a business because you are intrigued by it, and are planning to learn on the job, is probably not the best idea. Also rein your ambition in, and keep to things you can afford. This is going to be a huge investment of both time and money so do not make it harder on yourself by going for things you cannot commit to financially for the long term.

7. Location does not matter! Many many businesses have the potential to be relocated, so look for exactly the right business opportunity for you, not for the business opportunity simply located by you.

Make sure you get an accurate valuation for the business. You can receive advice from a business transfer agent or business broker and they will be able to value the business with the help of an accountant. Once you have agreed on a deal for an amount with the current owner you will have a window in which to check the figures and information you have been given about the business is correct. Make sure you use this opportunity you do not want a nasty surprise. This is termed 'due diligence'.

Source:  By Paul Howe

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Contact  Cecil Williams (cecil@bizbrokerflorida.com) or call  at 888-925-5055 ext.206.  Visit my personal website to search for business for sale in Florida www.bizbrokerflorida.com  Also, visit our Florida Business Exchange website at www.fbxbrokers.com